S.B. 43 Enrolled

PROVIDING INFORMATION RELATING TO
TAX CREDITS AND TAX FILING DUE
DATES
2003 GENERAL SESSION
STATE OF UTAH
Sponsor: David H. Steele
This act modifies Targeted Business Income Tax Credits Within an Enterprise Zone,
Corporate Franchise and Income Taxes, and the Individual Income Tax Act to modify
the requirements for providing information to the State Tax Commission when a
taxpayer claims a tax credit. The act modifies the information that certain entities are
required to provide to taxpayers claiming certain tax credits and the requirements for
providing this information. The act modifies the due dates for filing certain returns with
the State Tax Commission and makes technical changes. The act has retrospective
operation for taxable years beginning on or after January 1, 2003.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
9-2-1803, as enacted by Chapter 155, Laws of Utah 2001
59-7-605, as last amended by Chapter 231, Laws of Utah 2002
59-7-606, as last amended by Chapters 134 and 366, Laws of Utah 1997
59-7-607, as last amended by Chapter 159, Laws of Utah 2002
59-7-608, as last amended by Chapter 375, Laws of Utah 1997
59-7-610, as last amended by Chapter 155, Laws of Utah 2001
59-10-108.7, as last amended by Chapter 155, Laws of Utah 2001
59-10-109, as last amended by Chapter 375, Laws of Utah 1997
59-10-127, as last amended by Chapter 231, Laws of Utah 2002
59-10-128, as last amended by Chapters 134 and 366, Laws of Utah 1997
59-10-129, as last amended by Chapter 159, Laws of Utah 2002
59-10-507, as renumbered and amended by Chapter 2, Laws of Utah 1987
59-10-514, as renumbered and amended by Chapter 2, Laws of Utah 1987

Be it enacted by the Legislature of the state of Utah:
Section 1. Section 9-2-1803 is amended to read:
9-2-1803. Targeted business income tax credit structure -- Duties of the local zone
administrator -- Duties of the State Tax Commission.
(1) For taxable years beginning on or after January 1, 2002, a business applicant that is
certified under Subsection 9-2-1802 (3) and issued a targeted business tax credit eligibility form
by the department under Subsection (8) may claim a refundable income tax credit:
(a) against the business applicant's tax liability under:
(i) Title 59, Chapter 10, Individual Income Tax Act; or
(ii) Title 59, Chapter 7, Corporate Franchise and Income Taxes; and
(b) subject to requirements and limitations provided by this part.
(2) The total amount of the targeted business income tax credits allowed under this part
for all business applicants may not exceed $300,000 in any fiscal year.
(3) (a) A targeted business income tax credit allowed under this part for each community
investment project provided by a business applicant may not:
(i) be claimed by a business applicant for more than seven consecutive taxable years
from the date the business applicant first qualifies for a targeted business income tax credit on the
basis of a community investment project;
(ii) be carried forward or carried back;
(iii) exceed $100,000 in total amount for the community investment project period
during which the business applicant is eligible to claim a targeted business income tax credit; or
(iv) exceed in any year that the targeted business income tax credit is claimed the lesser
of:
(A) 50% of the maximum amount allowed by the local zone administrator; or
(B) the allocated cap amount determined by the department under Subsection
9-2-1802 (5).
(b) A business applicant may apply to the local zone administrator to claim a targeted
business income tax credit allowed under this part for each community investment project

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provided by the business applicant as the basis for its eligibility for a targeted business income
tax credit.
(4) Subject to other provisions of this section, the local zone administrator shall establish
for each business applicant that qualifies for a targeted business income tax credit:
(a) criteria for maintaining eligibility for the targeted business income tax credit that are
reasonably related to the community investment project that is the basis for the business
applicant's targeted business income tax credit;
(b) the maximum amount of the targeted business income tax credit the business
applicant is allowed for the community investment project period;
(c) the time period over which the total amount of the targeted business income tax credit
may be claimed;
(d) the maximum amount of the targeted business income tax credit that the business
applicant will be allowed to claim each year; and
(e) requirements for a business applicant to report to the local zone administrator
specifying:
(i) the frequency of the business applicant's reports to the local zone administrator, which
shall be made at least quarterly; and
(ii) the information needed by the local zone administrator to monitor the business
applicant's compliance with this Subsection (4) or Section 9-2-1802 that shall be included in the
report.
(5) In accordance with Subsection (4)(e), a business applicant allowed a targeted
business income tax credit under this part shall report to the local zone administrator.
(6) The amount of a targeted business income tax credit that a business applicant is
allowed to claim for a taxable year shall be reduced by 25% for each quarter in which the
department or the local zone administrator determines that the business applicant has failed to
comply with a requirement of Subsection (3) or Section 9-2-1802 .
(7) The department or local zone administrator may audit a business applicant to ensure:
(a) eligibility for a targeted business income tax credit; or

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(b) compliance with Subsection (3) or Section 9-2-1802 .
(8) The department shall issue a targeted business income tax credit eligibility form in a
form jointly developed by the State Tax Commission and the department no later than 30 days
after the last day of the business applicant's taxable year showing:
(a) the maximum amount of the targeted business income tax credit that the business
applicant is eligible for that taxable year;
(b) any reductions in the maximum amount of the targeted business income tax credit
because of failure to comply with a requirement of Subsection (3) or Section 9-2-1802 ;
(c) the allocated cap amount that the business applicant may claim for that taxable year;
and
(d) the actual amount of the targeted business income tax credit that the business
applicant may claim for that taxable year.
(9) (a) A business applicant shall [attach a copy of] retain the targeted business income
tax credit eligibility form provided by the department under this Subsection (9) [to any return
upon which a business applicant claims a targeted business income tax credit under this section].
(b) The State Tax Commission may audit a business applicant to ensure:
(i) eligibility for a targeted business income tax credit; or
(ii) compliance with Subsection (3) or Section 9-2-1802 .
Section 2. Section 59-7-605 is amended to read:
59-7-605. Definitions -- Tax credit -- Cleaner burning fuels.
(1) As used in this section:
(a) "Board" means the Air Quality Board created under Title 19, Chapter 2, Air
Conservation Act.
(b) "Certified by the board" means that:
(i) a motor vehicle on which conversion equipment has been installed meets the
following criteria:
(A) before the installation of conversion equipment, the vehicle does not exceed the
emission cut points for a transient test driving cycle, as specified in 40 [CFR] C.F.R. Part 51,

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Appendix E to Subpart S, or an equivalent test for the make, model, and year of the vehicle;
(B) the motor vehicle's emissions of regulated pollutants, when operating on fuels listed
in Subsection (2)(b), is less than the emissions were before the installation of conversion
equipment; and
(C) a reduction in emissions under Subsection (1)(b)(i)(B) is demonstrated by:
(I) certification of the conversion equipment by the federal Environmental Protection
Agency or by a state whose certification standards are recognized by the board;
(II) testing the motor vehicle, before and after installation of the conversion equipment,
in accordance with 40 [CFR] C.F.R. Part 86, Control of [Air Pollution] Emissions from New and
In-use [Motor Vehicle] Highway Vehicles and Engines[: Certification and Test Procedures],
using all fuel the motor vehicle is capable of using; or
(III) any other test or standard recognized by board rule; or
(ii) special mobile equipment on which conversion equipment has been installed meets
the following criteria:
(A) the special mobile equipment's emissions of regulated pollutants, when operating on
fuels listed in Subsection (2)(c), is less than the emissions were before the installation of
conversion equipment; and
(B) a reduction in emissions under Subsection (1)(b)(ii)(A) is demonstrated by:
(I) certification of the conversion equipment by the federal Environmental Protection
Agency or by a state whose certification standards are recognized by the board; or
(II) any other test or standard recognized by board rule.
(c) "Clean fuel grant" means a grant awarded under Title 9, Chapter 1, Part 7, Clean
Fuels Conversion Program Act, for reimbursement of a portion of the incremental cost of an
OEM vehicle or the cost of conversion equipment.
(d) "Conversion equipment" means equipment referred to in Subsection (2)(b) or (2)(c).
(e) "Incremental cost" has the same meaning as in Section 63-34-202 .
(f) "OEM vehicle" has the same meaning as in Section 63-34-202 .
(g) "Special mobile equipment":

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(i) means any mobile equipment or vehicle that is not designed or used primarily for the
transportation of persons or property; and
(ii) includes construction or maintenance equipment.
(2) For taxable years beginning on or after January 1, 2001, but beginning on or before
December 31, 2005, a taxpayer may claim a tax credit against tax otherwise due under this
chapter or Chapter 8, Gross Receipts Tax on Certain Corporations Not Required to Pay
Corporate Franchise or Income Tax Act, in an amount equal to:
(a) 50% of the incremental cost of an OEM vehicle registered in Utah minus the amount
of any clean fuel grant received, up to a maximum tax credit of $3,000 per vehicle, if the vehicle:
(i) is fueled by propane, natural gas, or electricity;
(ii) is fueled by other fuel the board determines annually on or before July 1 to be at least
as effective in reducing air pollution as fuels under Subsection (2)(a)(i); or
(iii) meets the clean-fuel vehicle standards in the federal Clean Air Act Amendments of
1990, 42 U.S.C. Sec. 7521 et seq.;
(b) 50% of the cost of equipment for conversion, if certified by the board, of a motor
vehicle registered in Utah minus the amount of any clean fuel grant received, up to a maximum
tax credit of $2,500 per motor vehicle, if the motor vehicle is to:
(i) be fueled by propane, natural gas, or electricity;
(ii) be fueled by other fuel the board determines annually on or before July 1 to be at
least as effective in reducing air pollution as fuels under Subsection (2)(b)(i); or
(iii) meet the federal clean-fuel vehicle standards in the federal Clean Air Act
Amendments of 1990, 42 U.S.C. Sec. 7521 et seq.; and
(c) 50% of the cost of equipment for conversion, if certified by the board, of a special
mobile equipment engine minus the amount of any clean fuel grant received, up to a maximum
tax credit of $1,000 per special mobile equipment engine, if the special mobile equipment is to
be fueled by:
(i) propane, natural gas, or electricity; or
(ii) other fuel the board determines annually on or before July 1 to be:

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(A) at least as effective in reducing air pollution as the fuels under Subsection (2)(c)(i);
or
(B) substantially more effective in reducing air pollution than the fuel for which the
engine was originally designed.
(3) A taxpayer shall provide proof of the purchase of an item for which a tax credit is
allowed under this section by:
(a) providing proof to the board in the form the board requires by rule;
(b) receiving a written statement from the board acknowledging receipt of the proof; and
(c) [attaching] retaining the written statement [obtained from the board to the tax return
in which the credit is claimed] described in Subsection (3)(b).
(4) Except as provided by Subsection (5), [this] the tax credit under this section is
allowed only:
(a) against any Utah tax owed in the taxable year by the taxpayer;
(b) in the taxable year in which the item is purchased for which the tax credit is claimed;
and
(c) once per vehicle.
(5) If the amount of a tax credit claimed by a taxpayer under this section exceeds the
taxpayer's tax liability under this chapter for a taxable year, the amount of the tax credit
exceeding the tax liability may be carried forward for a period that does not exceed the next five
taxable years.
Section 3. Section 59-7-606 is amended to read:
59-7-606. Tax credit -- Items using cleaner burning fuels.
(1) As used in this section, "board" means the Air Quality Board created under Title 19,
Chapter 2, [Environmental Quality Code] Air Conservation Act.
(2) For [tax] taxable years beginning on or after January 1, 1992, but prior to January 1,
2003, there is allowed a tax credit against tax otherwise due under this chapter in an amount
equal to 10%, up to a maximum of $50, of the total of both the purchase cost and installation
services cost of each pellet burning stove, high mass wood stove, and solid fuel burning device

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purchased and installed that is certified by the federal Environmental Protection Agency in
accordance with test procedures prescribed in 40 C.F.R. Sec. 60.534, including purchase cost and
installation service cost of natural gas or propane free standing fireplaces or inserts, but not
including fireplace logs.
(3) A taxpayer shall provide proof of the purchase of an item for which a tax credit is
allowed under this section by:
(a) providing proof to the board in the form [it] the board requires by rule;
(b) receiving a written statement from the board acknowledging receipt of the proof; and
(c) [attaching] retaining the written statement [obtained from the board to the tax return
in which the credit is claimed] described in Subsection (3)(b).
(4) [This] The tax credit under this section is allowed only:
(a) against any Utah tax owed in the taxable year by the taxpayer; and
(b) [in] for the taxable year in which the item is purchased for which the tax credit is
claimed.
Section 4. Section 59-7-607 is amended to read:
59-7-607. Utah low-income housing tax credit.
(1) As used in this section:
(a) "Allocation certificate" means:
(i) the certificate prescribed by the [tax] commission and issued by the Utah Housing
Corporation to each taxpayer that specifies the percentage of the annual federal low-income
housing tax credit that each taxpayer may take as an annual credit against state income tax; or
(ii) a copy of the allocation certificate that the housing sponsor provides to the taxpayer.
(b) "Building" means a qualified low-income building as defined in Section 42(c),
Internal Revenue Code.
(c) "Federal low-income housing tax credit" means the tax credit under Section 42,
Internal Revenue Code.
(d) "Housing sponsor" means a corporation in the case of a C corporation, a partnership
in the case of a partnership, a corporation in the case of an S corporation, or a limited liability

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company in the case of a limited liability company.
(e) "Qualified allocation plan" means the qualified allocation plan adopted by the Utah
Housing Corporation pursuant to Section 42(m), Internal Revenue Code.
(f) "Special low-income housing tax credit certificate" means a certificate:
(i) prescribed by the [tax] commission;
(ii) that a housing sponsor issues to a taxpayer for a taxable year; and
(iii) that specifies the amount of tax credit a taxpayer may claim under this section if the
taxpayer meets the requirements of this section.
(g) "Taxpayer" means [the] a person [entitled to the] that is allowed a tax credit
[provided under] in accordance with this section which is the corporation in the case of a C
corporation, the partners in the case of a partnership, the shareholders in the case of an S
corporation, and the members in the case of a limited liability company.
(2) (a) For taxable years beginning on or after January 1, 1995, there is allowed a
nonrefundable tax credit against taxes otherwise due under this chapter or Chapter 8, Gross
Receipts Tax on Certain Corporations Not Required to Pay Corporate Franchise or Income Tax
Act, for taxpayers issued an allocation certificate.
(b) The tax credit shall be in an amount equal to the greater of the amount of:
(i) federal low-income housing tax credit to which the taxpayer is [entitled] allowed
during that year multiplied by the percentage specified in an allocation certificate issued by the
Utah Housing Corporation; or
(ii) tax credit specified in the special low-income housing tax credit certificate that the
housing sponsor issues to the taxpayer as provided in Subsection (2)(c).
(c) For purposes of Subsection (2)(b)(ii), the tax credit is equal to the product of:
(i) the total amount of low-income housing tax credit under this section that:
(A) a housing sponsor is allowed for a building; and
(B) all of the taxpayers may claim with respect to the building if the taxpayers meet the
requirements of this section; and
(ii) the percentage of tax credit a taxpayer may claim:

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(A) under this section if the taxpayer meets the requirements of this section; and
(B) as provided in the agreement between the taxpayer and the housing sponsor.
(d) (i) For the calendar year beginning on January 1, 1995, through the calendar year
beginning on January 1, 2005, the aggregate annual tax credit [which] that the Utah Housing
Corporation may allocate for the credit period described in Section 42(f), Internal Revenue Code,
pursuant to this section and Section 59-10-129 is an amount equal to the product of:
(A) 12.5 cents; and
(B) the population of Utah.
(ii) For purposes of this section, the population of Utah shall be determined in
accordance with Section 146(j), Internal Revenue Code.
(3) (a) By October 1, 1994, the Utah Housing Corporation shall determine criteria and
procedures for allocating the tax credit under this section and Section 59-10-129 and incorporate
the criteria and procedures into the Utah Housing Corporation's qualified allocation plan.
(b) The Utah Housing Corporation shall create the criteria under Subsection (3)(a) based
on:
(i) the number of affordable housing units to be created in Utah for low and moderate
income persons in the residential housing development of which the building is a part;
(ii) the level of area median income being served by the development;
(iii) the need for the tax credit for the economic feasibility of the development; and
(iv) the extended period for which the development commits to remain as affordable
housing.
(4) (a) [Any] The following may apply to the Utah Housing Corporation for a tax credit
under this section:
(i) any housing sponsor that has received an allocation of the federal low-income housing
tax credit [and]; or
(ii) any applicant for an allocation of the federal low-income housing tax credit [may
apply to the Utah Housing Corporation for a credit under this section].
(b) The Utah Housing Corporation may not require fees for applications of the tax credit

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under this section in addition to those fees required for applications for the federal low-income
housing tax credit.
(5) (a) The Utah Housing Corporation shall determine the amount of the tax credit to
allocate to a qualifying housing sponsor in accordance with the qualified allocation plan of the
Utah Housing Corporation.
(b) (i) The Utah Housing Corporation shall allocate the tax credit to housing sponsors by
issuing an allocation certificate to qualifying housing sponsors.
(ii) The allocation certificate under Subsection (5)(b)(i) shall specify the allowed
percentage of the federal low-income housing tax credit as determined by the Utah Housing
Corporation.
(c) The percentage specified in an allocation certificate may not exceed 100% of the
federal low-income housing tax credit.
(6) [If a partnership, an S corporation, or a limited liability company qualifies for the
credit provided in this section as a] A housing sponsor[, it] shall provide a copy of the allocation
certificate to [the taxpayers of the entity. (7) A taxpayer shall attach a copy of the allocation
certificate to any return upon which a credit is claimed under this section.] each taxpayer that is
issued a special low-income housing tax credit certificate.
(7) (a) A housing sponsor shall provide to the commission a list of:
(i) the taxpayers issued a special low-income housing tax credit certificate; and
(ii) for each taxpayer described in Subsection (7)(a)(i), the amount of tax credit listed on
the special low-income housing tax credit certificate.
(b) A housing sponsor shall provide the list required by Subsection (7)(a):
(i) to the commission;
(ii) on a form provided by the commission; and
(iii) with the housing sponsor's tax return for each taxable year for which the housing
sponsor issues a special low-income housing tax credit certificate described in this Subsection
(7).
(8) (a) All elections made by the taxpayer pursuant to Section 42, Internal Revenue Code,

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shall apply to this section.
(b) (i) If a taxpayer is required to recapture a portion of any federal low-income housing
tax credit, the taxpayer shall also be required to recapture a portion of any state tax credits
authorized by this section.
(ii) The state recapture amount shall be equal to the percentage of the state tax credit that
equals the proportion the federal recapture amount bears to the original federal low-income
housing tax credit amount subject to recapture.
(9) (a) Any tax credits returned to the Utah Housing Corporation in any year may be
reallocated within the same time period as provided in Section 42, Internal Revenue Code.
(b) [credits] Tax credits that are unallocated by the Utah Housing Corporation in any year
may be carried over for allocation in the subsequent year.
(10) (a) Amounts otherwise qualifying for the tax credit, but not allowable because the
tax credit exceeds the tax, may be carried back three years or may be carried forward five years
as a credit against the tax.
(b) Carryover tax credits under Subsection (10)(a) shall be applied against the tax:
(i) before the application of the tax credits earned in the current year; and
(ii) on a first-earned first-used basis.
(11) Any tax credit taken in this section may be subject to an annual audit by the
commission.
(12) The Utah Housing Corporation shall provide an annual report to the Revenue and
Taxation Interim Committee which shall include at least:
(a) the purpose and effectiveness of the [exemption] tax credits; and
(b) the benefits of the [exemption] tax credits to the state.
(13) The [tax] commission may, in consultation with the Utah Housing Corporation,
promulgate rules to implement this section [and Section 59-10-129 ].
Section 5. Section 59-7-608 is amended to read:
59-7-608. Targeted jobs tax credit.
(1) As used in this section, "individual with a disability" means an individual who:

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(a) has been receiving services:
(i) from a day-training program that is:
(A) for persons with disabilities[, which is]; and
(B) certified by the Department of Human Services as a qualifying program[,]; and
(ii) for at least six consecutive months prior to working for the employer claiming the tax
credit under this section; or
(b) is eligible for services from the Division of Services for People with Disabilities at
the time the individual begins working for the employer claiming the tax credit under this
section.
(2) For taxable years beginning on or after January 1, 1995, there is allowed a
nonrefundable tax credit against tax otherwise due under this chapter for an employer [who] that:
(a) meets the unemployment and workers' compensation requirements of Title 34A, Utah
Labor Code[,]; and
(b) hires an individual with a disability who:
[(a)] (i) works in this state for at least 180 days in a taxable year for that employer; and
[(b)] (ii) is paid at least minimum wages by that employer.
(3) The tax credit shall be in an amount equal to:
(a) 10% of the gross wages earned in the first 180 days of employment by the individual
with a disability from the employer seeking the tax credit; and
(b) 20% of the gross wages earned in the remaining taxable year by the individual with a
disability from the employer seeking the tax credit.
(4) The tax credit which may be taken by an employer under this section shall be:
(a) limited to $3,000 per year per individual with a disability; and
(b) allowed only for the first two years the individual with a disability is employed by the
employer.
(5) Any amount of tax credit remaining may be carried forward two taxable years
following the taxable year of the employment eligible for the tax credit provided in this section.
(6) (a) The Division of Services for People with Disabilities shall certify that an

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employer qualifies for the tax credit provided in this section on a form provided by the [tax]
commission.
(b) The form described in Subsection (6)(a) shall include the name and Social Security
number of the individual for whom the tax credit is claimed.
(c) The Division of Services for People with Disabilities shall provide the employer
described in Subsection (6)(a) with a copy of the form described in this Subsection (6).
[(b) An] (d) The employer described in Subsection (6)(a) shall [attach] retain the
[certification] form [obtained from the Division of Services for People with Disabilities to the tax
return in which the credit is claimed] described in this Subsection (6).
Section 6. Section 59-7-610 is amended to read:
59-7-610. Recycling market development zones tax credit.
(1) For [tax] taxable years beginning on or after January 1, 1996, [the following state tax
credits are applicable to businesses] a business operating in a recycling market development zone
as defined in Section 9-2-1602 [:] may claim a tax credit as provided in this section.
(a) (i) There shall be allowed a nonrefundable tax credit of 5% of the purchase price paid
for machinery and equipment used directly in:
(A) commercial composting; or
(B) manufacturing facilities or plant units that:
(I) manufacture, process, compound, or produce recycled items of tangible personal
property for sale; or
(II) reduce or reuse postconsumer waste material.
(ii) The Department of Community and Economic Development shall certify that the
machinery and equipment described in Subsection (1)(a)(i) are integral to the composting or
recycling process:
(A) on a form provided by the [tax] commission; and
(B) before [the] a taxpayer is [entitled to the] allowed a tax credit under this section.
(iii) The Department of Community and Economic Development shall provide a
taxpayer seeking to claim a tax credit under this section with a copy of the form described in

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Subsection (1)(a)(ii).
[(iii)] (iv) The taxpayer described in Subsection (1)(a)(iii) shall retain a copy of the form
[enclose with its tax return the certification] received under Subsection (1)(a)[(ii)](iii).
(b) There shall be allowed a nonrefundable tax credit equal to 20% of net expenditures
up to $10,000 to third parties for rent, wages, supplies, tools, test inventory, and utilities made by
the taxpayer for establishing and operating recycling or composting technology in Utah, with an
annual maximum tax credit of $2,000.
(2) The total nonrefundable tax credit allowed under this section may not exceed 40% of
the Utah income tax liability of the taxpayer prior to any tax credits in the taxable year of
purchase prior to claiming the tax credit authorized by this section.
(3) (a) Any tax credit not used for the taxable year in which the purchase price on
composting or recycling machinery and equipment was paid may be carried over for credit
against the [business's] business' income taxes in the three succeeding taxable years until the total
tax credit amount is used.
(b) Tax credits not claimed by a business on [its] the business' state income tax return
within three years are forfeited.
(4) The [tax] commission shall make rules governing what information shall be filed
with the [tax] commission to verify the entitlement to and amount of a tax credit.
(5) (a) Notwithstanding Subsection (1)(a), for taxable years beginning on or after January
1, 2001, a taxpayer may not claim or carry forward a tax credit described in Subsection (1)(a) in a
taxable year during which the taxpayer claims or carries forward a tax credit under Section
9-2-413 .
(b) For a taxable year other than a taxable year during which the taxpayer may not claim
or carry forward a tax credit in accordance with Subsection (5)(a), a taxpayer may claim or carry
forward a tax credit described in Subsection (1)(a):
(i) if the taxpayer may claim or carry forward the tax credit in accordance with
Subsections (1) and (2); and
(ii) subject to Subsections (3) and (4).

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(6) Notwithstanding Subsection (1)(b), for taxable years beginning on or after January 1,
2001, a taxpayer may not claim a tax credit described in Subsection (1)(b) in a taxable year
during which the taxpayer claims or carries forward a tax credit under Section 9-2-413 .
(7) A taxpayer may not claim or carry forward a tax credit available under this section for
a taxable year during which the taxpayer has claimed the targeted business income tax credit
available under Section 9-2-1803 .
Section 7. Section 59-10-108.7 is amended to read:
59-10-108.7. Recycling market development zones tax credit.
(1) For [tax] taxable years beginning on or after January 1, 1996, [the following state tax
credits are applicable to] an individual in a recycling market development zone as defined in
Section 9-2-1602 [:] may claim a tax credit as provided in this section.
(a) (i) There shall be allowed a nonrefundable tax credit of 5% of the purchase price paid
for machinery and equipment used directly in:
(A) commercial composting; or
(B) manufacturing facilities or plant units that:
(I) manufacture, process, compound, or produce recycled items of tangible personal
property for sale; or
(II) reduce or reuse postconsumer waste material.
(ii) The Department of Community and Economic Development shall certify that the
machinery and equipment described in Subsection (1)(a)(i) are integral to the composting or
recycling process:
(A) on a form provided by the [tax] commission; and
(B) before [the] a taxpayer is [entitled to the] allowed a tax credit under this section.
(iii) The Department of Community and Economic Development shall provide a
taxpayer seeking to claim a tax credit under this section with a copy of the form described in
Subsection (1)(a)(ii).
[(iii)] (iv) The taxpayer described in Subsection (1)(a)(iii) shall [enclose with its tax
return the certification] retain a copy of the form received under Subsection (1)(a)[(ii)](iii).

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(b) There shall be allowed a nonrefundable tax credit equal to 20% of net expenditures
up to $10,000 to third parties for rent, wages, supplies, tools, test inventory, and utilities made by
the taxpayer for establishing and operating recycling or composting technology in Utah, with an
annual maximum tax credit of $2,000.
(2) The total nonrefundable tax credit allowed under this section may not exceed 40% of
the Utah income tax liability of the taxpayer prior to any tax credits in the taxable year of
purchase prior to claiming the tax credit authorized by this section.
(3) (a) Any tax credit not used for the taxable year in which the purchase price on
composting or recycling machinery and equipment was paid may be carried over for credit
against the individual's income taxes in the three succeeding taxable years until the total tax
credit amount is used.
(b) Tax credits not claimed by an individual on the individual's state income tax return
within three years are forfeited.
(4) The [tax] commission shall make rules governing what information shall be filed
with the [tax] commission to verify the entitlement to and amount of a tax credit.
(5) (a) Notwithstanding Subsection (1)(a), for taxable years beginning on or after January
1, 2001, a taxpayer may not claim or carry forward a tax credit described in Subsection (1)(a) in a
taxable year during which the taxpayer claims or carries forward a tax credit under Section
9-2-413 .
(b) For a taxable year other than a taxable year during which the taxpayer may not claim
or carry forward a tax credit in accordance with Subsection (5)(a), a taxpayer may claim or carry
forward a tax credit described in Subsection (1)(a):
(i) if the taxpayer may claim or carry forward the tax credit in accordance with
Subsections (1) and (2); and
(ii) subject to Subsections (3) and (4).
(6) Notwithstanding Subsection (1)(b), for taxable years beginning on or after January 1,
2001, a taxpayer may not claim a tax credit described in Subsection (1)(b) in a taxable year
during which the taxpayer claims or carries forward a tax credit under Section 9-2-413 .

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(7) A taxpayer may not claim or carry forward a tax credit available under this section for
a taxable year during which the taxpayer has claimed the targeted business income tax credit
available under Section 9-2-1803 .
Section 8. Section 59-10-109 is amended to read:
59-10-109. Targeted jobs tax credit.
(1) As used in this section, "individual with a disability" means an individual who:
(a) has been receiving services:
(i) from a day-training program that is:
(A) for persons with disabilities[, which is]; and
(B) certified by the Department of Human Services as a qualifying program[,]; and
(ii) for at least six consecutive months prior to working for the employer claiming the tax
credit under this section; or
(b) is eligible for services from the Division of Services for People with Disabilities at
the time the individual begins working for the employer claiming the tax credit under this
section.
(2) For taxable years beginning on or after January 1, 1995, there is allowed a
nonrefundable tax credit against tax otherwise due under this chapter for an employer [who] that:
(a) meets the unemployment and workers' compensation requirements of Title 34A, Utah
Labor Code[,]; and
(b) hires an individual with a disability who:
[(a)] (i) works in this state for at least 180 days in a taxable year for that employer; and
[(b)] (ii) is paid at least minimum wages by that employer.
(3) The tax credit shall be in an amount equal to:
(a) 10% of the gross wages earned in the first 180 days of employment by the individual
with a disability from the employer seeking the tax credit; and
(b) 20% of the gross wages earned in the remaining taxable year by the individual with a
disability from the employer seeking the tax credit.
(4) The tax credit which may be taken by an employer under this section shall be:

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(a) limited to $3,000 per year per individual with a disability; and
(b) allowed only for the first two years the individual with a disability is employed by the
employer.
(5) Any amount of tax credit remaining may be carried forward two taxable years
following the taxable year of the employment eligible for the tax credit provided in this section.
(6) (a) The Division of Services for People with Disabilities shall certify that an
employer qualifies for the tax credit provided in this section on a form provided by the [tax]
commission.
(b) The form described in Subsection (6)(a) shall include the name and Social Security
number of the individual for whom the tax credit is claimed.
(c) The Division of Services for People with Disabilities shall provide the employer
described in Subsection (6)(a) with a copy of the form described in this Subsection (6).
[(b) An] (d) The employer described in Subsection (6)(a) shall [attach] retain the
[certification] form [obtained from the Division of Services for People with Disabilities to the tax
return in which the credit is claimed] described in this Subsection (6).
Section 9. Section 59-10-127 is amended to read:
59-10-127. Definitions -- Tax credit -- Cleaner burning fuels.
(1) As used in this section:
(a) "Board" means the Air Quality Board created in Title 19, Chapter 2, Air Conservation
Act.
(b) "Certified by the board" means that:
(i) a motor vehicle on which conversion equipment has been installed meets the
following criteria:
(A) before the installation of conversion equipment, the vehicle does not exceed the
emission cut points for a transient test driving cycle, as specified in 40 [CFR] C.F.R. Part 51,
Appendix E to Subpart S, or an equivalent test for the make, model, and year of the vehicle;
(B) the motor vehicle's emissions of regulated pollutants, when operating on fuels listed
in Subsection (2)(b), is less than the emissions were before the installation of conversion

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equipment; and
(C) a reduction in emissions under Subsection (1)(b)(i)(B) is demonstrated by:
(I) certification of the conversion equipment by the federal Environmental Protection
Agency or by a state whose certification standards are recognized by the board;
(II) testing the motor vehicle, before and after installation of the conversion equipment,
in accordance with 40 [CFR] C.F.R. Part 86, Control [of Air Pollution] Emissions from New and
In-use [Motor Vehicle] Highway Vehicles and Engines[: Certification and Test Procedures],
using all fuels the motor vehicle is capable of using; or
(III) any other test or standard recognized by board rule; or
(ii) special mobile equipment on which conversion equipment has been installed meets
the following criteria:
(A) the special mobile equipment's emissions of regulated pollutants, when operating on
fuels listed in Subsection (2)(c), is less than the emissions were before the installation of
conversion equipment; and
(B) a reduction in emissions under Subsection (1)(b)(ii)(A) is demonstrated by:
(I) certification of the conversion equipment by the federal Environmental Protection
Agency or by a state whose certification standards are recognized by the board; or
(II) any other test or standard recognized by the board.
(c) "Clean fuel grant" means a grant the taxpayer receives under Title 9, Chapter 1, Part
7, Clean Fuels Conversion Program Act, for reimbursement of a portion of the incremental cost
of the OEM vehicle or the cost of conversion equipment.
(d) "Conversion equipment" means equipment referred to in Subsection (2)(b) or (2)(c).
(e) "Incremental cost" has the same meaning as in Section 63-34-202 .
(f) "OEM vehicle" has the same meaning as in Section 63-34-202 .
(g) "Special mobile equipment":
(i) means any mobile equipment or vehicle not designed or used primarily for the
transportation of persons or property; and
(ii) includes construction or maintenance equipment.

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(2) For taxable years beginning on or after January 1, 2001, but beginning on or before
December 31, 2005, a taxpayer may claim a tax credit against tax otherwise due under this
chapter in an amount equal to:
(a) 50% of the incremental cost of an OEM vehicle registered in Utah minus the amount
of any clean fuel grant received, up to a maximum tax credit of $3,000 per vehicle, if the vehicle:
(i) is fueled by propane, natural gas, or electricity;
(ii) is fueled by other fuel the board determines annually on or before July 1 to be at least
as effective in reducing air pollution as fuels under Subsection (2)(a)(i); or
(iii) meets the clean-fuel vehicle standards in the federal Clean Air Act Amendments of
1990, 42 U.S.C. Sec. 7521 et seq.;
(b) 50% of the cost of equipment for conversion, if certified by the board, of a motor
vehicle registered in Utah minus the amount of any clean fuel conversion grant received, up to a
maximum tax credit of $2,500 per vehicle, if the motor vehicle:
(i) is to be fueled by propane, natural gas, or electricity;
(ii) is to be fueled by other fuel the board determines annually on or before July 1 to be at
least as effective in reducing air pollution as fuels under Subsection (2)(b)(i); or
(iii) will meet the federal clean fuel vehicle standards in the federal Clean Air Act
Amendments of 1990, 42 U.S.C. Sec. 7521 et seq.; and
(c) 50% of the cost of equipment for conversion, if certified by the board, of a special
mobile equipment engine minus the amount of any clean fuel conversion grant received, up to a
maximum tax credit of $1,000 per special mobile equipment engine, if the special mobile
equipment is to be fueled by:
(i) propane, natural gas, or electricity; or
(ii) other fuel the board determines annually on or before July 1 to be:
(A) at least as effective in reducing air pollution as the fuels under Subsection (2)(c)(i);
or
(B) substantially more effective in reducing air pollution than the fuel for which the
engine was originally designed.

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(3) An individual shall provide proof of the purchase of an item for which a tax credit is
allowed under this section by:
(a) providing proof to the board in the form the board requires by rule;
(b) receiving a written statement from the board acknowledging receipt of the proof; and
(c) [attaching] retaining the written statement [obtained from the board to the tax return
in which the credit is claimed] described in Subsection (3)(b).
(4) Except as provided by Subsection (5), [this] the tax credit under this section is
allowed only:
(a) against any Utah tax owed in the taxable year by the taxpayer;
(b) in the taxable year in which the item is purchased for which the tax credit is claimed;
and
(c) once per vehicle.
(5) If the amount of a tax credit claimed by a taxpayer under this section exceeds the
taxpayer's tax liability under this chapter for a taxable year, the amount of the tax credit
exceeding the tax liability may be carried forward for a period that does not exceed the next five
taxable years.
Section 10. Section 59-10-128 is amended to read:
59-10-128. Tax credit -- Items using cleaner burning fuels.
(1) As used in this section, "board" means the Air Quality Board created under Title 19,
Chapter 2, Air Conservation Act.
(2) For [tax] taxable years beginning on or after January 1, 1992, but prior to January 1,
2003, there is allowed a tax credit against tax otherwise due under this chapter in an amount
equal to 10%, up to a maximum of $50, of the total of both the purchase cost of and installation
services cost of each pellet burning stove, high mass wood stove, and solid fuel burning device
that is certified by the federal Environmental Protection Agency in accordance with test
procedures prescribed in 40 C.F.R. Sec. 60.534, including purchase cost and installation service
cost of natural gas or propane free standing fireplaces or inserts, but not including fireplace logs.
(3) An individual shall provide proof of the purchase of an item for which a tax credit is

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allowed under this section by:
(a) providing proof to the board in the form [it] the board requires by rule;
(b) receiving a written statement from the board acknowledging receipt of the proof; and
(c) [attaching] retaining the written statement [obtained from the board to the tax return
in which the credit is claimed] described in Subsection (3)(b).
(4) [This] The tax credit under this section is allowed only:
(a) against any Utah tax owed in the taxable year by the taxpayer; and
(b) [in] for the taxable year in which the item is purchased for which the tax credit is
claimed.
Section 11. Section 59-10-129 is amended to read:
59-10-129. Utah low-income housing tax credit.
(1) As used in this section:
(a) "Allocation certificate" means:
(i) the certificate prescribed by the [tax] commission and issued by the Utah Housing
Corporation to each taxpayer that specifies the percentage of the annual federal low-income
housing tax credit that each taxpayer may take as an annual credit against state income tax; or
(ii) a copy of the allocation certificate that the housing sponsor provides to the taxpayer.
(b) "Building" means a qualified low-income building as defined in Section 42(c),
Internal Revenue Code.
(c) "Federal low-income housing tax credit" means the tax credit under Section 42,
Internal Revenue Code.
(d) "Housing sponsor" means a corporation in the case of a C corporation, a partnership
in the case of a partnership, a corporation in the case of an S corporation, or a limited liability
company in the case of a limited liability company.
(e) "Qualified allocation plan" means the qualified allocation plan adopted by the Utah
Housing Corporation pursuant to Section 42(m), Internal Revenue Code.
(f) "Special low-income housing tax credit certificate" means a certificate:
(i) prescribed by the [tax] commission;

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(ii) that a housing sponsor issues to a taxpayer for a taxable year; and
(iii) that specifies the amount of a tax credit a taxpayer may claim under this section if
the taxpayer meets the requirements of this section.
(g) "Taxpayer" means [the] a person [entitled to the] that is allowed a tax credit
[provided under] in accordance with this section which is the corporation in the case of a C
corporation, the partners in the case of a partnership, the shareholders in the case of an S
corporation, and the members in the case of a limited liability company.
(2) (a) For taxable years beginning on or after January 1, 1995, there is allowed a
nonrefundable tax credit against taxes otherwise due under this chapter for taxpayers issued an
allocation certificate.
(b) The tax credit shall be in an amount equal to the greater of the amount of:
(i) federal low-income housing tax credit to which the taxpayer is [entitled] allowed
during that year multiplied by the percentage specified in an allocation certificate issued by the
Utah Housing Corporation; or
(ii) tax credit specified in the special low-income housing tax credit certificate that the
housing sponsor issues to the taxpayer as provided in Subsection (2)(c).
(c) For purposes of Subsection (2)(b)(ii), the tax credit is equal to the product of:
(i) the total amount of low-income housing tax credit under this section that:
(A) a housing sponsor is allowed for a building; and
(B) all of the taxpayers may claim with respect to the building if the taxpayers meet the
requirements of this section; and
(ii) the percentage of tax credit a taxpayer may claim:
(A) under this section if the taxpayer meets the requirements of this section; and
(B) as provided in the agreement between the taxpayer and the housing sponsor.
(d) (i) For the calendar year beginning on January 1, 1995, through the calendar year
beginning on January 1, 2005, the aggregate annual tax credit [which] that the Utah Housing
Corporation may allocate for the credit period described in Section 42(f), Internal Revenue Code,
pursuant to this section and Section 59-7-607 is an amount equal to the product of:

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(A) 12.5 cents; and
(B) the population of Utah.
(ii) For purposes of this section, the population of Utah shall be determined in
accordance with Section 146(j), Internal Revenue Code.
(3) (a) By October 1, 1994, the Utah Housing Corporation shall determine criteria and
procedures for allocating the tax credit under this section and Section 59-7-607 and incorporate
the criteria and procedures into the Utah Housing Corporation's qualified allocation plan.
(b) The Utah Housing Corporation shall create the criteria under Subsection (3)(a) based
on:
(i) the number of affordable housing units to be created in Utah for low and moderate
income persons in the residential housing development of which the building is a part;
(ii) the level of area median income being served by the development;
(iii) the need for the tax credit for the economic feasibility of the development; and
(iv) the extended period for which the development commits to remain as affordable
housing.
(4) (a) [Any] The following may apply to the Utah Housing Corporation for a tax credit
under this section:
(i) any housing sponsor that has received an allocation of the federal low-income housing
tax credit [and]; or
(ii) any applicant for an allocation of the federal low-income housing tax credit [may
apply to the Utah Housing Corporation for a credit under this section].
(b) The Utah Housing Corporation may not require fees for applications of the tax credit
under this section in addition to those fees required for applications for the federal low-income
housing tax credit.
(5) (a) The Utah Housing Corporation shall determine the amount of the tax credit to
allocate to a qualifying housing sponsor in accordance with the qualified allocation plan of the
Utah Housing Corporation.
(b) (i) The Utah Housing Corporation shall allocate the tax credit to housing sponsors by

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issuing an allocation certificate to qualifying housing sponsors.
(ii) The allocation certificate under Subsection (5)(b)(i) shall specify the allowed
percentage of the federal low-income housing tax credit as determined by the Utah Housing
Corporation.
(c) The percentage specified in an allocation certificate may not exceed 100% of the
federal low-income housing tax credit.
(6) [If a partnership, an S corporation, or a limited liability company qualifies for the
credit provided in this section as a] A housing sponsor[, it] shall provide a copy of the allocation
certificate to [the taxpayers of the entity. (7) A taxpayer shall attach a copy of the allocation
certificate to any return upon which a credit is claimed under this section.] each taxpayer that is
issued a special low-income housing tax credit certificate.
(7) (a) A housing sponsor shall provide to the commission a list of:
(i) the taxpayers issued a special low-income housing tax credit certificate; and
(ii) for each taxpayer described in Subsection (7)(a)(i), the amount of tax credit listed on
the special low-income housing tax credit certificate.
(b) A housing sponsor shall provide the list required by Subsection (7)(a):
(i) to the commission;
(ii) on a form provided by the commission; and
(iii) with the housing sponsor's tax return for each taxable year for which the housing
sponsor issues a special low-income housing tax credit certificate described in this Subsection
(7).
(8) (a) All elections made by the taxpayer pursuant to Section 42, Internal Revenue Code,
shall apply to this section.
(b) (i) If a taxpayer is required to recapture a portion of any federal low-income housing
tax credit, the taxpayer shall also be required to recapture a portion of any state tax credits
authorized by this section.
(ii) The state recapture amount shall be equal to the percentage of the state tax credit that
equals the proportion the federal recapture amount bears to the original federal low-income

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housing tax credit amount subject to recapture.
(9) (a) Any tax credits returned to the Utah Housing Corporation in any year may be
reallocated within the same time period as provided in Section 42, Internal Revenue Code.
(b) [credits] Tax credits that are unallocated by the Utah Housing Corporation in any year
may be carried over for allocation in the subsequent year.
(10) (a) Amounts otherwise qualifying for the tax credit, but not allowable because the
tax credit exceeds the tax, may be carried back three years or may be carried forward five years
as a credit against the tax.
(b) Carryover tax credits under Subsection (10)(a) shall be applied against the tax:
(i) before the application of the tax credits earned in the current year; and
(ii) on a first-earned first-used basis.
(11) Any tax credit taken in this section may be subject to an annual audit by the
commission.
(12) The Utah Housing Corporation shall provide an annual report to the Revenue and
Taxation Interim Committee which shall include at least:
(a) the purpose and effectiveness of the [exemption] tax credits; and
(b) the benefits of the [exemption] tax credits to the state.
(13) The commission may, in consultation with the Utah Housing Corporation,
promulgate rules to implement this section.
Section 12. Section 59-10-507 is amended to read:
59-10-507. Return by partnership.
[Every] (1) For purposes of this section, "taxable year" means a year or other time period
that would be a taxable year of a partnership if the partnership were subject to taxation under this
chapter.
(2) A partnership having any income derived from sources in this state [(determined in
accordance with Section 59-10-303 )] shall make a return for the taxable year as prescribed by the
commission[, and shall attach to such return a copy of its federal partnership return for the same
year. For purposes of this section, "taxable year" means a year or period which would be a

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taxable year of the partnership if it were subject to tax under this chapter].
(3) For purposes of Subsection (2), a partnership's income derived from sources in this
state shall be determined in accordance with Section 59-10-303 .
Section 13. Section 59-10-514 is amended to read:
59-10-514. Place and time for filing returns.
[The income] (1) A tax return required by this chapter shall be filed with the
commission:
(a) except as provided in Subsection (1)(b), on or before the 15th day of the fourth month
following the [close] last day of the taxpayer's taxable year[.]; or
(b) notwithstanding Subsection (1)(a), on or before the day on which the return is due
under the Internal Revenue Code if:
(i) the return is an electronically filed individual income tax return; and
(ii) the Internal Revenue Code provides a due date for filing the electronically filed
individual income tax return that is different from the due date described in Subsection (1)(a).
(2) A person required to make and file a return under this chapter shall, without
assessment, notice, or demand, pay any tax due [thereon]:
(a) to the commission [or]; and
(b) before the due date [fixed] for filing [such] the return [(]determined without regard to
any extension of time for filing the return[)].
Section 14. Retrospective operation.
This act has retrospective operation for taxable years beginning on or after January 1,
2003.

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