H.B. 227

1

CORPORATE FRANCHISE AND INCOME
2 TAXES - EXEMPTION FOR BANKS
3 2005 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Wayne A. Harper
6
7 LONG TITLE
8 General Description:
9 This bill modifies the Corporate Franchise and Income Taxes chapter relating to the
10 taxation of banks.
11 Highlighted Provisions:
12 This bill:
13 . provides an exemption from corporate franchise and income taxes for banks; and
14 . makes technical changes.
15 Monies Appropriated in this Bill:
16 None
17 Other Special Clauses:
18 This bill takes effect for taxable years beginning on or after January 1, 2006.
19 Utah Code Sections Affected:
20 AMENDS:
21 59-7-102 (Contingently Superseded 05/02/05), as last amended by Chapters 76 and
22 286, Laws of Utah 2002
23
24 Be it enacted by the Legislature of the state of Utah:
25 Section 1. Section 59-7-102 (Contingently Superseded 05/02/05) is amended to read:
26 59-7-102 (Contingently Superseded 05/02/05). Exemptions.
27 (1) Except as provided in this section, the following are exempt from this chapter:

28 (a) an organization exempt under Section 501, Internal Revenue Code;
29 (b) an organization exempt under Section 528, Internal Revenue Code;
30 (c) an insurance company that is otherwise taxed on the insurance company's premiums
31 under Chapter 9, Taxation of Admitted Insurers;
32 (d) a building authority as defined in Section 17A-3-902 ;
33 (e) a farmers' cooperative; [or]
34 (f) a public agency, as defined in Section 11-13-103 , with respect to or as a result of an
35 ownership interest in:
36 (i) a project, as defined in Section 11-13-103 ; or
37 (ii) facilities providing additional project capacity, as defined in Section 11-13-103 [.];
38 or
39 (g) a bank as defined in Section 7-1-103 .
40 (2) Notwithstanding any other provision in this chapter or Chapter 8, Gross Receipts
41 Tax on Certain Corporations Not Required to Pay Corporate Franchise or Income Tax Act, a
42 person not otherwise subject to the tax imposed by this chapter or Chapter 8 is not subject to
43 the tax imposed by Sections 59-7-104 , 59-7-201 , 59-7-701 , and 59-8-104 , because of:
44 (a) that person's ownership of tangible personal property located at the premises of a
45 printer's facility in this state with which the person has contracted for printing; or
46 (b) the activities of the person's employees or agents who are:
47 (i) located solely at the premises of a printer's facility; and
48 (ii) performing services:
49 (A) related to:
50 (I) quality control;
51 (II) distribution; or
52 (III) printing services; and
53 (B) performed by the printer's facility in this state with which the person has contracted
54 for printing.
55 (3) Notwithstanding Subsection (1), an organization, company, authority, farmers'
56 cooperative, or public agency exempt from this chapter under Subsection (1) is subject to Part
57 8, Unrelated Business Income, to the extent provided in Part 8.
58 (4) Notwithstanding Subsection (1)(b), to the extent the income of an organization

59 described in Subsection (1)(b) is taxable for federal tax purposes under Section 528, Internal
60 Revenue Code, the organization's income is also taxable under this chapter.
61 Section 2. Effective date.
62 This bill takes effect for taxable years beginning on or after January 1, 2006.




Legislative Review Note
as of 1-18-05 4:41 PM

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

Office of Legislative Research and General Counsel