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H.B. 7 Enrolled

                 

INDIVIDUAL INCOME TAX -

                 
CONTRIBUTIONS FOR EDUCATION

                 
2005 GENERAL SESSION

                 
STATE OF UTAH

                 
Sponsor: Sheryl L. Allen

                 
                  LONG TITLE
                  General Description:
                      This bill modifies the Individual Income Tax Act relating to individual income tax
                  contributions for education.
                  Highlighted Provisions:
                      This bill:
                      .    repeals language designating certain individual income tax contributions to higher
                  education because the contributions failed to generate $30,000 per year for three
                  consecutive taxable years and the State Tax Commission was required by statute to
                  remove the designation for the contribution from tax returns and not collect the
                  contribution from individuals;
                      .    repeals language designating certain individual income tax contributions to a
                  chapter of the Utah Public Education Foundation because the Utah Public Education
                  Foundation is no longer in existence;
                      .    authorizes an individual income tax contribution to be made to a school district if
                  the school district has not established a foundation;
                      .    provides that if a person making a contribution to a school district foundation does
                  not designate a particular school district foundation to receive the contribution, the
                  contribution shall be made to the Utah State Office of Education to be distributed to
                  one or more associations of foundations;
                      .    provides that if a person making a contribution to a school district does not
                  designate a particular school district to receive the contribution, the contribution
                  shall be made to the Utah State Office of Education; and


                      .    makes technical changes.
                  Monies Appropriated in this Bill:
                      None
                  Other Special Clauses:
                      This bill has retrospective operation for taxable years beginning on or after January 1,
                  2005.
                  Utah Code Sections Affected:
                  AMENDS:
                      59-10-549, as last amended by Chapter 234, Laws of Utah 2004
                      59-10-551, as last amended by Chapter 162, Laws of Utah 2003
                 
                  Be it enacted by the Legislature of the state of Utah:
                      Section 1. Section 59-10-549 is amended to read:
                       59-10-549. Contributions for education.
                      (1) Except as provided in Section 59-10-551 , a taxpayer that files a return pursuant to
                  Section 59-10-502 may designate on the return a contribution as provided in this section to:
                      [(a) the State Board of Regents created by Section 53B-1-103 for:]
                      [(i) libraries; or]
                      [(ii) library equipment;]
                      [(b) an institution of higher education created by Section 53B-2-101 for:]
                      [(i) libraries; or]
                      [(ii) library equipment;]
                      [(c)] (a) (i) the foundation of any school district if that foundation is exempt from federal
                  income taxation under Section 501(c)(3), Internal Revenue Code; or
                      (ii) a school district described in Title 53A, Chapter 2, School Districts, if the school
                  district has not established a foundation;
                      [(d) a chapter of the Utah Public Education Foundation;]
                      [(e)] (b) a college campus of the Utah College of Applied Technology listed in Section


                  53B-2a-105; or
                      [(f)] (c) for taxable years beginning on or after January 1, 2004, but beginning on or
                  before December 31, 2006, the Uniform School Fund.
                      (2) (a) A taxpayer may designate as a contribution under this section any whole dollar
                  amount of $1 or more.
                      (b) (i) If the taxpayer is owed an individual income tax refund for the taxable year, the
                  amount of a contribution under this section shall be deducted from the taxpayer's individual
                  income tax refund.
                      (ii) If the taxpayer is not owed an individual income tax refund for the taxable year, the
                  taxpayer may remit a contribution under this section with the taxpayer's individual income tax
                  return.
                      (c) If a taxpayer files a joint return, the contribution under this section shall be a joint
                  contribution.
                      (d) A contribution under this section is irrevocable during the taxable year for which the
                  taxpayer makes the contribution.
                      [(3) If a taxpayer designates an amount as a contribution under Subsection (1)(b), but
                  does not designate a particular institution of higher education to receive the contribution, the
                  contribution shall be made to the State Board of Regents for the purposes described in
                  Subsection (1)(a).]
                      [(4)] (3) If a taxpayer designates an amount as a contribution under:
                      (a) Subsection (1)[(c)] (a) (i), but does not designate a particular school district
                  foundation to receive the contribution, the contribution shall be made to [the Utah Public
                  Education Foundation.] the Utah State Office of Education to be distributed to one or more
                  associations of foundations:
                      (i) if those foundations that are members of the association are established in accordance
                  with Section 53A-4-205 ; and
                      (ii) as determined by the Utah State Office of Education; or
                      (b) Subsection (1)(a)(ii), but does not designate a particular school district to receive the


                  contribution, the contribution shall be made to the Utah State Office of Education.
                      [(5)] (4) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
                  the commission may make rules to implement this section.
                      [(6)] (5) The commission shall:
                      (a) determine annually the total amount of contributions designated in accordance with
                  this section; and
                      (b) report this amount to the state treasurer.
                      [(7)] (6) The state treasurer shall credit any contributions reported to the state treasurer in
                  accordance with Subsection [(6)] (5):
                      (a) subject to [Subsections] Subsection (3) [and (4)], if a taxpayer designates a
                  contribution to an entity listed in [Subsections] Subsection (1)(a) [through (e)] or (b) in
                  accordance with this section, to the entity that is designated by the taxpayer; or
                      (b) if a taxpayer designates a contribution to the Uniform School Fund under Subsection
                  (1)[(f)](c) in accordance with this section, to the Uniform School Fund.
                      Section 2. Section 59-10-551 is amended to read:
                       59-10-551. Removal of designation and prohibitions on collection for certain
                  contributions on income tax form -- Conditions for removal and prohibitions on collection
                  -- Commission reporting requirements.
                      (1) (a) Beginning on January 1, 1998, if a contribution or combination of contributions
                  described in Subsection (1)(b) generate less than $30,000 per year for three consecutive years, the
                  commission shall remove the designation for the contribution from the income tax return and
                  may not collect the contribution from a resident or nonresident individual beginning two taxable
                  years after the three-year period for which the contribution generates less than $30,000 per year.
                      (b) The following contributions apply to Subsection (1)(a):
                      (i) the contribution provided for in Section 59-10-530 ;
                      (ii) the contribution provided for in Section 59-10-530.5 ;
                      [(iii) the sum of the contributions provided for in:]
                      [(A) Subsection 59-10-549 (1)(a); and]


                      [(B) Subsection 59-10-549 (1)(b);]
                      [(iv)] (iii) the sum of the contributions provided for in[: (A)] Subsection
                  59-10-549 (1)[(c)] (a); [and]
                      [(B) Subsection 59-10-549 (1)(d);]
                      [(v)] (iv) the contribution provided for in Subsection 59-10-549 (1)[(e)](b);
                      [(vi)] (v) the contribution provided for in Section 59-10-550 ; or
                      [(vii)] (vi) the contribution provided for in Section 59-10-550.1 .
                      (2) If the commission removes the designation for a contribution under Subsection (1),
                  the commission shall report to the Revenue and Taxation Interim Committee that the commission
                  removed the designation on or before the November interim meeting of the year in which the
                  commission determines to remove the designation.
                      Section 3. Retrospective operation.
                      This bill has retrospective operation for taxable years beginning on or after January 1,
                  2005.


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