H.B. 354

1

TAX AMENDMENTS
2 2006 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: John Dougall
5 Senate Sponsor: ____________
6
7 LONG TITLE
8 General Description:
9 This bill amends the Individual Income Tax Act, the Sales and Use Tax Act, and other
10 provisions relating to income taxation and sales and use taxation.
11 Highlighted Provisions:
12 This bill:
13 . imposes a single income tax rate for purposes of the Individual Income Tax Act;
14 . changes the basis for imposing individual income taxes from federal taxable income
15 to federal adjusted gross income;
16 . provides a sales and use tax exemption for sales of food and food ingredients;
17 . increases certain local option sales and use tax rates;
18 . addresses the distribution of revenues generated by the tax imposed in accordance
19 with the Local Sales and Use Tax Act to counties, cities, and towns;
20 . repeals and modifies additions to income of an individual, an estate, or a trust, and
21 repeals related provisions;
22 . repeals subtractions from income of an individual, an estate, or a trust, and repeals
23 related provisions;
24 . provides subtractions from income of an individual, an estate, or a trust;
25 . repeals tax credits and related provisions;
26 . modifies tax credits;
27 . repeals and reenacts tax credits for:

28 . a tax paid to another state; and
29 . a nonresident shareholder of an S corporation;
30 . provides income tax credits for:
31 . certain charitable contributions;
32 . homeowners; and
33 . claimants on the basis of filing status;
34 . requires certain tax credits claimed by a nonresident person, nonresident estate, or
35 nonresident trust to be apportioned;
36 . repeals individual income tax contributions and related provisions;
37 . modifies the calculation of income taxes on estates and trusts;
38 . addresses filing status for purposes of individual income taxes;
39 . modifies provisions relating to the administration of income taxes;
40 . modifies the calculation of income taxes on nonresident individuals;
41 . repeals a sales tax refund for qualified emergency food agencies;
42 . modifies the duties of the State Community Services Office relating to qualified
43 emergency food agencies;
44 . repeals and modifies definitions;
45 . repeals obsolete language;
46 . grants rulemaking authority to the State Tax Commission; and
47 . makes technical changes.
48 Monies Appropriated in this Bill:
49 None
50 Other Special Clauses:
51 This bill provides effective dates.
52 This bill provides revisor instructions.
53 Utah Code Sections Affected:
54 AMENDS:
55 9-4-802, as last amended by Chapter 132, Laws of Utah 2003
56 9-4-803, as last amended by Chapter 132, Laws of Utah 2003
57 9-4-1404, as last amended by Chapter 162, Laws of Utah 2001
58 19-1-403, as last amended by Chapter 108 and renumbered and amended by Chapter

59 294, Laws of Utah 2005
60 19-1-404, as renumbered and amended by Chapter 294, Laws of Utah 2005
61 19-2-104, as last amended by Chapter 131, Laws of Utah 2003
62 22-3-505, as enacted by Chapter 285, Laws of Utah 2004
63 26-18a-3, as last amended by Chapter 1, Laws of Utah 1997
64 26-18a-4, as last amended by Chapter 1, Laws of Utah 1997
65 53B-8a-106, as last amended by Chapter 109, Laws of Utah 2005
66 53B-8a-112, as enacted by Chapter 4, Laws of Utah 1996, Second Special Session
67 59-2-102, as last amended by Chapters 162, 243, 281 and 303, Laws of Utah 2004
68 59-6-101, as last amended by Chapter 3, Laws of Utah 1988
69 59-6-102, as last amended by Chapter 28, Laws of Utah 2002
70 59-7-607, as last amended by Chapter 113, Laws of Utah 2005
71 59-7-703, as last amended by Chapter 110, Laws of Utah 2003
72 59-10-103, as last amended by Chapter 241, Laws of Utah 2005
73 59-10-104, as last amended by Chapters 323 and 324, Laws of Utah 2001
74 59-10-114, as last amended by Chapters 109 and 241, Laws of Utah 2005
75 59-10-115, as renumbered and amended by Chapter 2, Laws of Utah 1987
76 59-10-116, as last amended by Chapter 79, Laws of Utah 2004
77 59-10-117, as last amended by Chapters 311 and 345, Laws of Utah 1995
78 59-10-119, as renumbered and amended by Chapter 2, Laws of Utah 1987
79 59-10-120, as renumbered and amended by Chapter 2, Laws of Utah 1987
80 59-10-121, as renumbered and amended by Chapter 2, Laws of Utah 1987
81 59-10-122, as renumbered and amended by Chapter 2, Laws of Utah 1987
82 59-10-123, as renumbered and amended by Chapter 2, Laws of Utah 1987
83 59-10-201, as last amended by Chapter 109, Laws of Utah 2005
84 59-10-201.1, as enacted by Chapter 345, Laws of Utah 1995
85 59-10-202, as last amended by Chapter 3, Laws of Utah 2003, Second Special Session
86 59-10-204, as last amended by Chapter 345, Laws of Utah 1995
87 59-10-205, as last amended by Chapter 345, Laws of Utah 1995
88 59-10-207, as last amended by Chapter 345, Laws of Utah 1995
89 59-10-210, as last amended by Chapter 345, Laws of Utah 1995

90 59-10-529, as last amended by Chapter 35, Laws of Utah 2002
91 59-12-104, as last amended by Chapters 158, 203, 209, 240 and 246, Laws of Utah
92 2005
93 59-12-204 (Effective 07/01/06), as last amended by Chapters 312 and 337, Laws of
94 Utah 2003
95 59-12-205 (Effective 07/01/06), as last amended by Chapter 158, Laws of Utah 2005
96 59-12-1102 (See 59-1-1201 re: Eff), as last amended by Chapter 255, Laws of Utah
97 2004
98 59-13-202, as last amended by Chapter 86, Laws of Utah 2000
99 62A-4a-607, as last amended by Chapter 327, Laws of Utah 2001
100 63-38f-402, as renumbered and amended by Chapter 148, Laws of Utah 2005
101 63-38f-412, as renumbered and amended by Chapter 148, Laws of Utah 2005
102 63-38f-413, as renumbered and amended by Chapter 148, Laws of Utah 2005
103 63-38f-501, as renumbered and amended by Chapter 148, Laws of Utah 2005
104 63-38f-502, as renumbered and amended by Chapter 148, Laws of Utah 2005
105 63-38f-503, as renumbered and amended by Chapter 148, Laws of Utah 2005
106 63-38f-1102, as renumbered and amended by Chapter 148, Laws of Utah 2005
107 63-38f-1110, as renumbered and amended by Chapter 148, Laws of Utah 2005
108 63-38f-1203, as renumbered and amended by Chapter 148, Laws of Utah 2005
109 63-55-209, as last amended by Chapters 37 and 90, Laws of Utah 2004
110 63-55-259, as last amended by Chapters 232 and 289, Laws of Utah 2005
111 72-12-107, as renumbered and amended by Chapter 270, Laws of Utah 1998
112 ENACTS:
113 59-10-118.1, Utah Code Annotated 1953
114 59-10-136, Utah Code Annotated 1953
115 59-10-209.1, Utah Code Annotated 1953
116 59-10-1001, Utah Code Annotated 1953
117 59-10-1002, Utah Code Annotated 1953
118 59-10-1004, Utah Code Annotated 1953
119 59-10-1005, Utah Code Annotated 1953
120 59-10-1006, Utah Code Annotated 1953

121 59-10-1007, Utah Code Annotated 1953
122 59-10-1101, Utah Code Annotated 1953
123 59-10-1102, Utah Code Annotated 1953
124 RENUMBERS AND AMENDS:
125 59-10-1003, (Renumbered from 59-10-106, as renumbered and amended by Chapter 2,
126 Laws of Utah 1987)
127 59-10-1103, (Renumbered from 59-10-108.2, as last amended by Chapter 110, Laws of
128 Utah 2003)
129 REPEALS:
130 23-14-14.1, as enacted by Chapter 162, Laws of Utah 2003
131 31A-32a-101, as enacted by Chapter 131, Laws of Utah 1999
132 31A-32a-102, as last amended by Chapter 116, Laws of Utah 2001
133 31A-32a-103, as enacted by Chapter 131, Laws of Utah 1999
134 31A-32a-104, as enacted by Chapter 131, Laws of Utah 1999
135 31A-32a-105, as enacted by Chapter 131, Laws of Utah 1999
136 31A-32a-106, as last amended by Chapter 53, Laws of Utah 2001
137 31A-32a-107, as enacted by Chapter 131, Laws of Utah 1999
138 59-10-102, as renumbered and amended by Chapter 2, Laws of Utah 1987
139 59-10-104.1, as enacted by Chapter 323, Laws of Utah 2001
140 59-10-105, as last amended by Chapter 323, Laws of Utah 2001
141 59-10-107, as renumbered and amended by Chapter 2, Laws of Utah 1987
142 59-10-108, as last amended by Chapter 73, Laws of Utah 2001
143 59-10-108.1, as enacted by Chapter 272, Laws of Utah 1999
144 59-10-108.5, as last amended by Chapter 25, Laws of Utah 1995
145 59-10-108.7, as last amended by Chapter 148, Laws of Utah 2005
146 59-10-109, as last amended by Chapter 198, Laws of Utah 2003
147 59-10-111, as last amended by Chapter 96, Laws of Utah 1987
148 59-10-112, as last amended by Chapter 345, Laws of Utah 1995
149 59-10-127, as last amended by Chapters 108 and 294, Laws of Utah 2005
150 59-10-128, as last amended by Chapter 198, Laws of Utah 2003
151 59-10-129, as last amended by Chapter 113, Laws of Utah 2005

152 59-10-130, as last amended by Chapter 145, Laws of Utah 2002
153 59-10-131, as last amended by Chapter 59, Laws of Utah 1999
154 59-10-132, as last amended by Chapter 59, Laws of Utah 1999
155 59-10-133, as last amended by Chapter 263, Laws of Utah 2005
156 59-10-134, as last amended by Chapters 217, 244 and 294, Laws of Utah 2005
157 59-10-134.1, as enacted by Chapter 312, Laws of Utah 2003
158 59-10-134.2, as enacted by Chapter 290, Laws of Utah 2005
159 59-10-135, as enacted by Chapter 62, Laws of Utah 2002
160 59-10-209, as last amended by Chapter 345, Laws of Utah 1995
161 59-10-530, as last amended by Chapter 12, Laws of Utah 1997
162 59-10-530.5, as last amended by Chapter 132, Laws of Utah 2003
163 59-10-546, as renumbered and amended by Chapter 2, Laws of Utah 1987
164 59-10-547, as last amended by Chapter 269, Laws of Utah 1998
165 59-10-548, as last amended by Chapters 107 and 256, Laws of Utah 2002
166 59-10-549, as last amended by Chapter 208, Laws of Utah 2005
167 59-10-550, as last amended by Chapters 1 and 12, Laws of Utah 1997
168 59-10-550.1, as enacted by Chapter 162, Laws of Utah 2003
169 59-10-551, as last amended by Chapter 208, Laws of Utah 2005
170 59-12-901, as last amended by Chapter 312, Laws of Utah 2003
171 59-12-902, as last amended by Chapter 18, Laws of Utah 2004
172
173 Be it enacted by the Legislature of the state of Utah:
174 Section 1. Section 9-4-802 is amended to read:
175 9-4-802. Purposes of Homeless Coordinating Committee -- Uses of Pamela
176 Atkinson Homeless Trust Account.
177 (1) (a) The Homeless Coordinating Committee shall work to ensure that services
178 provided to the homeless by state agencies, local governments, and private organizations are
179 provided in a cost-effective manner.
180 (b) Programs funded by the committee shall emphasize emergency housing and
181 self-sufficiency, including placement in meaningful employment or occupational training
182 activities and, where needed, special services to meet the unique needs of the homeless who

183 have families with children, or who are mentally ill, disabled, or suffer from other serious
184 challenges to employment and self-sufficiency.
185 (c) The committee may also fund treatment programs to ameliorate the effects of
186 substance abuse or a disability.
187 (2) The committee members designated in Subsection 9-4-801 (2) shall:
188 (a) award contracts funded by the Pamela Atkinson Homeless Trust Account with the
189 advice and input of those designated in Subsection 9-4-801 (3);
190 (b) consider need, diversity of geographic location, coordination with or enhancement
191 of existing services, and the extensive use of volunteers; and
192 (c) give priority for funding to programs that serve the homeless who are mentally ill
193 and who are in families with children.
194 (3) (a) In any fiscal year, no more than 80% of the funds in the Pamela Atkinson
195 Homeless Trust Account may be allocated to organizations that provide services only in Salt
196 Lake, Davis, Weber, and Utah Counties.
197 (b) The committee may[:(i)] expend up to 3% of its annual appropriation for
198 administrative costs associated with the allocation of funds from the Pamela Atkinson
199 Homeless Trust Account, and up to 2% of its annual appropriation for marketing the account
200 and soliciting donations to the account[; and].
201 [(ii) pay for the initial costs of the State Tax Commission in implementing Section
202 59-10-530.5 from the account.]
203 (4) (a) The committee may not expend, except as provided in Subsection (4)(b), an
204 amount equal to the greater of $50,000 or 20% of the amount donated to the Pamela Atkinson
205 Homeless Trust Account during fiscal year 1988-89.
206 (b) If there are decreases in contributions to the account, the committee may expend
207 funds held in reserve to provide program stability, but the committee shall reimburse the
208 amounts of those expenditures to the reserve fund.
209 (5) The committee shall make an annual report to the Economic Development and
210 Human Resources Appropriations Subcommittee regarding the programs and services funded
211 by contributions to the Pamela Atkinson Homeless Trust Account.
212 (6) The moneys in the Pamela Atkinson Homeless Trust Account shall be invested by
213 the state treasurer according to the procedures and requirements of Title 51, Chapter 7, State

214 Money Management Act, except that all interest or other earnings derived from the fund
215 moneys shall be deposited in the fund.
216 Section 2. Section 9-4-803 is amended to read:
217 9-4-803. Creation of Pamela Atkinson Homeless Trust Account.
218 (1) There is created a restricted account within the General Fund to be known as the
219 Pamela Atkinson Homeless Trust Account.
220 (2) Private contributions received under this section [and Section 59-10-530.5 ] shall be
221 deposited into the account to be used only for programs described in Section 9-4-802 .
222 (3) Money shall be appropriated from the account to the State Homeless Coordinating
223 Committee in accordance with the Utah Budgetary Procedures Act.
224 (4) The State Homeless Coordinating Committee may accept transfers, grants, gifts,
225 bequests, or any money made available from any source to implement this part.
226 Section 3. Section 9-4-1404 is amended to read:
227 9-4-1404. Duties of office.
228 The office shall:
229 (1) coordinate state activities designed to reduce poverty;
230 (2) encourage entities in the private sector to participate in efforts to ameliorate poverty
231 in the community;
232 (3) cooperate with agencies of local, state, and federal government in reducing poverty
233 and implementing community, social, and economic programs;
234 (4) receive and expend funds for the purposes outlined in this part;
235 (5) enter into contracts with and award grants to public and private nonprofit agencies
236 and organizations;
237 (6) develop a state plan based on needs identified by community action agencies and
238 community action statewide organizations;
239 (7) designate community action agencies to receive funds through the Community
240 Services Block Grant program;
241 (8) fund community action agencies and community action statewide organizations;
242 (9) make rules in conjunction with the division pursuant to Title 63, Chapter 46a, Utah
243 Administrative Rulemaking Act, to carry out the purposes of this part;
244 (10) provide assistance to local governments or private organizations for the purpose of

245 establishing and operating a community action agency;
246 (11) provide technical assistance to community action agencies to improve program
247 planning, program development, administration, and the mobilization of public and private
248 resources;
249 (12) convene public meetings which provide citizens the opportunity to comment on
250 public policies and programs to reduce poverty;
251 (13) advise the governor and Legislature of the nature and extent of poverty in the state
252 and make recommendations concerning changes in state and federal policies and programs;
253 (14) encourage Utah's nonprofit humanitarian assistance agencies serving low-income
254 persons by facilitating, coordinating, training, partnerships, and providing technical assistance
255 in addressing Utah's low-income persons by enhancing management, improving service and
256 program delivery, and preserving flexibility and local initiative;
257 (15) develop and implement management goals which fulfill the Community Services
258 Block Grant mission, state requirements, and the mandates of federal legislation;
259 (16) prepare a Community Services Block Grant plan which contains provisions
260 describing how the state will carry out the assurances of the Community Services Block Grant
261 Act;
262 (17) act as the state agency responsible for the evaluation and improvement of
263 emergency food assistance services in the state;
264 (18) monitor the impact of social policies on the emergency food network;
265 (19) provide training and technical assistance to all grantees to assist them in program
266 development and implementation, compliance with state and federal regulations, and reporting
267 and management information systems; and
268 [(20) certify, monitor, and decertify qualified emergency food agencies for purposes of
269 the sales tax refund under Section 59-12-902 ; and]
270 [(21)] (20) administer other programs to alleviate poverty assigned to the office.
271 Section 4. Section 19-1-403 is amended to read:
272 19-1-403. Clean Fuels Vehicle Fund -- Contents -- Loans or grants made with
273 fund monies.
274 (1) (a) There is created a revolving fund known as the Clean Fuels Vehicle Fund.
275 (b) The fund consists of:

276 (i) appropriations to the fund;
277 (ii) other public and private contributions made under Subsection (1)(d);
278 (iii) interest earnings on cash balances; and
279 (iv) all monies collected for loan repayments and interest on loans.
280 (c) All money appropriated to the fund is nonlapsing.
281 (d) The department may accept contributions from other public and private sources for
282 deposit into the fund.
283 (2) (a) Except as provided in Subsection (3), the department may make loans or grants
284 with monies available in the fund for:
285 (i) the conversion of private sector business vehicles and government vehicles to use a
286 clean fuel, if certified by the Air Quality Board; or
287 (ii) the purchase of OEM vehicles for use as private sector business vehicles or
288 government vehicles.
289 (b) The amount of a loan for any vehicle may not exceed:
290 (i) the actual cost of the vehicle conversion;
291 (ii) the incremental cost of purchasing the OEM vehicle; or
292 (iii) the cost of purchasing the OEM vehicle if there is no documented incremental
293 cost.
294 (c) The amount of a grant for any vehicle may not exceed:
295 (i) 50% of the actual cost of the vehicle conversion minus the amount of any tax credit
296 claimed under Section 59-7-605 [or 59-10-127 ] for the vehicle for which a grant is requested;
297 or
298 (ii) 50% of the incremental cost of purchasing an OEM vehicle minus the amount of
299 any tax credit claimed under Section 59-7-605 [or 59-10-127 ] for the vehicle for which a grant
300 is requested.
301 (d) (i) Except as provided in Subsection (3) and subject to the availability of monies in
302 the fund, the department may make loans for the purchase of vehicle refueling equipment for
303 private sector business vehicles and government vehicles.
304 (ii) The maximum amount loaned per installation of refueling equipment may not
305 exceed the actual cost of the refueling equipment.
306 (3) Notwithstanding Subsection (2)(a) or (2)(d), the department may not make a loan or

307 grant under this part with respect to an electric-hybrid vehicle.
308 (4) Administrative costs of the fund shall be paid from the fund.
309 (5) (a) The fund balance may not exceed $10,000,000.
310 (b) Interest on cash balances and repayment of loans in excess of the amount necessary
311 to maintain the fund balance at $10,000,000 shall be deposited in the General Fund.
312 (6) (a) Loans made from monies in the fund shall be supported by loan documents
313 evidencing the intent of the borrower to repay the loan.
314 (b) The original loan documents shall be filed with the Division of Finance and a copy
315 shall be filed with the department.
316 Section 5. Section 19-1-404 is amended to read:
317 19-1-404. Department duties -- Rulemaking -- Loan repayment.
318 (1) The department shall:
319 (a) establish and administer the loan and grant program to encourage government
320 officials and private sector business vehicle owners and operators to obtain and use clean-fuel
321 vehicles; and
322 (b) make rules in accordance with Title 63, Chapter 46a, Utah Administrative
323 Rulemaking Act:
324 (i) specifying the amount of money in the fund to be dedicated annually for grants;
325 (ii) limiting the amount of a grant given to any person claiming a tax credit under
326 Section 59-7-605 [or 59-10-127 ] for the motor vehicle for which a grant is requested to assure
327 that the sum of the tax credit and grant does not exceed:
328 (A) 50% of the incremental cost of the OEM vehicle; or
329 (B) 50% of the cost of conversion equipment;
330 (iii) limiting the number of motor vehicles per fleet operator that may be eligible for a
331 grant in a year;
332 (iv) specifying criteria the department shall consider in prioritizing and awarding loans
333 and grants;
334 (v) specifying repayment periods;
335 (vi) specifying procedures for:
336 (A) awarding loans and grants; and
337 (B) collecting loans; and

338 (vii) requiring all loan and grant applicants to:
339 (A) apply on forms provided by the department;
340 (B) agree in writing to use the clean fuel for which each vehicle is converted or
341 purchased using loan or grant proceeds for a minimum of 70% of the vehicle miles traveled
342 beginning from the time of conversion or purchase of the vehicle;
343 (C) agree in writing to notify the department if a vehicle converted or purchased using
344 loan or grant proceeds becomes inoperable through mechanical failure or accident and to
345 pursue a remedy outlined in department rules;
346 (D) provide reasonable data to the department on vehicles converted or purchased with
347 loan or grant proceeds; and
348 (E) submit vehicles converted or purchased with loan or grant proceeds to inspections
349 by the department as required in department rules and as necessary for administration of the
350 loan and grant program.
351 (2) (a) When developing repayment schedules for the loans, the department shall
352 consider the projected savings from use of the clean-fuel vehicle.
353 (b) A repayment schedule may not exceed ten years.
354 (c) Loans made from the fund for private sector vehicles shall be made at an interest
355 rate equal to the annual return earned in the state treasurer's Public Treasurer's Pool as
356 determined the month immediately preceding the closing date of the loan.
357 (d) Loans made from the fund for government vehicles shall be made at a zero interest
358 rate.
359 (3) The Division of Finance is responsible for collection of and accounting for the
360 loans and has custody of all loan documents, including all notes and contracts, evidencing the
361 indebtedness of the fund.
362 Section 6. Section 19-2-104 is amended to read:
363 19-2-104. Powers of board.
364 (1) The board may make rules in accordance with Title 63, Chapter 46a, Utah
365 Administrative Rulemaking Act:
366 (a) regarding the control, abatement, and prevention of air pollution from all sources
367 and the establishment of the maximum quantity of air contaminants that may be emitted by any
368 air contaminant source;

369 (b) establishing air quality standards;
370 (c) requiring persons engaged in operations which result in air pollution to:
371 (i) install, maintain, and use emission monitoring devices, as the board finds necessary;
372 (ii) file periodic reports containing information relating to the rate, period of emission,
373 and composition of the air contaminant; and
374 (iii) provide access to records relating to emissions which cause or contribute to air
375 pollution;
376 (d) implementing 15 U.S.C.A. 2601 et seq. Toxic Substances Control Act, Subchapter
377 II - Asbestos Hazard Emergency Response, and reviewing and approving asbestos management
378 plans submitted by local education agencies under that act;
379 (e) establishing a requirement for a diesel emission opacity inspection and maintenance
380 program for diesel-powered motor vehicles;
381 (f) implementing an operating permit program as required by and in conformity with
382 Titles IV and V of the federal Clean Air Act Amendments of 1990;
383 (g) establishing requirements for county emissions inspection and maintenance
384 programs after obtaining agreement from the counties that would be affected by the
385 requirements;
386 (h) with the approval of the governor, implementing in air quality nonattainment areas
387 employer-based trip reduction programs applicable to businesses having more than 100
388 employees at a single location and applicable to federal, state, and local governments to the
389 extent necessary to attain and maintain ambient air quality standards consistent with the state
390 implementation plan and federal requirements under the standards set forth in Subsection (2);
391 and
392 (i) implementing lead-based paint remediation training, certification, and performance
393 requirements in accordance with 15 U.S.C.A. 2601 et seq., Toxic Substances Control Act,
394 Subchapter IV -- Lead Exposure Reduction, Sections 402 and 406.
395 (2) When implementing Subsection (1)(h) the board shall take into consideration:
396 (a) the impact of the business on overall air quality; and
397 (b) the need of the business to use automobiles in order to carry out its business
398 purposes.
399 (3) The board may:

400 (a) hold hearings relating to any aspect of or matter in the administration of this chapter
401 and compel the attendance of witnesses and the production of documents and other evidence,
402 administer oaths and take testimony, and receive evidence as necessary;
403 (b) issue orders necessary to enforce the provisions of this chapter, enforce the orders
404 by appropriate administrative and judicial proceedings, and institute judicial proceedings to
405 secure compliance with this chapter;
406 (c) settle or compromise any civil action initiated to compel compliance with this
407 chapter and the rules made under this chapter;
408 (d) secure necessary scientific, technical, administrative, and operational services,
409 including laboratory facilities, by contract or otherwise;
410 (e) prepare and develop a comprehensive plan or plans for the prevention, abatement,
411 and control of air pollution in this state;
412 (f) encourage voluntary cooperation by persons and affected groups to achieve the
413 purposes of this chapter;
414 (g) encourage local units of government to handle air pollution within their respective
415 jurisdictions on a cooperative basis and provide technical and consultative assistance to them;
416 (h) encourage and conduct studies, investigations, and research relating to air
417 contamination and air pollution and their causes, effects, prevention, abatement, and control;
418 (i) determine by means of field studies and sampling the degree of air contamination
419 and air pollution in all parts of the state;
420 (j) monitor the effects of the emission of air contaminants from motor vehicles on the
421 quality of the outdoor atmosphere in all parts of this state and take appropriate action with
422 respect to them;
423 (k) collect and disseminate information and conduct educational and training programs
424 relating to air contamination and air pollution;
425 (l) advise, consult, contract, and cooperate with other agencies of the state, local
426 governments, industries, other states, interstate or interlocal agencies, the federal government,
427 and with interested persons or groups;
428 (m) consult, upon request, with any person proposing to construct, install, or otherwise
429 acquire an air contaminant source in the state concerning the efficacy of any proposed control
430 device, or system for this source, or the air pollution problem which may be related to the

431 source, device, or system, but a consultation does not relieve any person from compliance with
432 this chapter, the rules adopted under it, or any other provision of law;
433 (n) accept, receive, and administer grants or other funds or gifts from public and
434 private agencies, including the federal government, for the purpose of carrying out any of the
435 functions of this chapter;
436 (o) require the owner and operator of each new source which directly emits or has the
437 potential to emit 100 tons per year or more of any air contaminant or the owner or operator of
438 each existing source which by modification will increase emissions or have the potential of
439 increasing emissions by 100 tons per year or more of any air contaminant, to pay a fee
440 sufficient to cover the reasonable costs of:
441 (i) reviewing and acting upon the notice required under Section 19-2-108 ; and
442 (ii) implementing and enforcing requirements placed on the sources by any approval
443 order issued pursuant to notice, not including any court costs associated with any enforcement
444 action;
445 (p) assess and collect noncompliance penalties as required in Section 120 of the federal
446 Clean Air Act, 42 U.S.C. Sec. 7420;
447 (q) meet the requirements of federal air pollution laws;
448 (r) establish work practice, certification, and clearance air sampling requirements for
449 persons who:
450 (i) contract for hire to conduct demolition, renovation, salvage, encapsulation work
451 involving friable asbestos-containing materials, or asbestos inspections; [or]
452 (ii) conduct work described in Subsection (3)(r)(i) in areas to which the general public
453 has unrestrained access or in school buildings that are subject to the federal Asbestos Hazard
454 Emergency Response Act of 1986;
455 (iii) conduct asbestos inspections in facilities subject to 15 U.S.C.A. 2601 et seq.,
456 Toxic Substances Control Act, Subchapter II - Asbestos Hazard Emergency Response; or
457 (iv) conduct lead paint inspections in facilities subject to 15 U.S.C.A. 2601 et seq.,
458 Toxic Substances Control Act, Subchapter IV -- Lead Exposure Reduction;
459 (s) establish certification requirements for persons required under 15 U.S.C.A. 2601 et
460 seq., Toxic Substances Control Act, Subchapter II - Asbestos Hazard Emergency Response, to
461 be accredited as inspectors, management planners, abatement project designers, asbestos

462 abatement contractors and supervisors, or asbestos abatement workers;
463 (t) establish certification requirements for asbestos project monitors, which shall
464 provide for experience-based certification of persons who, prior to establishment of the
465 certification requirements, had received relevant asbestos training, as defined by rule, and had
466 acquired at least 1,000 hours of experience as project monitors;
467 (u) establish certification procedures and requirements for certification of the
468 conversion of a motor vehicle to a clean-fuel vehicle, certifying the vehicle is eligible for the
469 tax credit granted in Section 59-7-605 [or 59-10-127 ];
470 (v) establish a program to certify private sector air quality permitting professionals
471 (AQPP), as described in Section 19-2-109.5 ; and
472 (w) establish certification requirements for persons required under 15 U.S.C.A. 2601 et
473 seq., Toxic Control Act, Subchapter IV -- Lead Exposure Reduction, to be accredited as
474 inspectors, risk assessors, supervisors, project designers, or abatement workers.
475 (4) Any rules adopted under this chapter shall be consistent with provisions of federal
476 laws, if any, relating to control of motor vehicles or motor vehicle emissions.
477 (5) Nothing in this chapter authorizes the board to require installation of or payment for
478 any monitoring equipment by the owner or operator of a source if the owner or operator has
479 installed or is operating monitoring equipment that is equivalent to equipment which the board
480 would require under this section.
481 Section 7. Section 22-3-505 is amended to read:
482 22-3-505. Income taxes.
483 (1) A tax required to be paid by a trustee based on receipts allocated to income must be
484 paid from income.
485 (2) A tax required to be paid by a trustee based on receipts allocated to principal must
486 be paid from principal, even if the tax is called an income tax by the taxing authority.
487 (3) A tax required to be paid by a trustee on the trust's share of an entity's taxable
488 income must be paid proportionately:
489 (a) from income to the extent that receipts from the entity are allocated to income; and
490 (b) from principal to the extent that:
491 (i) receipts from the entity are allocated to principal; and
492 (ii) the trust's share of the entity's state taxable income as defined in Section

493 59-10-201.1 exceeds the total receipts described in Subsections (3)(a) and (3)(b)(i).
494 (4) For purposes of this section, receipts allocated to principal or income must be
495 reduced by the amount distributed to a beneficiary from principal or income for which the trust
496 receives a deduction in calculating the tax.
497 Section 8. Section 26-18a-3 is amended to read:
498 26-18a-3. Purpose of committee.
499 (1) The committee shall work to:
500 (a) provide financial assistance for initial medical expenses of children who need organ
501 transplants;
502 (b) obtain the assistance of volunteer and public service organizations; and
503 (c) fund activities as the committee designates for the purpose of educating the public
504 about the need for organ donors.
505 (2) (a) The committee is responsible for awarding financial assistance funded by the
506 trust account.
507 (b) The financial assistance awarded by the committee under Subsection (1)(a) shall be
508 in the form of interest free loans. The committee may establish terms for repayment of the
509 loans, including a waiver of the requirement to repay any awards if, in the committee's
510 judgment, repayment of the loan would impose an undue financial burden on the recipient.
511 (c) In making financial awards under Subsection (1)(a), the committee shall consider:
512 (i) need;
513 (ii) coordination with or enhancement of existing services or financial assistance,
514 including availability of insurance or other state aid;
515 (iii) the success rate of the particular organ transplant procedure needed by the child;
516 and
517 (iv) the extent of the threat to the child's life without the organ transplant.
518 (3) The committee may only provide the assistance described in this section to children
519 who have resided in Utah, or whose legal guardians have resided in Utah for at least six months
520 prior to the date of assistance under this section.
521 (4) (a) The committee may expend up to 5% of its annual appropriation for
522 administrative costs associated with the allocation of funds from the trust account.
523 (b) The administrative costs shall be used for the costs associated with staffing the

524 committee [and for State Tax Commission costs in implementing Section 59-10-550 ].
525 (5) The committee shall make an annual report to the Health and Human Services
526 Appropriations Subcommittee regarding the programs and services funded by contributions to
527 the trust account.
528 Section 9. Section 26-18a-4 is amended to read:
529 26-18a-4. Creation of Kurt Oscarson Children's Organ Transplant Trust
530 Account.
531 (1) There is created a restricted account within the General Fund pursuant to Section
532 51-5-4 known as the Kurt Oscarson Children's Organ Transplant Trust Account. Private
533 contributions received under this section [and Section 59-10-550 ] shall be deposited into the
534 trust account to be used only for the programs and purposes described in Section 26-18a-3 .
535 (2) Money shall be appropriated from the trust account to the committee in accordance
536 with Title 63, Chapter 38, Budgetary Procedures Act.
537 (3) [In addition to funds received under Section 59-10-550 , the] The committee may
538 accept transfers, grants, gifts, bequests, or any money made available from any source to
539 implement this chapter.
540 Section 10. Section 53B-8a-106 is amended to read:
541 53B-8a-106. Account agreements.
542 The trust may enter into account agreements with account owners on behalf of
543 beneficiaries under the following terms and agreements:
544 (1) (a) An account agreement may require an account owner to agree to invest a
545 specific amount of money in the trust for a specific period of time for the benefit of a specific
546 beneficiary, not to exceed an amount determined by the program administrator.
547 (b) Account agreements may be amended to provide for adjusted levels of payments
548 based upon changed circumstances or changes in educational plans.
549 (c) An account owner may make additional optional payments as long as the total
550 payments for a specific beneficiary do not exceed the total estimated higher education costs as
551 determined by the program administrator.
552 [(d) The maximum amount of investments that may be subtracted from federal taxable
553 income of a resident or nonresident individual under Subsection 59-10-114 (2)(j) shall be
554 $1,510 for each individual beneficiary for the 2005 calendar year and an amount adjusted

555 annually thereafter to reflect increases in the Consumer Price Index.]
556 [(2) (a) (i) Beneficiaries designated in account agreements must be designated after
557 birth and before age 19 for the participant to subtract allowable investments from federal
558 taxable income under Subsection 59-10-114 (2)(j).]
559 [(ii)] (2) (a) If [the] a beneficiary is designated after birth and before age 19, the
560 payment of benefits provided under the account agreement [must] shall begin [not] no later
561 than the beneficiary's 27th birthday.
562 [(b) (i) Account owners may designate beneficiaries age 19 or older, but investments
563 for those beneficiaries are not eligible for subtraction from federal taxable income. ]
564 [(ii)] (b) If a beneficiary age 19 or older is designated in an account agreement, the
565 payment of benefits provided under the account agreement must begin not later than ten years
566 from the account agreement date.
567 (3) Each account agreement shall state clearly that there are no guarantees regarding
568 moneys in the trust as to the return of principal and that losses could occur.
569 (4) Each account agreement shall provide that:
570 (a) no contributor to, or designated beneficiary under, an account agreement may direct
571 the investment of any contributions or earnings on contributions;
572 (b) no part of the money in any account may be used as security for a loan; and
573 (c) no account owner may borrow from the trust.
574 (5) The execution of an account agreement by the trust may not guarantee in any way
575 that higher education costs will be equal to projections and estimates provided by the trust or
576 that the beneficiary named in any participation agreement will:
577 (a) be admitted to an institution of higher education;
578 (b) if admitted, be determined a resident for tuition purposes by the institution of
579 higher education, unless the account agreement is vested;
580 (c) be allowed to continue attendance at the institution of higher education following
581 admission; or
582 (d) graduate from the institution of higher education.
583 (6) Beneficiaries may be changed as permitted by the rules and regulations of the board
584 upon written request of the account owner prior to the date of admission of any beneficiary
585 under an account agreement by an institution of higher education so long as the substitute

586 beneficiary is eligible for participation.
587 (7) Account agreements may be freely amended throughout their terms in order to
588 enable account owners to increase or decrease the level of participation, change the designation
589 of beneficiaries, and carry out similar matters as authorized by rule.
590 (8) Each account agreement shall provide that:
591 (a) the account agreement may be canceled upon the terms and conditions, and upon
592 payment of the fees and costs set forth and contained in the board's rules and regulations; and
593 (b) the program administrator may amend the agreement unilaterally and retroactively,
594 if necessary, to maintain the trust as a qualified tuition program under Section 529 Internal
595 Revenue Code.
596 Section 11. Section 53B-8a-112 is amended to read:
597 53B-8a-112. Tax considerations.
598 (1) For tax purposes the property of the trust and its income are governed by Sections
599 59-7-105 , 59-7-106 , [ 59-10-114 ,] and 59-10-201 .
600 (2) The tax commission, in consultation with the board, may adopt rules necessary to
601 monitor and implement the tax provisions referred to in Subsection (1) as related to the
602 property of the trust and its income.
603 Section 12. Section 59-2-102 is amended to read:
604 59-2-102. Definitions.
605 As used in this chapter and title:
606 (1) "Aerial applicator" means aircraft or rotorcraft used exclusively for the purpose of
607 engaging in dispensing activities directly affecting agriculture or horticulture with an
608 airworthiness certificate from the Federal Aviation Administration certifying the aircraft or
609 rotorcraft's use for agricultural and pest control purposes.
610 (2) "Air charter service" means an air carrier operation which requires the customer to
611 hire an entire aircraft rather than book passage in whatever capacity is available on a scheduled
612 trip.
613 (3) "Air contract service" means an air carrier operation available only to customers
614 who engage the services of the carrier through a contractual agreement and excess capacity on
615 any trip and is not available to the public at large.
616 (4) "Aircraft" is as defined in Section 72-10-102 .

617 (5) "Airline" means any air carrier operating interstate routes on a scheduled basis
618 which offers to fly passengers or cargo on the basis of available capacity on regularly scheduled
619 routes.
620 (6) "Assessment roll" means a permanent record of the assessment of property as
621 assessed by the county assessor and the commission and may be maintained manually or as a
622 computerized file as a consolidated record or as multiple records by type, classification, or
623 categories.
624 (7) "Certified revenue levy" means a property tax levy that provides the same amount
625 of ad valorem property tax revenue as was collected for the prior year, plus new growth, but
626 exclusive of revenue from collections from redemptions, interest, and penalties.
627 (8) "County-assessed commercial vehicle" means:
628 (a) any commercial vehicle, trailer, or semitrailer which is not apportioned under
629 Section 41-1a-301 and is not operated interstate to transport the vehicle owner's goods or
630 property in furtherance of the owner's commercial enterprise;
631 (b) any passenger vehicle owned by a business and used by its employees for
632 transportation as a company car or vanpool vehicle; and
633 (c) vehicles which are:
634 (i) especially constructed for towing or wrecking, and which are not otherwise used to
635 transport goods, merchandise, or people for compensation;
636 (ii) used or licensed as taxicabs or limousines;
637 (iii) used as rental passenger cars, travel trailers, or motor homes;
638 (iv) used or licensed in this state for use as ambulances or hearses;
639 (v) especially designed and used for garbage and rubbish collection; or
640 (vi) used exclusively to transport students or their instructors to or from any private,
641 public, or religious school or school activities.
642 (9) (a) Except as provided in Subsection (9)(b), for purposes of Section 59-2-801 ,
643 "designated tax area" means a tax area created by the overlapping boundaries of only the
644 following taxing entities:
645 (i) a county; and
646 (ii) a school district.
647 (b) Notwithstanding Subsection (9)(a), "designated tax area" includes a tax area created

648 by the overlapping boundaries of:
649 (i) the taxing entities described in Subsection (9)(a); and
650 (ii) (A) a city or town if the boundaries of the school district under Subsection (9)(a)
651 and the boundaries of the city or town are identical; or
652 (B) a special service district if the boundaries of the school district under Subsection
653 (9)(a) are located entirely within the special service district.
654 (10) "Eligible judgment" means a final and unappealable judgment or order under
655 Section 59-2-1330 :
656 (a) that became a final and unappealable judgment or order no more than 14 months
657 prior to the day on which the notice required by Subsection 59-2-919 (4) is required to be
658 mailed; and
659 (b) for which a taxing entity's share of the final and unappealable judgment or order is
660 greater than or equal to the lesser of:
661 (i) $5,000; or
662 (ii) 2.5% of the total ad valorem property taxes collected by the taxing entity in the
663 previous fiscal year.
664 (11) (a) "Escaped property" means any property, whether personal, land, or any
665 improvements to the property, subject to taxation and is:
666 (i) inadvertently omitted from the tax rolls, assigned to the incorrect parcel, or assessed
667 to the wrong taxpayer by the assessing authority;
668 (ii) undervalued or omitted from the tax rolls because of the failure of the taxpayer to
669 comply with the reporting requirements of this chapter; or
670 (iii) undervalued because of errors made by the assessing authority based upon
671 incomplete or erroneous information furnished by the taxpayer.
672 (b) Property which is undervalued because of the use of a different valuation
673 methodology or because of a different application of the same valuation methodology is not
674 "escaped property."
675 (12) "Fair market value" means the amount at which property would change hands
676 between a willing buyer and a willing seller, neither being under any compulsion to buy or sell
677 and both having reasonable knowledge of the relevant facts. For purposes of taxation, "fair
678 market value" shall be determined using the current zoning laws applicable to the property in

679 question, except in cases where there is a reasonable probability of a change in the zoning laws
680 affecting that property in the tax year in question and the change would have an appreciable
681 influence upon the value.
682 (13) "Farm machinery and equipment," for purposes of the exemption provided under
683 Section 59-2-1101 , means tractors, milking equipment and storage and cooling facilities, feed
684 handling equipment, irrigation equipment, harvesters, choppers, grain drills and planters, tillage
685 tools, scales, combines, spreaders, sprayers, haying equipment, and any other machinery or
686 equipment used primarily for agricultural purposes; but does not include vehicles required to be
687 registered with the Motor Vehicle Division or vehicles or other equipment used for business
688 purposes other than farming.
689 (14) "Geothermal fluid" means water in any form at temperatures greater than 120
690 degrees centigrade naturally present in a geothermal system.
691 (15) "Geothermal resource" means:
692 (a) the natural heat of the earth at temperatures greater than 120 degrees centigrade;
693 and
694 (b) the energy, in whatever form, including pressure, present in, resulting from, created
695 by, or which may be extracted from that natural heat, directly or through a material medium.
696 (16) (a) For purposes of Section 59-2-103 :
697 (i) "household" means the association of persons who live in the same dwelling,
698 sharing its furnishings, facilities, accommodations, and expenses; and
699 (ii) "household" includes married individuals, who are not legally separated, that have
700 established domiciles at separate locations within the state.
701 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
702 commission may make rules defining the term "domicile."
703 (17) (a) Except as provided in Subsection (17)(c), "improvement" means a building,
704 structure, fixture, fence, or other item that is permanently attached to land, regardless of
705 whether the title has been acquired to the land, if:
706 (i) (A) attachment to land is essential to the operation or use of the item; and
707 (B) the manner of attachment to land suggests that the item will remain attached to the
708 land in the same place over the useful life of the item; or
709 (ii) removal of the item would:

710 (A) cause substantial damage to the item; or
711 (B) require substantial alteration or repair of a structure to which the item is attached.
712 (b) "Improvement" includes:
713 (i) an accessory to an item described in Subsection (17)(a) if the accessory is:
714 (A) essential to the operation of the item described in Subsection (17)(a); and
715 (B) installed solely to serve the operation of the item described in Subsection (17)(a);
716 and
717 (ii) an item described in Subsection (17)(a) that:
718 (A) is temporarily detached from the land for repairs; and
719 (B) remains located on the land.
720 (c) Notwithstanding Subsections (17)(a) and (b), "improvement" does not include:
721 (i) an item considered to be personal property pursuant to rules made in accordance
722 with Section 59-2-107 ;
723 (ii) a moveable item that is attached to land:
724 (A) for stability only; or
725 (B) for an obvious temporary purpose;
726 (iii) (A) manufacturing equipment and machinery; or
727 (B) essential accessories to manufacturing equipment and machinery; [or]
728 (iv) an item attached to the land in a manner that facilitates removal without substantial
729 damage to:
730 (A) the land; or
731 (B) the item; or
732 (v) a transportable factory-built housing unit as defined in Section 59-2-1502 if that
733 transportable factory-built housing unit is considered to be personal property under Section
734 59-2-1503 .
735 (18) "Intangible property" means:
736 (a) property that is capable of private ownership separate from tangible property,
737 including:
738 (i) moneys;
739 (ii) credits;
740 (iii) bonds;

741 (iv) stocks;
742 (v) representative property;
743 (vi) franchises;
744 (vii) licenses;
745 (viii) trade names;
746 (ix) copyrights; and
747 (x) patents; or
748 (b) a low-income housing tax credit.
749 (19) "Low-income housing tax credit" means:
750 (a) a federal low-income housing tax credit under Section 42, Internal Revenue Code;
751 or
752 (b) a low-income housing tax credit under[: (i)] Section 59-7-607 [; or].
753 [(ii) Section 59-10-129 .]
754 (20) "Metalliferous minerals" includes gold, silver, copper, lead, zinc, and uranium.
755 (21) "Mine" means a natural deposit of either metalliferous or nonmetalliferous
756 valuable mineral.
757 (22) "Mining" means the process of producing, extracting, leaching, evaporating, or
758 otherwise removing a mineral from a mine.
759 (23) (a) "Mobile flight equipment" means tangible personal property that is:
760 (i) owned or operated by an:
761 (A) air charter service;
762 (B) air contract service; or
763 (C) airline; and
764 (ii) (A) capable of flight;
765 (B) attached to an aircraft that is capable of flight; or
766 (C) contained in an aircraft that is capable of flight if the tangible personal property is
767 intended to be used:
768 (I) during multiple flights;
769 (II) during a takeoff, flight, or landing; and
770 (III) as a service provided by an air charter service, air contract service, or airline.
771 (b) (i) "Mobile flight equipment" does not include a spare part other than a spare

772 engine that is rotated:
773 (A) at regular intervals; and
774 (B) with an engine that is attached to the aircraft.
775 (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
776 the commission may make rules defining the term "regular intervals."
777 (24) "Nonmetalliferous minerals" includes, but is not limited to, oil, gas, coal, salts,
778 sand, rock, gravel, and all carboniferous materials.
779 (25) "Personal property" includes:
780 (a) every class of property as defined in Subsection (26) which is the subject of
781 ownership and not included within the meaning of the terms "real estate" and "improvements";
782 (b) gas and water mains and pipes laid in roads, streets, or alleys;
783 (c) bridges and ferries;
784 (d) livestock which, for the purposes of the exemption provided under Section
785 59-2-1112 , means all domestic animals, honeybees, poultry, fur-bearing animals, and fish; and
786 (e) outdoor advertising structures as defined in Section 72-7-502 .
787 (26) (a) "Property" means property that is subject to assessment and taxation according
788 to its value.
789 (b) "Property" does not include intangible property as defined in this section.
790 (27) "Public utility," for purposes of this chapter, means the operating property of a
791 railroad, gas corporation, oil or gas transportation or pipeline company, coal slurry pipeline
792 company, electrical corporation, telephone corporation, sewerage corporation, or heat
793 corporation where the company performs the service for, or delivers the commodity to, the
794 public generally or companies serving the public generally, or in the case of a gas corporation
795 or an electrical corporation, where the gas or electricity is sold or furnished to any member or
796 consumers within the state for domestic, commercial, or industrial use. Public utility also
797 means the operating property of any entity or person defined under Section 54-2-1 except water
798 corporations.
799 (28) "Real estate" or "real property" includes:
800 (a) the possession of, claim to, ownership of, or right to the possession of land;
801 (b) all mines, minerals, and quarries in and under the land, all timber belonging to
802 individuals or corporations growing or being on the lands of this state or the United States, and

803 all rights and privileges appertaining to these; and
804 (c) improvements.
805 (29) "Residential property," for the purposes of the reductions and adjustments under
806 this chapter, means any property used for residential purposes as a primary residence. It does
807 not include property used for transient residential use or condominiums used in rental pools.
808 (30) For purposes of Subsection 59-2-801 (1)(e), "route miles" means the number of
809 miles calculated by the commission that is:
810 (a) measured in a straight line by the commission; and
811 (b) equal to the distance between a geographical location that begins or ends:
812 (i) at a boundary of the state; and
813 (ii) where an aircraft:
814 (A) takes off; or
815 (B) lands.
816 (31) (a) "State-assessed commercial vehicle" means:
817 (i) any commercial vehicle, trailer, or semitrailer which operates interstate or intrastate
818 to transport passengers, freight, merchandise, or other property for hire; or
819 (ii) any commercial vehicle, trailer, or semitrailer which operates interstate and
820 transports the vehicle owner's goods or property in furtherance of the owner's commercial
821 enterprise.
822 (b) "State-assessed commercial vehicle" does not include vehicles used for hire which
823 are specified in Subsection (8)(c) as county-assessed commercial vehicles.
824 (32) "Taxable value" means fair market value less any applicable reduction allowed for
825 residential property under Section 59-2-103 .
826 (33) "Tax area" means a geographic area created by the overlapping boundaries of one
827 or more taxing entities.
828 (34) "Taxing entity" means any county, city, town, school district, special taxing
829 district, or any other political subdivision of the state with the authority to levy a tax on
830 property.
831 (35) "Tax roll" means a permanent record of the taxes charged on property, as extended
832 on the assessment roll and may be maintained on the same record or records as the assessment
833 roll or may be maintained on a separate record properly indexed to the assessment roll. It

834 includes tax books, tax lists, and other similar materials.
835 Section 13. Section 59-6-101 is amended to read:
836 59-6-101. Definitions.
837 As used in this chapter:
838 (1) (a) Except as provided in Subsection (1)(b), "claimant" means a resident or
839 nonresident person.
840 (b) "Claimant" does not include an estate or trust.
841 (2) "Estate" means a nonresident estate or a resident estate.
842 [(1)] (3) "Minerals" means either metalliferous minerals as defined in Section
843 59-2-102 , nonmetalliferous minerals as defined in Section 59-2-102 , or both.
844 [(2)] (4) "Producer" means any person who produces or extracts minerals from deposits
845 in this state or who is the first purchaser of minerals produced or extracted from deposits in this
846 state.
847 (5) "Refundable tax credit" or "tax credit" means a tax credit that a claimant, estate, or
848 trust may claim:
849 (a) as provided by statute; and
850 (b) regardless of whether the claimant, estate, or trust has a tax liability under this
851 chapter for the taxable year for which the claimant, estate, or trust claims the tax credit.
852 (6) "Trust" means a nonresident trust or a resident trust.
853 Section 14. Section 59-6-102 is amended to read:
854 59-6-102. Producer's obligation to deduct and withhold payments -- Amount --
855 Exempt payments -- Credit against tax.
856 (1) Except as provided in Subsection (2), each producer shall deduct and withhold from
857 each payment being made to any person in respect to production of minerals in this state, but
858 not including that to which the producer is entitled, an amount equal to 5% of the amount
859 which would have otherwise been payable to the person entitled to the payment.
860 (2) Notwithstanding Subsection (1), the obligation to deduct and withhold from
861 payments as provided in Subsection (1) does not apply to those payments which are payable to:
862 (a) the United States, this state, or an agency or political subdivision of the United
863 States or this state;
864 (b) an organization that is exempt from the taxes imposed by Chapter 7, Corporate

865 Franchise and Income Taxes, in accordance with Subsection 59-7-102 (1)(a); or
866 (c) an Indian or Indian tribe if the amounts accruing are subject to the supervision of the
867 United States or an agency of the United States.
868 (3) [(a)] A [person who] claimant, estate, or trust that files a tax return with the state in
869 accordance with the following is entitled to a refundable tax credit against the tax reflected on
870 the return for the amount withheld by the producer under Subsection (1):
871 [(i)] (a) Chapter 7, Corporate Franchise and Income Taxes;
872 [(ii)] (b) Chapter 8, Gross Receipts Tax on Certain Corporations not Required to Pay
873 Corporate Franchise or Income Tax Act;
874 [(iii)] (c) Chapter 8a, Gross Receipts Tax on Electrical Corporations Act; or
875 [(iv)] (d) Chapter 10, Individual Income Tax Act.
876 [(b) If the amount withheld under Subsection (1) is greater than the tax due on the
877 return, the person making the return is entitled to a refund in the amount of the overpayment.]
878 Section 15. Section 59-7-607 is amended to read:
879 59-7-607. Utah low-income housing tax credit.
880 (1) As used in this section:
881 (a) "Allocation certificate" means:
882 (i) the certificate prescribed by the commission and issued by the Utah Housing
883 Corporation to each taxpayer that specifies the percentage of the annual federal low-income
884 housing tax credit that each taxpayer may take as an annual credit against state income tax; or
885 (ii) a copy of the allocation certificate that the housing sponsor provides to the
886 taxpayer.
887 (b) "Building" means a qualified low-income building as defined in Section 42(c),
888 Internal Revenue Code.
889 (c) "Federal low-income housing tax credit" means the tax credit under Section 42,
890 Internal Revenue Code.
891 (d) "Housing sponsor" means a corporation in the case of a C corporation, a partnership
892 in the case of a partnership, a corporation in the case of an S corporation, or a limited liability
893 company in the case of a limited liability company.
894 (e) "Qualified allocation plan" means the qualified allocation plan adopted by the Utah
895 Housing Corporation pursuant to Section 42(m), Internal Revenue Code.

896 (f) "Special low-income housing tax credit certificate" means a certificate:
897 (i) prescribed by the commission;
898 (ii) that a housing sponsor issues to a taxpayer for a taxable year; and
899 (iii) that specifies the amount of tax credit a taxpayer may claim under this section if
900 the taxpayer meets the requirements of this section.
901 (g) "Taxpayer" means a person that is allowed a tax credit in accordance with this
902 section which is the corporation in the case of a C corporation, the partners in the case of a
903 partnership, the shareholders in the case of an S corporation, and the members in the case of a
904 limited liability company.
905 (2) (a) For taxable years beginning on or after January 1, 1995, there is allowed a
906 nonrefundable tax credit against taxes otherwise due under this chapter or Chapter 8, Gross
907 Receipts Tax on Certain Corporations Not Required to Pay Corporate Franchise or Income Tax
908 Act, for taxpayers issued an allocation certificate.
909 (b) The tax credit shall be in an amount equal to the greater of the amount of:
910 (i) federal low-income housing tax credit to which the taxpayer is allowed during that
911 year multiplied by the percentage specified in an allocation certificate issued by the Utah
912 Housing Corporation; or
913 (ii) tax credit specified in the special low-income housing tax credit certificate that the
914 housing sponsor issues to the taxpayer as provided in Subsection (2)(c).
915 (c) For purposes of Subsection (2)(b)(ii), the tax credit is equal to the product of:
916 (i) the total amount of low-income housing tax credit under this section that:
917 (A) a housing sponsor is allowed for a building; and
918 (B) all of the taxpayers may claim with respect to the building if the taxpayers meet the
919 requirements of this section; and
920 (ii) the percentage of tax credit a taxpayer may claim:
921 (A) under this section if the taxpayer meets the requirements of this section; and
922 (B) as provided in the agreement between the taxpayer and the housing sponsor.
923 (d) (i) For the calendar year beginning on January 1, 1995, through the calendar year
924 beginning on January 1, 2015, the aggregate annual tax credit that the Utah Housing
925 Corporation may allocate for the credit period described in Section 42(f), Internal Revenue
926 Code, pursuant to this section [and Section 59-10-129 ] is an amount equal to the product of:

927 (A) 12.5 cents; and
928 (B) the population of Utah.
929 (ii) For purposes of this section, the population of Utah shall be determined in
930 accordance with Section 146(j), Internal Revenue Code.
931 (3) (a) [By October 1, 1994, the] The Utah Housing Corporation shall determine
932 criteria and procedures for allocating the tax credit under this section [and Section 59-10-129 ]
933 and incorporate the criteria and procedures into the Utah Housing Corporation's qualified
934 allocation plan.
935 (b) The Utah Housing Corporation shall create the criteria under Subsection (3)(a)
936 based on:
937 (i) the number of affordable housing units to be created in Utah for low and moderate
938 income persons in the residential housing development of which the building is a part;
939 (ii) the level of area median income being served by the development;
940 (iii) the need for the tax credit for the economic feasibility of the development; and
941 (iv) the extended period for which the development commits to remain as affordable
942 housing.
943 (4) (a) The following may apply to the Utah Housing Corporation for a tax credit under
944 this section:
945 (i) any housing sponsor that has received an allocation of the federal low-income
946 housing tax credit; or
947 (ii) any applicant for an allocation of the federal low-income housing tax credit.
948 (b) The Utah Housing Corporation may not require fees for applications of the tax
949 credit under this section in addition to those fees required for applications for the federal
950 low-income housing tax credit.
951 (5) (a) The Utah Housing Corporation shall determine the amount of the tax credit to
952 allocate to a qualifying housing sponsor in accordance with the qualified allocation plan of the
953 Utah Housing Corporation.
954 (b) (i) The Utah Housing Corporation shall allocate the tax credit to housing sponsors
955 by issuing an allocation certificate to qualifying housing sponsors.
956 (ii) The allocation certificate under Subsection (5)(b)(i) shall specify the allowed
957 percentage of the federal low-income housing tax credit as determined by the Utah Housing

958 Corporation.
959 (c) The percentage specified in an allocation certificate may not exceed 100% of the
960 federal low-income housing tax credit.
961 (6) A housing sponsor shall provide a copy of the allocation certificate to each taxpayer
962 that is issued a special low-income housing tax credit certificate.
963 (7) (a) A housing sponsor shall provide to the commission a list of:
964 (i) the taxpayers issued a special low-income housing tax credit certificate; and
965 (ii) for each taxpayer described in Subsection (7)(a)(i), the amount of tax credit listed
966 on the special low-income housing tax credit certificate.
967 (b) A housing sponsor shall provide the list required by Subsection (7)(a):
968 (i) to the commission;
969 (ii) on a form provided by the commission; and
970 (iii) with the housing sponsor's tax return for each taxable year for which the housing
971 sponsor issues a special low-income housing tax credit certificate described in this Subsection
972 (7).
973 (8) (a) All elections made by the taxpayer pursuant to Section 42, Internal Revenue
974 Code, shall apply to this section.
975 (b) (i) If a taxpayer is required to recapture a portion of any federal low-income
976 housing tax credit, the taxpayer shall also be required to recapture a portion of any state tax
977 credits authorized by this section.
978 (ii) The state recapture amount shall be equal to the percentage of the state tax credit
979 that equals the proportion the federal recapture amount bears to the original federal low-income
980 housing tax credit amount subject to recapture.
981 (9) (a) Any tax credits returned to the Utah Housing Corporation in any year may be
982 reallocated within the same time period as provided in Section 42, Internal Revenue Code.
983 (b) Tax credits that are unallocated by the Utah Housing Corporation in any year may
984 be carried over for allocation in the subsequent year.
985 (10) (a) Amounts otherwise qualifying for the tax credit, but not allowable because the
986 tax credit exceeds the tax, may be carried back three years or may be carried forward five years
987 as a credit against the tax.
988 (b) Carryover tax credits under Subsection (10)(a) shall be applied against the tax:

989 (i) before the application of the tax credits earned in the current year; and
990 (ii) on a first-earned first-used basis.
991 (11) Any tax credit taken in this section may be subject to an annual audit by the
992 commission.
993 (12) The Utah Housing Corporation shall provide an annual report to the Revenue and
994 Taxation Interim Committee which shall include at least:
995 (a) the purpose and effectiveness of the tax credits; and
996 (b) the benefits of the tax credits to the state.
997 (13) The commission may, in consultation with the Utah Housing Corporation,
998 promulgate rules to implement this section.
999 Section 16. Section 59-7-703 is amended to read:
1000 59-7-703. Payment or withholding of tax on behalf of nonresident shareholders --
1001 Rate.
1002 (1) As used in this section, "return" means:
1003 (a) if a nonresident shareholder is required to file a return under this chapter, a return
1004 filed under this chapter; or
1005 (b) if a nonresident shareholder is required to file a return under Chapter 10, Individual
1006 Income Tax Act, a return filed under Chapter 10, Individual Income Tax Act.
1007 (2) (a) Except as provided in Subsection (4), an S corporation shall pay or withhold a
1008 tax on behalf of any nonresident shareholder.
1009 (b) The amount paid or withheld by an S corporation under Subsection (2)(a) shall be
1010 determined by:
1011 (i) calculating the items of income or loss from federal form 1120S, Schedule K;
1012 (ii) applying the apportionment formula to determine the amount apportioned to Utah;
1013 (iii) reducing the amount apportioned to Utah by the percentage of ownership
1014 attributable to resident shareholders; and
1015 (iv) applying the rate to the remaining balance.
1016 (3) (a) For a nonresident shareholder who is required to file a return under this chapter:
1017 (i) the nonresident shareholder may claim a credit on the nonresident shareholder's
1018 return for the amount of tax paid or withheld by the S corporation on behalf of the nonresident
1019 shareholder;

1020 (ii) if the nonresident shareholder has no other Utah source income, the nonresident
1021 shareholder may elect:
1022 (A) not to claim the credit provided under Subsection (3)(a)(i); and
1023 (B) not to file a return for the taxable year; and
1024 (iii) if the nonresident shareholder may claim credits other than the credit described in
1025 Subsection (3)(a)(i), the nonresident shareholder shall file a return to claim those credits.
1026 (b) If a nonresident shareholder is required to file a return under Chapter 10, Individual
1027 Income Tax Act, the nonresident shareholder is subject to Section [ 59-10-108.2 ] 59-10-1103 .
1028 (4) Notwithstanding Subsection (2), the obligation to pay or withhold a tax under
1029 Subsection (2) does not apply to an organization that is exempt under Subsection
1030 59-7-102 (1)(a) from the taxes imposed by this chapter.
1031 (5) (a) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
1032 the commission shall by rule determine the rate at which an S corporation shall withhold for
1033 nonresident shareholders.
1034 (b) The rate described in Subsection (5)(a) shall be consistent with the composite tax
1035 rate paid by partnerships.
1036 (6) (a) If an S corporation fails to pay or withhold a tax as provided in this section, and
1037 thereafter the income subject to payment or withholding is reported and the resulting tax is paid
1038 by a nonresident shareholder, any tax required to be paid or withheld may not be collected from
1039 the S corporation.
1040 (b) A nonresident shareholder's payment under Subsection (6)(a) does not relieve the S
1041 corporation from liability for penalties or interest associated with failure to pay or withhold a
1042 tax as provided in this section.
1043 (7) Penalties, refunds, assessments, and required records for S corporations shall be
1044 governed by:
1045 (a) this chapter if a nonresident shareholder is subject to this chapter; or
1046 (b) Chapter 10, Individual Income Tax Act, if a nonresident shareholder is subject to
1047 Chapter 10, Individual Income Tax Act.
1048 (8) (a) An S corporation shall furnish each nonresident shareholder a statement
1049 showing:
1050 (i) the amount of the nonresident shareholder's share of the corporate earnings from

1051 Utah sources; and
1052 (ii) the amount of the withholding from the nonresident shareholder's share of the
1053 corporate earnings from Utah sources.
1054 (b) An S corporation shall pay the commission the amount withheld under this section:
1055 (i) by the due date of the corporation's return, not including extensions; and
1056 (ii) on forms furnished by the commission.
1057 Section 17. Section 59-10-103 is amended to read:
1058 59-10-103. Definitions.
1059 (1) As used in this chapter:
1060 [(a) "Adoption expenses" means:]
1061 [(i) any actual medical and hospital expenses of the mother of the adopted child which
1062 are incident to the child's birth;]
1063 [(ii) any welfare agency fees or costs;]
1064 [(iii) any child placement service fees or costs;]
1065 [(iv) any legal fees or costs; or]
1066 [(v) any other fees or costs relating to an adoption.]
1067 [(b) "Adult with a disability" means an individual who:]
1068 [(i) is 18 years of age or older;]
1069 [(ii) is eligible for services under Title 62A, Chapter 5, Services to People with
1070 Disabilities; and]
1071 [(iii) is not enrolled in:]
1072 [(A) an education program for students with disabilities that is authorized under
1073 Section 53A-15-301 ; or]
1074 [(B) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind.]
1075 [(c) (i) For purposes of Subsection 59-10-114 (2)(m), "capital gain transaction" means a
1076 transaction that results in a:]
1077 [(A) short-term capital gain; or]
1078 [(B) long-term capital gain.]
1079 [(ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
1080 the commission may by rule define the term "transaction."]
1081 [(d) "Commercial domicile" means the principal place from which the trade or business

1082 of a Utah small business corporation is directed or managed.]
1083 (a) "Adjusted gross income" is as defined in Section 62, Internal Revenue Code.
1084 [(e)] (b) "Corporation" includes:
1085 (i) associations;
1086 (ii) joint stock companies; and
1087 (iii) insurance companies.
1088 [(f) "Dependent child with a disability" means an individual 21 years of age or younger
1089 who:]
1090 [(i) (A) is diagnosed by a school district representative under rules adopted by the State
1091 Board of Education as having a disability classified as:]
1092 [(I) autism;]
1093 [(II) deafness;]
1094 [(III) preschool developmental delay;]
1095 [(IV) dual sensory impairment;]
1096 [(V) hearing impairment;]
1097 [(VI) intellectual disability;]
1098 [(VII) multidisability;]
1099 [(VIII) orthopedic impairment;]
1100 [(IX) other health impairment;]
1101 [(X) traumatic brain injury; or]
1102 [(XI) visual impairment;]
1103 [(B) is not receiving residential services from:]
1104 [(I) the Division of Services for People with Disabilities created under Section
1105 62A-5-102 ; or]
1106 [(II) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind;
1107 and]
1108 [(C) is enrolled in:]
1109 [(I) an education program for students with disabilities that is authorized under Section
1110 53A-15-301 ; or]
1111 [(II) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind;
1112 or]

1113 [(ii) is identified under guidelines of the Department of Health as qualified for:]
1114 [(A) Early Intervention; or]
1115 [(B) Infant Development Services.]
1116 [(g)] (c) "Employee" is as defined in Section 59-10-401 .
1117 [(h)] (d) "Employer" is as defined in Section 59-10-401 .
1118 (e) "Federal taxable income" means taxable income as defined by Section 63, Internal
1119 Revenue Code.
1120 [(i)] (f) "Fiduciary" means:
1121 (i) a guardian;
1122 (ii) a trustee;
1123 (iii) an executor;
1124 (iv) an administrator;
1125 (v) a receiver;
1126 (vi) a conservator; or
1127 (vii) any person acting in any fiduciary capacity for any individual.
1128 [(j)] (g) "Homesteaded land diminished from the Uintah and Ouray Reservation"
1129 means the homesteaded land that was held to have been diminished from the Uintah and Ouray
1130 Reservation in Hagen v. Utah, 510 U.S. 399 (1994).
1131 [(k)] (h) "Individual" means a natural person and includes aliens and minors.
1132 [(l) "Irrevocable trust" means a trust in which the settlor may not revoke or terminate
1133 all or part of the trust without the consent of a person who has a substantial beneficial interest
1134 in the trust and the interest would be adversely affected by the exercise of the settlor's power to
1135 revoke or terminate all or part of the trust.]
1136 [(m) For purposes of Subsection 59-10-114 (2)(m), "long-term capital gain" is as
1137 defined in Section 1222, Internal Revenue Code.]
1138 [(n)] (i) "Nonresident individual" means an individual who is not a resident of this
1139 state.
1140 [(o)] (j) "Nonresident trust" or "nonresident estate" means a trust or estate which is not
1141 a resident estate or trust.
1142 [(p)] (k) (i) "Partnership" includes a syndicate, group, pool, joint venture, or other
1143 unincorporated organization:

1144 (A) through or by means of which any business, financial operation, or venture is
1145 carried on; and
1146 (B) which is not, within the meaning of this chapter:
1147 (I) a trust;
1148 (II) an estate; or
1149 (III) a corporation.
1150 (ii) "Partnership" does not include any organization not included under the definition of
1151 "partnership" in Section 761, Internal Revenue Code.
1152 (iii) "Partner" includes a member in a syndicate, group, pool, joint venture, or
1153 organization described in Subsection (1)[(p)](k)(i).
1154 [(q) "Qualifying military service member" means a member of:]
1155 [(i) The Utah Army National Guard;]
1156 [(ii) The Utah Air National Guard; or]
1157 [(iii) the following if the member is assigned to a unit that is located in the state:]
1158 [(A) The Army Reserve;]
1159 [(B) The Naval Reserve;]
1160 [(C) The Air Force Reserve;]
1161 [(D) The Marine Corps Reserve; or]
1162 [(E) The Coast Guard Reserve.]
1163 [(r) "Qualifying stock" means stock that is:]
1164 [(i) (A) common; or]
1165 [(B) preferred;]
1166 [(ii) as defined by the commission by rule, originally issued to:]
1167 [(A) a resident or nonresident individual; or]
1168 [(B) a partnership if the resident or nonresident individual making a subtraction from
1169 federal taxable income in accordance with Subsection 59-10-114 (2)(m):]
1170 [(I) was a partner when the stock was issued; and]
1171 [(II) remains a partner until the last day of the taxable year for which the resident or
1172 nonresident individual makes the subtraction from federal taxable income in accordance with
1173 Subsection 59-10-114 (2)(m); and]
1174 [(iii) issued:]

1175 [(A) by a Utah small business corporation;]
1176 [(B) on or after January 1, 2003; and]
1177 [(C) for:]
1178 [(I) money; or]
1179 [(II) other property, except for stock or securities.]
1180 [(s)] (l) (i) "Resident individual" means:
1181 (A) an individual who is domiciled in this state for any period of time during the
1182 taxable year, but only for the duration of the period during which the individual is domiciled in
1183 this state; or
1184 (B) an individual who is not domiciled in this state but:
1185 (I) maintains a permanent place of abode in this state; and
1186 (II) spends in the aggregate 183 or more days of the taxable year in this state.
1187 (ii) For purposes of Subsection (1)[(s)](l)(i)(B), a fraction of a calendar day shall be
1188 counted as a whole day.
1189 [(t)] (m) "Resident estate" or "resident trust" is as defined in Section 75-7-103 .
1190 [(u) For purposes of Subsection 59-10-114 (2)(m), "short-term capital gain" is as
1191 defined in Section 1222, Internal Revenue Code.]
1192 [(v) "Taxable income" and "state taxable income" are defined as provided in Sections
1193 59-10-111 , 59-10-112 , 59-10-116 , 59-10-201.1 , and 59-10-204 .]
1194 (n) "Taxable income" or "state taxable income":
1195 (i) subject to Subsection 59-10-302 (2), for a resident individual, means the resident
1196 individual's adjusted gross income after making the additions and subtractions required by
1197 Sections 59-10-114 and 59-10-115 ;
1198 (ii) for a nonresident individual, is as defined in Section 59-10-116 ;
1199 (iii) for a resident estate or trust, is as calculated under Section 59-10-201.1 ; and
1200 (iv) for a nonresident estate or trust, is as calculated under Section 59-10-204 .
1201 [(w)] (o) "Taxpayer" means any individual, estate, or trust or beneficiary of an estate or
1202 trust, whose income is subject in whole or part to the tax imposed by this chapter.
1203 [(x)] (p) "Uintah and Ouray Reservation" means the lands recognized as being included
1204 within the Uintah and Ouray Reservation in:
1205 (i) Hagen v. Utah, 510 U.S. 399 (1994); and

1206 (ii) Ute Indian Tribe v. Utah, 114 F.3d 1513 (10th Cir. 1997).
1207 [(y) (i) "Utah small business corporation" means a corporation that:]
1208 [(A) is a small business corporation as defined in Section 1244(c)(3), Internal Revenue
1209 Code;]
1210 [(B) except as provided in Subsection (1)(y)(ii), meets the requirements of Section
1211 1244(c)(1)(C), Internal Revenue Code; and]
1212 [(C) has its commercial domicile in this state.]
1213 [(ii) Notwithstanding Subsection (1)(y)(i)(B), the time period described in Section
1214 1244(c)(1)(C) and Section 1244(c)(2), Internal Revenue Code, for determining the source of a
1215 corporation's aggregate gross receipts shall end on the last day of the taxable year for which the
1216 resident or nonresident individual makes a subtraction from federal taxable income in
1217 accordance with Subsection 59-10-114 (2)(m).]
1218 [(z)] (q) "Ute tribal member" means a person who is enrolled as a member of the Ute
1219 Indian Tribe of the Uintah and Ouray Reservation.
1220 [(aa)] (r) "Ute tribe" means the Ute Indian Tribe of the Uintah and Ouray Reservation.
1221 [(bb)] (s) "Wages" is as defined in Section 59-10-401 .
1222 (2) (a) Any term used in this chapter has the same meaning as when used in
1223 comparable context in the laws of the United States relating to federal income taxes unless a
1224 different meaning is clearly required.
1225 (b) Any reference to the Internal Revenue Code or to the laws of the United States shall
1226 mean the Internal Revenue Code or other provisions of the laws of the United States relating to
1227 federal income taxes that are in effect for the taxable year.
1228 (c) Any reference to a specific section of the Internal Revenue Code or other provision
1229 of the laws of the United States relating to federal income taxes shall include any
1230 corresponding or comparable provisions of the Internal Revenue Code as hereafter amended,
1231 redesignated, or reenacted.
1232 Section 18. Section 59-10-104 is amended to read:
1233 59-10-104. Tax basis -- Rates.
1234 (1) [Except as provided in Subsection (4), for] For taxable years beginning on or after
1235 January 1, [2001] 2007, a tax is imposed on the state taxable income[, as defined in Section
1236 59-10-112 ,] of every resident individual as provided in this section.

1237 [(2) For an individual, other than a husband and wife or head of household required to
1238 use the tax table under Subsection (3), the tax under this section is imposed in accordance with
1239 the following table:]
1240 [If the state taxable income is: The tax is:]
1241 [Less than or equal to $863 2.3% of the state taxable income]
1242 [ Greater than $863 but less than or equal $20, plus 3.3% of state taxable]
1243 [to $1,726 income greater than $863]
1244 [ Greater than $1,726 but less than or equal $48, plus 4.2% of state taxable]
1245 [to $2,588 income greater than $1,726]
1246 [ Greater than $2,588 but less than or equal $85, plus 5.2% of state taxable]
1247 [to $3,450 income greater than $2,588]
1248 [Greater than $3,450 but less than or equal $129, plus 6% of state taxable]
1249 [to $4,313 income greater than $3,450]
1250 [ Greater than $4,313 $181, plus 7% of state taxable]
1251 [ income greater than $4,313]
1252 [(3) For a husband and wife filing a single return jointly, or a head of household as
1253 defined in Section 2(b), Internal Revenue Code, filing a single return, the tax under this section
1254 is imposed in accordance with the following table:]
1255 [If the state taxable income is: The tax is:]
1256 [Less than or equal to $1,726 2.3% of the state taxable income]
1257 [Greater than $1,726 but less than or equal $40, plus 3.3% of state taxable]
1258 [to $3,450 income greater than $1,726]
1259 [Greater than $3,450 but less than or equal $97, plus 4.2% of state taxable]
1260 [to $5,176 income greater than $3,450]
1261 [Greater than $5,176 but less than or equal $169, plus 5.2% of state taxable]
1262 [to $6,900 income greater than $5,176]
1263 [Greater than $6,900 but less than or equal $259, plus 6% of state taxable]
1264 [to $8,626 income greater than $6,900]
1265 [Greater than $8,626 $362, plus 7% of state taxable]
1266 [ income greater than $8,626]
1267 [(4) This section does not apply to a resident individual exempt from taxation under

1268 Section 59-10-104.1 .]
1269 (2) The tax imposed by this section is equal to the product of:
1270 (a) a resident individual's state taxable income for the taxable year; and
1271 (b) 4.9%.
1272 Section 19. Section 59-10-114 is amended to read:
1273 59-10-114. Additions to and subtractions from adjusted gross income of an
1274 individual.
1275 (1) There shall be added to [federal taxable] adjusted gross income of a resident or
1276 nonresident individual[:] the amount disbursed to an account owner under Title 53B, Chapter
1277 8a, Higher Education Savings Incentive Program:
1278 (a) if the amount disbursed to the account owner is not expended for higher education
1279 costs as defined in Section 53B-8a-102 ; and
1280 (b) for the taxable year for which the amount described in Subsection (1)(a) is
1281 disbursed.
1282 [(a) the amount of any income tax imposed by this or any predecessor Utah individual
1283 income tax law and the amount of any income tax imposed by the laws of another state, the
1284 District of Columbia, or a possession of the United States, to the extent deducted from federal
1285 adjusted gross income, as defined by Section 62, Internal Revenue Code, in determining federal
1286 taxable income;]
1287 [(b) a lump sum distribution that the taxpayer does not include in adjusted gross
1288 income on the taxpayer's federal individual income tax return for the taxable year;]
1289 [(c) for taxable years beginning on or after January 1, 2002, the amount of a child's
1290 income calculated under Subsection (5) that:]
1291 [(i) a parent elects to report on the parent's federal individual income tax return for the
1292 taxable year; and]
1293 [(ii) the parent does not include in adjusted gross income on the parent's federal
1294 individual income tax return for the taxable year;]
1295 [(d) 25% of the personal exemptions, as defined and calculated in the Internal Revenue
1296 Code;]
1297 [(e) a withdrawal from a medical care savings account and any penalty imposed in the
1298 taxable year if:]

1299 [(i) the taxpayer did not deduct or include the amounts on the taxpayer's federal
1300 individual income tax return pursuant to Section 220, Internal Revenue Code; and]
1301 [(ii) the withdrawal is subject to Subsections 31A-32a-105 (1) and (2);]
1302 [(f) the amount disbursed to an account owner under Title 53B, Chapter 8a, Higher
1303 Education Savings Incentive Program, in the year in which the amount is disbursed;]
1304 [(g) except as provided in Subsection (6), for taxable years beginning on or after
1305 January 1, 2003, for bonds, notes, and other evidences of indebtedness acquired on or after
1306 January 1, 2003, the interest from bonds, notes, and other evidences of indebtedness issued by
1307 one or more of the following entities:]
1308 [(i) a state other than this state;]
1309 [(ii) the District of Columbia;]
1310 [(iii) a political subdivision of a state other than this state; or]
1311 [(iv) an agency or instrumentality of an entity described in Subsections (1)(g)(i)
1312 through (iii);]
1313 [(h) any distribution received by a resident beneficiary of a resident trust of income that
1314 was taxed at the trust level for federal tax purposes, but was subtracted from state taxable
1315 income of the trust pursuant to Subsection 59-10-202 (2)(c); and]
1316 [(i) any distribution received by a resident beneficiary of a nonresident trust of income
1317 that was taxed at the trust level for federal tax purposes, but was not taxed at the trust level by
1318 any state.]
1319 (2) There shall be subtracted from [federal taxable] adjusted gross income of a resident
1320 or nonresident individual:
1321 (a) the interest or dividends on obligations or securities of the United States and its
1322 possessions or of any authority, commission, or instrumentality of the United States, to the
1323 extent includable in gross income for federal income tax purposes but exempt from state
1324 income taxes under the laws of the United States, but the amount subtracted under this
1325 Subsection (2)(a) shall be reduced by any interest on indebtedness incurred or continued to
1326 purchase or carry the obligations or securities described in this Subsection (2)(a), and by any
1327 expenses incurred in the production of interest or dividend income described in this Subsection
1328 (2)(a) to the extent that such expenses, including amortizable bond premiums, are deductible in
1329 determining federal taxable income;

1330 [(b) (i) except as provided in Subsection (2)(b)(ii), 1/2 of the net amount of any income
1331 tax paid or payable to the United States after all allowable credits, as reported on the United
1332 States individual income tax return of the taxpayer for the same taxable year; and]
1333 [(ii) notwithstanding Subsection (2)(b)(i), for taxable years beginning on or after
1334 January 1, 2001, the amount of a credit or an advance refund amount reported on a resident or
1335 nonresident individual's United States individual income tax return allowed as a result of the
1336 acceleration of the income tax rate bracket benefit for 2001 in accordance with Section 101,
1337 Economic Growth and Tax Relief Reconciliation Act of 2001, Pub. L. No. 107-16, may not be
1338 used in calculating the amount described in Subsection (2)(b)(i);]
1339 [(c) the amount of adoption expenses for one of the following taxable years as elected
1340 by the resident or nonresident individual:]
1341 [(i) regardless of whether a court issues an order granting the adoption, the taxable year
1342 in which the adoption expenses are:]
1343 [(A) paid; or]
1344 [(B) incurred;]
1345 [(ii) the taxable year in which a court issues an order granting the adoption; or]
1346 [(iii) any year in which the resident or nonresident individual may claim the federal
1347 adoption expenses credit under Section 23, Internal Revenue Code;]
1348 [(d) amounts received by taxpayers under age 65 as retirement income which, for
1349 purposes of this section, means pensions and annuities, paid from an annuity contract
1350 purchased by an employer under a plan which meets the requirements of Section 404(a)(2),
1351 Internal Revenue Code, or purchased by an employee under a plan which meets the
1352 requirements of Section 408, Internal Revenue Code, or paid by the United States, a state, or
1353 political subdivision thereof, or the District of Columbia, to the employee involved or the
1354 surviving spouse;]
1355 [(e) for each taxpayer age 65 or over before the close of the taxable year, a $7,500
1356 personal retirement exemption;]
1357 [(f) 75% of the amount of the personal exemption, as defined and calculated in the
1358 Internal Revenue Code, for each dependent child with a disability and adult with a disability
1359 who is claimed as a dependent on a taxpayer's return;]
1360 [(g) any amount included in federal taxable income that was received pursuant to any

1361 federal law enacted in 1988 to provide reparation payments, as damages for human suffering,
1362 to United States citizens and resident aliens of Japanese ancestry who were interned during
1363 World War II;]
1364 [(h) subject to the limitations of Subsection (3)(e), amounts a taxpayer pays during the
1365 taxable year for health care insurance, as defined in Title 31A, Chapter 1, General Provisions:]
1366 [(i) for:]
1367 [(A) the taxpayer;]
1368 [(B) the taxpayer's spouse; and]
1369 [(C) the taxpayer's dependents; and]
1370 [(ii) to the extent the taxpayer does not deduct the amounts under Section 125, 162, or
1371 213, Internal Revenue Code, in determining federal taxable income for the taxable year;]
1372 [(i) (i) except as otherwise provided in this Subsection (2)(i), the amount of a
1373 contribution made during the taxable year on behalf of the taxpayer to a medical care savings
1374 account and interest earned on a contribution to a medical care savings account established
1375 pursuant to Title 31A, Chapter 32a, Medical Care Savings Account Act, to the extent the
1376 contribution is accepted by the account administrator as provided in the Medical Care Savings
1377 Account Act, and if the taxpayer did not deduct or include amounts on the taxpayer's federal
1378 individual income tax return pursuant to Section 220, Internal Revenue Code; and]
1379 [(ii) a contribution deductible under this Subsection (2)(i) may not exceed either of the
1380 following:]
1381 [(A) the maximum contribution allowed under the Medical Care Savings Account Act
1382 for the tax year multiplied by two for taxpayers who file a joint return, if neither spouse is
1383 covered by health care insurance as defined in Section 31A-1-301 or self-funded plan that
1384 covers the other spouse, and each spouse has a medical care savings account; or]
1385 [(B) the maximum contribution allowed under the Medical Care Savings Account Act
1386 for the tax year for taxpayers:]
1387 [(I) who do not file a joint return; or]
1388 [(II) who file a joint return, but do not qualify under Subsection (2)(i)(ii)(A);]
1389 [(j) the amount included in federal taxable income that was derived from money paid
1390 by an account owner to the program fund under Title 53B, Chapter 8a, Higher Education
1391 Savings Incentive Program, not to exceed amounts determined under Subsection

1392 53B-8a-106 (1)(d), and investment income earned on account agreements entered into under
1393 Section 53B-8a-106 that is included in federal taxable income, but only when the funds are
1394 used for qualified higher education costs of the beneficiary;]
1395 [(k) for taxable years beginning on or after January 1, 2000, any amounts paid for
1396 premiums for long-term care insurance as defined in Section 31A-1-301 to the extent the
1397 amounts paid for long-term care insurance were not deducted under Section 213, Internal
1398 Revenue Code, in determining federal taxable income;]
1399 [(l)] (b) for taxable years beginning on or after January 1, 2000, if the conditions of
1400 Subsection [(4)] (3)(a) are met, the amount of income derived by a Ute tribal member:
1401 (i) during a time period that the Ute tribal member resides on homesteaded land
1402 diminished from the Uintah and Ouray Reservation; and
1403 (ii) from a source within the Uintah and Ouray Reservation;
1404 (c) an amount received by a resident or nonresident individual or distribution received
1405 by a resident beneficiary of a resident trust:
1406 (i) if that amount or distribution constitutes a refund of taxes imposed by:
1407 (A) a state; or
1408 (B) the District of Columbia; and
1409 (ii) to the extent that amount or distribution is included in adjusted gross income for
1410 that taxable year on the federal individual income tax return of the resident or nonresident
1411 individual or resident beneficiary of a resident trust;
1412 (d) the amount of a railroad retirement benefit:
1413 (i) paid:
1414 (A) in accordance with The Railroad Retirement Act of 1974, 45 U.S.C. Sec 231 et
1415 seq.;
1416 (B) to a resident or nonresident individual; and
1417 (C) for the taxable year; and
1418 (ii) to the extent that railroad retirement benefit is included in adjusted gross income on
1419 that resident or nonresident individual's federal individual income tax return for that taxable
1420 year; and
1421 (e) an amount:
1422 (i) received by an enrolled member of an American Indian tribe; and

1423 (ii) to the extent that the state is not authorized or permitted to impose a tax under this
1424 part on that amount in accordance with:
1425 (A) federal law;
1426 (B) a treaty; or
1427 (C) a final decision issued by a court of competent jurisdiction.
1428 [(m) (i) for taxable years beginning on or after January 1, 2003, the total amount of a
1429 resident or nonresident individual's short-term capital gain or long-term capital gain on a
1430 capital gain transaction:]
1431 [(A) that occurs on or after January 1, 2003;]
1432 [(B) if 70% or more of the gross proceeds of the capital gain transaction are expended:]
1433 [(I) to purchase qualifying stock in a Utah small business corporation; and]
1434 [(II) within a 12-month period after the day on which the capital gain transaction
1435 occurs; and]
1436 [(C) if, prior to the purchase of the qualifying stock described in Subsection
1437 (2)(m)(i)(B)(I), the resident or nonresident individual did not have an ownership interest in the
1438 Utah small business corporation that issued the qualifying stock; and]
1439 [(ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
1440 the commission may make rules:]
1441 [(A) defining the term "gross proceeds"; and]
1442 [(B) for purposes of Subsection (2)(m)(i)(C), prescribing the circumstances under
1443 which a resident or nonresident individual has an ownership interest in a Utah small business
1444 corporation; and]
1445 [(n) for the taxable year beginning on or after January 1, 2005, but beginning on or
1446 before December 31, 2005, the first $2,200 of income a qualifying military service member
1447 receives:]
1448 [(i) for service:]
1449 [(A) as a qualifying military service member; or]
1450 [(B) under an order into active service in accordance with Section 39-1-5 ; and]
1451 [(ii) to the extent that income is included in adjusted gross income on that resident or
1452 nonresident individual's federal individual income tax return for that taxable year.]
1453 [(3) (a) For purposes of Subsection (2)(d), the amount of retirement income subtracted

1454 for taxpayers under 65 shall be the lesser of the amount included in federal taxable income, or
1455 $4,800, except that:]
1456 [(i) for married taxpayers filing joint returns, for each $1 of adjusted gross income
1457 earned over $32,000, the amount of the retirement income exemption that may be subtracted
1458 shall be reduced by 50 cents;]
1459 [(ii) for married taxpayers filing separate returns, for each $1 of adjusted gross income
1460 earned over $16,000, the amount of the retirement income exemption that may be subtracted
1461 shall be reduced by 50 cents; and]
1462 [(iii) for individual taxpayers, for each $1 of adjusted gross income earned over
1463 $25,000, the amount of the retirement income exemption that may be subtracted shall be
1464 reduced by 50 cents.]
1465 [(b) For purposes of Subsection (2)(e), the amount of the personal retirement
1466 exemption shall be further reduced according to the following schedule:]
1467 [(i) for married taxpayers filing joint returns, for each $1 of adjusted gross income
1468 earned over $32,000, the amount of the personal retirement exemption shall be reduced by 50
1469 cents;]
1470 [(ii) for married taxpayers filing separate returns, for each $1 of adjusted gross income
1471 earned over $16,000, the amount of the personal retirement exemption shall be reduced by 50
1472 cents; and]
1473 [(iii) for individual taxpayers, for each $1 of adjusted gross income earned over
1474 $25,000, the amount of the personal retirement exemption shall be reduced by 50 cents.]
1475 [(c) For purposes of Subsections (3)(a) and (b), adjusted gross income shall be
1476 calculated by adding to federal adjusted gross income any interest income not otherwise
1477 included in federal adjusted gross income.]
1478 [(d) For purposes of determining ownership of items of retirement income common
1479 law doctrine will be applied in all cases even though some items may have originated from
1480 service or investments in a community property state. Amounts received by the spouse of a
1481 living retiree because of the retiree's having been employed in a community property state are
1482 not deductible as retirement income of such spouse.]
1483 [(e) For purposes of Subsection (2)(h), a subtraction for an amount paid for health care
1484 insurance as defined in Title 31A, Chapter 1, General Provisions, is not allowed:]

1485 [(i) for an amount that is reimbursed or funded in whole or in part by the federal
1486 government, the state, or an agency or instrumentality of the federal government or the state;
1487 and]
1488 [(ii) for a taxpayer who is eligible to participate in a health plan maintained and funded
1489 in whole or in part by the taxpayer's employer or the taxpayer's spouse's employer.]
1490 [(4)] (3) (a) A subtraction for an amount described in Subsection (2)[(l)](b) is allowed
1491 only if:
1492 (i) the taxpayer is a Ute tribal member; and
1493 (ii) the governor and the Ute tribe execute and maintain an agreement meeting the
1494 requirements of this Subsection [(4)] (3).
1495 (b) The agreement described in Subsection [(4)] (3)(a):
1496 (i) may not:
1497 (A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
1498 (B) provide a subtraction under this section greater than or different from the
1499 subtraction described in Subsection (2)[(l)](b); or
1500 (C) affect the power of the state to establish rates of taxation; and
1501 (ii) shall:
1502 (A) provide for the implementation of the subtraction described in Subsection
1503 (2)[(l)](b);
1504 (B) be in writing;
1505 (C) be signed by:
1506 (I) the governor; and
1507 (II) the chair of the Business Committee of the Ute tribe;
1508 (D) be conditioned on obtaining any approval required by federal law; and
1509 (E) state the effective date of the agreement.
1510 (c) (i) The governor shall report to the commission by no later than February 1 of each
1511 year regarding whether or not an agreement meeting the requirements of this Subsection [(4)]
1512 (3) is in effect.
1513 (ii) If an agreement meeting the requirements of this Subsection [(4)] (3) is terminated,
1514 the subtraction permitted under Subsection (2)[(l)](b) is not allowed for taxable years
1515 beginning on or after the January 1 following the termination of the agreement.

1516 (d) For purposes of Subsection (2)[(l)](b) and in accordance with Title 63, Chapter 46a,
1517 Utah Administrative Rulemaking Act, the commission may make rules:
1518 (i) for determining whether income is derived from a source within the Uintah and
1519 Ouray Reservation; and
1520 (ii) that are substantially similar to how [federal] adjusted gross income derived from
1521 Utah sources is determined under Section 59-10-117 .
1522 [(5) (a) For purposes of this Subsection (5), "Form 8814" means:]
1523 [(i) the federal individual income tax Form 8814, Parents' Election To Report Child's
1524 Interest and Dividends; or]
1525 [(ii) (A) for taxable years beginning on or after January 1, 2002, a form designated by
1526 the commission in accordance with Subsection (5)(a)(ii)(B) as being substantially similar to
1527 2000 Form 8814 if for purposes of federal individual income taxes the information contained
1528 on 2000 Form 8814 is reported on a form other than Form 8814; and]
1529 [(B) for purposes of Subsection (5)(a)(ii)(A) and in accordance with Title 63, Chapter
1530 46a, Utah Administrative Rulemaking Act, the commission may make rules designating a form
1531 as being substantially similar to 2000 Form 8814 if for purposes of federal individual income
1532 taxes the information contained on 2000 Form 8814 is reported on a form other than Form
1533 8814.]
1534 [(b) The amount of a child's income added to adjusted gross income under Subsection
1535 (1)(c) is equal to the difference between:]
1536 [(i) the lesser of:]
1537 [(A) the base amount specified on Form 8814; and]
1538 [(B) the sum of the following reported on Form 8814:]
1539 [(I) the child's taxable interest;]
1540 [(II) the child's ordinary dividends; and]
1541 [(III) the child's capital gain distributions; and]
1542 [(ii) the amount not taxed that is specified on Form 8814.]
1543 [(6) Notwithstanding Subsection (1)(g), interest from bonds, notes, and other evidences
1544 of indebtedness issued by an entity described in Subsections (1)(g)(i) through (iv) may not be
1545 added to federal taxable income of a resident or nonresident individual if, as annually
1546 determined by the commission:]

1547 [(a) for an entity described in Subsection (1)(g)(i) or (ii), the entity and all of the
1548 political subdivisions, agencies, or instrumentalities of the entity do not impose a tax based on
1549 income on any part of the bonds, notes, and other evidences of indebtedness of this state; or]
1550 [(b) for an entity described in Subsection (1)(g)(iii) or (iv), the following do not impose
1551 a tax based on income on any part of the bonds, notes, and other evidences of indebtedness of
1552 this state:]
1553 [(i) the entity; or]
1554 [(ii) (A) the state in which the entity is located; or]
1555 [(B) the District of Columbia, if the entity is located within the District of Columbia.]
1556 Section 20. Section 59-10-115 is amended to read:
1557 59-10-115. Equitable adjustments.
1558 [(1) If any provision of the Internal Revenue Code requires the inclusion of an item of
1559 gross income or the allowance of an item of deduction from gross income in the computation
1560 of federal taxable income of the taxpayer for any taxable year beginning on or after the
1561 effective date of this chapter, and if such item has been taken into account in computing the
1562 taxable income of the taxpayer for state income tax purposes for any prior taxable year, the
1563 commission shall make or allow such adjustments to the taxpayer's state taxable income as are
1564 necessary to prevent the inclusion for a second time or the deduction for a second time of such
1565 item for state income tax purposes.]
1566 [(2) If in a return filed for any taxable year beginning on or after the effective date of
1567 this chapter, the taxpayer reports gain or loss from the disposition of property or claims a
1568 deduction for depreciation of property, and if his basis for gain or loss on the disposition of
1569 such property or for allowance of the depreciation deduction for the exhaustion, wear, and tear
1570 thereof (including a reasonable allowance for obsolescence) is different for federal income tax
1571 purposes than it would be for state income tax purposes if the provisions of former Title 59,
1572 Chapter 14, were applicable to such taxable year, the commission shall (anything in this
1573 chapter to the contrary notwithstanding) allow or make such adjustment to state taxable income
1574 of the taxpayer for such taxable year as will result in the use by the taxpayer of the same basis,
1575 for such purpose, that he would be allowed or required to use in reporting such gain or loss or
1576 claiming such depreciation deduction if the provisions of former Title 59, Chapter 14, were
1577 applicable to the taxable year.]

1578 [(3) If the taxpayer receives, in any taxable year beginning on or after the effective date
1579 of this chapter, a distribution from an electing small business corporation, as defined by
1580 Section 1371(b) of the Internal Revenue Code, of a net share of the corporation's undistributed
1581 taxable income for a taxable year or years prior to the taxable year in which such distribution is
1582 made, the commission shall make such adjustment to state taxable income as will prevent
1583 escape from taxation by this state of such undistributed taxable income previously taxed to the
1584 taxpayer for federal income tax purposes but not for state income tax purposes.]
1585 [(4)] (1) The commission shall [by rule prescribe for adjustments] allow an adjustment
1586 to [state taxable] adjusted gross income or an addition or subtraction required by Section
1587 59-10-114 of [the] a taxpayer [in circumstances other than those specified by Subsections (1),
1588 (2), and (3) of this section where, solely by reason of the enactment of this chapter,] if the
1589 taxpayer would otherwise:
1590 (a) receive [or have received] a double tax benefit under this part; or
1591 (b) suffer [or have suffered] a double tax detriment under this part. [Anything in this
1592 section or this chapter to the contrary notwithstanding, the commission may not make any
1593 adjustment pursuant to this section which will result in an increase or decrease of tax liability
1594 the amount of which is less than $25.]
1595 (2) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
1596 commission may make rules to allow for the adjustment, addition, or subtraction required by
1597 Subsection (1).
1598 Section 21. Section 59-10-116 is amended to read:
1599 59-10-116. Definitions -- Tax on nonresident individual -- Calculation --
1600 Rulemaking authority.
1601 (1) For purposes of this section:
1602 (a) "Military service" is as defined in Pub. L. No. 108-189, Sec. 101[;].
1603 (b) "Servicemember" is as defined in Pub. L. No. 108-189, Sec. 101[;].
1604 (c) "State income tax percentage" means a percentage equal to a nonresident
1605 individual's [federal] adjusted gross income for the taxable year received from Utah sources, as
1606 determined under Section 59-10-117 , divided by the difference between:
1607 (i) the nonresident individual's total [federal] adjusted gross income for that taxable
1608 year; and

1609 (ii) if the nonresident individual described in Subsection (1)(c)(i) is a servicemember,
1610 the compensation the servicemember receives for military service if the servicemember is
1611 serving in compliance with military orders[; and].
1612 (d) "State taxable income" means a nonresident individual's adjusted gross income
1613 after making the additions and subtractions required by Sections 59-10-114 and 59-10-115 .
1614 [(d)] (e) "Unapportioned state tax" means the product of the:
1615 (i) difference between:
1616 (A) a nonresident individual's [federal taxable income, as defined in Section
1617 59-10-111 , with the modifications, subtractions, and adjustments provided for in Section
1618 59-10-114 ] state taxable income; and
1619 (B) if the nonresident individual described in Subsection (1)[(d)] (e)(i)(A) is a
1620 servicemember, compensation the servicemember receives for military service if the
1621 servicemember is serving in compliance with military orders; and
1622 (ii) tax rate imposed under Section 59-10-104 .
1623 (2) [Except as provided in Subsection (3), a] A tax is imposed on a nonresident
1624 individual in an amount equal to the product of the nonresident individual's:
1625 (a) unapportioned state tax; and
1626 (b) state income tax percentage.
1627 [(3) This section does not apply to a nonresident individual exempt from taxation
1628 under Section 59-10-104.1 .]
1629 [(4)] (3) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
1630 Act, for purposes of Subsection (1), the commission may by rule define what constitutes
1631 compensation.
1632 Section 22. Section 59-10-117 is amended to read:
1633 59-10-117. Federal adjusted gross income derived from Utah sources.
1634 (1) For [the purpose] purposes of Section 59-10-116 , [federal] adjusted gross income
1635 derived from Utah sources [shall include] includes those items includable in [federal "adjusted
1636 gross income" (as defined by Section 62 of the Internal Revenue Code)] adjusted gross income
1637 attributable to or resulting from:
1638 (a) the ownership in this state of any interest in real or tangible personal property,
1639 [(]including real property or property rights from which "gross income from mining," as

1640 defined by Section 613(c) [of the], Internal Revenue Code, is derived[)]; or
1641 (b) the carrying on of a business, trade, profession, or occupation in this state.
1642 (2) For the purposes of Subsection (1):
1643 (a) income from intangible personal property, including annuities, dividends, interest,
1644 and gains from the disposition of intangible personal property shall constitute income derived
1645 from Utah sources only to the extent that such income is from property employed in a trade,
1646 business, profession, or occupation carried on in this state[.];
1647 (b) deductions with respect to capital losses, net long-term capital gains, and net
1648 operating losses shall be based solely on income, gain, loss, and deduction connected with Utah
1649 sources, under rules prescribed by the commission in accordance with Title 63, Chapter 46a,
1650 Utah Administrative Rulemaking Act, but otherwise shall be determined in the same manner as
1651 the corresponding federal deductions[.];
1652 (c) salaries, wages, commissions, and compensation for personal services rendered
1653 outside this state shall not be considered to be derived from Utah sources[.];
1654 (d) a nonresident shareholder's distributive share of ordinary income, gain, loss, and
1655 deduction derived from or connected with Utah sources shall be determined under Section
1656 59-10-118 [.];
1657 (e) a nonresident, other than a dealer holding property primarily for sale to customers
1658 in the ordinary course of his trade or business, [shall] may not be considered to carry on a trade,
1659 business, profession, or occupation in this state solely by reason of the purchase or sale of
1660 property for [his] the nonresident's own account[.];
1661 (f) if a trade, business, profession, or occupation is carried on partly within and partly
1662 without this state, items of income, gain, loss, and deductions derived from or connected with
1663 Utah sources shall be determined in accordance with the provisions of Section 59-10-118 [.];
1664 (g) a nonresident partner's distributive share of partnership income, gain, loss, and
1665 deduction derived from or connected with Utah sources shall be determined under Section
1666 59-10-303 [.];
1667 (h) the share of a nonresident estate or trust and nonresident beneficiaries of any estate
1668 or trust in income, gain, loss, and deduction derived from or connected with Utah sources shall
1669 be determined under Section 59-10-207 [.]; and
1670 (i) any dividend, interest, or distributive share of income, gain, or loss from a real

1671 estate investment trust, as defined in Section 59-7-116.5 , distributed or allocated to a
1672 nonresident investor in the trust, including any shareholder, beneficiary, or owner of a
1673 beneficial interest in the trust, shall be income from intangible personal property under
1674 Subsection (2)(a), and shall constitute income derived from Utah sources only to the extent the
1675 nonresident investor is employing its beneficial interest in the trust in a trade, business,
1676 profession, or occupation carried on by the investor in this state.
1677 Section 23. Section 59-10-118.1 is enacted to read:
1678 59-10-118.1. Filing status.
1679 Except as provided in Section 59-10-119 and subject to Section 59-10-503 , a resident
1680 or nonresident individual shall file a return under this chapter for a taxable year using the same
1681 filing status as the resident or nonresident individual uses for filing a federal individual income
1682 tax return for that same taxable year.
1683 Section 24. Section 59-10-119 is amended to read:
1684 59-10-119. Returns by husband and wife, either or both of whom is a
1685 nonresident.
1686 (1) If the [federal taxable] adjusted gross income of a husband and wife [(both] who
1687 are nonresidents of this state[)] is reported or determined on separate federal returns, [their] the
1688 state taxable [incomes in this state] income of that husband and wife shall be separately
1689 determined.
1690 (2) If the [federal taxable] adjusted gross income of a husband and wife [(both] who
1691 are nonresidents[)] of this state is reported or determined on a joint return [their tax], the state
1692 taxable income of that husband and wife shall be reported or determined in this state on a joint
1693 return.
1694 (3) (a) If either a husband or wife is a nonresident and the other a resident, separate
1695 taxes shall be determined on their separate state taxable incomes on such forms as the
1696 commission shall prescribe, unless both elect to determine their state taxable income as if both
1697 were residents.
1698 (b) If a husband and wife [(one being a resident, the other a nonresident)] described in
1699 Subsection (3)(a) file a joint federal income tax return, but determine their state taxable income
1700 separately, they shall compute their taxable incomes in this state as if their [federal taxable]
1701 adjusted gross incomes had been determined separately.

1702 Section 25. Section 59-10-120 is amended to read:
1703 59-10-120. Change of status as resident or nonresident.
1704 (1) If an individual changes [his] that individual's status during [his] the taxable year
1705 from resident to nonresident or from nonresident to resident, the commission may by rule
1706 require [him] that individual to file one return for the portion of the year during which [he] the
1707 individual is a resident and another return for the portion of the year during which [he] the
1708 individual is a nonresident.
1709 (2) Except as provided in Subsection (3), the state taxable income of the individual
1710 described in Subsection (1) shall be determined as provided in this chapter for residents and for
1711 nonresidents as if the individual's taxable year for federal income tax purposes were limited to
1712 the period of [his] the individual's resident and nonresident status respectively.
1713 (3) There shall be included in determining state taxable income from sources within or
1714 without this state, as the case may be, income, gain, loss, or deduction accrued prior to the
1715 change of status, even though not otherwise includable or allowable in respect of the period
1716 prior to such change, but the taxation or deduction of items received or accrued prior to the
1717 change of status shall not be affected by the change.
1718 Section 26. Section 59-10-121 is amended to read:
1719 59-10-121. Proration when two returns required.
1720 Where two returns are required to be filed as provided in Section 59-10-120 [: (1)
1721 personal exemptions and the standard deduction as used on the federal return shall be prorated
1722 between the two returns, under rules prescribed by the commission, to reflect the proportions of
1723 the taxable year during which the individual was a resident and a nonresident; and (2)], the
1724 total of the taxes due [thereon shall] on those returns may not be less than would be due if the
1725 total of the taxable incomes reported on the two returns were includable in one return.
1726 Section 27. Section 59-10-122 is amended to read:
1727 59-10-122. Taxable year.
1728 (1) For purposes of the tax imposed by this chapter, a taxpayer's taxable year shall be
1729 the same as [his] the taxpayer's taxable year for federal income tax purposes.
1730 (2) (a) If a taxpayer's taxable year is changed for federal income tax purposes, [his] the
1731 taxpayer's taxable year for purposes of the tax imposed by this chapter shall be similarly
1732 changed.

1733 (b) If a change in taxable year results in a taxable period of less than 12 months for
1734 federal income tax purposes, the same taxable period shall be used in computing the tax
1735 imposed by this chapter.
1736 Section 28. Section 59-10-123 is amended to read:
1737 59-10-123. Accounting method.
1738 (1) For purposes of the tax imposed by this chapter, a taxpayer's method of accounting
1739 shall be the same as the method employed for federal income tax purposes.
1740 (2) If a taxpayer's method of accounting is changed for federal income tax purposes,
1741 [his] the taxpayer's method of accounting shall be similarly changed and reflected in each
1742 return filed [for Utah individual income tax purposes] under this chapter for any taxable year
1743 for which [such] the change is reflected in [his] the taxpayer's return for federal income tax
1744 purposes.
1745 Section 29. Section 59-10-136 is enacted to read:
1746 59-10-136. Carry forward of tax credits -- Rulemaking authority.
1747 (1) Notwithstanding the repeal of a tax credit by this bill and subject to Subsection (2),
1748 a claimant, estate, or trust may carry forward a tax credit repealed by this bill:
1749 (a) if for a taxable year beginning before January 1, 2007, the claimant, estate, or trust
1750 is allowed to claim a tax credit repealed by this bill;
1751 (b) an amount of tax credit described in Subsection (1)(a) exceeds the claimant's,
1752 estate's, or trust's tax liability under this chapter for the taxable year for which the claimant,
1753 estate, or trust is allowed to claim the tax credit repealed by this bill; and
1754 (c) on the first day of the first taxable year beginning on or after January 1, 2007, there
1755 remains an amount of tax credit that the claimant is allowed to carry forward for a tax credit
1756 described in Subsection (1)(a).
1757 (2) If a claimant, estate, or trust may carry forward a tax credit in accordance with
1758 Subsection (1), the claimant, estate, or trust may carry forward the tax credit for a time period
1759 equal to the earlier of:
1760 (a) the number of taxable years required to carry forward the remaining amount of tax
1761 credit described in Subsection (1)(c); or
1762 (b) the number of taxable years that the claimant, estate, or trust would have been
1763 allowed to carry forward tax credit if the tax credit had not been repealed by this bill.

1764 (3) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
1765 commission may make rules for determining the number of taxable years that a claimant,
1766 estate, or trust would have been allowed to carry forward tax credit if the tax credit had not
1767 been repealed by this bill.
1768 Section 30. Section 59-10-201 is amended to read:
1769 59-10-201. Taxation of resident trusts and estates.
1770 (1) A tax determined in accordance with the [rates] rate prescribed by Section
1771 59-10-104 [for individuals filing separately] is imposed for each taxable year on the state
1772 taxable income of each resident estate or trust, except for trusts taxed as corporations.
1773 (2) A resident estate or trust shall be allowed the credit provided in Section
1774 [ 59-10-106 ] 59-10-1003 , relating to an income tax imposed by another state, except that the
1775 limitation shall be computed by reference to the taxable income of the estate or trust.
1776 (3) The property of the trust established in Title 53B, Chapter 8a, Higher Education
1777 Savings Incentive Program, and its income from operations and investments are exempt from
1778 all taxation by the state under this chapter.
1779 Section 31. Section 59-10-201.1 is amended to read:
1780 59-10-201.1. State taxable income of resident estate or trust defined.
1781 The state taxable income of a resident estate or trust means its federal taxable income as
1782 defined in [Subsections (a) and (b),] Section 641 (a) and (b), Internal Revenue Code, as
1783 adjusted by Sections 59-10-202 , 59-10-209.1 , and [ 59-10-209 ] 59-10-210 .
1784 Section 32. Section 59-10-202 is amended to read:
1785 59-10-202. Additions to and subtractions from state taxable income of resident or
1786 nonresident estate or trust.
1787 (1) There shall be added to federal taxable income of a resident or nonresident estate or
1788 trust:
1789 (a) the amount of any income tax imposed by this or any predecessor Utah individual
1790 income tax law and the amount of any income tax imposed by the laws of another state, the
1791 District of Columbia, or a possession of the United States, to the extent deducted from [federal]
1792 adjusted [total] gross income [as defined in Section 62, Internal Revenue Code,] in determining
1793 federal taxable income;
1794 (b) any charitable deduction that a resident or nonresident estate or trust takes for the

1795 taxable year on the resident or nonresident estate's or trust's federal tax return for estates and
1796 trusts for that taxable year;
1797 (c) any federal estate tax deduction or generation-skipping tax deduction that a resident
1798 or nonresident estate or trust takes for the taxable year on the resident or nonresident estate's or
1799 trust's federal tax return for estates and trusts for that taxable year; and
1800 (d) any fiduciary adjustments required by Section 59-10-210 .
1801 [(b) a lump sum distribution allowable as a deduction under Section 402(d)(3) of the
1802 Internal Revenue Code, to the extent deductible under Section 62(a)(8) of the Internal Revenue
1803 Code in determining federal adjusted gross income; and]
1804 [(c) the amount of any gain as defined in Section 644(b) of the Internal Revenue Code,
1805 to the extent deductible under Section 641(c) of the Internal Revenue Code in determining the
1806 federal taxable income of a trust.]
1807 (2) There shall be subtracted from federal taxable income of a resident or nonresident
1808 estate or trust:
1809 (a) the interest or [dividends] a dividend on obligations or securities of the United
1810 States and its possessions or of any authority, commission, or instrumentality of the United
1811 States, to the extent [includable] that interest or dividend is included in gross income for
1812 federal income tax purposes for the taxable year but exempt from state income taxes under the
1813 laws of the United States, but the amount subtracted under this Subsection (2)(a) shall be
1814 reduced by any interest on indebtedness incurred or continued to purchase or carry the
1815 obligations or securities described in this Subsection (2)(a), and by any expenses incurred in
1816 the production of interest or dividend income described in this Subsection (2)(a) to the extent
1817 that such expenses, including amortizable bond premiums, are deductible in determining
1818 federal taxable income;
1819 [(b) 1/2 of the net amount of any income tax paid or payable to the United States after
1820 all allowable credits, as per the United States fiduciary income tax return of the taxpayer for the
1821 same taxable year; and]
1822 [(c) income of an irrevocable resident trust if:]
1823 [(i) the income would not be treated as state taxable income derived from Utah sources
1824 under Section 59-10-204 if received by a nonresident trust;]
1825 [(ii) the trust first became a resident trust on or after January 1, 2004;]

1826 [(iii) no assets of the trust were held, at any time after January 1, 2003, in another
1827 resident irrevocable trust created by the same settlor or the spouse of the same settlor;]
1828 [(iv) the trustee of the trust is a trust company as defined in Subsection 7-5-1 (1)(d);]
1829 [(v) the amount subtracted under this Subsection (2) is reduced to the extent the settlor
1830 or any other person is treated as an owner of any portion of the trust under Subtitle A,
1831 Subchapter J, Subpart E of the Internal Revenue Code; and]
1832 [(vi) the amount subtracted under this Subsection (2) is reduced by any interest on
1833 indebtedness incurred or continued to purchase or carry the assets generating the income
1834 described in this Subsection (2), and by any expenses incurred in the production of income
1835 described in this Subsection (2), to the extent that those expenses, including amortizable bond
1836 premiums, are deductible in determining federal taxable income.]
1837 (b) if the conditions of Subsection (3)(a) are met, the amount of income of a resident or
1838 nonresident estate or trust derived from a deceased Ute tribal member:
1839 (i) during a time period that the Ute tribal member resided on homesteaded land
1840 diminished from the Uintah and Ouray Reservation; and
1841 (ii) from a source within the Uintah and Ouray Reservation;
1842 (c) any amount:
1843 (i) received by a resident or nonresident estate or trust;
1844 (ii) that constitutes a refund of taxes imposed by:
1845 (A) a state; or
1846 (B) the District of Columbia; and
1847 (iii) to the extent that amount is included in total income on that resident or nonresident
1848 estate's or trust's federal tax return for estates and trusts for that taxable year;
1849 (d) the amount of a railroad retirement benefit:
1850 (i) paid:
1851 (A) in accordance with The Railroad Retirement Act of 1974, 45 U.S.C. Sec. 231 et
1852 seq.;
1853 (B) to a resident or nonresident estate or trust derived from a deceased resident or
1854 nonresident individual; and
1855 (C) for the taxable year; and
1856 (ii) to the extent that railroad retirement benefit is included in total income on that

1857 resident or nonresident estate's or trust's federal tax return for estates and trusts;
1858 (e) an amount:
1859 (i) received by a resident or nonresident estate or trust if that amount is derived from a
1860 deceased enrolled member of an American Indian tribe; and
1861 (ii) to the extent that the state is not authorized or permitted to impose a tax under this
1862 part on that amount in accordance with:
1863 (A) federal law;
1864 (B) a treaty; or
1865 (C) a final decision issued by a court of competent jurisdiction; and
1866 (f) any fiduciary adjustments required by Section 59-10-210 .
1867 (3) (a) A subtraction for an amount described in Subsection (2)(b) is allowed only if:
1868 (i) the income is derived from a deceased Ute tribal member; and
1869 (ii) the governor and the Ute tribe execute and maintain an agreement meeting the
1870 requirements of this Subsection (3).
1871 (b) The agreement described in Subsection (3)(a):
1872 (i) may not:
1873 (A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
1874 (B) provide a subtraction under this section greater than or different from the
1875 subtraction described in Subsection (2)(b); or
1876 (C) affect the power of the state to establish rates of taxation; and
1877 (ii) shall:
1878 (A) provide for the implementation of the subtraction described in Subsection (2)(b);
1879 (B) be in writing;
1880 (C) be signed by:
1881 (I) the governor; and
1882 (II) the chair of the Business Committee of the Ute tribe;
1883 (D) be conditioned on obtaining any approval required by federal law; and
1884 (E) state the effective date of the agreement.
1885 (c) (i) The governor shall report to the commission by no later than February 1 of each
1886 year regarding whether or not an agreement meeting the requirements of this Subsection (3) is
1887 in effect.

1888 (ii) If an agreement meeting the requirements of this Subsection (3) is terminated, the
1889 subtraction permitted under Subsection (2)(b) is not allowed for taxable years beginning on or
1890 after the January 1 following the termination of the agreement.
1891 (d) For purposes of Subsection (2)(b) and in accordance with Title 63, Chapter 46a,
1892 Utah Administrative Rulemaking Act, the commission may make rules:
1893 (i) for determining whether income is derived from a source within the Uintah and
1894 Ouray Reservation; and
1895 (ii) that are substantially similar to how federal adjusted gross income derived from
1896 Utah sources is determined under Section 59-10-117 .
1897 Section 33. Section 59-10-204 is amended to read:
1898 59-10-204. State taxable income of nonresident estate or trust defined.
1899 The state taxable income of a nonresident estate or trust shall be its [federal] state
1900 taxable income as [defined] calculated in Section 59-10-201.1 , derived from Utah sources
1901 determined in accordance with the principles of Section 59-10-117 , and adjusted as provided in
1902 Section 59-10-207 .
1903 Section 34. Section 59-10-205 is amended to read:
1904 59-10-205. Tax on income derived from Utah sources.
1905 A tax is imposed on the state taxable income, as [defined] calculated in Section
1906 59-10-204 , of every nonresident estate or trust in accordance with the [rates] rate prescribed in
1907 Section 59-10-104 [for individuals filing separately]. The tax shall only be applied to income
1908 derived from Utah sources as adjusted by Section 59-10-207 , including such items from
1909 another estate or trust of which the first estate or trust is a beneficiary.
1910 Section 35. Section 59-10-207 is amended to read:
1911 59-10-207. Share of a nonresident estate or trust and beneficiaries in state taxable
1912 income.
1913 (1) The share of a nonresident estate or trust and its beneficiaries in items of income,
1914 gain, loss, and deduction entering into the definition of distributable net income and the share
1915 for purposes of Section 59-10-116 of a nonresident beneficiary of any estate or trust in estate or
1916 trust income, gain, loss, and deduction shall be determined as follows:
1917 (a) To the amount of items of income, gain, loss, and deduction that enter into the
1918 definition of distributable net income there shall be added or subtracted, as the case may be, the

1919 modifications described in Sections 59-10-202 and [ 59-10-209 ] 59-10-210 to the extent they
1920 relate to items of income, gain, loss, and deduction that also enter into the definition of
1921 distributable net income. No modification shall be made under this section that has the effect
1922 of duplicating an item already reflected in the definition of distributable net income.
1923 (b) The amount determined under Subsection (1)(a) shall be allocated among the estate
1924 or trust and its beneficiaries (including solely for the purpose of this allocation, resident
1925 beneficiaries) in proportion to their respective shares of federal distributable net income. The
1926 amounts so allocated shall have the same character as for federal income tax purposes.
1927 (c) If the estate or trust has no federal distributable net income for the taxable year, the
1928 share of each beneficiary in the net amount determined under Subsection (1)(a) shall be in
1929 proportion to his share of the estate or trust income for such year, under state law or the terms
1930 of the governing instrument, that is required to be distributed currently and any other amounts
1931 of such income distributed in such year. Any balance of such net income shall be allocated to
1932 the estate or trust.
1933 (2) The commission may by rule establish such other method or methods of
1934 determining the respective shares of the beneficiaries and of the estate or trust in its income
1935 derived from sources in this state, and in the modifications related thereto, as may be
1936 appropriate and equitable. The fiduciary may elect to use any other methods prescribed in this
1937 Subsection (2) only when the allocation of such respective shares under this section would
1938 result in an inequity in the allocation which is substantial both in amount and in relation to the
1939 total amount of the modifications referred to in Subsection (1)(a).
1940 Section 36. Section 59-10-209.1 is enacted to read:
1941 59-10-209.1. Adjustments to state taxable income.
1942 (1) The commission shall allow an adjustment to federal taxable income or an addition
1943 or subtraction required by Section 59-10-202 of a resident or nonresident estate or trust if the
1944 resident or nonresident estate or trust would otherwise:
1945 (a) receive a double tax benefit under this chapter; or
1946 (b) suffer a double tax detriment under this chapter.
1947 (2) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
1948 commission may make rules to allow for the adjustment, addition, or subtraction required by
1949 Subsection (1).

1950 Section 37. Section 59-10-210 is amended to read:
1951 59-10-210. Fiduciary adjustments.
1952 [(1) The fiduciary adjustments are the amounts of the modifications described in
1953 Subsections 59-10-202 (1)(a) and (2)(a), including such items from another estate or trust of
1954 which the first estate or trust is a beneficiary.]
1955 (1) As provided in this section, a share of the fiduciary adjustments described in
1956 Subsection (2) shall be added to or subtracted from:
1957 (a) federal taxable income of a resident or nonresident estate or trust; or
1958 (b) adjusted gross income of a resident or nonresident beneficiary of a resident or
1959 nonresident estate or trust.
1960 (2) For purposes of Subsection (1), the fiduciary adjustments are the following
1961 amounts:
1962 (a) the additions to and subtractions from federal taxable income of a resident or
1963 nonresident estate or trust required by Section 59-10-202 ; and
1964 (b) any tax credit allowed by:
1965 (i) Part 10, Nonrefundable Tax Credit Act; or
1966 (ii) Part 11, Refundable Tax Credit Act.
1967 [(2)] (3) (a) The respective shares of an estate or trust and its beneficiaries [(]including
1968 [solely] for the purpose of this allocation[,] a nonresident [beneficiaries)] beneficiary, in the
1969 state fiduciary adjustments, shall be allocated in proportion to their respective shares of federal
1970 distributable net income of the estate or trust.
1971 (b) If the estate or trust described in Subsection (3)(a) has no federal distributable net
1972 income for the taxable year, the share of each beneficiary in the fiduciary adjustments shall be
1973 allocated in proportion to [his] that beneficiary's share of the estate or trust income for [such]
1974 the taxable year[, which] that is, under state law or the governing instrument, required to be
1975 distributed currently plus any other amounts of [such] that income distributed in [such] that
1976 taxable year. [Any]
1977 (c) After making the allocations required by Subsections (3)(a) and (b), any balance of
1978 the fiduciary adjustments shall be allocated to the estate or trust.
1979 [(3) The commission may by rule and upon such terms and conditions as it may
1980 prescribe, authorize the use of such other appropriate and equitable method or methods for

1981 determining attribution and allocation of the fiduciary adjustments. The fiduciary may elect to
1982 use any other methods prescribed in this subsection only when the allocation of such respective
1983 fiduciary adjustments under this section would result in an inequity in the allocation which is
1984 substantial both in amount and in relation to the total amount of the modifications referred to in
1985 Subsection (1).]
1986 [(4) The taxable income of an estate or trust shall be adjusted by the deduction of the
1987 income of that estate or trust to the extent of and for so long as such income is distributed or is
1988 distributable to or otherwise accrues to the benefit of a person who has been declared by a court
1989 of competent jurisdiction to be mentally incompetent. The commission may promulgate rules
1990 necessary to provide for this adjustment.]
1991 (4) (a) The commission shall allow a fiduciary to use a method for determining the
1992 allocation of the fiduciary adjustments described in Subsection (2) other than the method
1993 described in Subsection (3) if using the method described in Subsection (3) results in an
1994 inequity:
1995 (i) in allocating the fiduciary adjustments described in Subsection (2); and
1996 (ii) if the inequity is substantial:
1997 (A) in amount; and
1998 (B) in relation to the total amount of the fiduciary adjustments described in Subsection
1999 (2).
2000 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
2001 commission may make rules authorizing a fiduciary to use a method for determining the
2002 allocation of the fiduciary adjustments described in Subsection (2) other than the method
2003 described in Subsection (3) if using the method described in Subsection (3) results in an
2004 inequity:
2005 (i) in allocating the fiduciary adjustments described in Subsection (2); and
2006 (ii) if the inequity is substantial:
2007 (A) in amount; and
2008 (B) in relation to the total amount of the fiduciary adjustments described in Subsection
2009 (2).
2010 Section 38. Section 59-10-529 is amended to read:
2011 59-10-529. Overpayment of tax -- Credits -- Refunds.

2012 (1) In cases where there has been an overpayment of any tax imposed by this chapter,
2013 the amount of overpayment is credited as follows:
2014 (a) against any income tax then due from the taxpayer;
2015 (b) against:
2016 (i) the amount of any judgment against the taxpayer, including one ordering the
2017 payment of a fine or of restitution to a victim under Title 77, Chapter 38a, Crime Victims
2018 Restitution Act, obtained through due process of law by any entity of state government; or
2019 (ii) any child support obligation which is due or past due, as determined by the Office
2020 of Recovery Services in the Department of Human Services and after notice and an opportunity
2021 for an adjudicative proceeding, as provided in Subsection (2); or
2022 (c) as bail, to ensure the appearance of the taxpayer before the appropriate authority to
2023 resolve an outstanding warrant against the taxpayer for which bail is due, if a court of
2024 competent jurisdiction has not approved an alternative form of payment. This bail may be
2025 applied to any fine or forfeiture which is due and related to a warrant which is outstanding on
2026 or after February 16, 1984, and in accordance with Subsections (3) and (4).
2027 (2) (a) Subsection (1)(b)(ii) may be exercised only if the Office of Recovery Services
2028 has sent written notice to the taxpayer's last-known address or the address on file under Section
2029 62A-11-304.4 , stating:
2030 (i) the amount of child support that is due or past due as of the date of the notice or
2031 other specified date;
2032 (ii) that any overpayment shall be applied to reduce the amount of due or past-due child
2033 support specified in the notice; and
2034 (iii) that the taxpayer may contest the amount of past-due child support specified in the
2035 notice by filing a written request for an adjudicative proceeding with the office within 15 days
2036 of the notice being sent.
2037 (b) The Office of Recovery Services shall establish rules to implement this Subsection
2038 (2), including procedures, in accordance with the other provisions of this section, to ensure
2039 prompt reimbursement to the taxpayer of any amount of an overpayment of taxes which was
2040 credited against a child support obligation in error, and to ensure prompt distribution of
2041 properly credited funds to the obligee parent.
2042 (3) Subsection (1)(c) may be exercised only if:

2043 (a) a court has issued a warrant for the arrest of the taxpayer for failure to post bail,
2044 appear, or otherwise satisfy the terms of a citation, summons, or court order; and
2045 (b) a notice of intent to apply the overpayment as bail on the issued warrant has been
2046 sent to the person's current address on file with the commission.
2047 (4) (a) The commission shall deliver the overpayment applied as bail to the court that
2048 issued the warrant of arrest. The clerk of the court is authorized to endorse the check or
2049 commission warrant of payment on behalf of the payees and deposit the monies in the court
2050 treasury.
2051 (b) The court receiving the overpayment applied as bail shall order withdrawal of the
2052 warrant for arrest of the taxpayer if the case is one for which a personal appearance of the
2053 taxpayer is not required and if the dollar amount of the overpayment represents the full dollar
2054 amount of bail. In all other cases, the court receiving the overpayment applied as bail is not
2055 required to order the withdrawal of the warrant of arrest of the taxpayer during the 40-day
2056 period, and the taxpayer may be arrested on the warrant. However, the bail amount shall be
2057 reduced by the amount of tax overpayment received by the court.
2058 (c) If the taxpayer fails to respond to the notice described in Subsection (3), or to
2059 resolve the warrant within 40 days after the notice was sent under that subsection, the
2060 overpayment applied as bail is forfeited and notice of the forfeiture shall be mailed to the
2061 taxpayer at the current address on file with the commission. The court may then issue another
2062 warrant or allow the original warrant to remain in force if:
2063 (i) the taxpayer has not complied with an order of the court;
2064 (ii) the taxpayer has failed to appear and respond to a criminal charge for which a
2065 personal appearance is required; or
2066 (iii) the taxpayer has paid partial but not full bail in a case for which a personal
2067 appearance is not required.
2068 (5) If the alleged violations named in the warrant are later resolved in favor of the
2069 taxpayer, the bail amount shall be remitted to the taxpayer.
2070 (6) Any balance shall be refunded immediately to the taxpayer.
2071 (7) (a) If a refund or credit is due because the amount of tax deducted and withheld
2072 from wages exceeds the actual tax due, a refund or credit may not be made or allowed unless
2073 the taxpayer or his legal representative files with the commission a tax return claiming the

2074 refund or credit:
2075 (i) within three years from the due date of the return, plus the period of any extension
2076 of time for filing the return provided for in Subsection (7)(c); or
2077 (ii) within two years from the date the tax was paid, whichever period is later.
2078 (b) Except as provided in Subsection (7)(d), in other instances where a refund or credit
2079 of tax which has not been deducted and withheld from income is due, a credit or refund may
2080 not be allowed or made after three years from the time the tax was paid, unless, before the
2081 expiration of the period, a claim is filed by the taxpayer or his legal representative.
2082 (c) Beginning on July 1, 1998, the commission shall extend the period for a taxpayer to
2083 file a claim under Subsection (7)(a)(i) if:
2084 (i) the time period for filing a claim under Subsection (7)(a) has not expired; and
2085 (ii) the commission and the taxpayer sign a written agreement:
2086 (A) authorizing the extension; and
2087 (B) providing for the length of the extension.
2088 (d) Notwithstanding Subsection (7)(b), beginning on July 1, 1998, the commission
2089 shall extend the period for a taxpayer to file a claim under Subsection (7)(b) if:
2090 (i) the three-year period under Subsection (7)(b) has not expired; and
2091 (ii) the commission and the taxpayer sign a written agreement:
2092 (A) authorizing the extension; and
2093 (B) providing for the length of the extension.
2094 (8) The fine and bail forfeiture provisions of this section apply to all warrants and fines
2095 issued in cases charging the taxpayer with a felony, a misdemeanor, or an infraction described
2096 in this section which are outstanding on or after February 16, 1984.
2097 (9) If the amount allowable as a credit for tax withheld from the taxpayer exceeds the
2098 tax to which the credit relates, the excess is considered an overpayment.
2099 (10) A claim for credit or refund of an overpayment which is attributable to the
2100 application to the taxpayer of a net operating loss carryback shall be filed within three years
2101 from the time the return was due for the taxable year of the loss.
2102 (11) If there has been an overpayment of the tax which is required to be deducted and
2103 withheld under Section 59-10-402 , a refund shall be made to the employer only to the extent
2104 that the amount of overpayment was not deducted and withheld by the employer.

2105 (12) If there is no tax liability for a period in which an amount is paid as income tax,
2106 the amount is an overpayment.
2107 (13) If an income tax is assessed or collected after the expiration of the applicable
2108 period of limitation, that amount is an overpayment.
2109 (14) (a) If a taxpayer is required to report a change or correction in [federal taxable]
2110 adjusted gross income reported on [his] the taxpayer's federal income tax return, or to report a
2111 change or correction which is treated in the same manner as if it were an overpayment for
2112 federal income tax purposes, or to file an amended return with the commission, a claim for
2113 credit or refund of any resulting overpayment of tax shall be filed by the taxpayer within two
2114 years from the date the notice of the change, correction, or amended return was required to be
2115 filed with the commission.
2116 (b) If the report or amended return is not filed within 90 days, interest on any resulting
2117 refund or credit ceases to accrue after the 90-day period.
2118 (c) The amount of the credit or refund may not exceed the amount of the reduction in
2119 tax attributable to the federal change, correction, or items amended on the taxpayer's amended
2120 federal income tax return.
2121 (d) Except as specifically provided, this section does not affect the amount or the time
2122 within which a claim for credit or refund may be filed.
2123 (15) No credit or refund may be allowed or made if the overpayment is less than $1.
2124 (16) The amount of the credit or refund may not exceed the tax paid during the three
2125 years immediately preceding the filing of the claim, or if no claim is filed, then during the three
2126 years immediately preceding the allowance of the credit or refund.
2127 (17) In the case of an overpayment of tax by the employer under the withholding
2128 provisions of this chapter, a refund or credit shall be made to the employer only to the extent
2129 that the amount of the overpayment was not deducted and withheld from wages under the
2130 provisions of this chapter.
2131 (18) If a taxpayer who is entitled to a refund under this chapter dies, the commission
2132 may make payment to the duly appointed executor or administrator of the taxpayer's estate. If
2133 there is no executor or administrator, payment may be made to those persons who establish
2134 entitlement to inherit the property of the decedent in the proportions set out in Title 75, Utah
2135 Uniform Probate Code.

2136 (19) Where an overpayment relates to adjustments to net income referred to in
2137 Subsection 59-10-536 [(3)(c)] (5), credit may be allowed or a refund paid any time before the
2138 expiration of the period within which a deficiency may be assessed.
2139 (20) An overpayment of a tax imposed by this chapter shall accrue interest at the rate
2140 and in the manner prescribed in Section 59-1-402 .
2141 Section 39. Section 59-10-1001 is enacted to read:
2142 Part 10. Nonrefundable Tax Credit Act
2143 59-10-1001. Title.
2144 This part is known as the "Nonrefundable Tax Credit Act."
2145 Section 40. Section 59-10-1002 is enacted to read:
2146 59-10-1002. Definitions.
2147 As used in this part:
2148 (1) (a) Except as provided in Subsection (1)(b) or 59-10-1003 (2), "claimant" means a
2149 resident or nonresident person that has state taxable income under Part 1, Determination and
2150 Reporting of Tax Liability and Information.
2151 (b) "Claimant" does not include an estate or trust.
2152 (2) Except as provided in Subsection 59-10-1003 (2), "estate" means a nonresident
2153 estate or a resident estate that has state taxable income under Part 2, Trusts and Estates.
2154 (3) "Nonrefundable tax credit" or "tax credit" means a tax credit that a claimant, estate,
2155 or trust may:
2156 (a) claim:
2157 (i) as provided by statute; and
2158 (ii) in an amount that does not exceed the claimant's, estate's, or trust's tax liability for a
2159 taxable year; and
2160 (b) carry forward or carry back:
2161 (i) if allowed by statute; and
2162 (ii) to the extent that the amount of the tax credit exceeds the claimant's, estate's, or
2163 trust's tax liability under this chapter for a taxable year.
2164 (4) Except as provided in Subsection 59-10-1003 (2), "trust" means a nonresident trust
2165 or a resident trust that has state taxable income under Part 2, Trusts and Estates.
2166 Section 41. Section 59-10-1003 , which is renumbered from Section 59-10-106 is

2167 renumbered and amended to read:
2168 [59-10-106]. 59-10-1003. Credit for tax paid to another state.
2169 (1) [A resident individual shall be allowed a] Except as provided in Subsection (2), a
2170 claimant, estate, or trust may claim a nonrefundable tax credit against the tax otherwise due
2171 under this chapter equal to the amount of the tax imposed:
2172 (a) on [him] that claimant, estate, or trust for the taxable year;
2173 (b) by another state of the United States, the District of Columbia, or a possession of
2174 the United States[,]; and
2175 (c) on income:
2176 (i) derived from sources [therein which] within that other state of the United States,
2177 District of Columbia, or possession of the United States; and
2178 (ii) if that income is also subject to tax under this chapter.
2179 (2) A tax credit under this section may only be claimed by a:
2180 (a) resident claimant;
2181 (b) resident estate; or
2182 (c) resident trust.
2183 [(2)] (3) The application of the tax credit provided under this section [shall] may not
2184 operate to reduce the tax payable under this chapter to an amount less than would have been
2185 payable were the income from the other state disregarded.
2186 [(3)] (4) The tax credit provided by this section shall be computed and claimed in
2187 accordance with rules prescribed by the commission.
2188 Section 42. Section 59-10-1004 is enacted to read:
2189 59-10-1004. Charitable contribution tax credit.
2190 (1) Except as provided in Section 59-10-1007 , for taxable years beginning on or after
2191 January 1, 2007, a claimant, estate, or trust may claim a nonrefundable tax credit:
2192 (a) in an amount equal to the product of:
2193 (i) the amount the claimant, estate, or trust subtracts as allowed by Section 170,
2194 Internal Revenue Code, for that taxable year:
2195 (A) for a claimant, on the claimant's federal individual income tax return; or
2196 (B) for an estate or trust, on the estate's or trust's federal tax return for estates and
2197 trusts;

2198 (ii) 50%; and
2199 (iii) the tax rate percentage imposed by Section 59-10-104 ;
2200 (b) as provided in this section; and
2201 (c) against taxes otherwise due under this chapter.
2202 (2) A claimant, estate, or trust may not carry forward or carry back a tax credit under
2203 this section.
2204 Section 43. Section 59-10-1005 is enacted to read:
2205 59-10-1005. Homeowner tax credit -- Rulemaking authority.
2206 (1) For taxable years beginning on or after January 1, 2007, a claimant may claim a
2207 nonrefundable tax credit:
2208 (a) in an amount equal to the greater of:
2209 (i) subject to Subsection (4), $250 if the requirements of Subsection (3) are met; or
2210 (ii) the product of:
2211 (A) the amount the claimant subtracts as allowed by Section 163(h)(3), Internal
2212 Revenue Code, for that taxable year on the claimant's federal individual income tax return;
2213 (B) 50%; and
2214 (C) the tax rate percentage imposed by Section 59-10-104 ;
2215 (b) as provided in this section; and
2216 (c) against taxes otherwise due under this chapter.
2217 (2) A claimant may not carry forward or carry back a tax credit under this section.
2218 (3) (a) Subject to the other provisions of this Subsection (3), a claimant may claim the
2219 tax credit described in Subsection (1)(a)(i) if the claimant is an owner of a residence that is:
2220 (i) located within this state; and
2221 (ii) the primary residence of the claimant.
2222 (b) If there are two or more owners of a residence described in Subsection (3)(a):
2223 (i) only one tax credit may be claimed under this section for a taxable year; and
2224 (ii) only one of the owners of the residence may claim the tax credit:
2225 (A) as determined by the owners of the residence; and
2226 (B) on that owner's return under this chapter for the taxable year.
2227 (c) A claimant may claim a tax credit under this section for only one primary residence
2228 in this state.

2229 (d) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
2230 commission may make rules determining what constitutes the primary residence of a claimant.
2231 (4) (a) For taxable years beginning on or after January 1, 2008, the commission shall
2232 increase or decrease the dollar amount described in Subsection (1)(a)(i) by a percentage equal
2233 to the percentage difference between the consumer price index for the preceding calendar year
2234 and the consumer price index for calendar year 2006.
2235 (b) For purposes of Subsection (4)(a), the commission shall calculate the consumer
2236 price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
2237 Section 44. Section 59-10-1006 is enacted to read:
2238 59-10-1006. Taxpayer tax credits.
2239 (1) Except as provided in Section 59-10-1007 and subject to Subsections (3) and (4),
2240 for taxable years beginning on or after January 1, 2007, a claimant may claim a nonrefundable
2241 tax credit in an amount equal to the sum of:
2242 (a) an amount equal to:
2243 (i) (A) $300 for a claimant who:
2244 (I) is a:
2245 (Aa) single individual; or
2246 (Bb) married individual who does not file a single return jointly with that individual's
2247 spouse; and
2248 (II) files a single return; or
2249 (B) $600 for a claimant who:
2250 (I) (Aa) is a husband and wife; and
2251 (Bb) files a single return jointly;
2252 (II) (Aa) is a surviving spouse, as defined in Section 2(a), Internal Revenue Code; and
2253 (Bb) files a single return; or
2254 (III) (Aa) is a head of household as defined in Section 2(b), Internal Revenue Code;
2255 and
2256 (Bb) files a single return; and
2257 (ii) the product of:
2258 (A) $100; and
2259 (B) the total number of personal exemptions the claimant is allowed to claim for the

2260 taxable year in accordance with Section 151, Internal Revenue Code;
2261 (b) as provided in this section; and
2262 (c) against taxes otherwise due under this chapter.
2263 (2) A claimant may not carry forward or carry back a tax credit under this section.
2264 (3) (a) The tax credit allowed by Subsection (1)(a) shall be reduced by $.02 for each
2265 dollar by which a claimant's adjusted gross income exceeds the product of:
2266 (i) the amount of the tax credit the claimant is allowed under Subsection (1)(a); and
2267 (ii) 30.
2268 (b) For purposes of Subsection (3)(a), a fraction of a dollar of adjusted gross income
2269 shall be rounded up to the next whole dollar of adjusted gross income.
2270 (4) (a) For taxable years beginning on or after January 1, 2008, the commission shall
2271 increase or decrease the dollar amounts described in Subsections (1)(a)(i)(A), (1)(a)(i)(B), and
2272 (1)(a)(ii)(A) by a percentage equal to the percentage difference between the consumer price
2273 index for the preceding calendar year and the consumer price index for calendar year 2006.
2274 (b) For purposes of Subsection (4)(a), the commission shall calculate the consumer
2275 price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
2276 Section 45. Section 59-10-1007 is enacted to read:
2277 59-10-1007. Apportionment of certain tax credits.
2278 (1) As used in this section:
2279 (a) "Adjusted income" means, for a taxable year, the sum of a nonresident estate's or a
2280 nonresident trust's:
2281 (i) federal taxable income, as defined in Section 641(a) and (b), Internal Revenue
2282 Code; and
2283 (ii) additions required by Subsections 59-10-202 (1)(b) and (c).
2284 (b) "Adjusted income derived from Utah sources" means, for a taxable year, the
2285 adjusted income of a nonresident estate or nonresident trust derived from Utah sources as
2286 determined in accordance with the principles of Section 59-10-117 .
2287 (c) "State income tax percentage" is as defined in Section 59-10-116 .
2288 (2) A nonresident person that claims a tax credit in accordance with Section
2289 59-10-1004 , 59-10-1005 , or 59-10-1006 may only claim an apportioned amount of the tax
2290 credit equal to the product of:

2291 (a) the nonresident individual's state income tax percentage; and
2292 (b) the amount of the tax credit that the nonresident person would have been allowed to
2293 claim but for the apportionment requirements of this section.
2294 (3) A nonresident estate or nonresident trust that claims a tax credit in accordance with
2295 Section 59-10-1004 may only claim an apportioned amount of the tax credit equal to the
2296 product of:
2297 (a) the nonresident estate's or nonresident trust's adjusted income derived from Utah
2298 sources divided by the nonresident estate's or nonresident trust's adjusted income; and
2299 (b) the amount of the tax credit that the nonresident estate or nonresident trust would
2300 have been allowed to claim but for the apportionment requirements of this section.
2301 Section 46. Section 59-10-1101 is enacted to read:
2302 Part 11. Refundable Tax Credit Act
2303 59-10-1101. Title.
2304 This part is known as the "Refundable Tax Credit Act."
2305 Section 47. Section 59-10-1102 is enacted to read:
2306 59-10-1102. Definitions.
2307 As used in this part:
2308 (1) (a) Except as provided in Subsection (1)(b) or Subsection 59-10-1103 (1)(a),
2309 "claimant' means a resident or nonresident person.
2310 (b) "Claimant" does not include an estate or trust.
2311 (2) Except as provided in Subsection 59-10-1103 (1)(a), "estate" means a nonresident
2312 estate or a resident estate.
2313 (3) "Refundable tax credit" or "tax credit" means a tax credit that a claimant, estate, or
2314 trust may claim:
2315 (a) as provided by statute; and
2316 (b) regardless of whether the claimant, estate, or trust has a tax liability under this
2317 chapter for a taxable year.
2318 (4) Except as provided in Subsection 59-10-1103 (1)(a), "trust" means a nonresident
2319 trust or a resident trust.
2320 Section 48. Section 59-10-1103 , which is renumbered from Section 59-10-108.2 is
2321 renumbered and amended to read:

2322 [59-10-108.2]. 59-10-1103. Tax credit for nonresident shareholders of S
2323 corporations.
2324 (1) (a) A nonresident shareholder of an S corporation [who is an individual] may claim
2325 a refundable tax credit against the tax otherwise due under this chapter[.] if that nonresident
2326 shareholder is a:
2327 (i) nonresident claimant;
2328 (ii) nonresident estate; or
2329 (iii) nonresident trust.
2330 (b) The tax credit described in Subsection (1)(a) is equal to the amount paid or
2331 withheld by the S corporation on behalf of the [individual] nonresident shareholder described
2332 in Subsection (1)(a) in accordance with Section 59-7-703 .
2333 (2) A nonresident shareholder [of an S corporation who is an individual and who]
2334 described in Subsection (1)(a) that has no other Utah source income may elect:
2335 (a) not to claim the tax credit provided in Subsection (1); and
2336 (b) not to file a [Utah individual income] tax return under this chapter for the taxable
2337 year.
2338 (3) If a nonresident shareholder described in Subsection (1)(a) may claim [credits other
2339 than the credit described in Subsection (1)] a nonrefundable tax credit under Part 10,
2340 Nonrefundable Tax Credit Act, the nonresident shareholder described in Subsection (1)(a) shall
2341 file [an individual income] a tax return under this chapter to claim [those credits] that
2342 nonrefundable tax credit.
2343 Section 49. Section 59-12-104 is amended to read:
2344 59-12-104. Exemptions.
2345 The following sales and uses are exempt from the taxes imposed by this chapter:
2346 (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
2347 under Chapter 13, Motor and Special Fuel Tax Act;
2348 (2) sales to the state, its institutions, and its political subdivisions; however, this
2349 exemption does not apply to sales of:
2350 (a) construction materials except:
2351 (i) construction materials purchased by or on behalf of institutions of the public
2352 education system as defined in Utah Constitution Article X, Section 2, provided the

2353 construction materials are clearly identified and segregated and installed or converted to real
2354 property which is owned by institutions of the public education system; and
2355 (ii) construction materials purchased by the state, its institutions, or its political
2356 subdivisions which are installed or converted to real property by employees of the state, its
2357 institutions, or its political subdivisions; or
2358 (b) tangible personal property in connection with the construction, operation,
2359 maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities
2360 providing additional project capacity, as defined in Section 11-13-103 ;
2361 (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
2362 (i) the proceeds of each sale do not exceed $1; and
2363 (ii) the seller or operator of the vending machine reports an amount equal to 150% of
2364 the cost of the item described in Subsection (3)(b) as goods consumed; and
2365 (b) Subsection (3)(a) applies to:
2366 (i) food and food ingredients; or
2367 (ii) prepared food;
2368 (4) sales of the following to a commercial airline carrier for in-flight consumption:
2369 (a) food and food ingredients;
2370 (b) prepared food; or
2371 (c) services related to Subsection (4)(a) or (b);
2372 (5) sales of parts and equipment for installation in aircraft operated by common carriers
2373 in interstate or foreign commerce;
2374 (6) sales of commercials, motion picture films, prerecorded audio program tapes or
2375 records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
2376 exhibitor, distributor, or commercial television or radio broadcaster;
2377 (7) sales of cleaning or washing of tangible personal property by a coin-operated
2378 laundry or dry cleaning machine;
2379 (8) sales made to or by religious or charitable institutions in the conduct of their regular
2380 religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
2381 fulfilled;
2382 (9) sales of vehicles of a type required to be registered under the motor vehicle laws of
2383 this state which are made to bona fide nonresidents of this state and are not afterwards

2384 registered or used in this state except as necessary to transport them to the borders of this state;
2385 (10) (a) amounts paid for an item described in Subsection (10)(b) if:
2386 (i) the item is intended for human use; and
2387 (ii) (A) a prescription was issued for the item; or
2388 (B) the item was purchased by a hospital or other medical facility; and
2389 (b) (i) Subsection (10)(a) applies to:
2390 (A) a drug;
2391 (B) a syringe; or
2392 (C) a stoma supply; and
2393 (ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
2394 commission may by rule define the terms:
2395 (A) "syringe"; or
2396 (B) "stoma supply";
2397 (11) sales or use of property, materials, or services used in the construction of or
2398 incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
2399 (12) (a) sales of an item described in Subsection (12)(c) served by:
2400 (i) the following if the item described in Subsection (12)(c) is not available to the
2401 general public:
2402 (A) a church; or
2403 (B) a charitable institution;
2404 (ii) an institution of higher education if:
2405 (A) the item described in Subsection (12)(c) is not available to the general public; or
2406 (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
2407 offered by the institution of higher education; or
2408 (b) sales of an item described in Subsection (12)(c) provided for a patient by:
2409 (i) a medical facility; or
2410 (ii) a nursing facility; and
2411 (c) Subsections (12)(a) and (b) apply to:
2412 (i) food and food ingredients;
2413 (ii) prepared food; or
2414 (iii) alcoholic beverages;

2415 (13) isolated or occasional sales by persons not regularly engaged in business, except
2416 the sale of vehicles or vessels required to be titled or registered under the laws of this state in
2417 which case the tax is based upon:
2418 (a) the bill of sale or other written evidence of value of the vehicle or vessel being sold;
2419 or
2420 (b) in the absence of a bill of sale or other written evidence of value, the then existing
2421 fair market value of the vehicle or vessel being sold as determined by the commission;
2422 (14) (a) the following purchases or leases by a manufacturer on or after July 1, 1995:
2423 (i) machinery and equipment:
2424 (A) used in the manufacturing process;
2425 (B) having an economic life of three or more years; and
2426 (C) used:
2427 (I) to manufacture an item sold as tangible personal property; and
2428 (II) in new or expanding operations in a manufacturing facility in the state; and
2429 (ii) subject to the provisions of Subsection (14)(b), normal operating replacements that:
2430 (A) have an economic life of three or more years;
2431 (B) are used in the manufacturing process in a manufacturing facility in the state;
2432 (C) are used to replace or adapt an existing machine to extend the normal estimated
2433 useful life of the machine; and
2434 (D) do not include repairs and maintenance;
2435 (b) the rates for the exemption under Subsection (14)(a)(ii) are as follows:
2436 (i) beginning July 1, 1996, through June 30, 1997, 30% of the sale or lease described in
2437 Subsection (14)(a)(ii) is exempt;
2438 (ii) beginning July 1, 1997, through June 30, 1998, 60% of the sale or lease described
2439 in Subsection (14)(a)(ii) is exempt; and
2440 (iii) beginning July 1, 1998, 100% of the sale or lease described in Subsection
2441 (14)(a)(ii) is exempt;
2442 (c) for purposes of this Subsection (14), the commission shall by rule define the terms
2443 "new or expanding operations" and "establishment"; and
2444 (d) on or before October 1, 1991, and every five years after October 1, 1991, the
2445 commission shall:

2446 (i) review the exemptions described in Subsection (14)(a) and make recommendations
2447 to the Revenue and Taxation Interim Committee concerning whether the exemptions should be
2448 continued, modified, or repealed; and
2449 (ii) include in its report:
2450 (A) the cost of the exemptions;
2451 (B) the purpose and effectiveness of the exemptions; and
2452 (C) the benefits of the exemptions to the state;
2453 (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
2454 (i) tooling;
2455 (ii) special tooling;
2456 (iii) support equipment;
2457 (iv) special test equipment; or
2458 (v) parts used in the repairs or renovations of tooling or equipment described in
2459 Subsections (15)(a)(i) through (iv); and
2460 (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
2461 (i) the tooling, equipment, or parts are used or consumed exclusively in the
2462 performance of any aerospace or electronics industry contract with the United States
2463 government or any subcontract under that contract; and
2464 (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
2465 title to the tooling, equipment, or parts is vested in the United States government as evidenced
2466 by:
2467 (A) a government identification tag placed on the tooling, equipment, or parts; or
2468 (B) listing on a government-approved property record if placing a government
2469 identification tag on the tooling, equipment, or parts is impractical;
2470 (16) intrastate movements of:
2471 (a) freight by common carriers; or
2472 (b) passengers:
2473 (i) by taxicabs as described in SIC Code 4121 of the 1987 Standard Industrial
2474 Classification Manual of the federal Executive Office of the President, Office of Management
2475 and Budget;
2476 (ii) transported by an establishment described in SIC Code 4111 of the 1987 Standard

2477 Industrial Classification Manual of the federal Executive Office of the President, Office of
2478 Management and Budget, if the transportation originates and terminates within a county of the
2479 first, second, or third class; or
2480 (iii) transported by the following described in SIC Code 4789 of the 1987 Standard
2481 Industrial Classification Manual of the federal Executive Office of the President, Office of
2482 Management and Budget:
2483 (A) a horse-drawn cab; or
2484 (B) a horse-drawn carriage;
2485 (17) sales of newspapers or newspaper subscriptions;
2486 (18) (a) except as provided in Subsection (18)(b), tangible personal property traded in
2487 as full or part payment of the purchase price, except that for purposes of calculating sales or use
2488 tax upon vehicles not sold by a vehicle dealer, trade-ins are limited to other vehicles only, and
2489 the tax is based upon:
2490 (i) the bill of sale or other written evidence of value of the vehicle being sold and the
2491 vehicle being traded in; or
2492 (ii) in the absence of a bill of sale or other written evidence of value, the then existing
2493 fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
2494 commission; and
2495 (b) notwithstanding Subsection (18)(a), Subsection (18)(a) does not apply to the
2496 following items of tangible personal property traded in as full or part payment of the purchase
2497 price:
2498 (i) money;
2499 (ii) electricity;
2500 (iii) water;
2501 (iv) gas; or
2502 (v) steam;
2503 (19) (a) (i) except as provided in Subsection (19)(b), sales of tangible personal property
2504 used or consumed primarily and directly in farming operations, regardless of whether the
2505 tangible personal property:
2506 (A) becomes part of real estate; or
2507 (B) is installed by a:

2508 (I) farmer;
2509 (II) contractor; or
2510 (III) subcontractor; or
2511 (ii) sales of parts used in the repairs or renovations of tangible personal property if the
2512 tangible personal property is exempt under Subsection (19)(a)(i); and
2513 (b) notwithstanding Subsection (19)(a), amounts paid or charged for the following
2514 tangible personal property are subject to the taxes imposed by this chapter:
2515 (i) (A) subject to Subsection (19)(b)(i)(B), the following tangible personal property if
2516 the tangible personal property is used in a manner that is incidental to farming:
2517 (I) machinery;
2518 (II) equipment;
2519 (III) materials; or
2520 (IV) supplies; and
2521 (B) tangible personal property that is considered to be used in a manner that is
2522 incidental to farming includes:
2523 (I) hand tools; or
2524 (II) maintenance and janitorial equipment and supplies;
2525 (ii) (A) subject to Subsection (19)(b)(ii)(B), tangible personal property if the tangible
2526 personal property is used in an activity other than farming; and
2527 (B) tangible personal property that is considered to be used in an activity other than
2528 farming includes:
2529 (I) office equipment and supplies; or
2530 (II) equipment and supplies used in:
2531 (Aa) the sale or distribution of farm products;
2532 (Bb) research; or
2533 (Cc) transportation; or
2534 (iii) a vehicle required to be registered by the laws of this state during the period ending
2535 two years after the date of the vehicle's purchase;
2536 (20) sales of hay;
2537 (21) exclusive sale of locally grown seasonal crops, seedling plants, or garden, farm, or
2538 other agricultural produce if sold by a producer during the harvest season;

2539 (22) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
2540 under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
2541 (23) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
2542 nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
2543 wholesaler, or retailer for use in packaging tangible personal property to be sold by that
2544 manufacturer, processor, wholesaler, or retailer;
2545 (24) property stored in the state for resale;
2546 (25) property brought into the state by a nonresident for his or her own personal use or
2547 enjoyment while within the state, except property purchased for use in Utah by a nonresident
2548 living and working in Utah at the time of purchase;
2549 (26) property purchased for resale in this state, in the regular course of business, either
2550 in its original form or as an ingredient or component part of a manufactured or compounded
2551 product;
2552 (27) property upon which a sales or use tax was paid to some other state, or one of its
2553 subdivisions, except that the state shall be paid any difference between the tax paid and the tax
2554 imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
2555 the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
2556 Act;
2557 (28) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
2558 person for use in compounding a service taxable under the subsections;
2559 (29) purchases made in accordance with the special supplemental nutrition program for
2560 women, infants, and children established in 42 U.S.C. Sec. 1786;
2561 (30) beginning on July 1, 1999, through June 30, 2014, sales or leases of rolls, rollers,
2562 refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
2563 of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification
2564 Manual of the federal Executive Office of the President, Office of Management and Budget;
2565 (31) sales of boats of a type required to be registered under Title 73, Chapter 18, State
2566 Boating Act, boat trailers, and outboard motors which are made to bona fide nonresidents of
2567 this state and are not thereafter registered or used in this state except as necessary to transport
2568 them to the borders of this state;
2569 (32) sales of aircraft manufactured in Utah if sold for delivery and use outside Utah

2570 where a sales or use tax is not imposed, even if the title is passed in Utah;
2571 (33) amounts paid for the purchase of telephone service for purposes of providing
2572 telephone service;
2573 (34) fares charged to persons transported directly by a public transit district created
2574 under the authority of Title 17A, Chapter 2, Part 10, Utah Public Transit District Act;
2575 (35) sales or leases of vehicles to, or use of vehicles by an authorized carrier;
2576 (36) (a) 45% of the sales price of any new manufactured home; and
2577 (b) 100% of the sales price of any used manufactured home;
2578 (37) sales relating to schools and fundraising sales;
2579 (38) sales or rentals of durable medical equipment if:
2580 (a) a person presents a prescription for the durable medical equipment; and
2581 (b) the durable medical equipment is used for home use only;
2582 (39) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
2583 Section 72-11-102 ; and
2584 (b) the commission shall by rule determine the method for calculating sales exempt
2585 under Subsection (39)(a) that are not separately metered and accounted for in utility billings;
2586 (40) sales to a ski resort of:
2587 (a) snowmaking equipment;
2588 (b) ski slope grooming equipment;
2589 (c) passenger ropeways as defined in Section 72-11-102 ; or
2590 (d) parts used in the repairs or renovations of equipment or passenger ropeways
2591 described in Subsections (40)(a) through (c);
2592 (41) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
2593 (42) sales or rentals of the right to use or operate for amusement, entertainment, or
2594 recreation a coin-operated amusement device as defined in Section 59-12-102 ;
2595 (43) sales of cleaning or washing of tangible personal property by a coin-operated car
2596 wash machine;
2597 (44) sales by the state or a political subdivision of the state, except state institutions of
2598 higher education as defined in Section 53B-3-102 , of:
2599 (a) photocopies; or
2600 (b) other copies of records held or maintained by the state or a political subdivision of

2601 the state;
2602 (45) (a) amounts paid:
2603 (i) to a person providing intrastate transportation to an employer's employee to or from
2604 the employee's primary place of employment;
2605 (ii) by an:
2606 (A) employee; or
2607 (B) employer; and
2608 (iii) pursuant to a written contract between:
2609 (A) the employer; and
2610 (B) (I) the employee; or
2611 (II) a person providing transportation to the employer's employee; and
2612 (b) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
2613 commission may for purposes of Subsection (45)(a) make rules defining what constitutes an
2614 employee's primary place of employment;
2615 (46) amounts paid for admission to an athletic event at an institution of higher
2616 education that is subject to the provisions of Title IX of the Education Amendments of 1972,
2617 20 U.S.C. Sec. 1681 et seq.;
2618 (47) sales of telephone service charged to a prepaid telephone calling card;
2619 (48) (a) sales of:
2620 (i) hearing aids;
2621 (ii) hearing aid accessories; or
2622 (iii) except as provided in Subsection (48)(b), parts used in the repairs or renovations
2623 of hearing aids or hearing aid accessories; and
2624 (b) for purposes of this Subsection (48), notwithstanding Subsection (48)(a)(iii),
2625 "parts" does not include batteries;
2626 (49) (a) sales made to or by:
2627 (i) an area agency on aging; or
2628 (ii) a senior citizen center owned by a county, city, or town; or
2629 (b) sales made by a senior citizen center that contracts with an area agency on aging;
2630 (50) (a) beginning on July 1, 2001, through June 30, 2007, and subject to Subsection
2631 (50)(b), a sale or lease of semiconductor fabricating or processing materials regardless of

2632 whether the semiconductor fabricating or processing materials:
2633 (i) actually come into contact with a semiconductor; or
2634 (ii) ultimately become incorporated into real property;
2635 (b) (i) beginning on July 1, 2001, through June 30, 2002, 10% of the sale or lease
2636 described in Subsection (50)(a) is exempt;
2637 (ii) beginning on July 1, 2002, through June 30, 2003, 50% of the sale or lease
2638 described in Subsection (50)(a) is exempt; and
2639 (iii) beginning on July 1, 2003, through June 30, 2007, the entire amount of the sale or
2640 lease described in Subsection (50)(a) is exempt; and
2641 (c) each year on or before the November interim meeting, the Revenue and Taxation
2642 Interim Committee shall:
2643 (i) review the exemption described in this Subsection (50) and make recommendations
2644 concerning whether the exemption should be continued, modified, or repealed; and
2645 (ii) include in the review under this Subsection (50)(c):
2646 (A) the cost of the exemption;
2647 (B) the purpose and effectiveness of the exemption; and
2648 (C) the benefits of the exemption to the state;
2649 (51) an amount paid by or charged to a purchaser for accommodations and services
2650 described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under Section
2651 59-12-104.2 ;
2652 (52) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
2653 sports event registration certificate in accordance with Section 41-3-306 for the event period
2654 specified on the temporary sports event registration certificate;
2655 (53) sales or uses of electricity, if the sales or uses are:
2656 (a) made under a tariff adopted by the Public Service Commission of Utah only for
2657 purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
2658 source, as designated in the tariff by the Public Service Commission of Utah; and
2659 (b) for an amount of electricity that is:
2660 (i) unrelated to the amount of electricity used by the person purchasing the electricity
2661 under the tariff described in Subsection (53)(a); and
2662 (ii) equivalent to the number of kilowatthours specified in the tariff described in

2663 Subsection (53)(a) that may be purchased under the tariff described in Subsection (53)(a);
2664 (54) sales or rentals of mobility enhancing equipment if a person presents a
2665 prescription for the mobility enhancing equipment;
2666 (55) sales of water in a:
2667 (a) pipe;
2668 (b) conduit;
2669 (c) ditch; or
2670 (d) reservoir;
2671 (56) sales of currency or coinage that constitute legal tender of the United States or of a
2672 foreign nation;
2673 (57) (a) sales of an item described in Subsection (57)(b) if the item:
2674 (i) does not constitute legal tender of any nation; and
2675 (ii) has a gold, silver, or platinum content of 80% or more; and
2676 (b) Subsection (57)(a) applies to a gold, silver, or platinum:
2677 (i) ingot;
2678 (ii) bar;
2679 (iii) medallion; or
2680 (iv) decorative coin;
2681 (58) amounts paid on a sale-leaseback transaction;
2682 (59) sales of a prosthetic device:
2683 (a) for use on or in a human;
2684 (b) for which a prescription is issued; and
2685 (c) to a person that presents a prescription for the prosthetic device;
2686 (60) (a) except as provided in Subsection (60)(b), purchases, leases, or rentals of
2687 machinery or equipment by an establishment described in Subsection (60)(c) if the machinery
2688 or equipment is primarily used in the production or postproduction of the following media for
2689 commercial distribution:
2690 (i) a motion picture;
2691 (ii) a television program;
2692 (iii) a movie made for television;
2693 (iv) a music video;

2694 (v) a commercial;
2695 (vi) a documentary; or
2696 (vii) a medium similar to Subsections (60)(a)(i) through (vi) as determined by the
2697 commission by administrative rule made in accordance with Subsection (60)(d); or
2698 (b) notwithstanding Subsection (60)(a), purchases, leases, or rentals of machinery or
2699 equipment by an establishment described in Subsection (60)(c) that is used for the production
2700 or postproduction of the following are subject to the taxes imposed by this chapter:
2701 (i) a live musical performance;
2702 (ii) a live news program; or
2703 (iii) a live sporting event;
2704 (c) the following establishments listed in the 1997 North American Industry
2705 Classification System of the federal Executive Office of the President, Office of Management
2706 and Budget, apply to Subsections (60)(a) and (b):
2707 (i) NAICS Code 512110; or
2708 (ii) NAICS Code 51219; and
2709 (d) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
2710 commission may by rule:
2711 (i) prescribe what constitutes a medium similar to Subsections (60)(a)(i) through (vi);
2712 or
2713 (ii) define:
2714 (A) "commercial distribution";
2715 (B) "live musical performance";
2716 (C) "live news program"; or
2717 (D) "live sporting event";
2718 (61) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
2719 or before June 30, 2009, of machinery or equipment that:
2720 (i) is leased or purchased for or by a facility that:
2721 (A) is a renewable energy production facility;
2722 (B) is located in the state; and
2723 (C) (I) becomes operational on or after July 1, 2004; or
2724 (II) has its generation capacity increased by one or more megawatts on or after July 1,

2725 2004 as a result of the use of the machinery or equipment;
2726 (ii) has an economic life of five or more years; and
2727 (iii) is used to make the facility or the increase in capacity of the facility described in
2728 Subsection (61)(a)(i) operational up to the point of interconnection with an existing
2729 transmission grid including:
2730 (A) a wind turbine;
2731 (B) generating equipment;
2732 (C) a control and monitoring system;
2733 (D) a power line;
2734 (E) substation equipment;
2735 (F) lighting;
2736 (G) fencing;
2737 (H) pipes; or
2738 (I) other equipment used for locating a power line or pole; and
2739 (b) this Subsection (61) does not apply to:
2740 (i) machinery or equipment used in construction of:
2741 (A) a new renewable energy production facility; or
2742 (B) the increase in the capacity of a renewable energy production facility;
2743 (ii) contracted services required for construction and routine maintenance activities;
2744 and
2745 (iii) unless the machinery or equipment is used or acquired for an increase in capacity
2746 of the facility described in Subsection (61)(a)(i)(C)(II), machinery or equipment used or
2747 acquired after:
2748 (A) the renewable energy production facility described in Subsection (61)(a)(i) is
2749 operational as described in Subsection (61)(a)(iii); or
2750 (B) the increased capacity described in Subsection (61)(a)(i) is operational as described
2751 in Subsection (61)(a)(iii);
2752 (62) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
2753 or before June 30, 2009, of machinery or equipment that:
2754 (i) is leased or purchased for or by a facility that:
2755 (A) is a waste energy production facility;

2756 (B) is located in the state; and
2757 (C) (I) becomes operational on or after July 1, 2004; or
2758 (II) has its generation capacity increased by one or more megawatts on or after July 1,
2759 2004 as a result of the use of the machinery or equipment;
2760 (ii) has an economic life of five or more years; and
2761 (iii) is used to make the facility or the increase in capacity of the facility described in
2762 Subsection (62)(a)(i) operational up to the point of interconnection with an existing
2763 transmission grid including:
2764 (A) generating equipment;
2765 (B) a control and monitoring system;
2766 (C) a power line;
2767 (D) substation equipment;
2768 (E) lighting;
2769 (F) fencing;
2770 (G) pipes; or
2771 (H) other equipment used for locating a power line or pole; and
2772 (b) this Subsection (62) does not apply to:
2773 (i) machinery or equipment used in construction of:
2774 (A) a new waste energy facility; or
2775 (B) the increase in the capacity of a waste energy facility;
2776 (ii) contracted services required for construction and routine maintenance activities;
2777 and
2778 (iii) unless the machinery or equipment is used or acquired for an increase in capacity
2779 described in Subsection (62)(a)(i)(C)(II), machinery or equipment used or acquired after:
2780 (A) the waste energy facility described in Subsection (62)(a)(i) is operational as
2781 described in Subsection (62)(a)(iii); or
2782 (B) the increased capacity described in Subsection (62)(a)(i) is operational as described
2783 in Subsection (62)(a)(iii);
2784 (63) (a) leases of five or more years or purchases made on or after July 1, 2004 but on
2785 or before June 30, 2009, of machinery or equipment that:
2786 (i) is leased or purchased for or by a facility that:

2787 (A) is located in the state;
2788 (B) produces fuel from biomass energy including:
2789 (I) methanol; or
2790 (II) ethanol; and
2791 (C) (I) becomes operational on or after July 1, 2004; or
2792 (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004 as
2793 a result of the installation of the machinery or equipment;
2794 (ii) has an economic life of five or more years; and
2795 (iii) is installed on the facility described in Subsection (63)(a)(i);
2796 (b) this Subsection (63) does not apply to:
2797 (i) machinery or equipment used in construction of:
2798 (A) a new facility described in Subsection (63)(a)(i); or
2799 (B) the increase in capacity of the facility described in Subsection (63)(a)(i); or
2800 (ii) contracted services required for construction and routine maintenance activities;
2801 and
2802 (iii) unless the machinery or equipment is used or acquired for an increase in capacity
2803 described in Subsection (63)(a)(i)(C)(II), machinery or equipment used or acquired after:
2804 (A) the facility described in Subsection (63)(a)(i) is operational; or
2805 (B) the increased capacity described in Subsection (63)(a)(i) is operational;
2806 (64) amounts paid to a purchaser as a rebate from the manufacturer of a new vehicle
2807 for purchasing the new vehicle;
2808 (65) (a) subject to Subsection (65)(b), sales of tangible personal property to persons
2809 within this state that is subsequently shipped outside the state and incorporated pursuant to
2810 contract into and becomes a part of real property located outside of this state, except to the
2811 extent that the other state or political entity imposes a sales, use, gross receipts, or other similar
2812 transaction excise tax on it against which the other state or political entity allows a credit for
2813 taxes imposed by this chapter; and
2814 (b) the exemption provided for in Subsection (65)(a):
2815 (i) is allowed only if the exemption is applied:
2816 (A) in calculating the purchase price of the tangible personal property; and
2817 (B) to a written contract that is in effect on July 1, 2004; and

2818 (ii) (A) does not apply beginning on the day on which the contract described in
2819 Subsection (65)(b)(i):
2820 (I) is substantially modified; or
2821 (II) terminates; and
2822 (B) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
2823 the commission may by rule prescribe the circumstances under which a contract is substantially
2824 modified;
2825 (66) purchases:
2826 (a) of one or more of the following items in printed or electronic format:
2827 (i) a list containing information that includes one or more:
2828 (A) names; or
2829 (B) addresses; or
2830 (ii) a database containing information that includes one or more:
2831 (A) names; or
2832 (B) addresses; and
2833 (b) used to send direct mail; [and]
2834 (67) redemptions or repurchases of property by a person if that property was:
2835 (a) delivered to a pawnbroker as part of a pawn transaction; and
2836 (b) redeemed or repurchased within the time period established in a written agreement
2837 between the person and the pawnbroker for redeeming or repurchasing the property[.]; and
2838 (68) sales of food and food ingredients.
2839 Section 50. Section 59-12-204 (Effective 07/01/06) is amended to read:
2840 59-12-204 (Effective 07/01/06). Sales and use tax ordinance provisions -- Tax rate
2841 -- Distribution of tax revenues.
2842 (1) The tax ordinance adopted pursuant to this part shall impose a tax upon those
2843 transactions listed in Subsection 59-12-103 (1).
2844 (2) (a) Except as provided in Subsections (2)(b) and 59-12-207.1 (7)(c), the tax
2845 ordinance under Subsection (1) shall include a provision imposing a tax upon every transaction
2846 listed in Subsection 59-12-103 (1) made within a county, including areas contained within the
2847 cities and towns located in the county:
2848 (i) at the rate of [1% ] 1.1% of the purchase price paid or charged; and

2849 (ii) if the transaction is consummated within the county in accordance with Section
2850 59-12-205 .
2851 (b) Notwithstanding Subsection (2)(a), a tax ordinance under this Subsection (2) shall
2852 include a provision prohibiting a county, city, or town from imposing a tax under this section
2853 on the sales and uses described in Section 59-12-104 to the extent the sales and uses are
2854 exempt from taxation under Section 59-12-104 .
2855 (3) Such tax ordinance shall include provisions substantially the same as those
2856 contained in Part 1, Tax Collection, insofar as they relate to sales or use tax, except that the
2857 name of the county as the taxing agency shall be substituted for that of the state where
2858 necessary for the purpose of this part and that an additional license is not required if one has
2859 been or is issued under Section 59-12-106 .
2860 (4) Such tax ordinance shall include a provision that the county shall contract, prior to
2861 the effective date of the ordinance, with the commission to perform all functions incident to the
2862 administration or operation of the ordinance.
2863 (5) Such tax ordinance shall include a provision that the sale, storage, use, or other
2864 consumption of tangible personal property, the purchase price or the cost of which has been
2865 subject to sales or use tax under a sales and use tax ordinance enacted in accordance with this
2866 part by any county, city, or town in any other county in this state, shall be exempt from the tax
2867 due under this ordinance.
2868 (6) Such tax ordinance shall include a provision that any person subject to the
2869 provisions of a city or town sales and use tax shall be exempt from the county sales and use tax
2870 if the city or town sales and use tax is levied under an ordinance including provisions in
2871 substance as follows:
2872 (a) a provision imposing a tax upon every transaction listed in Section 59-12-103 made
2873 within the city or town at the rate imposed by the county in which it is situated pursuant to
2874 Subsection (2);
2875 (b) provisions substantially the same as those contained in Part 1, Tax Collection,
2876 insofar as they relate to sales and use taxes, except that the name of the city or town as the
2877 taxing agency shall be substituted for that of the state where necessary for the purposes of this
2878 part;
2879 (c) a provision that the city or town shall contract prior to the effective date of the city

2880 or town sales and use tax ordinance with the commission to perform all functions incident to
2881 the administration or operation of the sales and use tax ordinance of the city or town;
2882 (d) a provision that the sale, storage, use, or other consumption of tangible personal
2883 property, the gross receipts from the sale of or the cost of which has been subject to sales or use
2884 tax under a sales and use tax ordinance enacted in accordance with this part by any county
2885 other than the county in which the city or town is located, or city or town in this state, shall be
2886 exempt from the tax; and
2887 (e) a provision that the amount of any tax paid under Part 1, Tax Collection, shall not
2888 be included as a part of the purchase price paid or charged for a taxable item.
2889 (7) (a) Notwithstanding any other provision of this section, beginning on July 1, 1999,
2890 through May 5, 2003, the commission shall:
2891 (i) determine and retain the portion of the sales and use tax imposed under this section:
2892 (A) by a city or town that will have constructed within its boundaries the Airport to
2893 University of Utah Light Rail described in the Transportation Equity Act for the 21st Century,
2894 Pub. L. No. 105-178, Sec. 3030(c)(2)(B)(i)(II), 112 Stat. 107; and
2895 (B) that is equal to the revenues generated by a 1/64% tax rate; and
2896 (ii) deposit the revenues described in Subsection (7)(a)(i) in the Airport to University
2897 of Utah Light Rail Restricted Account created in Section 17A-2-1064 for the purposes
2898 described in Section 17A-2-1064 .
2899 (b) Notwithstanding any other provision of this section, beginning July 1, 2000, the
2900 commission shall:
2901 (i) determine and retain the portion of sales and use tax imposed under this section:
2902 (A) by each county and by each city and town within that county whose legislative
2903 body consents by resolution to the commission's retaining and depositing sales and use tax
2904 revenues as provided in this Subsection (7)(b); and
2905 (B) that is equal to the revenues generated by a 1/64% tax rate;
2906 (ii) deposit the revenues described in Subsection (7)(b)(i) into a special fund of the
2907 county, or a city, town, or other political subdivision of the state located within that county, that
2908 has issued bonds to finance sports or recreational facilities or that is leasing sports or
2909 recreational facilities, in order to repay those bonds or to pay the lease payments; and
2910 (iii) continue to deposit those revenues into the special fund only as long as the bonds

2911 or leases are outstanding.
2912 Section 51. Section 59-12-205 (Effective 07/01/06) is amended to read:
2913 59-12-205 (Effective 07/01/06). Ordinances to conform with statutory
2914 amendments -- Distribution of tax revenues -- Rulemaking authority -- Determination of
2915 population.
2916 (1) Each county, city, and town, in order to maintain in effect sales and use tax
2917 ordinances adopted pursuant to Section 59-12-204 , shall, within 30 days of any amendment of
2918 any applicable provisions of Part 1, Tax Collection, adopt amendments of their respective sales
2919 and use tax ordinances to conform with the amendments to Part 1, Tax Collection, insofar as
2920 they relate to sales and use taxes.
2921 (2) Except as provided in Subsection (7):
2922 (a) 50% of each dollar collected from the sales and use tax authorized by this part shall
2923 be paid to each county, city, and town on the basis of the percentage that the population of the
2924 county, city, or town bears to the total population of all counties, cities, and towns in the state;
2925 and
2926 (b) notwithstanding Sections 59-12-207.1 through 59-12-207.3 , 50% of each dollar
2927 collected from the sales and use tax authorized by this part shall be paid to each county, city,
2928 and town on the basis of the location where the transaction is consummated as determined
2929 under this section.
2930 (3) For purposes of Subsection (2)(b), the location where a transaction is consummated
2931 is determined in accordance with Subsections (4) through (6).
2932 (4) (a) For a transaction that is reported to the commission on a return other than a
2933 simplified electronic return, the location where the transaction is consummated is determined
2934 in accordance with Subsections (4)(b) through (h).
2935 (b) (i) Except as provided in Subsections (4)(c) through (h), for a transaction described
2936 in Subsection (4)(b)(ii), the location where the transaction is consummated is the place of
2937 business of the seller.
2938 (ii) Subsection (4)(b)(i) applies to a transaction other than a transaction described in:
2939 (A) Subsection (4)(c)(ii);
2940 (B) Subsection (4)(d)(ii);
2941 (C) Subsection (4)(e)(ii);

2942 (D) Subsection (4)(f)(ii);
2943 (E) Subsection (4)(g)(ii); or
2944 (F) Subsection (4)(h).
2945 (c) (i) Notwithstanding Subsection (4)(b), for a transaction described in Subsection
2946 (4)(c)(ii), the location where the transaction is consummated is determined by allocating the
2947 total revenues remitted to the commission each month that are generated by the tax imposed
2948 under this section on the transactions described in Subsection (4)(c)(ii):
2949 (A) to each local taxing jurisdiction; and
2950 (B) on the basis of the population of each local taxing jurisdiction as compared to the
2951 population of the state.
2952 (ii) Subsection (4)(c)(i) applies to a transaction:
2953 (A) made by a seller described in Subsection 59-12-107 (1)(b); and
2954 (B) involving tangible personal property that is shipped from outside the state.
2955 (d) (i) Notwithstanding Subsection (4)(b), for a transaction described in Subsection
2956 (4)(d)(ii), the location where the transaction is consummated is determined by allocating the
2957 total revenues reported to the commission each month that are generated by the tax imposed
2958 under this section on the transactions described in Subsection (4)(d)(ii):
2959 (A) to local taxing jurisdictions within a county; and
2960 (B) on the basis of the proportion of total revenues generated by the transactions
2961 described in Subsection (4)(b)(ii) that are reported to the commission for that month within a
2962 local taxing jurisdiction within that county as compared to the total revenues generated by the
2963 transactions described in Subsection (4)(b)(ii) that are reported to the commission for that
2964 month within all local taxing jurisdictions within that county.
2965 (ii) Subsection (4)(d)(i) applies to a transaction:
2966 (A) made from a location in the state other than a fixed place of business in the state;
2967 or
2968 (B) (I) made by a seller described in Subsection 59-12-107 (1)(a); and
2969 (II) involving tangible personal property that is shipped from outside the state.
2970 (e) (i) Notwithstanding Subsection (4)(b), for a transaction described in Subsection
2971 (4)(e)(ii), the location where the transaction is consummated is determined by allocating the
2972 total revenues reported to the commission each month that are generated by the tax imposed

2973 under this section on the transactions described in Subsection (4)(e)(ii):
2974 (A) to local taxing jurisdictions; and
2975 (B) on the basis of the proportion of the total revenues generated by the transactions
2976 described in Subsection (4)(b)(ii) that are reported to the commission for that month within
2977 each local taxing jurisdiction as compared to the total revenues generated by the transactions
2978 described in Subsection (4)(b)(ii) that are reported to the commission for that month within the
2979 state.
2980 (ii) Subsection (4)(e)(i) applies to a transaction involving tangible personal property
2981 purchased with a direct payment permit in accordance with Section 59-12-107.1 .
2982 (f) (i) Notwithstanding Subsection (4)(b), for a transaction described in Subsection
2983 (4)(f)(ii), the location where the transaction is consummated is each location where the good or
2984 service described in Subsection 59-12-107.2 (1)(b) is used.
2985 (ii) Subsection (4)(f)(i) applies to a transaction involving a good or service:
2986 (A) described in Subsection 59-12-107.2 (1)(b);
2987 (B) that is concurrently available for use in more than one location; and
2988 (C) is purchased using the form described in Section 59-12-107.2 .
2989 (g) (i) Notwithstanding Subsection (4)(b), for a transaction described in Subsection
2990 (4)(g)(ii), the location where the transaction is consummated is determined by allocating the
2991 total revenues reported to the commission each month that are generated by the tax imposed
2992 under this section on the transactions described in Subsection (4)(g)(ii):
2993 (A) to local taxing jurisdictions; and
2994 (B) on the basis of the proportion of the total revenues generated by the transactions
2995 described in Subsection (4)(b)(ii) that are reported to the commission for that month within
2996 each local taxing jurisdiction as compared to the total revenues generated by the transactions
2997 described in Subsection (4)(b)(ii) that are reported to the commission for that month within the
2998 state.
2999 (ii) Subsection (4)(g)(i) applies to a transaction involving a purchase of direct mail if
3000 the purchaser of the direct mail provides to the seller the form described in Subsection
3001 59-12-107.3 (1)(a) at the time of the purchase of the direct mail.
3002 (h) Notwithstanding Subsection (4)(b), for a transaction involving the sale of a service
3003 described in Section 59-12-207.4 , the location where the transaction is consummated is the

3004 same as the location of the transaction determined under Section 59-12-207.4 .
3005 (5) (a) For a transaction that is reported to the commission on a simplified electronic
3006 return, the location where the transaction is consummated is determined in accordance with
3007 Subsections (5)(b) through (e).
3008 (b) (i) Except as provided in Subsections (5)(c) through (e), the location where a
3009 transaction is consummated is determined by allocating the total revenues reported to the
3010 commission each month on the simplified electronic return:
3011 (A) to local taxing jurisdictions; and
3012 (B) on the basis of the proportion of the total revenues generated by the transactions
3013 described in Subsection (4)(b)(ii) that are reported to the commission in accordance with
3014 Subsection (5)(b)(ii) for that month within each local taxing jurisdiction as compared to the
3015 total revenues generated by the transactions described in Subsection (4)(b)(ii) that are reported
3016 to the commission in accordance with Subsection (5)(b)(ii) for that month within the state.
3017 (ii) In making the allocations required by Subsection (5)(b)(i), the commission shall
3018 use the total revenues generated by the transactions described in Subsection (4)(b)(ii) reported
3019 to the commission:
3020 (A) in the report required by Subsection 59-12-105 (2); and
3021 (B) if a local taxing jurisdiction reports revenues to the commission in accordance with
3022 Subsection (5)(b)(iii), in the report made in accordance with Subsection (5)(b)(iii).
3023 (iii) (A) For purposes of this Subsection (5)(b), a local taxing jurisdiction may report to
3024 the commission the revenues generated by a tax imposed by this chapter within the local taxing
3025 jurisdiction if a seller:
3026 (I) opens an additional place of business within the local taxing jurisdiction after the
3027 seller makes an initial application for a license under Section 59-12-106 ; and
3028 (II) estimates that the additional place of business will increase by 5% or more the
3029 revenues generated by a tax imposed by this chapter within the local taxing jurisdiction.
3030 (B) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
3031 the commission may make rules providing procedures and requirements for making the report
3032 described in this Subsection (5)(b).
3033 (c) (i) Notwithstanding Subsection (5)(b), for a transaction described in Subsection
3034 (5)(c)(ii), the location where the transaction is consummated is determined by allocating the

3035 total revenues reported to the commission each month that are generated by the tax imposed
3036 under this section on the transactions described in Subsection (5)(c)(ii):
3037 (A) to local taxing jurisdictions within a county; and
3038 (B) on the basis of the proportion of the total revenues generated by the transactions
3039 described in Subsection (4)(b)(ii) that are reported to the commission for that month within a
3040 local taxing jurisdiction within that county as compared to the total revenues generated by the
3041 transactions described in Subsection (4)(b)(ii) that are reported to the commission for that
3042 month within all local taxing jurisdictions within that county.
3043 (ii) Subsection (5)(c)(i) applies to a transaction:
3044 (A) made from a location in the state other than a fixed place of business in the state;
3045 or
3046 (B) (I) made by a seller described in Subsection 59-12-107 (1)(a); and
3047 (II) involving tangible personal property that is shipped from outside the state.
3048 (d) Notwithstanding Subsection (5)(b), for a transaction made by a seller described in
3049 Subsection 59-12-107 (1)(b), the location where the transaction is consummated is determined
3050 by allocating the total revenues remitted to the commission each month that are generated by
3051 the tax imposed under this section on the transactions made by a seller described in Subsection
3052 59-12-107 (1)(b):
3053 (i) to each local taxing jurisdiction; and
3054 (ii) on the basis of the population of each local taxing jurisdiction as compared to the
3055 population of the state.
3056 (e) (i) Notwithstanding Subsection (5)(b), for a transaction described in Subsection
3057 (5)(e)(ii), the location where the transaction is consummated is determined by allocating the
3058 total revenues reported to the commission each month that are generated by the tax imposed
3059 under this section on the transactions described in Subsection (5)(e)(ii):
3060 (A) to local taxing jurisdictions; and
3061 (B) on the basis of the proportion of the total revenues generated by the transactions
3062 described in Subsection (4)(b)(ii) that are reported to the commission for that month within
3063 each local taxing jurisdiction as compared to the total revenues generated by the transactions
3064 described in Subsection (4)(b)(ii) that are reported to the commission for that month within the
3065 state.

3066 (ii) Subsection (5)(e)(i) applies to a transaction involving tangible personal property
3067 purchased with a direct payment permit in accordance with Section 59-12-107.1 .
3068 (6) For purposes of Subsections (4) and (5) and in accordance with Title 63, Chapter
3069 46a, Utah Administrative Rulemaking Act, the commission may make rules defining what
3070 constitutes a fixed place of business in the state.
3071 [(7) (a) Notwithstanding Subsection (2), a county, city, or town may not receive a tax
3072 revenue distribution less than .75% of the taxable sales within the boundaries of the county,
3073 city, or town.]
3074 [(b) The commission shall proportionally reduce quarterly distributions to any county,
3075 city, or town that, but for the reduction, would receive a distribution in excess of 1% of the
3076 sales and use tax revenue collected within the boundaries of the county, city, or town.]
3077 (7) (a) As used in this Subsection (7), "minimum tax revenue distribution" means the
3078 total amount of tax revenue distributions a county, city, or town receives from a tax imposed in
3079 accordance with this part for fiscal year 2005-06.
3080 (b) (i) Except as provided in Subsection (7)(c) or (d), for each fiscal year beginning
3081 with fiscal year 2006-07 and ending with fiscal year 2012-13, a county, city, or town shall
3082 receive a tax revenue distribution for a tax imposed in accordance with this part equal to the
3083 greater of:
3084 (A) the payment required by Subsection (2); or
3085 (B) the minimum tax revenue distribution.
3086 (ii) If the tax revenue distribution required by Subsection (7)(b)(i) for a county, city, or
3087 town is equal to the amount described in Subsection (7)(b)(i)(A) for three consecutive fiscal
3088 years, for fiscal years beginning with the fiscal year immediately following that three
3089 consecutive fiscal-year period, the county, city, or town shall receive the tax revenue
3090 distribution equal to the payment required by Subsection (2).
3091 (c) For a fiscal year beginning with fiscal year 2013-14 and ending with fiscal year
3092 2015-16, a county, city, or town shall receive the minimum tax revenue distribution for that
3093 fiscal year if for fiscal year 2012-13 the payment required by Subsection (2) to that county, city,
3094 or town is less than or equal to the product of:
3095 (i) the minimum tax revenue distribution; and
3096 (ii) .70.

3097 (d) (i) If a city or town is incorporated under Title 10, Chapter 2, Part 1, Incorporation,
3098 on or after July 1, 2006, the incorporated city or town and the entire unincorporated area of
3099 each county in which the incorporated city or town is located shall receive a tax revenue
3100 distribution equal to the payment required by Subsection (2).
3101 (ii) If the boundaries of a county, city, or town change as a result of an annexation,
3102 boundary adjustment, consolidation, disconnection, dissolution, or any other change affecting
3103 the boundaries of the county, city, or town, that county, city, or town shall receive a tax revenue
3104 distribution equal to the payment required by Subsection (2).
3105 (e) (i) The commission shall:
3106 (A) make monthly distributions of the revenues generated by the tax under this part to
3107 each county, city, or town imposing the tax; and
3108 (B) proportionately adjust monthly distributions to counties, cities, and towns to ensure
3109 that each county, city, or town receives for a fiscal year the amount required by Subsection
3110 (7)(b).
3111 (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
3112 the commission may make rules for making:
3113 (A) distributions to counties, cities, and towns as required by Subsection (7)(e)(i)(A);
3114 or
3115 (B) adjustments to distributions to counties, cities, and towns as required by Subsection
3116 (7)(e)(i)(B).
3117 (8) (a) Population figures for purposes of this section shall be based on the most recent
3118 official census or census estimate of the United States Census Bureau.
3119 (b) If a needed population estimate is not available from the United States Census
3120 Bureau, population figures shall be derived from the estimate from the Utah Population
3121 Estimates Committee created by executive order of the governor.
3122 (9) The population of a county for purposes of this section shall be determined solely
3123 from the unincorporated area of the county.
3124 Section 52. Section 59-12-1102 (See 59-1-1201 re: Eff) is amended to read:
3125 59-12-1102 (See 59-1-1201 re: Eff). Base -- Rate -- Imposition of tax --
3126 Distribution of revenue -- Administration -- Enactment or repeal of tax -- Effective date --
3127 Notice requirements.

3128 (1) (a) (i) Except as provided in Subsections (1)(a)(ii) and 59-12-207.1 (7)(c), subject to
3129 the provisions of Subsections (2) through (5), and in addition to any other tax authorized by
3130 this chapter, a county may impose by ordinance a county option sales and use tax of [.25%]
3131 .28% upon the transactions described in Subsection 59-12-103 (1).
3132 (ii) Notwithstanding Subsection (1)(a)(i), a county may not impose a tax under this
3133 section on the sales and uses described in Section 59-12-104 to the extent the sales and uses are
3134 exempt from taxation under Section 59-12-104 .
3135 (b) For purposes of this Subsection (1), the location of a transaction shall be
3136 determined in accordance with Sections 59-12-207.1 through 59-12-207.4 .
3137 (c) The county option sales and use tax under this section shall be imposed:
3138 (i) upon transactions that are located within the county, including transactions that are
3139 located within municipalities in the county; and
3140 (ii) except as provided in Subsection (1)(d) or (5), beginning on the first day of
3141 January:
3142 (A) of the next calendar year after adoption of the ordinance imposing the tax if the
3143 ordinance is adopted on or before May 25; or
3144 (B) of the second calendar year after adoption of the ordinance imposing the tax if the
3145 ordinance is adopted after May 25.
3146 (d) Notwithstanding Subsection (1)(c)(ii), the county option sales and use tax under
3147 this section shall be imposed:
3148 (i) beginning January 1, 1998, if an ordinance adopting the tax imposed on or before
3149 September 4, 1997; or
3150 (ii) beginning January 1, 1999, if an ordinance adopting the tax is imposed during 1997
3151 but after September 4, 1997.
3152 (2) (a) Before imposing a county option sales and use tax under Subsection (1), a
3153 county shall hold two public hearings on separate days in geographically diverse locations in
3154 the county.
3155 (b) (i) At least one of the hearings required by Subsection (2)(a) shall have a starting
3156 time of no earlier than 6 p.m.
3157 (ii) The earlier of the hearings required by Subsection (2)(a) shall be no less than seven
3158 days after the day the first advertisement required by Subsection (2)(c) is published.

3159 (c) (i) Before holding the public hearings required by Subsection (2)(a), the county
3160 shall advertise in a newspaper of general circulation in the county:
3161 (A) its intent to adopt a county option sales and use tax;
3162 (B) the date, time, and location of each public hearing; and
3163 (C) a statement that the purpose of each public hearing is to obtain public comments
3164 regarding the proposed tax.
3165 (ii) The advertisement shall be published once each week for the two weeks preceding
3166 the earlier of the two public hearings.
3167 (iii) The advertisement shall be no less than 1/8 page in size, and the type used shall be
3168 no smaller than 18 point and surrounded by a 1/4-inch border.
3169 (iv) The advertisement may not be placed in that portion of the newspaper where legal
3170 notices and classified advertisements appear.
3171 (v) Whenever possible:
3172 (A) the advertisement shall appear in a newspaper that is published at least five days a
3173 week, unless the only newspaper in the county is published less than five days a week; and
3174 (B) the newspaper selected shall be one of general interest and readership in the
3175 community, and not one of limited subject matter.
3176 (d) The adoption of an ordinance imposing a county option sales and use tax is subject
3177 to a local referendum election as provided in Title 20A, Chapter 7, Part 6, Local Referenda -
3178 Procedures, except that:
3179 (i) notwithstanding Subsection 20A-7-609 (2)(a), the county clerk shall hold a
3180 referendum election that qualifies for the ballot on the earlier of the next regular general
3181 election date or the next municipal general election date more than 155 days after adoption of
3182 an ordinance under this section;
3183 (ii) for 1997 only, the 120-day period in Subsection 20A-7-606 (1) shall be 30 days; and
3184 (iii) the deadlines in Subsections 20A-7-606 (2) and (3) do not apply, and the clerk shall
3185 take the actions required by those subsections before the referendum election.
3186 (3) (a) If the aggregate population of the counties imposing a county option sales and
3187 use tax under Subsection (1) is less than 75% of the state population, the tax levied under
3188 Subsection (1) shall be distributed to the county in which the tax was collected.
3189 (b) If the aggregate population of the counties imposing a county option sales and use

3190 tax under Subsection (1) is greater than or equal to 75% of the state population:
3191 (i) 50% of the tax collected under Subsection (1) in each county shall be distributed to
3192 the county in which the tax was collected; and
3193 (ii) except as provided in Subsection (3)(c), 50% of the tax collected under Subsection
3194 (1) in each county shall be distributed proportionately among all counties imposing the tax,
3195 based on the total population of each county.
3196 (c) If the amount to be distributed annually to a county under Subsection (3)(b)(ii),
3197 when combined with the amount distributed to the county under Subsection (3)(b)(i), does not
3198 equal at least $75,000, then:
3199 (i) the amount to be distributed annually to that county under Subsection (3)(b)(ii) shall
3200 be increased so that, when combined with the amount distributed to the county under
3201 Subsection (3)(b)(i), the amount distributed annually to the county is $75,000; and
3202 (ii) the amount to be distributed annually to all other counties under Subsection
3203 (3)(b)(ii) shall be reduced proportionately to offset the additional amount distributed under
3204 Subsection (3)(c)(i).
3205 (d) The commission shall establish rules to implement the distribution of the tax under
3206 Subsections (3)(a), (b), and (c).
3207 (4) (a) Except as provided in Subsection (4)(b) or (c), a tax authorized under this part
3208 shall be administered, collected, and enforced in accordance with:
3209 (i) the same procedures used to administer, collect, and enforce the tax under:
3210 (A) Part 1, Tax Collection; or
3211 (B) Part 2, Local Sales and Use Tax Act; and
3212 (ii) Chapter 1, General Taxation Policies.
3213 (b) Notwithstanding Subsection (4)(a), a tax under this part is not subject to
3214 Subsections 59-12-205 (2) through (9).
3215 (c) Notwithstanding Subsection (4)(a), the fee charged by the commission under
3216 Section 59-12-206 shall be based on the distribution amounts resulting after all the applicable
3217 distribution calculations under Subsection (3) have been made.
3218 (5) (a) For purposes of this Subsection (5):
3219 (i) "Annexation" means an annexation to a county under Title 17, Chapter 2,
3220 Annexation to County.

3221 (ii) "Annexing area" means an area that is annexed into a county.
3222 (b) (i) Except as provided in Subsection (5)(c) or (d), if, on or after July 1, 2004, a
3223 county enacts or repeals a tax under this part:
3224 (A) (I) the enactment shall take effect as provided in Subsection (1)(c); or
3225 (II) the repeal shall take effect on the first day of a calendar quarter; and
3226 (B) after a 90-day period beginning on the date the commission receives notice meeting
3227 the requirements of Subsection (5)(b)(ii) from the county.
3228 (ii) The notice described in Subsection (5)(b)(i)(B) shall state:
3229 (A) that the county will enact or repeal a tax under this part;
3230 (B) the statutory authority for the tax described in Subsection (5)(b)(ii)(A);
3231 (C) the effective date of the tax described in Subsection (5)(b)(ii)(A); and
3232 (D) if the county enacts the tax described in Subsection (5)(b)(ii)(A), the rate of the
3233 tax.
3234 (c) (i) Notwithstanding Subsection (5)(b)(i), for a transaction described in Subsection
3235 (5)(c)(iii), the enactment of a tax shall take effect on the first day of the first billing period:
3236 (A) that begins after the effective date of the enactment of the tax; and
3237 (B) if the billing period for the transaction begins before the effective date of the
3238 enactment of the tax under Subsection (1).
3239 (ii) Notwithstanding Subsection (5)(b)(i), for a transaction described in Subsection
3240 (5)(c)(iii), the repeal of a tax shall take effect on the first day of the last billing period:
3241 (A) that began before the effective date of the repeal of the tax; and
3242 (B) if the billing period for the transaction begins before the effective date of the repeal
3243 of the tax imposed under Subsection (1).
3244 (iii) Subsections (5)(c)(i) and (ii) apply to transactions subject to a tax under:
3245 (A) Subsection 59-12-103 (1)(b);
3246 (B) Subsection 59-12-103 (1)(c);
3247 (C) Subsection 59-12-103 (1)(d);
3248 (D) Subsection 59-12-103 (1)(e);
3249 (E) Subsection 59-12-103 (1)(f);
3250 (F) Subsection 59-12-103 (1)(g);
3251 (G) Subsection 59-12-103 (1)(h);

3252 (H) Subsection 59-12-103 (1)(i);
3253 (I) Subsection 59-12-103 (1)(j); or
3254 (J) Subsection 59-12-103 (1)(k).
3255 (d) (i) Notwithstanding Subsection (5)(b)(i), if a tax due under this chapter on a
3256 catalogue sale is computed on the basis of sales and use tax rates published in the catalogue, an
3257 enactment or repeal of a tax described in Subsection (5)(b)(i) takes effect:
3258 (A) on the first day of a calendar quarter; and
3259 (B) beginning 60 days after the effective date of the enactment or repeal under
3260 Subsection (5)(b)(i).
3261 (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
3262 the commission may by rule define the term "catalogue sale."
3263 (e) (i) Except as provided in Subsection (5)(f) or (g), if, for an annexation that occurs
3264 on or after July 1, 2004, the annexation will result in the enactment or repeal of a tax under this
3265 part for an annexing area, the enactment or repeal shall take effect:
3266 (A) on the first day of a calendar quarter; and
3267 (B) after a 90-day period beginning on the date the commission receives notice meeting
3268 the requirements of Subsection (5)(e)(ii) from the county that annexes the annexing area.
3269 (ii) The notice described in Subsection (5)(e)(i)(B) shall state:
3270 (A) that the annexation described in Subsection (5)(e)(i) will result in an enactment or
3271 repeal of a tax under this part for the annexing area;
3272 (B) the statutory authority for the tax described in Subsection (5)(e)(ii)(A);
3273 (C) the effective date of the tax described in Subsection (5)(e)(ii)(A); and
3274 (D) the rate of the tax described in Subsection (5)(e)(ii)(A).
3275 (f) (i) Notwithstanding Subsection (5)(e)(i), for a transaction described in Subsection
3276 (5)(f)(iii), the enactment of a tax shall take effect on the first day of the first billing period:
3277 (A) that begins after the effective date of the enactment of the tax; and
3278 (B) if the billing period for the transaction begins before the effective date of the
3279 enactment of the tax under Subsection (1).
3280 (ii) Notwithstanding Subsection (5)(e)(i), for a transaction described in Subsection
3281 (5)(f)(iii), the repeal of a tax shall take effect on the first day of the last billing period:
3282 (A) that began before the effective date of the repeal of the tax; and

3283 (B) if the billing period for the transaction begins before the effective date of the repeal
3284 of the tax imposed under Subsection (1).
3285 (iii) Subsections (5)(f)(i) and (ii) apply to transactions subject to a tax under:
3286 (A) Subsection 59-12-103 (1)(b);
3287 (B) Subsection 59-12-103 (1)(c);
3288 (C) Subsection 59-12-103 (1)(d);
3289 (D) Subsection 59-12-103 (1)(e);
3290 (E) Subsection 59-12-103 (1)(f);
3291 (F) Subsection 59-12-103 (1)(g);
3292 (G) Subsection 59-12-103 (1)(h);
3293 (H) Subsection 59-12-103 (1)(i);
3294 (I) Subsection 59-12-103 (1)(j); or
3295 (J) Subsection 59-12-103 (1)(k).
3296 (g) (i) Notwithstanding Subsection (5)(e)(i), if a tax due under this chapter on a
3297 catalogue sale is computed on the basis of sales and use tax rates published in the catalogue, an
3298 enactment or repeal of a tax described in Subsection (5)(e)(i) takes effect:
3299 (A) on the first day of a calendar quarter; and
3300 (B) beginning 60 days after the effective date of the enactment or repeal under
3301 Subsection (5)(e)(i).
3302 (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
3303 the commission may by rule define the term "catalogue sale."
3304 Section 53. Section 59-13-202 is amended to read:
3305 59-13-202. Definitions -- Refund of tax for agricultural uses on income and
3306 corporate franchise tax returns -- Application for permit for refund -- Division of
3307 Finance to pay claims -- Rules permitted to enforce part -- Penalties.
3308 (1) As used in this section, "refundable tax credit" or "tax credit" means a tax credit that
3309 a person may claim:
3310 (a) as provided by statute; and
3311 (b) regardless of whether the person has a tax liability under Chapter 7, Corporate
3312 Franchise and Income Taxes, for the taxable year for which the person claims the tax credit.
3313 [(1)] (2) Any person [who] that purchases and uses any motor fuel within the state for

3314 the purpose of operating or propelling stationary farm engines and self-propelled farm
3315 machinery used for nonhighway agricultural uses, and [who] that has paid the tax on the motor
3316 fuel as provided by this part, is entitled to a refund of the tax subject to the conditions and
3317 limitations provided under this part.
3318 [(2)] (3) (a) [Every] A person desiring a nonhighway agricultural use refund under this
3319 part shall claim the refund as a refundable tax credit on the [state income] tax return [or
3320 corporate franchise tax return] the person files under Chapter 7, Corporate Franchise and
3321 Income Taxes.
3322 (b) A person not subject to filing a [Utah income tax return or corporate franchise] tax
3323 return described in Subsection (3)(a) shall obtain a permit and file claims on a calendar year
3324 basis.
3325 (c) Any person claiming a refundable [motor fuel] tax credit under this section is
3326 required to furnish any or all of the information outlined in this section upon request of the
3327 commission. [Credit]
3328 (d) A refundable tax credit under this section is allowed only on purchases on which
3329 tax is paid during the taxable year covered by the tax return.
3330 [(3)] (4) In order to obtain a permit for a refund of motor fuel tax paid, an application
3331 shall be filed containing:
3332 (a) the name of [applicant] the person;
3333 (b) the [applicant's] person's address;
3334 (c) location and number of acres owned and operated, location and number of acres
3335 rented and operated, the latter of which shall be verified by a signed statement from the legal
3336 owner;
3337 (d) number of acres planted to each crop, type of soil, and whether irrigated or dry; and
3338 (e) make, size, type of fuel used, and power rating of each piece of equipment using
3339 fuel. If the [applicant] person is an operator of self-propelled or tractor-pulled farm machinery
3340 with which the [applicant] person works for hire doing custom jobs for other farmers, the
3341 application shall include information the commission requires and shall all be contained in, and
3342 be considered part of, the original application. The [applicant] person shall also file with the
3343 application a certificate from the county assessor showing each piece of equipment using fuel.
3344 This original application and all information contained in it constitutes a permanent file with

3345 the commission in the name of the [applicant] person.
3346 [(4)] (5) Any person claiming the right to a refund of motor fuel tax paid shall file a
3347 claim with the commission by April 15 of each year for the refund for the previous calendar
3348 year. The claim shall state the name and address of the [claimant] person, the number of
3349 gallons of motor fuel purchased for nonhighway agricultural uses, and the amount paid for the
3350 motor fuel. The [applicant] person shall retain the original invoice to support the claim. No
3351 more than one claim for a tax refund may be filed annually by each user of motor fuel
3352 purchased for nonhighway agricultural uses.
3353 [(5)] (6) Upon commission approval of the claim for a refund, the Division of Finance
3354 shall pay the amount found due to the [claimant] person. The total amount of claims for
3355 refunds shall be paid from motor fuel taxes.
3356 [(6)] (7) The commission may promulgate rules to enforce this part, and may refuse to
3357 accept as evidence of purchase or payment any instruments which show alteration or which fail
3358 to indicate the quantity of the purchase, the price of the motor fuel, a statement that it is
3359 purchased for purposes other than transportation, and the date of purchase and delivery. If the
3360 commission is not satisfied with the evidence submitted in connection with the claim, it may
3361 reject the claim or require additional evidence.
3362 [(7)] (8) Any person aggrieved by the decision of the commission with respect to a
3363 refundable tax credit or refund may file a request for agency action, requesting a hearing before
3364 the commission.
3365 [(8)] (9) Any person [who] that makes any false claim, report, or statement, [either] as
3366 claimant, agent, or creditor, with intent to defraud or secure a refund to which the [claimant]
3367 person is not entitled, is subject to the criminal penalties provided under Section 59-1-401 , and
3368 the commission shall initiate the filing of a complaint for alleged violations of this part. In
3369 addition to these penalties, the person may not receive any refund as a claimant or as a creditor
3370 of a claimant for refund for a period of five years.
3371 [(9)] (10) Refunds to which [taxpayers are] a person is entitled under this part shall be
3372 paid from the Transportation Fund.
3373 Section 54. Section 62A-4a-607 is amended to read:
3374 62A-4a-607. Promotion of adoption -- Agency notice to potential adoptive
3375 parents.

3376 (1) (a) The division and all child placing agencies licensed under this part shall
3377 promote adoption when that is a possible and appropriate alternative for a child. Specifically,
3378 in accordance with Section 62A-4a-205.6 , the division shall actively promote the adoption of
3379 all children in its custody who have a final plan for termination of parental rights pursuant to
3380 Section 78-3a-312 or a primary permanency goal of adoption.
3381 (b) Beginning May 1, 2000, the division may not place a child for adoption, either
3382 temporarily or permanently, with any individual or individuals who do not qualify for adoptive
3383 placement pursuant to the requirements of Sections 78-30-1 , 78-30-1.5 , and 78-30-9 .
3384 (2) The division shall obtain or conduct research of prior adoptive families to
3385 determine what families may do to be successful with their adoptive children and shall make
3386 this research available to potential adoptive parents.
3387 (3) (a) A child placing agency licensed under this part shall inform each potential
3388 adoptive parent with whom it is working that:
3389 (i) children in the custody of the state are available for adoption;
3390 (ii) Medicaid coverage for medical, dental, and mental health services may be available
3391 for these children;
3392 [(iii) tax benefits, including the tax credit provided for in Section 59-10-133 , and
3393 financial assistance may be available to defray the costs of adopting these children;]
3394 [(iv)] (iii) training and ongoing support may be available to the adoptive parents of
3395 these children; and
3396 [(v)] (iv) information about individual children may be obtained by contacting the
3397 division's offices or its Internet site as explained by the child placing agency.
3398 (b) A child placing agency shall:
3399 (i) provide the notice required by Subsection (3)(a) at the earliest possible opportunity;
3400 and
3401 (ii) simultaneously distribute a copy of the pamphlet prepared by the division in
3402 accordance with Subsection (3)(d).
3403 (c) As a condition of licensure, the child placing agency shall certify to the Office of
3404 Licensing at the time of license renewal that it has complied with the provisions of this section.
3405 (d) Before July 1, 2000, the division shall:
3406 (i) prepare a pamphlet that explains the information that is required by Subsection

3407 (3)(a); and
3408 (ii) regularly distribute copies of the pamphlet described in Subsection (3)(d)(i) to child
3409 placing agencies.
3410 (e) The division shall respond to any inquiry made as a result of the notice provided in
3411 Subsection (3)(a).
3412 Section 55. Section 63-38f-402 is amended to read:
3413 63-38f-402. Definitions.
3414 As used in this part:
3415 (1) "Business entity" means an entity under which business is conducted or transacted.
3416 [(1)] (2) "County applicant" means the governing authority of a county that meets the
3417 requirements for designation as an enterprise zone under Section 63-38f-404 .
3418 [(2)] (3) "Municipal applicant" means the governing authority of a city or town that
3419 meets the requirements for designation as an enterprise zone under Section 63-38f-404 .
3420 (4) "Nonrefundable tax credit" or "tax credit" means a tax credit that a business entity
3421 may:
3422 (a) claim:
3423 (i) as provided by statute; and
3424 (ii) in an amount that does not exceed the business entity's tax liability for a taxable
3425 year; and
3426 (b) carry forward or carry back:
3427 (i) if allowed by statute; and
3428 (ii) to the extent that the amount of the tax credit exceeds the business entity's tax
3429 liability under Chapter 7, Corporate Franchise and Income Taxes, for the taxable year for
3430 which the business entity claims the tax credit.
3431 [(3)] (5) "Tax incentives" or "tax benefits" means the nonrefundable tax credits
3432 available under Section 63-38f-413 .
3433 Section 56. Section 63-38f-412 is amended to read:
3434 63-38f-412. Businesses qualifying for tax incentives.
3435 The tax incentives described in this part are available only to a business [firm] entity for
3436 which at least 51% of the employees employed at facilities of the [firm] business entity located
3437 in the enterprise zone are individuals who, at the time of employment, reside in the county in

3438 which the enterprise zone is located.
3439 Section 57. Section 63-38f-413 is amended to read:
3440 63-38f-413. State tax credits.
3441 (1) Subject to the limitations of Subsections (2) through (4), the following [state]
3442 nonrefundable tax credits against [individual income taxes or corporate franchise and income
3443 taxes] a tax under Chapter 7, Corporate Franchise and Income Taxes, are applicable in an
3444 enterprise zone:
3445 (a) a tax credit of $750 may be claimed by a business entity for each new full-time
3446 position filled for not less than six months during a given tax year;
3447 (b) an additional $500 tax credit may be claimed if the new position pays at least 125%
3448 of:
3449 (i) the county average monthly nonagricultural payroll wage for the respective industry
3450 as determined by the Department of Workforce Services; or
3451 (ii) if the county average monthly nonagricultural payroll wage is not available for the
3452 respective industry, the total average monthly nonagricultural payroll wage in the respective
3453 county where the enterprise zone is located;
3454 (c) an additional tax credit of $750 may be claimed if the new position is in a business
3455 that adds value to agricultural commodities through manufacturing or processing;
3456 (d) an additional tax credit of $200 may be claimed for two consecutive years for each
3457 new employee who is insured under an employer-sponsored health insurance program if the
3458 employer pays at least 50% of the premium cost for two consecutive years;
3459 (e) a tax credit of 50% of the value of a cash contribution to a private nonprofit
3460 corporation, except that the credit claimed may not exceed $100,000:
3461 (i) that is exempt from federal income taxation under Section 501(c)(3), Internal
3462 Revenue Code;
3463 (ii) whose primary purpose is community and economic development; and
3464 (iii) that has been accredited by the board of directors of the Utah Rural Development
3465 Council;
3466 (f) a tax credit of 25% of the first $200,000 spent on rehabilitating a building in the
3467 enterprise zone that has been vacant for two years or more; and
3468 (g) an annual investment tax credit of 10% of the first $250,000 in investment, and 5%

3469 of the next $1,000,000 qualifying investment in plant, equipment, or other depreciable
3470 property.
3471 (2) (a) Subject to the limitations of Subsection (2)(b), a business entity claiming a tax
3472 credit under Subsections (1)(a) through (d) may claim [a] the tax credit for 30 full-time
3473 employee positions or less in each of its taxable years.
3474 (b) A business entity that received a tax credit for its full-time employee positions
3475 under Subsections (1)(a) through (d) may claim an additional tax credit for a full-time
3476 employee position under Subsections (1)(a) through (d) if:
3477 (i) the business entity creates a new full-time employee position;
3478 (ii) the total number of full-time employee positions at the business entity is greater
3479 than the number of full-time employee positions previously claimed by the business entity
3480 under Subsections (1)(a) through (d); and
3481 (iii) the total number of tax credits the business entity has claimed for its current
3482 taxable year, including the new full-time employee position for which the business entity is
3483 claiming a tax credit, is less than or equal to 30.
3484 (c) A business entity existing in an enterprise zone on the date of its designation shall
3485 calculate the number of full-time positions based on the average number of employees reported
3486 to the Department of Workforce Services.
3487 (d) Construction jobs are not eligible for the tax [credit] credits under Subsections
3488 (1)(a) through (d).
3489 (3) If the amount of a tax credit under this section exceeds a business entity's tax
3490 liability under this chapter for a taxable year, the amount of the tax credit exceeding the
3491 liability may be carried forward for a period that does not exceed the next three taxable years.
3492 (4) (a) If a business entity is located in a county that met the requirements of
3493 Subsections 63-38f-404 (1)(b) and (c) but did not qualify as an enterprise zone prior to January
3494 1, 1998, because the county was located in a metropolitan statistical area in more than one
3495 state, the business entity:
3496 (i) shall qualify for tax credits for a taxable year beginning on or after January 1, 1997,
3497 but beginning before December 31, 1997;
3498 (ii) may claim a tax credit as described in Subsection (4)(a) in a taxable year beginning
3499 on or after January 1, 1997, but beginning before December 31, 1997; and

3500 (iii) may qualify for tax credits for any taxable year beginning on or after January 1,
3501 1998, if the county is designated as an enterprise zone in accordance with this part.
3502 (b) If a business entity claims a tax credit under Subsection (4)(a)(ii), the business
3503 entity:
3504 (i) may claim the tax credit by filing for the taxable year beginning on or after January
3505 1, 1997, but beginning before December 31, 1997:
3506 [(A) an individual income tax return;]
3507 (A) a return under Title 59, Chapter 7, Corporate Franchise and Income Taxes;
3508 (B) an amended [individual income tax] return under Title 59, Chapter 7, Corporate
3509 Franchise and Income Taxes;
3510 (C) a [corporate franchise and income tax] return under Title 59, Chapter 10,
3511 Individual Income Tax Act; or
3512 (D) an amended [corporate franchise and income tax] return under Title 59, Chapter
3513 10, Individual Income Tax Act; and
3514 (ii) may carry forward the tax credit to a taxable year beginning on or after January 1,
3515 1998, in accordance with Subsection (3).
3516 (5) The tax credits under Subsections (1)(a) through (g) may not be claimed by a
3517 business entity engaged in retail trade or by a public utilities business.
3518 (6) A business entity may not claim or carry forward a tax credit available under this
3519 part for a taxable year during which the business entity has claimed the targeted business
3520 income tax credit available under Section 63-38f-503 .
3521 Section 58. Section 63-38f-501 is amended to read:
3522 63-38f-501. Definitions.
3523 As used in this part:
3524 (1) "Allocated cap amount" means the total amount of the targeted business income tax
3525 credit that a business applicant is allowed to claim for a taxable year that represents a pro rata
3526 share of the total amount of $300,000 for each fiscal year allowed under Subsection
3527 63-38f-503 (2).
3528 (2) "Business applicant" means a business that meets the criteria established in Section
3529 63-38f-502 .
3530 (3) "Community investment project" means a project that includes one or more of the

3531 following criteria in addition to the normal operations of the business applicant:
3532 (a) substantial new employment;
3533 (b) new capital development; or
3534 (c) a combination of both Subsections (3)(a) and (b).
3535 (4) "Community investment project period" means the total number of years that the
3536 office determines a business applicant is eligible for a targeted business income tax credit for
3537 each community investment project.
3538 (5) "Enterprise zone" means an area within a county or municipality that has been
3539 designated as an enterprise zone by the office under Part 4, Enterprise Zone Act.
3540 (6) "Local zone administrator" means a person:
3541 (a) designated by the governing authority of the county or municipal applicant as the
3542 local zone administrator in an enterprise zone application; and
3543 (b) approved by the office as the local zone administrator.
3544 (7) "Refundable tax credit" means a tax credit that a business applicant may claim:
3545 (a) as provided in this part; and
3546 (b) regardless of whether the business applicant has a tax liability under Chapter 7,
3547 Corporate Franchise and Income Taxes, for the taxable year for which the business applicant
3548 claims the tax credit.
3549 [(7)] (8) "Targeted business income tax credit " means [an income] a refundable tax
3550 credit available under Section 63-38f-503 .
3551 [(8)] (9) "Targeted business income tax credit eligibility form" means a document
3552 provided annually to the business applicant by the office that complies with the requirements of
3553 Subsection 63-38f-503 (8).
3554 Section 59. Section 63-38f-502 is amended to read:
3555 63-38f-502. Application for targeted business income tax credits.
3556 (1) (a) For taxable years beginning on or after January 1, 2002, a business applicant
3557 may elect to claim a targeted business income tax credit available under Section 63-38f-503 if
3558 the business applicant:
3559 (i) is located in:
3560 (A) an enterprise zone; and
3561 (B) a county with:

3562 (I) a population of less than 25,000; and
3563 (II) an unemployment rate that for six months or more of each calendar year is at least
3564 one percentage point higher than the state average;
3565 (ii) meets the requirements of Section 63-38f-412 ;
3566 (iii) provides:
3567 (A) a community investment project within the enterprise zone; and
3568 (B) a portion of the community investment project during each taxable year for which
3569 the business applicant claims the targeted business tax incentive; and
3570 (iv) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, is
3571 not engaged in the following, as defined by the State Tax Commission by rule:
3572 (A) construction;
3573 (B) retail trade; or
3574 (C) public utility activities.
3575 (b) For a taxable year for which a business applicant claims a targeted business income
3576 tax credit available under this part, the business applicant may not claim or carry forward a tax
3577 credit available under Section 63-38f-413 [,] or 59-7-610 [, or 59-10-108.7 ].
3578 (2) (a) A business applicant seeking to claim a targeted business income tax credit
3579 under this part shall file an application as provided in Subsection (2)(b) with the local zone
3580 administrator by no later than June 1 of the year in which the business applicant is seeking to
3581 claim a targeted business income tax credit.
3582 (b) The application described in Subsection (2)(a) shall include:
3583 (i) any documentation required by the local zone administrator to demonstrate that the
3584 business applicant meets the requirements of Subsection (1);
3585 (ii) a plan developed by the business applicant that outlines:
3586 (A) if the community investment project includes substantial new employment, the
3587 projected number and anticipated wage level of the jobs that the business applicant plans to
3588 create as the basis for qualifying for a targeted business income tax credit;
3589 (B) if the community investment project includes new capital development, a
3590 description of the capital development the business applicant plans to make as the basis for
3591 qualifying for a targeted business income tax credit; and
3592 (C) a description of how the business applicant's plan coordinates with:

3593 (I) the goals of the enterprise zone in which the business applicant is providing a
3594 community investment project; and
3595 (II) the overall economic development goals of the county or municipality in which the
3596 business applicant is providing a community investment project; and
3597 (iii) any additional information required by the local zone administrator.
3598 (3) (a) The local zone administrator shall:
3599 (i) evaluate an application filed under Subsection (2); and
3600 (ii) determine whether the business applicant is eligible for a targeted business income
3601 tax credit.
3602 (b) If the local zone administrator determines that the business applicant is eligible for
3603 a targeted business income tax credit, the local zone administrator shall:
3604 (i) certify that the business applicant is eligible for the targeted business income tax
3605 credit;
3606 (ii) structure the targeted business income tax credit for the business applicant in
3607 accordance with Section 63-38f-503 ; and
3608 (iii) monitor a business applicant to ensure compliance with this section.
3609 (4) A local zone administrator shall report to the office by no later than June 30 of each
3610 year:
3611 (a) (i) any application approved by the local zone administrator during the last fiscal
3612 year; and
3613 (ii) the information established in Subsections 63-38f-503 (4)(a) through (d) for each
3614 new business applicant; and
3615 (b) (i) the status of any existing business applicants that the local zone administrator
3616 monitors; and
3617 (ii) any information required by the office to determine the status of an existing
3618 business applicant.
3619 (5) (a) By July 15 of each year, the department shall notify the local zone administrator
3620 of the allocated cap amount that each business applicant that the local zone administrator
3621 monitors is eligible to claim.
3622 (b) By September 15 of each year, the local zone administrator shall notify, in writing,
3623 each business applicant that the local zone administrator monitors of the allocated cap amount

3624 determined by the office under Subsection (5)(a) that the business applicant is eligible to claim
3625 for a taxable year.
3626 Section 60. Section 63-38f-503 is amended to read:
3627 63-38f-503. Targeted business income tax credit structure -- Duties of the local
3628 zone administrator -- Duties of the State Tax Commission.
3629 (1) For taxable years beginning on or after January 1, 2002, a business applicant that is
3630 certified under Subsection 63-38f-502 (3) and issued a targeted business tax credit eligibility
3631 form by the office under Subsection (8) may claim a refundable [income] tax credit:
3632 (a) against the business applicant's tax liability under[:(i) Title 59, Chapter 10,
3633 Individual Income Tax Act; or (ii)] Title 59, Chapter 7, Corporate Franchise and Income Taxes;
3634 and
3635 (b) subject to requirements and limitations provided by this part.
3636 (2) The total amount of the targeted business income tax credits allowed under this part
3637 for all business applicants may not exceed $300,000 in any fiscal year.
3638 (3) (a) A targeted business income tax credit allowed under this part for each
3639 community investment project provided by a business applicant may not:
3640 (i) be claimed by a business applicant for more than seven consecutive taxable years
3641 from the date the business applicant first qualifies for a targeted business income tax credit on
3642 the basis of a community investment project;
3643 (ii) be carried forward or carried back;
3644 (iii) exceed $100,000 in total amount for the community investment project period
3645 during which the business applicant is eligible to claim a targeted business income tax credit;
3646 or
3647 (iv) exceed in any year that the targeted business income tax credit is claimed the lesser
3648 of:
3649 (A) 50% of the maximum amount allowed by the local zone administrator; or
3650 (B) the allocated cap amount determined by the office under Subsection 63-38f-502 (5).
3651 (b) A business applicant may apply to the local zone administrator to claim a targeted
3652 business income tax credit allowed under this part for each community investment project
3653 provided by the business applicant as the basis for its eligibility for a targeted business income
3654 tax credit.

3655 (4) Subject to other provisions of this section, the local zone administrator shall
3656 establish for each business applicant that qualifies for a targeted business income tax credit:
3657 (a) criteria for maintaining eligibility for the targeted business income tax credit that
3658 are reasonably related to the community investment project that is the basis for the business
3659 applicant's targeted business income tax credit;
3660 (b) the maximum amount of the targeted business income tax credit the business
3661 applicant is allowed for the community investment project period;
3662 (c) the time period over which the total amount of the targeted business income tax
3663 credit may be claimed;
3664 (d) the maximum amount of the targeted business income tax credit that the business
3665 applicant will be allowed to claim each year; and
3666 (e) requirements for a business applicant to report to the local zone administrator
3667 specifying:
3668 (i) the frequency of the business applicant's reports to the local zone administrator,
3669 which shall be made at least quarterly; and
3670 (ii) the information needed by the local zone administrator to monitor the business
3671 applicant's compliance with this Subsection (4) or Section 63-38f-502 that shall be included in
3672 the report.
3673 (5) In accordance with Subsection (4)(e), a business applicant allowed a targeted
3674 business income tax credit under this part shall report to the local zone administrator.
3675 (6) The amount of a targeted business income tax credit that a business applicant is
3676 allowed to claim for a taxable year shall be reduced by 25% for each quarter in which the office
3677 or the local zone administrator determines that the business applicant has failed to comply with
3678 a requirement of Subsection (3) or Section 63-38f-502 .
3679 (7) The office or local zone administrator may audit a business applicant to ensure:
3680 (a) eligibility for a targeted business income tax credit; or
3681 (b) compliance with Subsection (3) or Section 63-38f-502 .
3682 (8) The office shall issue a targeted business income tax credit eligibility form in a
3683 form jointly developed by the State Tax Commission and the office no later than 30 days after
3684 the last day of the business applicant's taxable year showing:
3685 (a) the maximum amount of the targeted business income tax credit that the business

3686 applicant is eligible for that taxable year;
3687 (b) any reductions in the maximum amount of the targeted business income tax credit
3688 because of failure to comply with a requirement of Subsection (3) or Section 63-38f-502 ;
3689 (c) the allocated cap amount that the business applicant may claim for that taxable
3690 year; and
3691 (d) the actual amount of the targeted business income tax credit that the business
3692 applicant may claim for that taxable year.
3693 (9) (a) A business applicant shall retain the targeted business income tax credit
3694 eligibility form provided by the office under this Subsection (9).
3695 (b) The State Tax Commission may audit a business applicant to ensure:
3696 (i) eligibility for a targeted business income tax credit; or
3697 (ii) compliance with Subsection (3) or Section 63-38f-502 .
3698 Section 61. Section 63-38f-1102 is amended to read:
3699 63-38f-1102. Definitions.
3700 As used in this part:
3701 (1) "Composting" means the controlled decay of landscape waste or sewage sludge and
3702 organic industrial waste, or a mixture of these, by the action of bacteria, fungi, molds, and other
3703 organisms.
3704 (2) "Postconsumer waste material" means any product generated by a business or
3705 consumer that has served its intended end use, and that has been separated from solid waste for
3706 the purposes of collection, recycling, and disposition and that does not include secondary waste
3707 material.
3708 (3) (a) "Recovered materials" means waste materials and by-products that have been
3709 recovered or diverted from solid waste.
3710 (b) "Recovered materials" does not include those materials and by-products generated
3711 from, and commonly reused within, an original manufacturing process.
3712 (4) (a) "Recycling" means the diversion of materials from the solid waste stream and
3713 the beneficial use of the materials and includes a series of activities by which materials that
3714 would become or otherwise remain waste are diverted from the waste stream for collection,
3715 separation, and processing, and are used as raw materials or feedstocks in lieu of or in addition
3716 to virgin materials in the manufacture of goods sold or distributed in commerce or the reuse of

3717 the materials as substitutes for goods made from virgin materials.
3718 (b) "Recycling" does not include burning municipal solid waste for energy recovery.
3719 (5) "Recycling market development zone" or "zone" means an area designated by the
3720 office as meeting the requirements of this part.
3721 (6) (a) "Secondary waste material" means industrial by-products that go to disposal
3722 facilities and waste generated after completion of a manufacturing process.
3723 (b) "Secondary waste material" does not include internally generated scrap commonly
3724 returned to industrial or manufacturing processes, such as home scrap and mill broke.
3725 (7) "State tax incentives," "tax incentives," or "tax benefits" means the nonrefundable
3726 tax credits available under [Sections] Section 59-7-608 [and 59-10-108.7 ].
3727 Section 62. Section 63-38f-1110 is amended to read:
3728 63-38f-1110. Recycling market development zones credit.
3729 For a taxpayer within a recycling market development zone, there are allowed the
3730 nonrefundable tax credits [against tax] as provided by [Sections] Section 59-7-610 [and
3731 59-10-108.7 ].
3732 Section 63. Section 63-38f-1203 is amended to read:
3733 63-38f-1203. Definitions.
3734 As used in this part:
3735 (1) "Board" means the Utah Capital Investment Board.
3736 (2) "Certificate" means a contract between the board and a designated investor under
3737 which a contingent tax credit is available and issued to the designated investor.
3738 (3) "Commitment" means a written commitment by a designated purchaser to purchase
3739 from the board certificates presented to the board for redemption by a designated investor.
3740 Each commitment shall state the dollar amount of contingent tax credits that the designated
3741 purchaser has committed to purchase from the board.
3742 (4) "Contingent tax credit" means a contingent tax credit issued under this part that is
3743 available against a tax [liabilities] liability imposed by Title 59, Chapter 7, Corporate Franchise
3744 and Income Taxes, [and Chapter 10, Individual Income Tax Act,] if there are insufficient funds
3745 in the redemption reserve and the board has not exercised other options for redemption under
3746 Subsection 63-38f-1220 (3)(b).
3747 (5) "Corporation" means the Utah Capital Investment Corporation created under

3748 Section 63-38f-1207 .
3749 (6) "Designated investor" means:
3750 (a) a person who purchases an equity interest in the Utah fund of funds; or
3751 (b) a transferee of a certificate or contingent tax credit.
3752 (7) "Designated purchaser" means:
3753 (a) a person who enters into a written undertaking with the board to purchase a
3754 commitment; or
3755 (b) a transferee who assumes the obligations to make the purchase described in the
3756 commitment.
3757 (8) "Person" means an individual, partnership, limited liability company, corporation,
3758 association, organization, business trust, estate, trust, or any other legal or commercial entity.
3759 (9) "Redemption reserve" means the reserve established by the corporation to facilitate
3760 the cash redemption of certificates.
3761 (10) "Utah fund of funds" means a limited partnership or limited liability company
3762 established under Section 63-38f-1213 in which a designated investor purchases an equity
3763 interest.
3764 Section 64. Section 63-55-209 is amended to read:
3765 63-55-209. Repeal dates, Title 9.
3766 (1) Title 9, Chapter 1, Part 8, Commission on National and Community Service Act, is
3767 repealed July 1, 2014.
3768 (2) Title 9, Chapter 2, Part 4, Enterprise Zone Act, is repealed July 1, 2008.
3769 (3) (a) Title 9, Chapter 2, Part 16, Recycling Market Development Zone Act, is
3770 repealed July 1, 2010.
3771 (b) [Sections] Section 59-7-610 [and 59-10-108.7 ], regarding tax credits for certain
3772 persons in recycling market development zones, are repealed for taxable years beginning on or
3773 after January 1, 2011.
3774 (c) Notwithstanding Subsection (3)(b), a person may not claim a tax credit under
3775 Section 59-7-610 [or 59-10-108.7 ]:
3776 (i) for the purchase price of machinery or equipment described in Section 59-7-610 [or
3777 59-10-108.7 ] if the machinery or equipment is purchased on or after July 1, 2010; or
3778 (ii) for an expenditure described in Subsection 59-7-610 (1)(b) [or 59-10-108.7 (1)(b)],

3779 if the expenditure is made on or after July 1, 2010.
3780 (d) Notwithstanding Subsections (3)(b) and (c), a person may carry forward a tax credit
3781 in accordance with Section 59-7-610 [or 59-10-108.7 ] if:
3782 (i) the person is entitled to a tax credit under Section 59-7-610 [or 59-10-108.7 ]; and
3783 (ii) (A) for the purchase price of machinery or equipment described in Section
3784 59-7-610 [or 59-10-108.7 ], the machinery or equipment is purchased on or before June 30,
3785 2010; or
3786 (B) for an expenditure described in Subsection 59-7-610 (1)(b) [or 59-10-108.7 (1)(b)],
3787 the expenditure is made on or before June 30, 2010.
3788 (4) Title 9, Chapter 2, Part 19, Utah Venture Capital Enhancement Act, is repealed July
3789 1, 2008.
3790 (5) Title 9, Chapter 3, Part 3, Heber Valley Historic Railroad Authority, is repealed
3791 July 1, 2009.
3792 (6) Title 9, Chapter 4, Part 9, Utah Housing Corporation Act, is repealed July 1, 2006.
3793 Section 65. Section 63-55-259 is amended to read:
3794 63-55-259. Repeal dates, Title 59.
3795 (1) Title 59, Chapter 1, Part 12, Legislative Intent, is repealed July 1, 2006.
3796 (2) Section 59-9-102.5 is repealed December 31, 2010.
3797 [(3) Section 59-10-530.5 , Homeless Trust Account, is repealed July 1, 2007.]
3798 Section 66. Section 72-12-107 is amended to read:
3799 72-12-107. Benefits of ride-sharing driver not taxable income.
3800 Money and other benefits, other than salary, received by a driver in a ride-sharing
3801 arrangement does not constitute income for the purpose of computing adjusted gross income
3802 under Title 59, Chapter 10, Individual Income Tax.
3803 Section 67. Repealer.
3804 This bill repeals:
3805 Section 23-14-14.1, Wolf Depredation and Management Restricted Account --
3806 Interest -- Use of contributions and interest.
3807 Section 31A-32a-101, Title and scope.
3808 Section 31A-32a-102, Definitions.
3809 Section 31A-32a-103, Establishing medical care savings accounts.

3810 Section 31A-32a-104, Administration of medical care savings account.
3811 Section 31A-32a-105, Withdrawals -- Termination -- Transfers.
3812 Section 31A-32a-106, Regulation of account administrators -- Administration of
3813 tax deductions.
3814 Section 31A-32a-107, Penalties for noncompliance with tax requirements.
3815 Section 59-10-102, Declaration of intent.
3816 Section 59-10-104.1, Exemption from taxation.
3817 Section 59-10-105, Optional tax -- Calculation -- Commission authority to
3818 prescribed tax tables -- Exemption.
3819 Section 59-10-107, Credit for tax paid by estate or trust to another state.
3820 Section 59-10-108, Credit for cash contributions to sheltered workshops.
3821 Section 59-10-108.1, Tax credit for at-home parent.
3822 Section 59-10-108.5, Historic preservation credit.
3823 Section 59-10-108.7, Recycling market development zones tax credit.
3824 Section 59-10-109, Targeted jobs tax credit.
3825 Section 59-10-111, Federal taxable income defined.
3826 Section 59-10-112, State taxable income of resident individual.
3827 Section 59-10-127, Definitions -- Tax credit -- Cleaner burning fuels.
3828 Section 59-10-128, Tax credit -- Items using cleaner burning fuels.
3829 Section 59-10-129, Utah low-income housing tax credit.
3830 Section 59-10-130, Tutoring tax credits for disabled dependents.
3831 Section 59-10-131, Credits for research activities conducted in the state -- Carry
3832 forward -- Commission to report modification or repeal of federal credits -- Tax Review
3833 Commission study.
3834 Section 59-10-132, Credits for machinery, equipment, or both primarily used for
3835 conducting qualified research or basic research -- Carry forward -- Commission to report
3836 modification or repeal of federal credits -- Tax Review Commission study.
3837 Section 59-10-133, Tax credit for adoption of a child who has a special need.
3838 Section 59-10-134, Renewable energy systems tax credit -- Definitions -- Individual
3839 tax credit -- Limitations -- Business tax credit -- Limitations -- State tax credit in addition
3840 to allowable federal credits -- Certification -- Rulemaking authority -- Reimbursement of

3841 Uniform School Fund.
3842 Section 59-10-134.1, Refundable tax credit for hand tools used in farming
3843 operations -- Procedures for refund -- Transfers from General Fund to Uniform School
3844 Fund -- Rulemaking authority.
3845 Section 59-10-134.2, Definitions -- Nonrefundable tax credit for live organ
3846 donation expenses -- Rulemaking authority.
3847 Section 59-10-135, Removal of tax credit from tax return and prohibition on
3848 claiming or carrying forward a tax credit -- Conditions for removal and prohibition on
3849 claiming or carrying forward a tax credit -- Commission reporting requirements.
3850 Section 59-10-209, Adjustments to state taxable income of resident estates or trusts
3851 and beneficiaries.
3852 Section 59-10-530, Nongame wildlife contribution -- Credit to Wildlife Resources
3853 Account.
3854 Section 59-10-530.5, Homeless contribution -- Credit to Pamela Atkinson Homeless
3855 Trust Account.
3856 Section 59-10-546, Application of former law.
3857 Section 59-10-547, Election Campaign Fund designations -- Transfer from General
3858 Fund -- Form and procedure.
3859 Section 59-10-548, Election Campaign Fund -- Contents -- Disbursement and
3860 distribution -- Limitations on expenditures.
3861 Section 59-10-549, Contributions for education.
3862 Section 59-10-550, Checkoff for children's organ transplants -- Credit to Kurt
3863 Oscarson Children's Organ Transplant Trust Account.
3864 Section 59-10-550.1, Contribution to Wolf Depredation and Management
3865 Restricted Account.
3866 Section 59-10-551, Removal of designation and prohibitions on collection for
3867 certain contributions on income tax form -- Conditions for removal and prohibitions on
3868 collection -- Commission reporting requirements.
3869 Section 59-12-901, Definitions.
3870 Section 59-12-902, Sales tax refund for qualified emergency food agencies -- Use of
3871 amounts received as refund -- Administration -- Rulemaking authority.

3872 Section 68. Effective dates.
3873 (1) Except as provided in Subsections (2) and (3), this bill takes effect for taxable years
3874 beginning on or after January 1, 2007.
3875 (2) The amendments in this bill to Sections 9-4-1404 , 59-12-104 , 59-12-204 ,
3876 59-12-205 , and 59-12-1102 take effect on July 1, 2006.
3877 (3) The repeal of Sections 59-12-901 and 59-12-902 in this bill takes effect on July 1,
3878 2006.
3879 Section 69. Revisor instructions.
3880 It is the intent of the Legislature that, in preparing the Utah Code database for
3881 publication, the Office of Legislative Research and General Counsel shall replace the
3882 references in Section 59-10-136 from "this bill" to the bill's designated chapter number in the
3883 Laws of Utah.




Legislative Review Note
as of 2-7-06 3:32 PM

Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.

Office of Legislative Research and General Counsel