S.B. 110

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Senate 2^nd Reading Amendments 1-29-2003 rd/rlr 1

INDIVIDUAL INCOME TAX - STATE
2 EARNED INCOME TAX CREDIT
3 2003 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Thomas V. Hatch
6 This act modifies the Individual Income Tax Act to allow S [ a taxpayer having a federal
7 adjusted gross income of $25,000 or less ] CERTAIN TAXPAYERS s to claim for taxable years
7a beginning on or after
8 January 1, 2003, a nonrefundable state earned income tax credit that is equal to a certain
9 percentage of the federal earned income tax credit. The act defines terms, requires the
10 State Tax Commission to make transfers from the General Fund to the Uniform School
11 Fund equal to the amount of state earned income tax credit claimed, and grants
12 rulemaking authority to the State Tax Commission. This act has retrospective operation
13 for taxable years beginning on or after January 1, 2003.
14 This act affects sections of Utah Code Annotated 1953 as follows:
15 ENACTS:
16 59-10-136, Utah Code Annotated 1953
17 Be it enacted by the Legislature of the state of Utah:
18 Section 1. Section 59-10-136 is enacted to read:
19 59-10-136. Nonrefundable earned income tax credit -- Commission to transfer
20 from the General Fund into the Uniform School Fund an amount equal to the amount of
21 state earned income tax credit claimed -- Rulemaking authority.
22 (1) (a) Subject to Subsection (1)(b), for taxable years beginning on or after January 1,
23 2003, a taxpayer may claim as provided in this section a nonrefundable earned income tax
24 credit equal to 5% of the amount the taxpayer is allowed as a federal earned income tax credit
25 in accordance with Section 32, Internal Revenue Code, for the taxable year.
26 (b) Notwithstanding Subsection (1)(a), a taxpayer may not claim an earned income tax

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Senate 2^nd Reading Amendments 1-29-2003 rd/rlr 27

credit under this section if the taxpayer's adjusted gross income, as defined in Section 62,
28 Internal Revenue Code, is greater than S [ $25,000 ] : (i) $12,500 FOR A TAXPAYER OTHER THAN A:
28a (A) HUSBAND AND WIFE FILING A SINGLE RETURN JOINTLY; OR
28b (B) HEAD OF HOUSEHOLD; OR
28c (ii) $25,000 FOR A:
28d (A) HUSBAND AND WIFE FILING A SINGLE RETURN JOINTLY; OR
28e (B) HEAD OF HOUSEHOLD s .
29 (2) A taxpayer may not carry forward or carry back any earned income tax credit
30 allowed under this section.
31 (3) (a) In accordance with any rules prescribed by the commission under Subsection
32 (3)(b), the commission shall transfer at least annually from the General Fund into the Uniform
33 School Fund an amount equal to the amount of earned income tax credit claimed under this
34 section.
35 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
36 commission may make rules providing procedures for making transfers from the General Fund
37 into the Uniform School Fund as required by Subsection (3)(a).
38 Section 2. Retrospective operation.
39 This act has retrospective operation for taxable years beginning on or after January 1,
40 2003.

Legislative Review Note
as of 1-15-03 4:07 PM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel