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First Substitute S.B. 37
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8 LONG TITLE
9 General Description:
10 This bill amends the Revenue and Taxation title and the State Affairs in General title
11 relating to the income taxation of individuals, estates, and trusts.
12 Highlighted Provisions:
13 This bill:
14 . provides and modifies definitions;
15 . modifies the additions to and subtractions from federal taxable income of a resident
16 or nonresident individual;
17 . modifies the adjustments to state taxable income for purposes of individual income
18 taxes;
19 . addresses the calculation of state taxable income of a resident or nonresident estate
20 or trust;
21 . modifies the additions to and subtractions from federal taxable income of a resident
22 or nonresident estate or trust;
23 . modifies the adjustments to state taxable income for purposes of income taxes on
24 estates and trusts;
25 . modifies the fiduciary adjustments for purposes of income taxes on estates and
26 trusts;
27 . creates the Nonrefundable Tax Credit Act and renumbers and amends as part of this
28 Act the nonrefundable income tax credits authorized under the Individual Income
29 Tax Act;
30 . creates the Refundable Tax Credit Act and renumbers and amends as part of this
31 Act the refundable income tax credits authorized under the Individual Income Tax
32 Act;
33 . addresses which of the nonrefundable and refundable income tax credits an estate or
34 trust may claim;
35 . repeals obsolete language; and
36 . makes technical changes.
37 Monies Appropriated in this Bill:
38 None
39 Other Special Clauses:
40 This bill has retrospective operation for taxable years beginning on or after January 1,
41 2006.
42 Utah Code Sections Affected:
43 AMENDS:
44 19-1-403, as last amended by Chapter 108 and renumbered and amended by Chapter
45 294, Laws of Utah 2005
46 19-1-404, as renumbered and amended by Chapter 294, Laws of Utah 2005
47 19-2-104, as last amended by Chapter 131, Laws of Utah 2003
48 53B-8a-106, as last amended by Chapter 109, Laws of Utah 2005
49 59-2-102, as last amended by Chapters 162, 243, 281 and 303, Laws of Utah 2004
50 59-6-101, as last amended by Chapter 3, Laws of Utah 1988
51 59-6-102, as last amended by Chapter 28, Laws of Utah 2002
52 59-7-607, as last amended by Chapter 113, Laws of Utah 2005
53 59-7-614, as last amended by Chapters 217, 244 and 294, Laws of Utah 2005
54 59-7-703, as last amended by Chapter 110, Laws of Utah 2003
55 59-10-103, as last amended by Chapter 241, Laws of Utah 2005
56 59-10-112, as last amended by Chapter 345, Laws of Utah 1995
57 59-10-114, as last amended by Chapters 109 and 241, Laws of Utah 2005
58 59-10-115, as renumbered and amended by Chapter 2, Laws of Utah 1987
59 59-10-201, as last amended by Chapter 109, Laws of Utah 2005
60 59-10-201.1, as enacted by Chapter 345, Laws of Utah 1995
61 59-10-202, as last amended by Chapter 3, Laws of Utah 2003, Second Special Session
62 59-10-204, as last amended by Chapter 345, Laws of Utah 1995
63 59-10-205, as last amended by Chapter 345, Laws of Utah 1995
64 59-10-207, as last amended by Chapter 345, Laws of Utah 1995
65 59-10-210, as last amended by Chapter 345, Laws of Utah 1995
66 59-13-202, as last amended by Chapter 86, Laws of Utah 2000
67 62A-4a-607, as last amended by Chapter 327, Laws of Utah 2001
68 63-38f-402, as renumbered and amended by Chapter 148, Laws of Utah 2005
69 63-38f-412, as renumbered and amended by Chapter 148, Laws of Utah 2005
70 63-38f-413, as renumbered and amended by Chapter 148, Laws of Utah 2005
71 63-38f-501, as renumbered and amended by Chapter 148, Laws of Utah 2005
72 63-38f-502, as renumbered and amended by Chapter 148, Laws of Utah 2005
73 63-38f-503, as renumbered and amended by Chapter 148, Laws of Utah 2005
74 63-38f-1102, as renumbered and amended by Chapter 148, Laws of Utah 2005
75 63-38f-1110, as renumbered and amended by Chapter 148, Laws of Utah 2005
76 63-38f-1203, as renumbered and amended by Chapter 148, Laws of Utah 2005
77 63-55-209, as last amended by Chapters 37 and 90, Laws of Utah 2004
78 ENACTS:
79 59-10-209.1, Utah Code Annotated 1953
80 59-10-1001, Utah Code Annotated 1953
81 59-10-1002, Utah Code Annotated 1953
82 59-10-1101, Utah Code Annotated 1953
83 59-10-1102, Utah Code Annotated 1953
84 RENUMBERS AND AMENDS:
85 59-10-1003, (Renumbered from 59-10-106, as renumbered and amended by Chapter 2,
86 Laws of Utah 1987)
87 59-10-1004, (Renumbered from 59-10-108, as last amended by Chapter 73, Laws of
88 Utah 2001)
89 59-10-1005, (Renumbered from 59-10-108.1, as enacted by Chapter 272, Laws of Utah
90 1999)
91 59-10-1006, (Renumbered from 59-10-108.5, as last amended by Chapter 25, Laws of
92 Utah 1995)
93 59-10-1007, (Renumbered from 59-10-108.7, as last amended by Chapter 148, Laws of
94 Utah 2005)
95 59-10-1008, (Renumbered from 59-10-109, as last amended by Chapter 198, Laws of
96 Utah 2003)
97 59-10-1009, (Renumbered from 59-10-127, as last amended by Chapters 108 and 294,
98 Laws of Utah 2005)
99 59-10-1010, (Renumbered from 59-10-129, as last amended by Chapter 113, Laws of
100 Utah 2005)
101 59-10-1011, (Renumbered from 59-10-130, as last amended by Chapter 145, Laws of
102 Utah 2002)
103 59-10-1012, (Renumbered from 59-10-131, as last amended by Chapter 59, Laws of
104 Utah 1999)
105 59-10-1013, (Renumbered from 59-10-132, as last amended by Chapter 59, Laws of
106 Utah 1999)
107 59-10-1014, (Renumbered from 59-10-134, as last amended by Chapters 217, 244 and
108 294, Laws of Utah 2005)
109 59-10-1015, (Renumbered from 59-10-134.2, as enacted by Chapter 290, Laws of Utah
110 2005)
111 59-10-1016, (Renumbered from 59-10-135, as enacted by Chapter 62, Laws of Utah
112 2002)
113 59-10-1103, (Renumbered from 59-10-108.2, as last amended by Chapter 110, Laws of
114 Utah 2003)
115 59-10-1104, (Renumbered from 59-10-133, as last amended by Chapter 263, Laws of
116 Utah 2005)
117 59-10-1105, (Renumbered from 59-10-134.1, as enacted by Chapter 312, Laws of Utah
118 2003)
119 REPEALS:
120 59-10-107, as renumbered and amended by Chapter 2, Laws of Utah 1987
121 59-10-128, as last amended by Chapter 198, Laws of Utah 2003
122 59-10-209, as last amended by Chapter 345, Laws of Utah 1995
123
124 Be it enacted by the Legislature of the state of Utah:
125 Section 1. Section 19-1-403 is amended to read:
126 19-1-403. Clean Fuels Vehicle Fund -- Contents -- Loans or grants made with
127 fund monies.
128 (1) (a) There is created a revolving fund known as the Clean Fuels Vehicle Fund.
129 (b) The fund consists of:
130 (i) appropriations to the fund;
131 (ii) other public and private contributions made under Subsection (1)(d);
132 (iii) interest earnings on cash balances; and
133 (iv) all monies collected for loan repayments and interest on loans.
134 (c) All money appropriated to the fund is nonlapsing.
135 (d) The department may accept contributions from other public and private sources for
136 deposit into the fund.
137 (2) (a) Except as provided in Subsection (3), the department may make loans or grants
138 with monies available in the fund for:
139 (i) the conversion of private sector business vehicles and government vehicles to use a
140 clean fuel, if certified by the Air Quality Board; or
141 (ii) the purchase of OEM vehicles for use as private sector business vehicles or
142 government vehicles.
143 (b) The amount of a loan for any vehicle may not exceed:
144 (i) the actual cost of the vehicle conversion;
145 (ii) the incremental cost of purchasing the OEM vehicle; or
146 (iii) the cost of purchasing the OEM vehicle if there is no documented incremental
147 cost.
148 (c) The amount of a grant for any vehicle may not exceed:
149 (i) 50% of the actual cost of the vehicle conversion minus the amount of any tax credit
150 claimed under Section 59-7-605 or [
151 requested; or
152 (ii) 50% of the incremental cost of purchasing an OEM vehicle minus the amount of
153 any tax credit claimed under Section 59-7-605 or [
154 which a grant is requested.
155 (d) (i) Except as provided in Subsection (3) and subject to the availability of monies in
156 the fund, the department may make loans for the purchase of vehicle refueling equipment for
157 private sector business vehicles and government vehicles.
158 (ii) The maximum amount loaned per installation of refueling equipment may not
159 exceed the actual cost of the refueling equipment.
160 (3) Notwithstanding Subsection (2)(a) or (2)(d), the department may not make a loan or
161 grant under this part with respect to an electric-hybrid vehicle.
162 (4) Administrative costs of the fund shall be paid from the fund.
163 (5) (a) The fund balance may not exceed $10,000,000.
164 (b) Interest on cash balances and repayment of loans in excess of the amount necessary
165 to maintain the fund balance at $10,000,000 shall be deposited in the General Fund.
166 (6) (a) Loans made from monies in the fund shall be supported by loan documents
167 evidencing the intent of the borrower to repay the loan.
168 (b) The original loan documents shall be filed with the Division of Finance and a copy
169 shall be filed with the department.
170 Section 2. Section 19-1-404 is amended to read:
171 19-1-404. Department duties -- Rulemaking -- Loan repayment.
172 (1) The department shall:
173 (a) establish and administer the loan and grant program to encourage government
174 officials and private sector business vehicle owners and operators to obtain and use clean-fuel
175 vehicles; and
176 (b) make rules in accordance with Title 63, Chapter 46a, Utah Administrative
177 Rulemaking Act:
178 (i) specifying the amount of money in the fund to be dedicated annually for grants;
179 (ii) limiting the amount of a grant given to any person claiming a tax credit under
180 Section 59-7-605 or [
181 requested to assure that the sum of the tax credit and grant does not exceed:
182 (A) 50% of the incremental cost of the OEM vehicle; or
183 (B) 50% of the cost of conversion equipment;
184 (iii) limiting the number of motor vehicles per fleet operator that may be eligible for a
185 grant in a year;
186 (iv) specifying criteria the department shall consider in prioritizing and awarding loans
187 and grants;
188 (v) specifying repayment periods;
189 (vi) specifying procedures for:
190 (A) awarding loans and grants; and
191 (B) collecting loans; and
192 (vii) requiring all loan and grant applicants to:
193 (A) apply on forms provided by the department;
194 (B) agree in writing to use the clean fuel for which each vehicle is converted or
195 purchased using loan or grant proceeds for a minimum of 70% of the vehicle miles traveled
196 beginning from the time of conversion or purchase of the vehicle;
197 (C) agree in writing to notify the department if a vehicle converted or purchased using
198 loan or grant proceeds becomes inoperable through mechanical failure or accident and to
199 pursue a remedy outlined in department rules;
200 (D) provide reasonable data to the department on vehicles converted or purchased with
201 loan or grant proceeds; and
202 (E) submit vehicles converted or purchased with loan or grant proceeds to inspections
203 by the department as required in department rules and as necessary for administration of the
204 loan and grant program.
205 (2) (a) When developing repayment schedules for the loans, the department shall
206 consider the projected savings from use of the clean-fuel vehicle.
207 (b) A repayment schedule may not exceed ten years.
208 (c) Loans made from the fund for private sector vehicles shall be made at an interest
209 rate equal to the annual return earned in the state treasurer's Public Treasurer's Pool as
210 determined the month immediately preceding the closing date of the loan.
211 (d) Loans made from the fund for government vehicles shall be made at a zero interest
212 rate.
213 (3) The Division of Finance is responsible for collection of and accounting for the
214 loans and has custody of all loan documents, including all notes and contracts, evidencing the
215 indebtedness of the fund.
216 Section 3. Section 19-2-104 is amended to read:
217 19-2-104. Powers of board.
218 (1) The board may make rules in accordance with Title 63, Chapter 46a, Utah
219 Administrative Rulemaking Act:
220 (a) regarding the control, abatement, and prevention of air pollution from all sources
221 and the establishment of the maximum quantity of air contaminants that may be emitted by any
222 air contaminant source;
223 (b) establishing air quality standards;
224 (c) requiring persons engaged in operations which result in air pollution to:
225 (i) install, maintain, and use emission monitoring devices, as the board finds necessary;
226 (ii) file periodic reports containing information relating to the rate, period of emission,
227 and composition of the air contaminant; and
228 (iii) provide access to records relating to emissions which cause or contribute to air
229 pollution;
230 (d) implementing 15 U.S.C.A. 2601 et seq. Toxic Substances Control Act, Subchapter
231 II - Asbestos Hazard Emergency Response, and reviewing and approving asbestos management
232 plans submitted by local education agencies under that act;
233 (e) establishing a requirement for a diesel emission opacity inspection and maintenance
234 program for diesel-powered motor vehicles;
235 (f) implementing an operating permit program as required by and in conformity with
236 Titles IV and V of the federal Clean Air Act Amendments of 1990;
237 (g) establishing requirements for county emissions inspection and maintenance
238 programs after obtaining agreement from the counties that would be affected by the
239 requirements;
240 (h) with the approval of the governor, implementing in air quality nonattainment areas
241 employer-based trip reduction programs applicable to businesses having more than 100
242 employees at a single location and applicable to federal, state, and local governments to the
243 extent necessary to attain and maintain ambient air quality standards consistent with the state
244 implementation plan and federal requirements under the standards set forth in Subsection (2);
245 and
246 (i) implementing lead-based paint remediation training, certification, and performance
247 requirements in accordance with 15 U.S.C.A. 2601 et seq., Toxic Substances Control Act,
248 Subchapter IV -- Lead Exposure Reduction, Sections 402 and 406.
249 (2) When implementing Subsection (1)(h) the board shall take into consideration:
250 (a) the impact of the business on overall air quality; and
251 (b) the need of the business to use automobiles in order to carry out its business
252 purposes.
253 (3) The board may:
254 (a) hold hearings relating to any aspect of or matter in the administration of this chapter
255 and compel the attendance of witnesses and the production of documents and other evidence,
256 administer oaths and take testimony, and receive evidence as necessary;
257 (b) issue orders necessary to enforce the provisions of this chapter, enforce the orders
258 by appropriate administrative and judicial proceedings, and institute judicial proceedings to
259 secure compliance with this chapter;
260 (c) settle or compromise any civil action initiated to compel compliance with this
261 chapter and the rules made under this chapter;
262 (d) secure necessary scientific, technical, administrative, and operational services,
263 including laboratory facilities, by contract or otherwise;
264 (e) prepare and develop a comprehensive plan or plans for the prevention, abatement,
265 and control of air pollution in this state;
266 (f) encourage voluntary cooperation by persons and affected groups to achieve the
267 purposes of this chapter;
268 (g) encourage local units of government to handle air pollution within their respective
269 jurisdictions on a cooperative basis and provide technical and consultative assistance to them;
270 (h) encourage and conduct studies, investigations, and research relating to air
271 contamination and air pollution and their causes, effects, prevention, abatement, and control;
272 (i) determine by means of field studies and sampling the degree of air contamination
273 and air pollution in all parts of the state;
274 (j) monitor the effects of the emission of air contaminants from motor vehicles on the
275 quality of the outdoor atmosphere in all parts of this state and take appropriate action with
276 respect to them;
277 (k) collect and disseminate information and conduct educational and training programs
278 relating to air contamination and air pollution;
279 (l) advise, consult, contract, and cooperate with other agencies of the state, local
280 governments, industries, other states, interstate or interlocal agencies, the federal government,
281 and with interested persons or groups;
282 (m) consult, upon request, with any person proposing to construct, install, or otherwise
283 acquire an air contaminant source in the state concerning the efficacy of any proposed control
284 device, or system for this source, or the air pollution problem which may be related to the
285 source, device, or system, but a consultation does not relieve any person from compliance with
286 this chapter, the rules adopted under it, or any other provision of law;
287 (n) accept, receive, and administer grants or other funds or gifts from public and
288 private agencies, including the federal government, for the purpose of carrying out any of the
289 functions of this chapter;
290 (o) require the owner and operator of each new source which directly emits or has the
291 potential to emit 100 tons per year or more of any air contaminant or the owner or operator of
292 each existing source which by modification will increase emissions or have the potential of
293 increasing emissions by 100 tons per year or more of any air contaminant, to pay a fee
294 sufficient to cover the reasonable costs of:
295 (i) reviewing and acting upon the notice required under Section 19-2-108 ; and
296 (ii) implementing and enforcing requirements placed on the sources by any approval
297 order issued pursuant to notice, not including any court costs associated with any enforcement
298 action;
299 (p) assess and collect noncompliance penalties as required in Section 120 of the federal
300 Clean Air Act, 42 U.S.C. Sec. 7420;
301 (q) meet the requirements of federal air pollution laws;
302 (r) establish work practice, certification, and clearance air sampling requirements for
303 persons who:
304 (i) contract for hire to conduct demolition, renovation, salvage, encapsulation work
305 involving friable asbestos-containing materials, or asbestos inspections; [
306 (ii) conduct work described in Subsection (3)(r)(i) in areas to which the general public
307 has unrestrained access or in school buildings that are subject to the federal Asbestos Hazard
308 Emergency Response Act of 1986;
309 (iii) conduct asbestos inspections in facilities subject to 15 U.S.C.A. 2601 et seq.,
310 Toxic Substances Control Act, Subchapter II - Asbestos Hazard Emergency Response; or
311 (iv) conduct lead paint inspections in facilities subject to 15 U.S.C.A. 2601 et seq.,
312 Toxic Substances Control Act, Subchapter IV -- Lead Exposure Reduction;
313 (s) establish certification requirements for persons required under 15 U.S.C.A. 2601 et
314 seq., Toxic Substances Control Act, Subchapter II - Asbestos Hazard Emergency Response, to
315 be accredited as inspectors, management planners, abatement project designers, asbestos
316 abatement contractors and supervisors, or asbestos abatement workers;
317 (t) establish certification requirements for asbestos project monitors, which shall
318 provide for experience-based certification of persons who, prior to establishment of the
319 certification requirements, had received relevant asbestos training, as defined by rule, and had
320 acquired at least 1,000 hours of experience as project monitors;
321 (u) establish certification procedures and requirements for certification of the
322 conversion of a motor vehicle to a clean-fuel vehicle, certifying the vehicle is eligible for the
323 tax credit granted in Section 59-7-605 or [
324 (v) establish a program to certify private sector air quality permitting professionals
325 (AQPP), as described in Section 19-2-109.5 ; and
326 (w) establish certification requirements for persons required under 15 U.S.C.A. 2601 et
327 seq., Toxic Control Act, Subchapter IV -- Lead Exposure Reduction, to be accredited as
328 inspectors, risk assessors, supervisors, project designers, or abatement workers.
329 (4) Any rules adopted under this chapter shall be consistent with provisions of federal
330 laws, if any, relating to control of motor vehicles or motor vehicle emissions.
331 (5) Nothing in this chapter authorizes the board to require installation of or payment for
332 any monitoring equipment by the owner or operator of a source if the owner or operator has
333 installed or is operating monitoring equipment that is equivalent to equipment which the board
334 would require under this section.
335 Section 4. Section 53B-8a-106 is amended to read:
336 53B-8a-106. Account agreements.
337 The trust may enter into account agreements with account owners on behalf of
338 beneficiaries under the following terms and agreements:
339 (1) (a) An account agreement may require an account owner to agree to invest a
340 specific amount of money in the trust for a specific period of time for the benefit of a specific
341 beneficiary, not to exceed an amount determined by the program administrator.
342 (b) Account agreements may be amended to provide for adjusted levels of payments
343 based upon changed circumstances or changes in educational plans.
344 (c) An account owner may make additional optional payments as long as the total
345 payments for a specific beneficiary do not exceed the total estimated higher education costs as
346 determined by the program administrator.
347 (d) The maximum amount of investments that may be subtracted from federal taxable
348 income of a resident or nonresident individual under Subsection 59-10-114 (2)[
349 $1,510 for each individual beneficiary for the 2005 calendar year and an amount adjusted
350 annually thereafter to reflect increases in the Consumer Price Index.
351 (2) (a) (i) Beneficiaries designated in account agreements must be designated after
352 birth and before age 19 for the participant to subtract allowable investments from federal
353 taxable income under Subsection 59-10-114 (2)[
354 (ii) If the beneficiary is designated after birth and before age 19, the payment of
355 benefits provided under the account agreement must begin not later than the beneficiary's 27th
356 birthday.
357 (b) (i) Account owners may designate beneficiaries age 19 or older, but investments for
358 those beneficiaries are not eligible for subtraction from federal taxable income.
359 (ii) If a beneficiary age 19 or older is designated, the payment of benefits provided
360 under the account agreement must begin not later than ten years from the account agreement
361 date.
362 (3) Each account agreement shall state clearly that there are no guarantees regarding
363 moneys in the trust as to the return of principal and that losses could occur.
364 (4) Each account agreement shall provide that:
365 (a) no contributor to, or designated beneficiary under, an account agreement may direct
366 the investment of any contributions or earnings on contributions;
367 (b) no part of the money in any account may be used as security for a loan; and
368 (c) no account owner may borrow from the trust.
369 (5) The execution of an account agreement by the trust may not guarantee in any way
370 that higher education costs will be equal to projections and estimates provided by the trust or
371 that the beneficiary named in any participation agreement will:
372 (a) be admitted to an institution of higher education;
373 (b) if admitted, be determined a resident for tuition purposes by the institution of
374 higher education, unless the account agreement is vested;
375 (c) be allowed to continue attendance at the institution of higher education following
376 admission; or
377 (d) graduate from the institution of higher education.
378 (6) Beneficiaries may be changed as permitted by the rules and regulations of the board
379 upon written request of the account owner prior to the date of admission of any beneficiary
380 under an account agreement by an institution of higher education so long as the substitute
381 beneficiary is eligible for participation.
382 (7) Account agreements may be freely amended throughout their terms in order to
383 enable account owners to increase or decrease the level of participation, change the designation
384 of beneficiaries, and carry out similar matters as authorized by rule.
385 (8) Each account agreement shall provide that:
386 (a) the account agreement may be canceled upon the terms and conditions, and upon
387 payment of the fees and costs set forth and contained in the board's rules and regulations; and
388 (b) the program administrator may amend the agreement unilaterally and retroactively,
389 if necessary, to maintain the trust as a qualified tuition program under Section 529 Internal
390 Revenue Code.
391 Section 5. Section 59-2-102 is amended to read:
392 59-2-102. Definitions.
393 As used in this chapter and title:
394 (1) "Aerial applicator" means aircraft or rotorcraft used exclusively for the purpose of
395 engaging in dispensing activities directly affecting agriculture or horticulture with an
396 airworthiness certificate from the Federal Aviation Administration certifying the aircraft or
397 rotorcraft's use for agricultural and pest control purposes.
398 (2) "Air charter service" means an air carrier operation which requires the customer to
399 hire an entire aircraft rather than book passage in whatever capacity is available on a scheduled
400 trip.
401 (3) "Air contract service" means an air carrier operation available only to customers
402 who engage the services of the carrier through a contractual agreement and excess capacity on
403 any trip and is not available to the public at large.
404 (4) "Aircraft" is as defined in Section 72-10-102 .
405 (5) "Airline" means any air carrier operating interstate routes on a scheduled basis
406 which offers to fly passengers or cargo on the basis of available capacity on regularly scheduled
407 routes.
408 (6) "Assessment roll" means a permanent record of the assessment of property as
409 assessed by the county assessor and the commission and may be maintained manually or as a
410 computerized file as a consolidated record or as multiple records by type, classification, or
411 categories.
412 (7) "Certified revenue levy" means a property tax levy that provides the same amount
413 of ad valorem property tax revenue as was collected for the prior year, plus new growth, but
414 exclusive of revenue from collections from redemptions, interest, and penalties.
415 (8) "County-assessed commercial vehicle" means:
416 (a) any commercial vehicle, trailer, or semitrailer which is not apportioned under
417 Section 41-1a-301 and is not operated interstate to transport the vehicle owner's goods or
418 property in furtherance of the owner's commercial enterprise;
419 (b) any passenger vehicle owned by a business and used by its employees for
420 transportation as a company car or vanpool vehicle; and
421 (c) vehicles which are:
422 (i) especially constructed for towing or wrecking, and which are not otherwise used to
423 transport goods, merchandise, or people for compensation;
424 (ii) used or licensed as taxicabs or limousines;
425 (iii) used as rental passenger cars, travel trailers, or motor homes;
426 (iv) used or licensed in this state for use as ambulances or hearses;
427 (v) especially designed and used for garbage and rubbish collection; or
428 (vi) used exclusively to transport students or their instructors to or from any private,
429 public, or religious school or school activities.
430 (9) (a) Except as provided in Subsection (9)(b), for purposes of Section 59-2-801 ,
431 "designated tax area" means a tax area created by the overlapping boundaries of only the
432 following taxing entities:
433 (i) a county; and
434 (ii) a school district.
435 (b) Notwithstanding Subsection (9)(a), "designated tax area" includes a tax area created
436 by the overlapping boundaries of:
437 (i) the taxing entities described in Subsection (9)(a); and
438 (ii) (A) a city or town if the boundaries of the school district under Subsection (9)(a)
439 and the boundaries of the city or town are identical; or
440 (B) a special service district if the boundaries of the school district under Subsection
441 (9)(a) are located entirely within the special service district.
442 (10) "Eligible judgment" means a final and unappealable judgment or order under
443 Section 59-2-1330 :
444 (a) that became a final and unappealable judgment or order no more than 14 months
445 prior to the day on which the notice required by Subsection 59-2-919 (4) is required to be
446 mailed; and
447 (b) for which a taxing entity's share of the final and unappealable judgment or order is
448 greater than or equal to the lesser of:
449 (i) $5,000; or
450 (ii) 2.5% of the total ad valorem property taxes collected by the taxing entity in the
451 previous fiscal year.
452 (11) (a) "Escaped property" means any property, whether personal, land, or any
453 improvements to the property, subject to taxation and is:
454 (i) inadvertently omitted from the tax rolls, assigned to the incorrect parcel, or assessed
455 to the wrong taxpayer by the assessing authority;
456 (ii) undervalued or omitted from the tax rolls because of the failure of the taxpayer to
457 comply with the reporting requirements of this chapter; or
458 (iii) undervalued because of errors made by the assessing authority based upon
459 incomplete or erroneous information furnished by the taxpayer.
460 (b) Property which is undervalued because of the use of a different valuation
461 methodology or because of a different application of the same valuation methodology is not
462 "escaped property."
463 (12) "Fair market value" means the amount at which property would change hands
464 between a willing buyer and a willing seller, neither being under any compulsion to buy or sell
465 and both having reasonable knowledge of the relevant facts. For purposes of taxation, "fair
466 market value" shall be determined using the current zoning laws applicable to the property in
467 question, except in cases where there is a reasonable probability of a change in the zoning laws
468 affecting that property in the tax year in question and the change would have an appreciable
469 influence upon the value.
470 (13) "Farm machinery and equipment," for purposes of the exemption provided under
471 Section 59-2-1101 , means tractors, milking equipment and storage and cooling facilities, feed
472 handling equipment, irrigation equipment, harvesters, choppers, grain drills and planters, tillage
473 tools, scales, combines, spreaders, sprayers, haying equipment, and any other machinery or
474 equipment used primarily for agricultural purposes; but does not include vehicles required to be
475 registered with the Motor Vehicle Division or vehicles or other equipment used for business
476 purposes other than farming.
477 (14) "Geothermal fluid" means water in any form at temperatures greater than 120
478 degrees centigrade naturally present in a geothermal system.
479 (15) "Geothermal resource" means:
480 (a) the natural heat of the earth at temperatures greater than 120 degrees centigrade;
481 and
482 (b) the energy, in whatever form, including pressure, present in, resulting from, created
483 by, or which may be extracted from that natural heat, directly or through a material medium.
484 (16) (a) For purposes of Section 59-2-103 :
485 (i) "household" means the association of persons who live in the same dwelling,
486 sharing its furnishings, facilities, accommodations, and expenses; and
487 (ii) "household" includes married individuals, who are not legally separated, that have
488 established domiciles at separate locations within the state.
489 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
490 commission may make rules defining the term "domicile."
491 (17) (a) Except as provided in Subsection (17)(c), "improvement" means a building,
492 structure, fixture, fence, or other item that is permanently attached to land, regardless of
493 whether the title has been acquired to the land, if:
494 (i) (A) attachment to land is essential to the operation or use of the item; and
495 (B) the manner of attachment to land suggests that the item will remain attached to the
496 land in the same place over the useful life of the item; or
497 (ii) removal of the item would:
498 (A) cause substantial damage to the item; or
499 (B) require substantial alteration or repair of a structure to which the item is attached.
500 (b) "Improvement" includes:
501 (i) an accessory to an item described in Subsection (17)(a) if the accessory is:
502 (A) essential to the operation of the item described in Subsection (17)(a); and
503 (B) installed solely to serve the operation of the item described in Subsection (17)(a);
504 and
505 (ii) an item described in Subsection (17)(a) that:
506 (A) is temporarily detached from the land for repairs; and
507 (B) remains located on the land.
508 (c) Notwithstanding Subsections (17)(a) and (b), "improvement" does not include:
509 (i) an item considered to be personal property pursuant to rules made in accordance
510 with Section 59-2-107 ;
511 (ii) a moveable item that is attached to land:
512 (A) for stability only; or
513 (B) for an obvious temporary purpose;
514 (iii) (A) manufacturing equipment and machinery; or
515 (B) essential accessories to manufacturing equipment and machinery; or
516 (iv) an item attached to the land in a manner that facilitates removal without substantial
517 damage to:
518 (A) the land; or
519 (B) the item; or
520 (v) a transportable factory-built housing unit as defined in Section 59-2-1502 if that
521 transportable factory-built housing unit is considered to be personal property under Section
522 59-2-1503 .
523 (18) "Intangible property" means:
524 (a) property that is capable of private ownership separate from tangible property,
525 including:
526 (i) moneys;
527 (ii) credits;
528 (iii) bonds;
529 (iv) stocks;
530 (v) representative property;
531 (vi) franchises;
532 (vii) licenses;
533 (viii) trade names;
534 (ix) copyrights; and
535 (x) patents; or
536 (b) a low-income housing tax credit.
537 (19) "Low-income housing tax credit" means:
538 (a) a federal low-income housing tax credit under Section 42, Internal Revenue Code;
539 or
540 (b) a low-income housing tax credit under:
541 (i) Section 59-7-607 ; or
542 (ii) Section [
543 (20) "Metalliferous minerals" includes gold, silver, copper, lead, zinc, and uranium.
544 (21) "Mine" means a natural deposit of either metalliferous or nonmetalliferous
545 valuable mineral.
546 (22) "Mining" means the process of producing, extracting, leaching, evaporating, or
547 otherwise removing a mineral from a mine.
548 (23) (a) "Mobile flight equipment" means tangible personal property that is:
549 (i) owned or operated by an:
550 (A) air charter service;
551 (B) air contract service; or
552 (C) airline; and
553 (ii) (A) capable of flight;
554 (B) attached to an aircraft that is capable of flight; or
555 (C) contained in an aircraft that is capable of flight if the tangible personal property is
556 intended to be used:
557 (I) during multiple flights;
558 (II) during a takeoff, flight, or landing; and
559 (III) as a service provided by an air charter service, air contract service, or airline.
560 (b) (i) "Mobile flight equipment" does not include a spare part other than a spare
561 engine that is rotated:
562 (A) at regular intervals; and
563 (B) with an engine that is attached to the aircraft.
564 (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
565 the commission may make rules defining the term "regular intervals."
566 (24) "Nonmetalliferous minerals" includes, but is not limited to, oil, gas, coal, salts,
567 sand, rock, gravel, and all carboniferous materials.
568 (25) "Personal property" includes:
569 (a) every class of property as defined in Subsection (26) which is the subject of
570 ownership and not included within the meaning of the terms "real estate" and "improvements";
571 (b) gas and water mains and pipes laid in roads, streets, or alleys;
572 (c) bridges and ferries;
573 (d) livestock which, for the purposes of the exemption provided under Section
574 59-2-1112 , means all domestic animals, honeybees, poultry, fur-bearing animals, and fish; and
575 (e) outdoor advertising structures as defined in Section 72-7-502 .
576 (26) (a) "Property" means property that is subject to assessment and taxation according
577 to its value.
578 (b) "Property" does not include intangible property as defined in this section.
579 (27) "Public utility," for purposes of this chapter, means the operating property of a
580 railroad, gas corporation, oil or gas transportation or pipeline company, coal slurry pipeline
581 company, electrical corporation, telephone corporation, sewerage corporation, or heat
582 corporation where the company performs the service for, or delivers the commodity to, the
583 public generally or companies serving the public generally, or in the case of a gas corporation
584 or an electrical corporation, where the gas or electricity is sold or furnished to any member or
585 consumers within the state for domestic, commercial, or industrial use. Public utility also
586 means the operating property of any entity or person defined under Section 54-2-1 except water
587 corporations.
588 (28) "Real estate" or "real property" includes:
589 (a) the possession of, claim to, ownership of, or right to the possession of land;
590 (b) all mines, minerals, and quarries in and under the land, all timber belonging to
591 individuals or corporations growing or being on the lands of this state or the United States, and
592 all rights and privileges appertaining to these; and
593 (c) improvements.
594 (29) "Residential property," for the purposes of the reductions and adjustments under
595 this chapter, means any property used for residential purposes as a primary residence. It does
596 not include property used for transient residential use or condominiums used in rental pools.
597 (30) For purposes of Subsection 59-2-801 (1)(e), "route miles" means the number of
598 miles calculated by the commission that is:
599 (a) measured in a straight line by the commission; and
600 (b) equal to the distance between a geographical location that begins or ends:
601 (i) at a boundary of the state; and
602 (ii) where an aircraft:
603 (A) takes off; or
604 (B) lands.
605 (31) (a) "State-assessed commercial vehicle" means:
606 (i) any commercial vehicle, trailer, or semitrailer which operates interstate or intrastate
607 to transport passengers, freight, merchandise, or other property for hire; or
608 (ii) any commercial vehicle, trailer, or semitrailer which operates interstate and
609 transports the vehicle owner's goods or property in furtherance of the owner's commercial
610 enterprise.
611 (b) "State-assessed commercial vehicle" does not include vehicles used for hire which
612 are specified in Subsection (8)(c) as county-assessed commercial vehicles.
613 (32) "Taxable value" means fair market value less any applicable reduction allowed for
614 residential property under Section 59-2-103 .
615 (33) "Tax area" means a geographic area created by the overlapping boundaries of one
616 or more taxing entities.
617 (34) "Taxing entity" means any county, city, town, school district, special taxing
618 district, or any other political subdivision of the state with the authority to levy a tax on
619 property.
620 (35) "Tax roll" means a permanent record of the taxes charged on property, as extended
621 on the assessment roll and may be maintained on the same record or records as the assessment
622 roll or may be maintained on a separate record properly indexed to the assessment roll. It
623 includes tax books, tax lists, and other similar materials.
624 Section 6. Section 59-6-101 is amended to read:
625 59-6-101. Definitions.
626 As used in this chapter:
627 (1) (a) Except as provided in Subsection (1)(b), "claimant" means a resident or
628 nonresident person.
629 (b) "Claimant" does not include an estate or trust.
630 (2) "Estate" means a nonresident estate or a resident estate.
631 [
632 59-2-102 , nonmetalliferous minerals as defined in Section 59-2-102 , or both.
633 [
634 in this state or who is the first purchaser of minerals produced or extracted from deposits in this
635 state.
636 (5) "Refundable tax credit" or "tax credit" means a tax credit that a claimant, estate, or
637 trust may claim:
638 (a) as provided by statute; and
639 (b) regardless of whether the claimant, estate, or trust has a tax liability for a tax
640 described in Subsection 59-6-102 (3) for the taxable year for which the claimant, estate, or trust
641 claims the tax credit.
642 (6) "Trust" means a nonresident trust or a resident trust.
643 Section 7. Section 59-6-102 is amended to read:
644 59-6-102. Producer's obligation to deduct and withhold payments -- Amount --
645 Exempt payments -- Credit against tax.
646 (1) Except as provided in Subsection (2), each producer shall deduct and withhold
647 from each payment being made to any person in respect to production of minerals in this state,
648 but not including that to which the producer is entitled, an amount equal to 5% of the amount
649 which would have otherwise been payable to the person entitled to the payment.
650 (2) Notwithstanding Subsection (1), the obligation to deduct and withhold from
651 payments as provided in Subsection (1) does not apply to those payments which are payable to:
652 (a) the United States, this state, or an agency or political subdivision of the United
653 States or this state;
654 (b) an organization that is exempt from the taxes imposed by Chapter 7, Corporate
655 Franchise and Income Taxes, in accordance with Subsection 59-7-102 (1)(a); or
656 (c) an Indian or Indian tribe if the amounts accruing are subject to the supervision of
657 the United States or an agency of the United States.
658 (3) [
659 accordance with the following is entitled to a refundable tax credit against the tax reflected on
660 the return for the amount withheld by the producer under Subsection (1):
661 [
662 [
663 Corporate Franchise or Income Tax Act;
664 [
665 [
666 [
667
668 Section 8. Section 59-7-607 is amended to read:
669 59-7-607. Utah low-income housing tax credit.
670 (1) As used in this section:
671 (a) "Allocation certificate" means:
672 (i) the certificate prescribed by the commission and issued by the Utah Housing
673 Corporation to each taxpayer that specifies the percentage of the annual federal low-income
674 housing tax credit that each taxpayer may take as an annual credit against state income tax; or
675 (ii) a copy of the allocation certificate that the housing sponsor provides to the
676 taxpayer.
677 (b) "Building" means a qualified low-income building as defined in Section 42(c),
678 Internal Revenue Code.
679 (c) "Federal low-income housing tax credit" means the tax credit under Section 42,
680 Internal Revenue Code.
681 (d) "Housing sponsor" means a corporation in the case of a C corporation, a partnership
682 in the case of a partnership, a corporation in the case of an S corporation, or a limited liability
683 company in the case of a limited liability company.
684 (e) "Qualified allocation plan" means the qualified allocation plan adopted by the Utah
685 Housing Corporation pursuant to Section 42(m), Internal Revenue Code.
686 (f) "Special low-income housing tax credit certificate" means a certificate:
687 (i) prescribed by the commission;
688 (ii) that a housing sponsor issues to a taxpayer for a taxable year; and
689 (iii) that specifies the amount of tax credit a taxpayer may claim under this section if
690 the taxpayer meets the requirements of this section.
691 (g) "Taxpayer" means a person that is allowed a tax credit in accordance with this
692 section which is the corporation in the case of a C corporation, the partners in the case of a
693 partnership, the shareholders in the case of an S corporation, and the members in the case of a
694 limited liability company.
695 (2) (a) For taxable years beginning on or after January 1, 1995, there is allowed a
696 nonrefundable tax credit against taxes otherwise due under this chapter or Chapter 8, Gross
697 Receipts Tax on Certain Corporations Not Required to Pay Corporate Franchise or Income Tax
698 Act, for taxpayers issued an allocation certificate.
699 (b) The tax credit shall be in an amount equal to the greater of the amount of:
700 (i) federal low-income housing tax credit to which the taxpayer is allowed during that
701 year multiplied by the percentage specified in an allocation certificate issued by the Utah
702 Housing Corporation; or
703 (ii) tax credit specified in the special low-income housing tax credit certificate that the
704 housing sponsor issues to the taxpayer as provided in Subsection (2)(c).
705 (c) For purposes of Subsection (2)(b)(ii), the tax credit is equal to the product of:
706 (i) the total amount of low-income housing tax credit under this section that:
707 (A) a housing sponsor is allowed for a building; and
708 (B) all of the taxpayers may claim with respect to the building if the taxpayers meet the
709 requirements of this section; and
710 (ii) the percentage of tax credit a taxpayer may claim:
711 (A) under this section if the taxpayer meets the requirements of this section; and
712 (B) as provided in the agreement between the taxpayer and the housing sponsor.
713 (d) (i) For the calendar year beginning on January 1, 1995, through the calendar year
714 beginning on January 1, 2015, the aggregate annual tax credit that the Utah Housing
715 Corporation may allocate for the credit period described in Section 42(f), Internal Revenue
716 Code, pursuant to this section and Section [
717 product of:
718 (A) 12.5 cents; and
719 (B) the population of Utah.
720 (ii) For purposes of this section, the population of Utah shall be determined in
721 accordance with Section 146(j), Internal Revenue Code.
722 (3) (a) By October 1, 1994, the Utah Housing Corporation shall determine criteria and
723 procedures for allocating the tax credit under this section and Section [
724 and incorporate the criteria and procedures into the Utah Housing Corporation's qualified
725 allocation plan.
726 (b) The Utah Housing Corporation shall create the criteria under Subsection (3)(a)
727 based on:
728 (i) the number of affordable housing units to be created in Utah for low and moderate
729 income persons in the residential housing development of which the building is a part;
730 (ii) the level of area median income being served by the development;
731 (iii) the need for the tax credit for the economic feasibility of the development; and
732 (iv) the extended period for which the development commits to remain as affordable
733 housing.
734 (4) (a) The following may apply to the Utah Housing Corporation for a tax credit under
735 this section:
736 (i) any housing sponsor that has received an allocation of the federal low-income
737 housing tax credit; or
738 (ii) any applicant for an allocation of the federal low-income housing tax credit.
739 (b) The Utah Housing Corporation may not require fees for applications of the tax
740 credit under this section in addition to those fees required for applications for the federal
741 low-income housing tax credit.
742 (5) (a) The Utah Housing Corporation shall determine the amount of the tax credit to
743 allocate to a qualifying housing sponsor in accordance with the qualified allocation plan of the
744 Utah Housing Corporation.
745 (b) (i) The Utah Housing Corporation shall allocate the tax credit to housing sponsors
746 by issuing an allocation certificate to qualifying housing sponsors.
747 (ii) The allocation certificate under Subsection (5)(b)(i) shall specify the allowed
748 percentage of the federal low-income housing tax credit as determined by the Utah Housing
749 Corporation.
750 (c) The percentage specified in an allocation certificate may not exceed 100% of the
751 federal low-income housing tax credit.
752 (6) A housing sponsor shall provide a copy of the allocation certificate to each taxpayer
753 that is issued a special low-income housing tax credit certificate.
754 (7) (a) A housing sponsor shall provide to the commission a list of:
755 (i) the taxpayers issued a special low-income housing tax credit certificate; and
756 (ii) for each taxpayer described in Subsection (7)(a)(i), the amount of tax credit listed
757 on the special low-income housing tax credit certificate.
758 (b) A housing sponsor shall provide the list required by Subsection (7)(a):
759 (i) to the commission;
760 (ii) on a form provided by the commission; and
761 (iii) with the housing sponsor's tax return for each taxable year for which the housing
762 sponsor issues a special low-income housing tax credit certificate described in this Subsection
763 (7).
764 (8) (a) All elections made by the taxpayer pursuant to Section 42, Internal Revenue
765 Code, shall apply to this section.
766 (b) (i) If a taxpayer is required to recapture a portion of any federal low-income
767 housing tax credit, the taxpayer shall also be required to recapture a portion of any state tax
768 credits authorized by this section.
769 (ii) The state recapture amount shall be equal to the percentage of the state tax credit
770 that equals the proportion the federal recapture amount bears to the original federal low-income
771 housing tax credit amount subject to recapture.
772 (9) (a) Any tax credits returned to the Utah Housing Corporation in any year may be
773 reallocated within the same time period as provided in Section 42, Internal Revenue Code.
774 (b) Tax credits that are unallocated by the Utah Housing Corporation in any year may
775 be carried over for allocation in the subsequent year.
776 (10) (a) Amounts otherwise qualifying for the tax credit, but not allowable because the
777 tax credit exceeds the tax, may be carried back three years or may be carried forward five years
778 as a credit against the tax.
779 (b) Carryover tax credits under Subsection (10)(a) shall be applied against the tax:
780 (i) before the application of the tax credits earned in the current year; and
781 (ii) on a first-earned first-used basis.
782 (11) Any tax credit taken in this section may be subject to an annual audit by the
783 commission.
784 (12) The Utah Housing Corporation shall provide an annual report to the Revenue and
785 Taxation Interim Committee which shall include at least:
786 (a) the purpose and effectiveness of the tax credits; and
787 (b) the benefits of the tax credits to the state.
788 (13) The commission may, in consultation with the Utah Housing Corporation,
789 promulgate rules to implement this section.
790 Section 9. Section 59-7-614 is amended to read:
791 59-7-614. Renewable energy systems tax credit -- Definitions -- Limitations --
792 State tax credit in addition to allowable federal credits -- Certification -- Rulemaking
793 authority -- Reimbursement of Uniform School Fund.
794 (1) As used in this section:
795 (a) "Active solar system":
796 (i) means a system of equipment capable of collecting and converting incident solar
797 radiation into thermal, mechanical, or electrical energy, and transferring these forms of energy
798 by a separate apparatus to storage or to the point of use; and
799 (ii) includes water heating, space heating or cooling, and electrical or mechanical
800 energy generation.
801 (b) "Biomass system" means any system of apparatus and equipment capable of
802 converting organic plant, wood, or waste products into electrical and thermal energy and
803 transferring these forms of energy by a separate apparatus to the point of use or storage.
804 (c) "Business entity" means any sole proprietorship, estate, trust, partnership,
805 association, corporation, cooperative, or other entity under which business is conducted or
806 transacted.
807 (d) "Commercial energy system" means any active solar, passive solar, wind,
808 hydroenergy, or biomass system used to supply energy to a commercial unit or as a commercial
809 enterprise.
810 (e) "Commercial enterprise" means a business entity whose purpose is to produce
811 electrical, mechanical, or thermal energy for sale from a commercial energy system.
812 (f) (i) "Commercial unit" means any building or structure which a business entity uses
813 to transact its business except as provided in Subsection (1)(f)(ii); and
814 (ii) (A) in the case of an active solar system used for agricultural water pumping or a
815 wind system, each individual energy generating device shall be a commercial unit; and
816 (B) if an energy system is the building or structure which a business entity uses to
817 transact its business, a commercial unit is the complete energy system itself.
818 (g) "Hydroenergy system" means a system of apparatus and equipment capable of
819 intercepting and converting kinetic water energy into electrical or mechanical energy and
820 transferring this form of energy by separate apparatus to the point of use or storage.
821 (h) "Individual taxpayer" means any person who is a taxpayer as defined in Section
822 59-10-103 and an individual as defined in Section 59-10-103 .
823 (i) "Passive solar system":
824 (i) means a direct thermal system which utilizes the structure of a building and its
825 operable components to provide for collection, storage, and distribution of heating or cooling
826 during the appropriate times of the year by utilizing the climate resources available at the site;
827 and
828 (ii) includes those portions and components of a building that are expressly designed
829 and required for the collection, storage, and distribution of solar energy.
830 (j) "Residential energy system" means any active solar, passive solar, wind, or
831 hydroenergy system used to supply energy to or for any residential unit.
832 (k) "Residential unit" means any house, condominium, apartment, or similar dwelling
833 unit which serves as a dwelling for a person, group of persons, or a family but does not include
834 property subject to a fee under:
835 (i) Section 59-2-404 ;
836 (ii) Section 59-2-405 ;
837 (iii) Section 59-2-405.1 ;
838 (iv) Section 59-2-405.2 ; or
839 (v) Section 59-2-405.3 .
840 (l) "Utah Geological Survey" means the Utah Geological Survey established in Section
841 63-73-5 .
842 (m) "Wind system" means a system of apparatus and equipment capable of intercepting
843 and converting wind energy into mechanical or electrical energy and transferring these forms of
844 energy by a separate apparatus to the point of use or storage.
845 (2) (a) (i) For taxable years beginning on or after January 1, 2001, but beginning on or
846 before December 31, 2006, a business entity that purchases and completes or participates in the
847 financing of a residential energy system to supply all or part of the energy required for a
848 residential unit owned or used by the business entity and situated in Utah is entitled to a tax
849 credit as provided in this Subsection (2)(a).
850 (ii) (A) A business entity is entitled to a tax credit equal to 25% of the costs of a
851 residential energy system installed with respect to each residential unit it owns or uses,
852 including installation costs, against any tax due under this chapter for the taxable year in which
853 the energy system is completed and placed in service.
854 (B) The total amount of the credit under this Subsection (2)(a) may not exceed $2,000
855 per residential unit.
856 (C) The credit under this Subsection (2)(a) is allowed for any residential energy system
857 completed and placed in service on or after January 1, 2001, but on or before December 31,
858 2006.
859 (iii) If a business entity sells a residential unit to an individual taxpayer prior to making
860 a claim for the tax credit under this Subsection (2)(a), the business entity may:
861 (A) assign its right to this tax credit to the individual taxpayer; and
862 (B) if the business entity assigns its right to the tax credit to an individual taxpayer
863 under Subsection (2)(a)(iii)(A), the individual taxpayer may claim the tax credit as if the
864 individual taxpayer had completed or participated in the costs of the residential energy system
865 under Section [
866 (b) (i) For taxable years beginning on or after January 1, 2001, but beginning on or
867 before December 31, 2006, a business entity that purchases or participates in the financing of a
868 commercial energy system is entitled to a tax credit as provided in this Subsection (2)(b) if:
869 (A) the commercial energy system supplies all or part of the energy required by
870 commercial units owned or used by the business entity; or
871 (B) the business entity sells all or part of the energy produced by the commercial
872 energy system as a commercial enterprise.
873 (ii) (A) A business entity is entitled to a tax credit equal to 10% of the costs of any
874 commercial energy system installed, including installation costs, against any tax due under this
875 chapter for the taxable year in which the commercial energy system is completed and placed in
876 service.
877 (B) The total amount of the credit under this Subsection (2)(b) may not exceed $50,000
878 per commercial unit.
879 (C) The credit under this Subsection (2)(b) is allowed for any commercial energy
880 system completed and placed in service on or after January 1, 2001, but on or before December
881 31, 2006.
882 (iii) A business entity that leases a commercial energy system installed on a
883 commercial unit is eligible for the tax credit under this Subsection (2)(b) if the lessee can
884 confirm that the lessor irrevocably elects not to claim the credit.
885 (iv) Only the principal recovery portion of the lease payments, which is the cost
886 incurred by a business entity in acquiring a commercial energy system, excluding interest
887 charges and maintenance expenses, is eligible for the tax credit under this Subsection (2)(b).
888 (v) A business entity that leases a commercial energy system is eligible to use the tax
889 credit under this Subsection (2)(b) for a period no greater than seven years from the initiation
890 of the lease.
891 (c) (i) A tax credit under this section may be claimed for the taxable year in which the
892 energy system is completed and placed in service.
893 (ii) Additional energy systems or parts of energy systems may be claimed for
894 subsequent years.
895 (iii) If the amount of a tax credit under this section exceeds a business entity's tax
896 liability under this chapter for a taxable year, the amount of the credit exceeding the liability
897 may be carried over for a period which does not exceed the next four taxable years.
898 (3) (a) The tax credits provided for under Subsection (2) are in addition to any tax
899 credits provided under the laws or rules and regulations of the United States.
900 (b) (i) The Utah Geological Survey may set standards for residential and commercial
901 energy systems that cover the safety, reliability, efficiency, leasing, and technical feasibility of
902 the systems to ensure that the systems eligible for the tax credit use the state's renewable and
903 nonrenewable energy resources in an appropriate and economic manner.
904 (ii) A tax credit may not be taken under Subsection (2) until the Utah Geological
905 Survey has certified that the energy system has been completely installed and is a viable system
906 for saving or production of energy from renewable resources.
907 (c) The Utah Geological Survey and the commission are authorized to promulgate rules
908 in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, which are
909 necessary to implement this section.
910 (d) The Uniform School Fund shall be reimbursed by transfers from the General Fund
911 for any credits taken under this section.
912 Section 10. Section 59-7-703 is amended to read:
913 59-7-703. Payment or withholding of tax on behalf of nonresident shareholders --
914 Rate.
915 (1) As used in this section, "return" means:
916 (a) if a nonresident shareholder is required to file a return under this chapter, a return
917 filed under this chapter; or
918 (b) if a nonresident shareholder is required to file a return under Chapter 10, Individual
919 Income Tax Act, a return filed under Chapter 10, Individual Income Tax Act.
920 (2) (a) Except as provided in Subsection (4), an S corporation shall pay or withhold a
921 tax on behalf of any nonresident shareholder.
922 (b) The amount paid or withheld by an S corporation under Subsection (2)(a) shall be
923 determined by:
924 (i) calculating the items of income or loss from federal form 1120S, Schedule K;
925 (ii) applying the apportionment formula to determine the amount apportioned to Utah;
926 (iii) reducing the amount apportioned to Utah by the percentage of ownership
927 attributable to resident shareholders; and
928 (iv) applying the rate to the remaining balance.
929 (3) (a) For a nonresident shareholder who is required to file a return under this chapter:
930 (i) the nonresident shareholder may claim a credit on the nonresident shareholder's
931 return for the amount of tax paid or withheld by the S corporation on behalf of the nonresident
932 shareholder;
933 (ii) if the nonresident shareholder has no other Utah source income, the nonresident
934 shareholder may elect:
935 (A) not to claim the credit provided under Subsection (3)(a)(i); and
936 (B) not to file a return for the taxable year; and
937 (iii) if the nonresident shareholder may claim credits other than the credit described in
938 Subsection (3)(a)(i), the nonresident shareholder shall file a return to claim those credits.
939 (b) If a nonresident shareholder is required to file a return under Chapter 10, Individual
940 Income Tax Act, the nonresident shareholder is subject to Section [
941 (4) Notwithstanding Subsection (2), the obligation to pay or withhold a tax under
942 Subsection (2) does not apply to an organization that is exempt under Subsection
943 59-7-102 (1)(a) from the taxes imposed by this chapter.
944 (5) (a) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
945 the commission shall by rule determine the rate at which an S corporation shall withhold for
946 nonresident shareholders.
947 (b) The rate described in Subsection (5)(a) shall be consistent with the composite tax
948 rate paid by partnerships.
949 (6) (a) If an S corporation fails to pay or withhold a tax as provided in this section, and
950 thereafter the income subject to payment or withholding is reported and the resulting tax is paid
951 by a nonresident shareholder, any tax required to be paid or withheld may not be collected from
952 the S corporation.
953 (b) A nonresident shareholder's payment under Subsection (6)(a) does not relieve the S
954 corporation from liability for penalties or interest associated with failure to pay or withhold a
955 tax as provided in this section.
956 (7) Penalties, refunds, assessments, and required records for S corporations shall be
957 governed by:
958 (a) this chapter if a nonresident shareholder is subject to this chapter; or
959 (b) Chapter 10, Individual Income Tax Act, if a nonresident shareholder is subject to
960 Chapter 10, Individual Income Tax Act.
961 (8) (a) An S corporation shall furnish each nonresident shareholder a statement
962 showing:
963 (i) the amount of the nonresident shareholder's share of the corporate earnings from
964 Utah sources; and
965 (ii) the amount of the withholding from the nonresident shareholder's share of the
966 corporate earnings from Utah sources.
967 (b) An S corporation shall pay the commission the amount withheld under this section:
968 (i) by the due date of the corporation's return, not including extensions; and
969 (ii) on forms furnished by the commission.
970 Section 11. Section 59-10-103 is amended to read:
971 59-10-103. Definitions.
972 (1) As used in this chapter:
973 (a) "Adoption expenses" means:
974 (i) any actual medical and hospital expenses of the mother of the adopted child which
975 are incident to the child's birth;
976 (ii) any welfare agency fees or costs;
977 (iii) any child placement service fees or costs;
978 (iv) any legal fees or costs; or
979 (v) any other fees or costs relating to an adoption.
980 (b) "Adult with a disability" means an individual who:
981 (i) is 18 years of age or older;
982 (ii) is eligible for services under Title 62A, Chapter 5, Services [
983 Disabilities; and
984 (iii) is not enrolled in:
985 (A) an education program for students with disabilities that is authorized under Section
986 53A-15-301 ; or
987 (B) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind.
988 (c) (i) For purposes of Subsection 59-10-114 (2)[
989 means a transaction that results in a:
990 (A) short-term capital gain; or
991 (B) long-term capital gain.
992 (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
993 the commission may by rule define the term "transaction."
994 (d) "Commercial domicile" means the principal place from which the trade or business
995 of a Utah small business corporation is directed or managed.
996 (e) "Corporation" includes:
997 (i) associations;
998 (ii) joint stock companies; and
999 (iii) insurance companies.
1000 (f) "Dependent child with a disability" means an individual 21 years of age or younger
1001 who:
1002 (i) (A) is diagnosed by a school district representative under rules adopted by the State
1003 Board of Education as having a disability classified as:
1004 (I) autism;
1005 (II) deafness;
1006 (III) preschool developmental delay;
1007 (IV) dual sensory impairment;
1008 (V) hearing impairment;
1009 (VI) intellectual disability;
1010 (VII) multidisability;
1011 (VIII) orthopedic impairment;
1012 (IX) other health impairment;
1013 (X) traumatic brain injury; or
1014 (XI) visual impairment;
1015 (B) is not receiving residential services from:
1016 (I) the Division of Services for People with Disabilities created under Section
1017 62A-5-102 ; or
1018 (II) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind;
1019 and
1020 (C) is enrolled in:
1021 (I) an education program for students with disabilities that is authorized under Section
1022 53A-15-301 ; or
1023 (II) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind;
1024 or
1025 (ii) is identified under guidelines of the Department of Health as qualified for:
1026 (A) Early Intervention; or
1027 (B) Infant Development Services.
1028 (g) "Employee" is as defined in Section 59-10-401 .
1029 (h) "Employer" is as defined in Section 59-10-401 .
1030 (i) "Fiduciary" means:
1031 (i) a guardian;
1032 (ii) a trustee;
1033 (iii) an executor;
1034 (iv) an administrator;
1035 (v) a receiver;
1036 (vi) a conservator; or
1037 (vii) any person acting in any fiduciary capacity for any individual.
1038 (j) "Homesteaded land diminished from the Uintah and Ouray Reservation" means the
1039 homesteaded land that was held to have been diminished from the Uintah and Ouray
1040 Reservation in Hagen v. Utah, 510 U.S. 399 (1994).
1041 (k) "Individual" means a natural person and includes aliens and minors.
1042 (l) "Irrevocable trust" means a trust in which the settlor may not revoke or terminate all
1043 or part of the trust without the consent of a person who has a substantial beneficial interest in
1044 the trust and the interest would be adversely affected by the exercise of the settlor's power to
1045 revoke or terminate all or part of the trust.
1046 (m) For purposes of Subsection 59-10-114 (2)[
1047 defined in Section 1222, Internal Revenue Code.
1048 (n) "Nonresident individual" means an individual who is not a resident of this state.
1049 (o) "Nonresident trust" or "nonresident estate" means a trust or estate which is not a
1050 resident estate or trust.
1051 (p) (i) "Partnership" includes a syndicate, group, pool, joint venture, or other
1052 unincorporated organization:
1053 (A) through or by means of which any business, financial operation, or venture is
1054 carried on; and
1055 (B) which is not, within the meaning of this chapter:
1056 (I) a trust;
1057 (II) an estate; or
1058 (III) a corporation.
1059 (ii) "Partnership" does not include any organization not included under the definition of
1060 "partnership" in Section 761, Internal Revenue Code.
1061 (iii) "Partner" includes a member in a syndicate, group, pool, joint venture, or
1062 organization described in Subsection (1)(p)(i).
1063 (q) "Qualifying military service member" means a member of:
1064 (i) The Utah Army National Guard;
1065 (ii) The Utah Air National Guard; or
1066 (iii) the following if the member is assigned to a unit that is located in the state:
1067 (A) The Army Reserve;
1068 (B) The Naval Reserve;
1069 (C) The Air Force Reserve;
1070 (D) The Marine Corps Reserve; or
1071 (E) The Coast Guard Reserve.
1072 (r) "Qualifying stock" means stock that is:
1073 (i) (A) common; or
1074 (B) preferred;
1075 (ii) as defined by the commission by rule, originally issued to:
1076 (A) a resident or nonresident individual; or
1077 (B) a partnership if the resident or nonresident individual making a subtraction from
1078 federal taxable income in accordance with Subsection 59-10-114 (2)[
1079 (I) was a partner when the stock was issued; and
1080 (II) remains a partner until the last day of the taxable year for which the resident or
1081 nonresident individual makes the subtraction from federal taxable income in accordance with
1082 Subsection 59-10-114 (2)[
1083 (iii) issued:
1084 (A) by a Utah small business corporation;
1085 (B) on or after January 1, 2003; and
1086 (C) for:
1087 (I) money; or
1088 (II) other property, except for stock or securities.
1089 (s) (i) "Resident individual" means:
1090 (A) an individual who is domiciled in this state for any period of time during the
1091 taxable year, but only for the duration of the period during which the individual is domiciled in
1092 this state; or
1093 (B) an individual who is not domiciled in this state but:
1094 (I) maintains a permanent place of abode in this state; and
1095 (II) spends in the aggregate 183 or more days of the taxable year in this state.
1096 (ii) For purposes of Subsection (1)(s)(i)(B), a fraction of a calendar day shall be
1097 counted as a whole day.
1098 (t) "Resident estate" or "resident trust" is as defined in Section 75-7-103 .
1099 (u) For purposes of Subsection 59-10-114 (2)[
1100 defined in Section 1222, Internal Revenue Code.
1101 (v) "Taxable income" and "state taxable income" are defined as provided in Sections
1102 59-10-111 , 59-10-112 , [
1103 (w) "Taxpayer" means any individual, estate, or trust or beneficiary of an estate or
1104 trust, whose income is subject in whole or part to the tax imposed by this chapter.
1105 (x) "Uintah and Ouray Reservation" means the lands recognized as being included
1106 within the Uintah and Ouray Reservation in:
1107 (i) Hagen v. Utah, 510 U.S. 399 (1994); and
1108 (ii) Ute Indian Tribe v. Utah, 114 F.3d 1513 (10th Cir. 1997).
1109 (y) (i) "Utah small business corporation" means a corporation that:
1110 (A) is a small business corporation as defined in Section 1244(c)(3), Internal Revenue
1111 Code;
1112 (B) except as provided in Subsection (1)(y)(ii), meets the requirements of Section
1113 1244(c)(1)(C), Internal Revenue Code; and
1114 (C) has its commercial domicile in this state.
1115 (ii) Notwithstanding Subsection (1)(y)(i)(B), the time period described in Section
1116 1244(c)(1)(C) and Section 1244(c)(2), Internal Revenue Code, for determining the source of a
1117 corporation's aggregate gross receipts shall end on the last day of the taxable year for which the
1118 resident or nonresident individual makes a subtraction from federal taxable income in
1119 accordance with Subsection 59-10-114 (2)[
1120 (z) "Ute tribal member" means a person who is enrolled as a member of the Ute Indian
1121 Tribe of the Uintah and Ouray Reservation.
1122 (aa) "Ute tribe" means the Ute Indian Tribe of the Uintah and Ouray Reservation.
1123 (bb) "Wages" is as defined in Section 59-10-401 .
1124 (2) (a) Any term used in this chapter has the same meaning as when used in
1125 comparable context in the laws of the United States relating to federal income taxes unless a
1126 different meaning is clearly required.
1127 (b) Any reference to the Internal Revenue Code or to the laws of the United States shall
1128 mean the Internal Revenue Code or other provisions of the laws of the United States relating to
1129 federal income taxes that are in effect for the taxable year.
1130 (c) Any reference to a specific section of the Internal Revenue Code or other provision
1131 of the laws of the United States relating to federal income taxes shall include any
1132 corresponding or comparable provisions of the Internal Revenue Code as hereafter amended,
1133 redesignated, or reenacted.
1134 Section 12. Section 59-10-112 is amended to read:
1135 59-10-112. State taxable income of resident individual.
1136 "State taxable income" in the case of a resident individual means [
1137 individual's federal taxable income [
1138 [
1139 59-10-114 . [
1140
1141 Section 13. Section 59-10-114 is amended to read:
1142 59-10-114. Additions to and subtractions from federal taxable income of an
1143 individual.
1144 (1) There shall be added to federal taxable income of a resident or nonresident
1145 individual:
1146 (a) the amount of any income tax imposed by this or any predecessor Utah individual
1147 income tax law and the amount of any income tax imposed by the laws of another state, the
1148 District of Columbia, or a possession of the United States, to the extent deducted from federal
1149 adjusted gross income, as defined by Section 62, Internal Revenue Code, in determining federal
1150 taxable income;
1151 (b) a lump sum distribution that the taxpayer does not include in adjusted gross income
1152 on the taxpayer's federal individual income tax return for the taxable year;
1153 (c) for taxable years beginning on or after January 1, 2002, the amount of a child's
1154 income calculated under Subsection (5) that:
1155 (i) a parent elects to report on the parent's federal individual income tax return for the
1156 taxable year; and
1157 (ii) the parent does not include in adjusted gross income on the parent's federal
1158 individual income tax return for the taxable year;
1159 (d) 25% of the personal exemptions, as defined and calculated in the Internal Revenue
1160 Code;
1161 (e) a withdrawal from a medical care savings account and any penalty imposed in the
1162 taxable year if:
1163 (i) the taxpayer did not deduct or include the amounts on the taxpayer's federal
1164 individual income tax return pursuant to Section 220, Internal Revenue Code; and
1165 (ii) the withdrawal is subject to Subsections 31A-32a-105 (1) and (2);
1166 (f) the amount disbursed to an account owner under Title 53B, Chapter 8a, Higher
1167 Education Savings Incentive Program, in the year in which the amount is disbursed;
1168 (g) except as provided in Subsection (6), for taxable years beginning on or after
1169 January 1, 2003, for bonds, notes, and other evidences of indebtedness acquired on or after
1170 January 1, 2003, the interest from bonds, notes, and other evidences of indebtedness issued by
1171 one or more of the following entities:
1172 (i) a state other than this state;
1173 (ii) the District of Columbia;
1174 (iii) a political subdivision of a state other than this state; or
1175 (iv) an agency or instrumentality of an entity described in Subsections (1)(g)(i) through
1176 (iii);
1177 (h) subject to Subsection (2)(n), any distribution received by a resident beneficiary of a
1178 resident trust of income that was taxed at the trust level for federal tax purposes, but was
1179 subtracted from state taxable income of the trust pursuant to Subsection 59-10-202 (2)(c); [
1180 (i) any distribution received by a resident beneficiary of a nonresident trust of income
1181 that was taxed at the trust level for federal tax purposes, but was not taxed at the trust level by
1182 any state[
1183 (j) any adoption expense:
1184 (i) for which a resident or nonresident individual receives reimbursement from another
1185 person; and
1186 (ii) to the extent to which the resident or nonresident individual deducts that adoption
1187 expense from federal taxable income on a state or federal individual income tax return.
1188 (2) There shall be subtracted from federal taxable income of a resident or nonresident
1189 individual:
1190 (a) the interest or [
1191 States and its possessions or of any authority, commission, or instrumentality of the United
1192 States, to the extent [
1193 federal income tax purposes for the taxable year but exempt from state income taxes under the
1194 laws of the United States, but the amount subtracted under this Subsection (2)(a) shall be
1195 reduced by any interest on indebtedness incurred or continued to purchase or carry the
1196 obligations or securities described in this Subsection (2)(a), and by any expenses incurred in
1197 the production of interest or dividend income described in this Subsection (2)(a) to the extent
1198 that such expenses, including amortizable bond premiums, are deductible in determining
1199 federal taxable income;
1200 (b) [
1201 income tax paid or payable to the United States after all allowable credits, as reported on the
1202 United States individual income tax return of the taxpayer for the same taxable year; [
1203 [
1204
1205
1206
1207
1208
1209 (c) the amount of adoption expenses for one of the following taxable years as elected
1210 by the resident or nonresident individual:
1211 (i) regardless of whether a court issues an order granting the adoption, the taxable year
1212 in which the adoption expenses are:
1213 (A) paid; or
1214 (B) incurred;
1215 (ii) the taxable year in which a court issues an order granting the adoption; or
1216 (iii) any year in which the resident or nonresident individual may claim the federal
1217 adoption expenses credit under Section 23, Internal Revenue Code;
1218 (d) amounts received by taxpayers under age 65 as retirement income which, for
1219 purposes of this section, means pensions and annuities, paid from an annuity contract
1220 purchased by an employer under a plan which meets the requirements of Section 404(a)(2),
1221 Internal Revenue Code, or purchased by an employee under a plan which meets the
1222 requirements of Section 408, Internal Revenue Code, or paid by the United States, a state, or
1223 political subdivision thereof, or the District of Columbia, to the employee involved or the
1224 surviving spouse;
1225 (e) for each taxpayer age 65 or over before the close of the taxable year, a $7,500
1226 personal retirement exemption;
1227 (f) 75% of the amount of the personal exemption, as defined and calculated in the
1228 Internal Revenue Code, for each dependent child with a disability and adult with a disability
1229 who is claimed as a dependent on a taxpayer's return;
1230 [
1231
1232
1233
1234 [
1235 the taxable year for health care insurance, as defined in Title 31A, Chapter 1, General
1236 Provisions:
1237 (i) for:
1238 (A) the taxpayer;
1239 (B) the taxpayer's spouse; and
1240 (C) the taxpayer's dependents; and
1241 (ii) to the extent the taxpayer does not deduct the amounts under Section 125, 162, or
1242 213, Internal Revenue Code, in determining federal taxable income for the taxable year;
1243 [
1244 a contribution made during the taxable year on behalf of the taxpayer to a medical care savings
1245 account and interest earned on a contribution to a medical care savings account established
1246 pursuant to Title 31A, Chapter 32a, Medical Care Savings Account Act, to the extent the
1247 contribution is accepted by the account administrator as provided in the Medical Care Savings
1248 Account Act, and if the taxpayer did not deduct or include amounts on the taxpayer's federal
1249 individual income tax return pursuant to Section 220, Internal Revenue Code; and
1250 (ii) a contribution deductible under this Subsection (2)[
1251 the following:
1252 (A) the maximum contribution allowed under the Medical Care Savings Account Act
1253 for the tax year multiplied by two for taxpayers who file a joint return, if neither spouse is
1254 covered by health care insurance as defined in Section 31A-1-301 or self-funded plan that
1255 covers the other spouse, and each spouse has a medical care savings account; or
1256 (B) the maximum contribution allowed under the Medical Care Savings Account Act
1257 for the tax year for taxpayers:
1258 (I) who do not file a joint return; or
1259 (II) who file a joint return, but do not qualify under Subsection (2)[
1260 [
1261 paid by an account owner to the program fund under Title 53B, Chapter 8a, Higher Education
1262 Savings Incentive Program, not to exceed amounts determined under Subsection
1263 53B-8a-106 (1)(d), and investment income earned on account agreements entered into under
1264 Section 53B-8a-106 that is included in federal taxable income, but only when the funds are
1265 used for qualified higher education costs of the beneficiary;
1266 [
1267 premiums for long-term care insurance as defined in Section 31A-1-301 to the extent the
1268 amounts paid for long-term care insurance were not deducted under Section 213, Internal
1269 Revenue Code, in determining federal taxable income;
1270 [
1271 Subsection (4)(a) are met, the amount of income derived by a Ute tribal member:
1272 (i) during a time period that the Ute tribal member resides on homesteaded land
1273 diminished from the Uintah and Ouray Reservation; and
1274 (ii) from a source within the Uintah and Ouray Reservation;
1275 [
1276 a resident or nonresident individual's short-term capital gain or long-term capital gain on a
1277 capital gain transaction:
1278 (A) that occurs on or after January 1, 2003;
1279 (B) if 70% or more of the gross proceeds of the capital gain transaction are expended:
1280 (I) to purchase qualifying stock in a Utah small business corporation; and
1281 (II) within a 12-month period after the day on which the capital gain transaction occurs;
1282 and
1283 (C) if, prior to the purchase of the qualifying stock described in Subsection
1284 (2)[
1285 the Utah small business corporation that issued the qualifying stock; and
1286 (ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
1287 commission may make rules:
1288 (A) defining the term "gross proceeds"; and
1289 (B) for purposes of Subsection (2)[
1290 which a resident or nonresident individual has an ownership interest in a Utah small business
1291 corporation; [
1292 [
1293 or before December 31, 2005, the first $2,200 of income a qualifying military service member
1294 receives:
1295 (i) for service:
1296 (A) as a qualifying military service member; or
1297 (B) under an order into active service in accordance with Section 39-1-5 ; and
1298 (ii) to the extent that income is included in adjusted gross income on that resident or
1299 nonresident individual's federal individual income tax return for that taxable year[
1300 (n) an amount received by a resident or nonresident individual or distribution received
1301 by a resident or nonresident beneficiary of a resident trust:
1302 (i) if that amount or distribution constitutes a refund of taxes imposed by:
1303 (A) a state; or
1304 (B) the District of Columbia; and
1305 (ii) to the extent that amount or distribution is included in adjusted gross income for
1306 that taxable year on the federal individual income tax return of the resident or nonresident
1307 individual or resident or nonresident beneficiary of a resident trust;
1308 (o) the amount of a railroad retirement benefit:
1309 (i) paid:
1310 (A) in accordance with The Railroad Retirement Act of 1974, 45 U.S.C. Sec. 231 et
1311 seq.;
1312 (B) to a resident or nonresident individual; and
1313 (C) for the taxable year; and
1314 (ii) to the extent that railroad retirement benefit is included in adjusted gross income on
1315 that resident or nonresident individual's federal individual income tax return for that taxable
1316 year; and
1317 (p) an amount:
1318 (i) received by an enrolled member of an American Indian tribe; and
1319 (ii) to the extent that the state is not authorized or permitted to impose a tax under this
1320 part on that amount in accordance with:
1321 (A) federal law;
1322 (B) a treaty; or
1323 (C) a final decision issued by a court of competent jurisdiction.
1324 (3) (a) For purposes of Subsection (2)(d), the amount of retirement income subtracted
1325 for taxpayers under 65 shall be the lesser of the amount included in federal taxable income, or
1326 $4,800, except that:
1327 (i) for married taxpayers filing joint returns, for each $1 of adjusted gross income
1328 earned over $32,000, the amount of the retirement income exemption that may be subtracted
1329 shall be reduced by 50 cents;
1330 (ii) for married taxpayers filing separate returns, for each $1 of adjusted gross income
1331 earned over $16,000, the amount of the retirement income exemption that may be subtracted
1332 shall be reduced by 50 cents; and
1333 (iii) for individual taxpayers, for each $1 of adjusted gross income earned over
1334 $25,000, the amount of the retirement income exemption that may be subtracted shall be
1335 reduced by 50 cents.
1336 (b) For purposes of Subsection (2)(e), the amount of the personal retirement exemption
1337 shall be further reduced according to the following schedule:
1338 (i) for married taxpayers filing joint returns, for each $1 of adjusted gross income
1339 earned over $32,000, the amount of the personal retirement exemption shall be reduced by 50
1340 cents;
1341 (ii) for married taxpayers filing separate returns, for each $1 of adjusted gross income
1342 earned over $16,000, the amount of the personal retirement exemption shall be reduced by 50
1343 cents; and
1344 (iii) for individual taxpayers, for each $1 of adjusted gross income earned over
1345 $25,000, the amount of the personal retirement exemption shall be reduced by 50 cents.
1346 (c) For purposes of Subsections (3)(a) and (b), adjusted gross income shall be
1347 calculated by adding to federal adjusted gross income any interest income not otherwise
1348 included in federal adjusted gross income.
1349 (d) For purposes of determining ownership of items of retirement income common law
1350 doctrine will be applied in all cases even though some items may have originated from service
1351 or investments in a community property state. Amounts received by the spouse of a living
1352 retiree because of the retiree's having been employed in a community property state are not
1353 deductible as retirement income of such spouse.
1354 (e) For purposes of Subsection (2)[
1355 care insurance as defined in Title 31A, Chapter 1, General Provisions, is not allowed:
1356 (i) for an amount that is reimbursed or funded in whole or in part by the federal
1357 government, the state, or an agency or instrumentality of the federal government or the state;
1358 and
1359 (ii) for a taxpayer who is eligible to participate in a health plan maintained and funded
1360 in whole or in part by the taxpayer's employer or the taxpayer's spouse's employer.
1361 (4) (a) A subtraction for an amount described in Subsection (2)[
1362 if:
1363 (i) the taxpayer is a Ute tribal member; and
1364 (ii) the governor and the Ute tribe execute and maintain an agreement meeting the
1365 requirements of this Subsection (4).
1366 (b) The agreement described in Subsection (4)(a):
1367 (i) may not:
1368 (A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
1369 (B) provide a subtraction under this section greater than or different from the
1370 subtraction described in Subsection (2)[
1371 (C) affect the power of the state to establish rates of taxation; and
1372 (ii) shall:
1373 (A) provide for the implementation of the subtraction described in Subsection
1374 (2)[
1375 (B) be in writing;
1376 (C) be signed by:
1377 (I) the governor; and
1378 (II) the chair of the Business Committee of the Ute tribe;
1379 (D) be conditioned on obtaining any approval required by federal law; and
1380 (E) state the effective date of the agreement.
1381 (c) (i) The governor shall report to the commission by no later than February 1 of each
1382 year regarding whether or not an agreement meeting the requirements of this Subsection (4) is
1383 in effect.
1384 (ii) If an agreement meeting the requirements of this Subsection (4) is terminated, the
1385 subtraction permitted under Subsection (2)[
1386 or after the January 1 following the termination of the agreement.
1387 (d) For purposes of Subsection (2)[
1388 Utah Administrative Rulemaking Act, the commission may make rules:
1389 (i) for determining whether income is derived from a source within the Uintah and
1390 Ouray Reservation; and
1391 (ii) that are substantially similar to how federal adjusted gross income derived from
1392 Utah sources is determined under Section 59-10-117 .
1393 (5) (a) For purposes of this Subsection (5), "Form 8814" means:
1394 (i) the federal individual income tax Form 8814, Parents' Election To Report Child's
1395 Interest and Dividends; or
1396 (ii) (A) for taxable years beginning on or after January 1, 2002, a form designated by
1397 the commission in accordance with Subsection (5)(a)(ii)(B) as being substantially similar to
1398 2000 Form 8814 if for purposes of federal individual income taxes the information contained
1399 on 2000 Form 8814 is reported on a form other than Form 8814; and
1400 (B) for purposes of Subsection (5)(a)(ii)(A) and in accordance with Title 63, Chapter
1401 46a, Utah Administrative Rulemaking Act, the commission may make rules designating a form
1402 as being substantially similar to 2000 Form 8814 if for purposes of federal individual income
1403 taxes the information contained on 2000 Form 8814 is reported on a form other than Form
1404 8814.
1405 (b) The amount of a child's income added to adjusted gross income under Subsection
1406 (1)(c) is equal to the difference between:
1407 (i) the lesser of:
1408 (A) the base amount specified on Form 8814; and
1409 (B) the sum of the following reported on Form 8814:
1410 (I) the child's taxable interest;
1411 (II) the child's ordinary dividends; and
1412 (III) the child's capital gain distributions; and
1413 (ii) the amount not taxed that is specified on Form 8814.
1414 (6) Notwithstanding Subsection (1)(g), interest from bonds, notes, and other evidences
1415 of indebtedness issued by an entity described in Subsections (1)(g)(i) through (iv) may not be
1416 added to federal taxable income of a resident or nonresident individual if, as annually
1417 determined by the commission:
1418 (a) for an entity described in Subsection (1)(g)(i) or (ii), the entity and all of the
1419 political subdivisions, agencies, or instrumentalities of the entity do not impose a tax based on
1420 income on any part of the bonds, notes, and other evidences of indebtedness of this state; or
1421 (b) for an entity described in Subsection (1)(g)(iii) or (iv), the following do not impose
1422 a tax based on income on any part of the bonds, notes, and other evidences of indebtedness of
1423 this state:
1424 (i) the entity; or
1425 (ii) (A) the state in which the entity is located; or
1426 (B) the District of Columbia, if the entity is located within the District of Columbia.
1427 Section 14. Section 59-10-115 is amended to read:
1428 59-10-115. Adjustments to state taxable income.
1429 [
1430
1431
1432
1433
1434
1435
1436
1437 [
1438
1439
1440
1441
1442
1443
1444
1445
1446
1447
1448
1449 [
1450
1451
1452
1453
1454
1455
1456 [
1457 to state taxable income of [
1458
1459
1460 (a) receive [
1461 (b) suffer [
1462
1463
1464
1465 (2) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
1466 commission may make rules to allow for the adjustment to state taxable income required by
1467 Subsection (1).
1468 Section 15. Section 59-10-201 is amended to read:
1469 59-10-201. Taxation of resident trusts and estates.
1470 (1) A tax determined in accordance with the rates prescribed by Section 59-10-104 for
1471 individuals filing separately is imposed for each taxable year on the state taxable income of
1472 each resident estate or trust, except for trusts taxed as corporations.
1473 (2) A resident estate or trust shall be allowed the credit provided in Section
1474 [
1475 limitation shall be computed by reference to the taxable income of the estate or trust.
1476 (3) The property of the trust established in Title 53B, Chapter 8a, Higher Education
1477 Savings Incentive Program, and its income from operations and investments are exempt from
1478 all taxation by the state under this chapter.
1479 Section 16. Section 59-10-201.1 is amended to read:
1480 59-10-201.1. State taxable income of resident estate or trust defined.
1481 The state taxable income of a resident estate or trust means its federal taxable income as
1482 [
1483 Code, as adjusted by Sections 59-10-202 , 59-10-209.1 , and [
1484 Section 17. Section 59-10-202 is amended to read:
1485 59-10-202. Additions to and subtractions from state taxable income of resident or
1486 nonresident estate or trust.
1487 (1) There shall be added to federal taxable income of a resident or nonresident estate or
1488 trust:
1489 (a) the amount of any income tax imposed by this or any predecessor Utah individual
1490 income tax law and the amount of any income tax imposed by the laws of another state, the
1491 District of Columbia, or a possession of the United States, to the extent deducted from federal
1492 adjusted total income as defined in Section 62, Internal Revenue Code, in determining federal
1493 taxable income;
1494 (b) a lump sum distribution allowable as a deduction under Section 402(d)(3) of the
1495 Internal Revenue Code, to the extent deductible under Section 62(a)(8) of the Internal Revenue
1496 Code in determining federal adjusted gross income; [
1497 [
1498
1499
1500 (c) except as provided in Subsection (3), for taxable years beginning on or after
1501 January 1, 2003, for bonds, notes, and other evidences of indebtedness acquired on or after
1502 January 1, 2003, the interest from bonds, notes, and other evidences of indebtedness issued by
1503 one or more of the following entities:
1504 (i) a state other than this state;
1505 (ii) the District of Columbia;
1506 (iii) a political subdivision of a state other than this state; or
1507 (iv) an agency or instrumentality of an entity described in Subsections (1)(c)(i) through
1508 (iii);
1509 (d) any portion of federal taxable income for a taxable year if that federal taxable
1510 income is derived from stock:
1511 (i) in an S corporation; and
1512 (ii) that is held by an electing small business trust; and
1513 (e) any fiduciary adjustments required by Section 59-10-210 .
1514 (2) There shall be subtracted from federal taxable income of a resident or nonresident
1515 estate or trust:
1516 (a) the interest or [
1517 States and its possessions or of any authority, commission, or instrumentality of the United
1518 States, to the extent [
1519 federal income tax purposes for the taxable year but exempt from state income taxes under the
1520 laws of the United States, but the amount subtracted under this Subsection (2) shall be reduced
1521 by any interest on indebtedness incurred or continued to purchase or carry the obligations or
1522 securities described in this Subsection (2), and by any expenses incurred in the production of
1523 interest or dividend income described in this Subsection (2) to the extent that such expenses,
1524 including amortizable bond premiums, are deductible in determining federal taxable income;
1525 (b) 1/2 of the net amount of any income tax paid or payable to the United States after
1526 all allowable credits, as per the United States fiduciary income tax return of the taxpayer for the
1527 same taxable year; [
1528 (c) income of an irrevocable resident trust if:
1529 (i) the income would not be treated as state taxable income derived from Utah sources
1530 under Section 59-10-204 if received by a nonresident trust;
1531 (ii) the trust first became a resident trust on or after January 1, 2004;
1532 (iii) no assets of the trust were held, at any time after January 1, 2003, in another
1533 resident irrevocable trust created by the same settlor or the spouse of the same settlor;
1534 (iv) the trustee of the trust is a trust company as defined in Subsection 7-5-1 (1)(d);
1535 (v) the amount subtracted under this Subsection (2) is reduced to the extent the settlor
1536 or any other person is treated as an owner of any portion of the trust under Subtitle A,
1537 Subchapter J, Subpart E of the Internal Revenue Code; and
1538 (vi) the amount subtracted under this Subsection (2) is reduced by any interest on
1539 indebtedness incurred or continued to purchase or carry the assets generating the income
1540 described in this Subsection (2), and by any expenses incurred in the production of income
1541 described in this Subsection (2), to the extent that those expenses, including amortizable bond
1542 premiums, are deductible in determining federal taxable income[
1543 (d) if the conditions of Subsection (4)(a) are met, the amount of income of a resident or
1544 nonresident estate or trust derived from a deceased Ute tribal member:
1545 (i) during a time period that the Ute tribal member resided on homesteaded land
1546 diminished from the Uintah and Ouray Reservation; and
1547 (ii) from a source within the Uintah and Ouray Reservation;
1548 (e) (i) for taxable years beginning on or after January 1, 2003, the total amount of a
1549 resident or nonresident estate's or trust's short-term capital gain or long-term capital gain on a
1550 capital gain transaction:
1551 (A) that occurs on or after January 1, 2003;
1552 (B) if 70% or more of the gross proceeds of the capital gain transaction are expended:
1553 (I) to purchase qualifying stock in a Utah small business corporation; and
1554 (II) within a 12-month period after the day on which the capital gain transaction occurs;
1555 and
1556 (C) if, prior to the purchase of the qualifying stock described in Subsection
1557 (2)(e)(i)(B)(I), the resident or nonresident estate or trust did not have an ownership interest in
1558 the Utah small business corporation that issued the qualifying stock; and
1559 (ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
1560 commission may make rules:
1561 (A) defining the term "gross proceeds"; and
1562 (B) for purposes of Subsection (2)(e)(i)(C), prescribing the circumstances under which
1563 a resident or nonresident estate or trust has an ownership interest in a Utah small business
1564 corporation;
1565 (f) for the taxable year beginning on or after January 1, 2005, but beginning on or
1566 before December 31, 2005, the first $2,200 of income of a resident or nonresident estate or
1567 trust that is derived from a deceased qualifying military service member:
1568 (i) for service:
1569 (A) as a qualifying military service member; or
1570 (B) under an order into active service in accordance with Section 39-1-5 ; and
1571 (ii) to the extent that income is included in total income on that resident or nonresident
1572 estate's or trust's federal income tax return for estates and trusts for that taxable year;
1573 (g) any amount:
1574 (i) received by a resident or nonresident estate or trust;
1575 (ii) that constitutes a refund of taxes imposed by:
1576 (A) a state; or
1577 (B) the District of Columbia; and
1578 (iii) to the extent that amount is included in total income on that resident or nonresident
1579 estate's or trust's federal tax return for estates and trusts for that taxable year;
1580 (h) the amount of a railroad retirement benefit:
1581 (i) paid:
1582 (A) in accordance with The Railroad Retirement Act of 1974, 45 U.S.C. Sec. 231 et
1583 seq.;
1584 (B) to a resident or nonresident estate or trust derived from a deceased resident or
1585 nonresident individual; and
1586 (C) for the taxable year; and
1587 (ii) to the extent that railroad retirement benefit is included in total income on that
1588 resident or nonresident estate's or trust's federal tax return for estates and trusts;
1589 (i) an amount:
1590 (i) received by a resident or nonresident estate or trust if that amount is derived from a
1591 deceased enrolled member of an American Indian tribe; and
1592 (ii) to the extent that the state is not authorized or permitted to impose a tax under this
1593 part on that amount in accordance with:
1594 (A) federal law;
1595 (B) a treaty; or
1596 (C) a final decision issued by a court of competent jurisdiction; and
1597 (j) any fiduciary adjustments required by Section 59-10-210 .
1598 (3) Notwithstanding Subsection (1)(c), interest from bonds, notes, and other evidences
1599 of indebtedness issued by an entity described in Subsections (1)(c)(i) through (iv) may not be
1600 added to federal taxable income of a resident or nonresident estate or trust if, as annually
1601 determined by the commission:
1602 (a) for an entity described in Subsection (1)(c)(i) or (ii), the entity and all of the
1603 political subdivisions, agencies, or instrumentalities of the entity do not impose a tax based on
1604 income on any part of the bonds, notes, and other evidences of indebtedness of this state; or
1605 (b) for an entity described in Subsection (1)(c)(iii) or (iv), the following do not impose
1606 a tax based on income on any part of the bonds, notes, and other evidences of indebtedness of
1607 this state:
1608 (i) the entity; or
1609 (ii) (A) the state in which the entity is located; or
1610 (B) the District of Columbia, if the entity is located within the District of Columbia.
1611 (4) (a) A subtraction for an amount described in Subsection (2)(d) is allowed only if:
1612 (i) the income is derived from a deceased Ute tribal member; and
1613 (ii) the governor and the Ute tribe execute and maintain an agreement meeting the
1614 requirements of this Subsection (4).
1615 (b) The agreement described in Subsection (4)(a):
1616 (i) may not:
1617 (A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
1618 (B) provide a subtraction under this section greater than or different from the
1619 subtraction described in Subsection (2)(d); or
1620 (C) affect the power of the state to establish rates of taxation; and
1621 (ii) shall:
1622 (A) provide for the implementation of the subtraction described in Subsection (2)(d);
1623 (B) be in writing;
1624 (C) be signed by:
1625 (I) the governor; and
1626 (II) the chair of the Business Committee of the Ute tribe;
1627 (D) be conditioned on obtaining any approval required by federal law; and
1628 (E) state the effective date of the agreement.
1629 (c) (i) The governor shall report to the commission by no later than February 1 of each
1630 year regarding whether or not an agreement meeting the requirements of this Subsection (4) is
1631 in effect.
1632 (ii) If an agreement meeting the requirements of this Subsection (4) is terminated, the
1633 subtraction permitted under Subsection (2)(d) is not allowed for taxable years beginning on or
1634 after the January 1 following the termination of the agreement.
1635 (d) For purposes of Subsection (2)(d) and in accordance with Title 63, Chapter 46a,
1636 Utah Administrative Rulemaking Act, the commission may make rules:
1637 (i) for determining whether income is derived from a source within the Uintah and
1638 Ouray Reservation; and
1639 (ii) that are substantially similar to how federal adjusted gross income derived from
1640 Utah sources is determined under Section 59-10-117 .
1641 Section 18. Section 59-10-204 is amended to read:
1642 59-10-204. State taxable income of nonresident estate or trust defined.
1643 The state taxable income of a nonresident estate or trust shall be its [
1644 taxable income as [
1645 determined in accordance with the principles of Section 59-10-117 , and adjusted as provided in
1646 Section 59-10-207 .
1647 Section 19. Section 59-10-205 is amended to read:
1648 59-10-205. Tax on income derived from Utah sources.
1649 A tax is imposed on the state taxable income, as [
1650 59-10-204 , of every nonresident estate or trust in accordance with the rates prescribed in
1651 Section 59-10-104 for individuals filing separately. The tax shall only be applied to income
1652 derived from Utah sources as adjusted by Section 59-10-207 , including such items from
1653 another estate or trust of which the first estate or trust is a beneficiary.
1654 Section 20. Section 59-10-207 is amended to read:
1655 59-10-207. Share of a nonresident estate or trust and beneficiaries in state taxable
1656 income.
1657 (1) The share of a nonresident estate or trust and its beneficiaries in items of income,
1658 gain, loss, and deduction entering into the definition of distributable net income and the share
1659 for purposes of Section 59-10-116 of a nonresident beneficiary of any estate or trust in estate or
1660 trust income, gain, loss, and deduction shall be determined as follows:
1661 (a) To the amount of items of income, gain, loss, and deduction that enter into the
1662 definition of distributable net income there shall be added or subtracted, as the case may be, the
1663 modifications described in Sections 59-10-202 and [
1664 relate to items of income, gain, loss, and deduction that also enter into the definition of
1665 distributable net income. No modification shall be made under this section that has the effect
1666 of duplicating an item already reflected in the definition of distributable net income.
1667 (b) The amount determined under Subsection (1)(a) shall be allocated among the estate
1668 or trust and its beneficiaries (including solely for the purpose of this allocation, resident
1669 beneficiaries) in proportion to their respective shares of federal distributable net income. The
1670 amounts so allocated shall have the same character as for federal income tax purposes.
1671 (c) If the estate or trust has no federal distributable net income for the taxable year, the
1672 share of each beneficiary in the net amount determined under Subsection (1)(a) shall be in
1673 proportion to his share of the estate or trust income for such year, under state law or the terms
1674 of the governing instrument, that is required to be distributed currently and any other amounts
1675 of such income distributed in such year. Any balance of such net income shall be allocated to
1676 the estate or trust.
1677 (2) The commission may by rule establish such other method or methods of
1678 determining the respective shares of the beneficiaries and of the estate or trust in its income
1679 derived from sources in this state, and in the modifications related thereto, as may be
1680 appropriate and equitable. The fiduciary may elect to use any other methods prescribed in this
1681 subsection only when the allocation of such respective shares under this section would result in
1682 an inequity in the allocation which is substantial both in amount and in relation to the total
1683 amount of the modifications referred to in Subsection (1)(a).
1684 Section 21. Section 59-10-209.1 is enacted to read:
1685 59-10-209.1. Adjustments to state taxable income.
1686 (1) The commission shall allow an adjustment to state taxable income of a resident or
1687 nonresident estate or trust if the resident or nonresident estate or trust would otherwise:
1688 (a) receive a double tax benefit under this chapter; or
1689 (b) suffer a double tax detriment under this chapter.
1690 (2) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
1691 commission may make rules to allow for the adjustment to state taxable income required by
1692 Subsection (1).
1693 Section 22. Section 59-10-210 is amended to read:
1694 59-10-210. Fiduciary adjustments.
1695 [
1696
1697
1698 (1) A share of the fiduciary adjustments described in Subsection (2) shall be added to
1699 or subtracted from federal taxable income:
1700 (a) of:
1701 (i) a resident or nonresident estate or trust; or
1702 (ii) a resident or nonresident beneficiary of a resident or nonresident estate or trust; and
1703 (b) as provided in this section.
1704 (2) For purposes of Subsection (1), the fiduciary adjustments are the following
1705 amounts:
1706 (a) the additions to and subtractions from federal taxable income of a resident or
1707 nonresident estate or trust required by Section 59-10-202 , except for Subsection
1708 59-10-202 (2)(b); and
1709 (b) a tax credit claimed by a resident or nonresident estate or trust as allowed by:
1710 (i) Section 59-6-102 ;
1711 (ii) Part 10, Nonrefundable Tax Credit Act;
1712 (iii) Part 11, Refundable Tax Credit Act;
1713 (iv) Section 59-13-202 ;
1714 (v) Section 63-38f-413 ; or
1715 (vi) Section 63-38f-503 .
1716 [
1717
1718 in the state fiduciary adjustments, shall be allocated in proportion to their respective shares of
1719 federal distributable net income of the estate or trust.
1720 (b) If the estate or trust described in Subsection (3)(a) has no federal distributable net
1721 income for the taxable year, the share of each beneficiary in the fiduciary adjustments shall be
1722 allocated in proportion to [
1723 the taxable year[
1724 distributed currently plus any other amounts of [
1725 taxable year. [
1726 (c) After making the allocations required by Subsections (3)(a) and (b), any balance of
1727 the fiduciary adjustments shall be allocated to the estate or trust.
1728 [
1729 determining the allocation of the fiduciary adjustments described in Subsection (2) other than
1730 the method described in Subsection (3) if using the method described in Subsection (3) results
1731 in an inequity:
1732 (i) in allocating the fiduciary adjustments described in Subsection (2); and
1733 (ii) if the inequity is substantial:
1734 (A) in amount; and
1735 (B) in relation to the total amount of the fiduciary adjustments described in Subsection
1736 (2).
1737 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
1738 commission may [
1739
1740 fiduciary to use a method for determining [
1741 adjustments[
1742
1743
1744
1745
1746
1747
1748
1749
1750 using the method described in Subsection (3) results in an inequity:
1751 (i) in allocating the fiduciary adjustments described in Subsection (2); and
1752 (ii) if the inequity is substantial:
1753 (A) in amount; and
1754 (B) in relation to the total amount of the fiduciary adjustments described in Subsection
1755 (2).
1756 Section 23. Section 59-10-1001 is enacted to read:
1757
1758 59-10-1001. Title.
1759 This part is known as the "Nonrefundable Tax Credit Act."
1760 Section 24. Section 59-10-1002 is enacted to read:
1761 59-10-1002. Definitions.
1762 As used in this part:
1763 (1) (a) Except as provided in Subsection (1)(b) or Subsection 59-10-1003 (2),
1764 "claimant" means a resident or nonresident person that has state taxable income under Part 1,
1765 Determination and Reporting of Tax Liability and Information.
1766 (b) "Claimant" does not include an estate or trust.
1767 (2) Except as provided in Subsection 59-10-1003 (2), "estate" means a nonresident
1768 estate or a resident estate that has state taxable income under Part 2, Trusts and Estates.
1769 (3) "Nonrefundable tax credit" or "tax credit" means a tax credit that a claimant, estate,
1770 or trust may:
1771 (a) claim:
1772 (i) as provided by statute; and
1773 (ii) in an amount that does not exceed the claimant's, estate's, or trust's tax liability
1774 under this chapter for a taxable year; and
1775 (b) carry forward or carry back:
1776 (i) if allowed by statute; and
1777 (ii) to the extent that the amount of the tax credit exceeds the claimant's, estate's, or
1778 trust's tax liability under this chapter for a taxable year.
1779 (4) Except as provided in Subsection 59-10-1003 (2), "trust" means a nonresident trust
1780 or a resident trust that has state taxable income under Part 2, Trusts and Estates.
1781 Section 25. Section 59-10-1003 , which is renumbered from Section 59-10-106 is
1782 renumbered and amended to read:
1783 [
1784 state.
1785 (1) [
1786 claimant, estate, or trust may claim a nonrefundable tax credit against the tax otherwise due
1787 under this chapter equal to the amount of the tax imposed:
1788 (a) on [
1789 (b) by another state of the United States, the District of Columbia, or a possession of
1790 the United States[
1791 (c) on income:
1792 (i) derived from sources [
1793 District of Columbia, or possession of the United States; and
1794 (ii) if that income is also subject to tax under this chapter.
1795 (2) A tax credit under this section may only be claimed by a:
1796 (a) resident claimant;
1797 (b) resident estate; or
1798 (c) resident trust.
1799 [
1800 operate to reduce the tax payable under this chapter to an amount less than would have been
1801 payable were the income from the other state disregarded.
1802 [
1803 accordance with rules prescribed by the commission.
1804 Section 26. Section 59-10-1004 , which is renumbered from Section 59-10-108 is
1805 renumbered and amended to read:
1806 [
1807 workshops.
1808 (1) For tax years beginning January 1, 1983, and thereafter, in computing the tax due
1809 the state under Section 59-10-104 there shall be a nonrefundable tax credit allowed for cash
1810 contributions made by a claimant, estate, or trust within the taxable year to nonprofit
1811 rehabilitation sheltered workshop facilities for persons with a disability operating in Utah that
1812 are certified by the Department of Human Services as a qualifying facility.
1813 (2) The allowable tax credit is an amount equal to 50% of the aggregate amount of the
1814 cash contributions to the qualifying rehabilitation facilities, but the allowed tax credit may not
1815 exceed $200.
1816 (3) The amount of contribution claimed as a tax credit under this section may not also
1817 be claimed as a charitable deduction in determining net taxable income.
1818 Section 27. Section 59-10-1005 , which is renumbered from Section 59-10-108.1 is
1819 renumbered and amended to read:
1820 [
1821 (1) As used in this section:
1822 (a) "At-home parent" means a parent:
1823 (i) who provides full-time care at the parent's residence for one or more of the parent's
1824 own qualifying children;
1825 (ii) who claims the qualifying child as a dependent on the parent's individual income
1826 tax return for the taxable year for which the parent claims the credit; and
1827 (iii) if the sum of the following amounts are $3,000 or less for the taxable year for
1828 which the parent claims the credit:
1829 (A) the total wages, tips, and other compensation listed on all of the parent's federal
1830 Forms W-2; and
1831 (B) the gross income listed on the parent's federal Form 1040 Schedule C, Profit or
1832 Loss From Business.
1833 (b) "Parent" means an individual who:
1834 (i) is the biological mother or father of a qualifying child;
1835 (ii) is the stepfather or stepmother of a qualifying child;
1836 (iii) (A) legally adopts a qualifying child; or
1837 (B) has a qualifying child placed in the individual's home:
1838 (I) by a child placing agency as defined in Section 62A-4a-601 ; and
1839 (II) for the purpose of legally adopting the child;
1840 (iv) is a foster parent of a qualifying child; or
1841 (v) is a legal guardian of a qualifying child.
1842 (c) "Qualifying child" means a child who is no more than 12 months of age on the last
1843 day of the taxable year for which the tax credit is claimed.
1844 (2) For taxable years beginning on or after January 1, 2000, a [
1845 claim on the [
1846 $100 for each qualifying child if:
1847 (a) the [
1848 income tax return with the [
1849 (b) the federal adjusted gross income of all of the [
1850 individual income tax return is less than or equal to $50,000.
1851 (3) A [
1852 by this section.
1853 (4) It is the intent of the Legislature that for fiscal years beginning on or after fiscal
1854 year 2000-01, the Legislature appropriate from the General Fund a sufficient amount to replace
1855 Uniform School Fund revenues expended to provide for the tax credit under this section.
1856 Section 28. Section 59-10-1006 , which is renumbered from Section 59-10-108.5 is
1857 renumbered and amended to read:
1858 [
1859 (1) (a) For tax years beginning January 1, 1993, and thereafter, there is allowed to
1860 [
1861 income tax due, an amount equal to 20% of qualified rehabilitation expenditures, costing more
1862 than $10,000, incurred in connection with any residential certified historic building. When
1863 qualifying expenditures of more than $10,000 are incurred, the tax credit allowed by this
1864 section shall apply to the full amount of expenditures.
1865 (b) All rehabilitation work to which the tax credit may be applied shall be approved by
1866 the State Historic Preservation Office prior to completion of the rehabilitation project as
1867 meeting the Secretary of the Interior's Standards for Rehabilitation so that the office can
1868 provide corrective comments to the [
1869 historical qualities of the building.
1870 (c) Any amount of tax credit remaining may be carried forward to each of the five
1871 taxable years following the qualified expenditures.
1872 (d) The commission, in consultation with the Division of State History, shall
1873 promulgate rules to implement this section.
1874 (2) As used in this section:
1875 (a) "Certified historic building" means a building that is listed on the National Register
1876 of Historic Places within three years of taking the credit under this section or that is located in a
1877 National Register Historic District and the building has been designated by the Division of
1878 State History as being of significance to the district.
1879 (b) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable
1880 to the rehabilitation and restoration of the physical elements of the building, including the
1881 historic decorative elements, and the upgrading of the structural, mechanical, electrical, and
1882 plumbing systems to applicable codes.
1883 (ii) "Qualified rehabilitation expenditures" does not include expenditures related to:
1884 (A) [
1885 (B) cost of acquisition of the property;
1886 (C) any expenditure attributable to the enlargement of an existing building;
1887 (D) rehabilitation of a certified historic building without the approval required in
1888 Subsection (1)(b); or
1889 (E) any expenditure attributable to landscaping and other site features, outbuildings,
1890 garages, and related features.
1891 (c) "Residential" means a building used for residential use, either owner occupied or
1892 income producing.
1893 Section 29. Section 59-10-1007 , which is renumbered from Section 59-10-108.7 is
1894 renumbered and amended to read:
1895 [
1896 (1) For taxable years beginning on or after January 1, 1996, [
1897 estate, or trust in a recycling market development zone as defined in Section 63-38f-1102 may
1898 claim a nonrefundable tax credit as provided in this section.
1899 (a) (i) There shall be allowed a [
1900 paid for machinery and equipment used directly in:
1901 (A) commercial composting; or
1902 (B) manufacturing facilities or plant units that:
1903 (I) manufacture, process, compound, or produce recycled items of tangible personal
1904 property for sale; or
1905 (II) reduce or reuse postconsumer waste material.
1906 (ii) The Governor's Office of Economic Development shall certify that the machinery
1907 and equipment described in Subsection (1)(a)(i) are integral to the composting or recycling
1908 process:
1909 (A) on a form provided by the commission; and
1910 (B) before a [
1911 section.
1912 (iii) The Governor's Office of Economic Development shall provide a [
1913 claimant, estate, or trust seeking to claim a tax credit under this section with a copy of the form
1914 described in Subsection (1)(a)(ii).
1915 (iv) The [
1916 retain a copy of the form received under Subsection (1)(a)(iii).
1917 (b) There shall be allowed a [
1918 expenditures up to $10,000 to third parties for rent, wages, supplies, tools, test inventory, and
1919 utilities made by the [
1920 recycling or composting technology in Utah, with an annual maximum tax credit of $2,000.
1921 (2) The total [
1922 of the Utah income tax liability of the [
1923 credits in the taxable year of purchase prior to claiming the tax credit authorized by this
1924 section.
1925 (3) (a) Any tax credit not used for the taxable year in which the purchase price on
1926 composting or recycling machinery and equipment was paid may be carried [
1927 forward against the [
1928 this chapter in the three succeeding taxable years until the total tax credit amount is used.
1929 (b) Tax credits not claimed by [
1930 [
1931 three years are forfeited.
1932 (4) The commission shall make rules governing what information shall be filed with
1933 the commission to verify the entitlement to and amount of a tax credit.
1934 (5) (a) Notwithstanding Subsection (1)(a), for taxable years beginning on or after
1935 January 1, 2001, a [
1936 credit described in Subsection (1)(a) in a taxable year during which the [
1937 estate, or trust claims or carries forward a tax credit under Section 63-38f-413 .
1938 (b) For a taxable year other than a taxable year during which the [
1939 estate, or trust may not claim or carry forward a tax credit in accordance with Subsection (5)(a),
1940 a [
1941 Subsection (1)(a):
1942 (i) if the [
1943 in accordance with Subsections (1) and (2); and
1944 (ii) subject to Subsections (3) and (4).
1945 (6) Notwithstanding Subsection (1)(b), for taxable years beginning on or after January
1946 1, 2001, a [
1947 Subsection (1)(b) in a taxable year during which the [
1948 or carries forward a tax credit under Section 63-38f-413 .
1949 (7) A [
1950 available under this section for a taxable year during which the [
1951 trust has claimed the targeted business income tax credit available under Section 63-38f-503 .
1952 Section 30. Section 59-10-1008 , which is renumbered from Section 59-10-109 is
1953 renumbered and amended to read:
1954 [
1955 (1) As used in this section, "individual with a disability" means an individual who:
1956 (a) has been receiving services:
1957 (i) from a day-training program that is:
1958 (A) for persons with disabilities; and
1959 (B) certified by the Department of Human Services as a qualifying program; and
1960 (ii) for at least six consecutive months prior to working for the [
1961 estate, or trust claiming the tax credit under this section; or
1962 (b) is eligible for services from the Division of Services for People with Disabilities at
1963 the time the individual begins working for the [
1964 tax credit under this section.
1965 (2) For taxable years beginning on or after January 1, 1995, there is allowed a
1966 nonrefundable tax credit against tax otherwise due under this chapter for [
1967 claimant, estate, or trust that:
1968 (a) meets the unemployment and workers' compensation requirements of Title 34A,
1969 Utah Labor Code; and
1970 (b) hires an individual with a disability who:
1971 (i) works in this state for at least 180 days in a taxable year for that [
1972 claimant, estate, or trust; and
1973 (ii) is paid at least minimum wages by that [
1974 (3) The tax credit shall be in an amount equal to:
1975 (a) 10% of the gross wages earned in the first 180 days of employment by the
1976 individual with a disability from the [
1977 and
1978 (b) 20% of the gross wages earned in the remaining taxable year by the individual with
1979 a disability from the [
1980 (4) The tax credit [
1981 trust under this section shall be:
1982 (a) limited to $3,000 per year per individual with a disability; and
1983 (b) allowed only for the first two years the individual with a disability is employed by
1984 the [
1985 (5) Any amount of tax credit remaining may be carried forward two taxable years
1986 following the taxable year of the employment eligible for the tax credit provided in this section.
1987 (6) (a) The Division of Services for People with Disabilities shall certify that [
1988
1989 form provided by the commission.
1990 (b) The form described in Subsection (6)(a) shall include the name and Social Security
1991 number of the individual for whom the tax credit is claimed.
1992 (c) The Division of Services for People with Disabilities shall provide the [
1993 claimant, estate, or trust described in Subsection (6)(a) with a copy of the form described in
1994 this Subsection (6).
1995 (d) The [
1996 the form described in this Subsection (6).
1997 Section 31. Section 59-10-1009 , which is renumbered from Section 59-10-127 is
1998 renumbered and amended to read:
1999 [
2000 (1) As used in this section:
2001 (a) "Board" means the Air Quality Board created in Title 19, Chapter 2, Air
2002 Conservation Act.
2003 (b) "Certified by the board" means that:
2004 (i) a motor vehicle on which conversion equipment has been installed meets the
2005 following criteria:
2006 (A) before the installation of conversion equipment, the vehicle does not exceed the
2007 emission cut points for a transient test driving cycle, as specified in 40 C.F.R. Part 51,
2008 Appendix E to Subpart S, or an equivalent test for the make, model, and year of the vehicle;
2009 (B) the motor vehicle's emissions of regulated pollutants, when operating on fuels
2010 listed in Subsection (2)(a)(ii)(A) or (2)(a)(ii)(B), is less than the emissions were before the
2011 installation of conversion equipment; and
2012 (C) a reduction in emissions under Subsection (1)(b)(i)(B) is demonstrated by:
2013 (I) certification of the conversion equipment by the federal Environmental Protection
2014 Agency or by a state whose certification standards are recognized by the board;
2015 (II) testing the motor vehicle, before and after installation of the conversion equipment,
2016 in accordance with 40 C.F.R. Part 86, Control Emissions from New and In-use Highway
2017 Vehicles and Engines, using all fuels the motor vehicle is capable of using; or
2018 (III) any other test or standard recognized by board rule; or
2019 (ii) special mobile equipment on which conversion equipment has been installed meets
2020 the following criteria:
2021 (A) the special mobile equipment's emissions of regulated pollutants, when operating
2022 on fuels listed in Subsection (2)(a)(iii)(A) or (2)(a)(iii)(B), is less than the emissions were
2023 before the installation of conversion equipment; and
2024 (B) a reduction in emissions under Subsection (1)(b)(ii)(A) is demonstrated by:
2025 (I) certification of the conversion equipment by the federal Environmental Protection
2026 Agency or by a state whose certification standards are recognized by the board; or
2027 (II) any other test or standard recognized by the board.
2028 (c) "Clean fuel grant" means a grant [
2029 under Title 19, Chapter 1, Part 4, Clean Fuels Conversion Program Act, for reimbursement of a
2030 portion of the incremental cost of the OEM vehicle or the cost of conversion equipment.
2031 (d) "Conversion equipment" means equipment referred to in Subsection (2)(a)(ii) or
2032 (2)(a)(iii).
2033 (e) "Electric-hybrid vehicle" is as defined in 42 U.S.C. Sec. 13435.
2034 (f) "Incremental cost" has the same meaning as in Section 19-1-402 .
2035 (g) "OEM vehicle" has the same meaning as in Section 19-1-402 .
2036 (h) "Special mobile equipment":
2037 (i) means any mobile equipment or vehicle not designed or used primarily for the
2038 transportation of persons or property; and
2039 (ii) includes construction or maintenance equipment.
2040 (2) (a) Except as provided in Subsection (2)(b), for taxable years beginning on or after
2041 January 1, 2001, but beginning on or before December 31, 2010, a [
2042 or trust may claim a nonrefundable tax credit against tax otherwise due under this chapter in an
2043 amount equal to:
2044 (i) 50% of the incremental cost of an OEM vehicle registered in Utah minus the
2045 amount of any clean fuel grant received, up to a maximum tax credit of $3,000 per vehicle, if
2046 the vehicle:
2047 (A) is fueled by propane, natural gas, or electricity;
2048 (B) is fueled by other fuel the board determines annually on or before July 1 to be at
2049 least as effective in reducing air pollution as fuels under Subsection (2)(a)(i)(A); or
2050 (C) meets the clean-fuel vehicle standards in the federal Clean Air Act Amendments of
2051 1990, 42 U.S.C. Sec. 7521 et seq.;
2052 (ii) 50% of the cost of equipment for conversion, if certified by the board, of a motor
2053 vehicle registered in Utah minus the amount of any clean fuel conversion grant received, up to
2054 a maximum tax credit of $2,500 per vehicle, if the motor vehicle:
2055 (A) is to be fueled by propane, natural gas, or electricity;
2056 (B) is to be fueled by other fuel the board determines annually on or before July 1 to be
2057 at least as effective in reducing air pollution as fuels under Subsection (2)(a)(ii)(A); or
2058 (C) will meet the federal clean fuel vehicle standards in the federal Clean Air Act
2059 Amendments of 1990, 42 U.S.C. Sec. 7521 et seq.; and
2060 (iii) 50% of the cost of equipment for conversion, if certified by the board, of a special
2061 mobile equipment engine minus the amount of any clean fuel conversion grant received, up to a
2062 maximum tax credit of $1,000 per special mobile equipment engine, if the special mobile
2063 equipment is to be fueled by:
2064 (A) propane, natural gas, or electricity; or
2065 (B) other fuel the board determines annually on or before July 1 to be:
2066 (I) at least as effective in reducing air pollution as the fuels under Subsection
2067 (2)(a)(iii)(A); or
2068 (II) substantially more effective in reducing air pollution than the fuel for which the
2069 engine was originally designed.
2070 (b) Notwithstanding Subsection (2)(a), for taxable years beginning on or after January
2071 1, 2006, a [
2072 respect to an electric-hybrid vehicle.
2073 (3) [
2074 item for which a tax credit is allowed under this section by:
2075 (a) providing proof to the board in the form the board requires by rule;
2076 (b) receiving a written statement from the board acknowledging receipt of the proof;
2077 and
2078 (c) retaining the written statement described in Subsection (3)(b).
2079 (4) Except as provided by Subsection (5), the tax credit under this section is allowed
2080 only:
2081 (a) against any Utah tax owed in the taxable year by the [
2082 trust;
2083 (b) in the taxable year in which the item is purchased for which the tax credit is
2084 claimed; and
2085 (c) once per vehicle.
2086 (5) If the amount of a tax credit claimed by a [
2087 this section exceeds the [
2088 for a taxable year, the amount of the tax credit exceeding the tax liability may be carried
2089 forward for a period that does not exceed the next five taxable years.
2090 Section 32. Section 59-10-1010 , which is renumbered from Section 59-10-129 is
2091 renumbered and amended to read:
2092 [
2093 (1) As used in this section:
2094 (a) "Allocation certificate" means:
2095 (i) the certificate prescribed by the commission and issued by the Utah Housing
2096 Corporation to each [
2097 annual federal low-income housing [
2098 may take as an annual tax credit against [
2099 (ii) a copy of the allocation certificate that the housing sponsor provides to the
2100 [
2101 (b) "Building" means a qualified low-income building as defined in Section 42(c),
2102 Internal Revenue Code.
2103 (c) "Federal low-income housing [
2104 credit under Section 42, Internal Revenue Code.
2105 (d) "Housing sponsor" means a corporation in the case of a C corporation, a partnership
2106 in the case of a partnership, a corporation in the case of an S corporation, or a limited liability
2107 company in the case of a limited liability company.
2108 (e) "Qualified allocation plan" means the qualified allocation plan adopted by the Utah
2109 Housing Corporation pursuant to Section 42(m), Internal Revenue Code.
2110 (f) "Special low-income housing tax credit certificate" means a certificate:
2111 (i) prescribed by the commission;
2112 (ii) that a housing sponsor issues to a [
2113 year; and
2114 (iii) that specifies the amount of a tax credit a [
2115 claim under this section if the [
2116 this section.
2117 [
2118
2119
2120
2121 (2) (a) For taxable years beginning on or after January 1, 1995, there is allowed a
2122 nonrefundable tax credit against taxes otherwise due under this chapter for [
2123 claimant, estate, or trust issued an allocation certificate.
2124 (b) The tax credit shall be in an amount equal to the greater of the amount of:
2125 (i) federal low-income housing [
2126 trust is allowed during that year multiplied by the percentage specified in an allocation
2127 certificate issued by the Utah Housing Corporation; or
2128 (ii) tax credit specified in the special low-income housing tax credit certificate that the
2129 housing sponsor issues to the [
2130 (2)(c).
2131 (c) For purposes of Subsection (2)(b)(ii), the tax credit is equal to the product of:
2132 (i) the total amount of low-income housing tax credit under this section that:
2133 (A) a housing sponsor is allowed for a building; and
2134 (B) all of the [
2135 building if the [
2136 and
2137 (ii) the percentage of tax credit a [
2138 (A) under this section if the [
2139 of this section; and
2140 (B) as provided in the agreement between the [
2141 the housing sponsor.
2142 (d) (i) For the calendar year beginning on January 1, 1995, through the calendar year
2143 beginning on January 1, 2015, the aggregate annual tax credit that the Utah Housing
2144 Corporation may allocate for the credit period described in Section 42(f), Internal Revenue
2145 Code, pursuant to this section and Section 59-7-607 is an amount equal to the product of:
2146 (A) 12.5 cents; and
2147 (B) the population of Utah.
2148 (ii) For purposes of this section, the population of Utah shall be determined in
2149 accordance with Section 146(j), Internal Revenue Code.
2150 (3) (a) By October 1, 1994, the Utah Housing Corporation shall determine criteria and
2151 procedures for allocating the tax credit under this section and Section 59-7-607 and incorporate
2152 the criteria and procedures into the Utah Housing Corporation's qualified allocation plan.
2153 (b) The Utah Housing Corporation shall create the criteria under Subsection (3)(a)
2154 based on:
2155 (i) the number of affordable housing units to be created in Utah for low and moderate
2156 income persons in the residential housing development of which the building is a part;
2157 (ii) the level of area median income being served by the development;
2158 (iii) the need for the tax credit for the economic feasibility of the development; and
2159 (iv) the extended period for which the development commits to remain as affordable
2160 housing.
2161 (4) (a) The following may apply to the Utah Housing Corporation for a tax credit under
2162 this section:
2163 (i) any housing sponsor that is a claimant, estate, or trust if that housing sponsor has
2164 received an allocation of the federal low-income housing [
2165 (ii) any applicant for an allocation of the federal low-income housing [
2166 applicant is a claimant, estate, or trust.
2167 (b) The Utah Housing Corporation may not require fees for applications of the tax
2168 credit under this section in addition to those fees required for applications for the federal
2169 low-income housing [
2170 (5) (a) The Utah Housing Corporation shall determine the amount of the tax credit to
2171 allocate to a qualifying housing sponsor in accordance with the qualified allocation plan of the
2172 Utah Housing Corporation.
2173 (b) (i) The Utah Housing Corporation shall allocate the tax credit to housing sponsors
2174 by issuing an allocation certificate to qualifying housing sponsors.
2175 (ii) The allocation certificate under Subsection (5)(b)(i) shall specify the allowed
2176 percentage of the federal low-income housing [
2177 Corporation.
2178 (c) The percentage specified in an allocation certificate may not exceed 100% of the
2179 federal low-income housing [
2180 (6) A housing sponsor shall provide a copy of the allocation certificate to each
2181 [
2182 certificate.
2183 (7) (a) A housing sponsor shall provide to the commission a list of:
2184 (i) the [
2185 tax credit certificate; and
2186 (ii) for each [
2187 amount of tax credit listed on the special low-income housing tax credit certificate.
2188 (b) A housing sponsor shall provide the list required by Subsection (7)(a):
2189 (i) to the commission;
2190 (ii) on a form provided by the commission; and
2191 (iii) with the housing sponsor's tax return for each taxable year for which the housing
2192 sponsor issues a special low-income housing tax credit certificate described in this Subsection
2193 (7).
2194 (8) (a) All elections made by the [
2195 Section 42, Internal Revenue Code, shall apply to this section.
2196 (b) (i) If a [
2197 federal low-income housing [
2198 required to recapture a portion of any state tax credits authorized by this section.
2199 (ii) The state recapture amount shall be equal to the percentage of the state tax credit
2200 that equals the proportion the federal recapture amount bears to the original federal low-income
2201 housing [
2202 (9) (a) Any tax credits returned to the Utah Housing Corporation in any year may be
2203 reallocated within the same time period as provided in Section 42, Internal Revenue Code.
2204 (b) Tax credits that are unallocated by the Utah Housing Corporation in any year may
2205 be carried over for allocation in the subsequent year.
2206 (10) (a) Amounts otherwise qualifying for the tax credit, but not allowable because the
2207 tax credit exceeds the tax, may be carried back three years or may be carried forward five years
2208 as a tax credit [
2209 (b) Carryover tax credits under Subsection (10)(a) shall be applied against the tax:
2210 (i) before the application of the tax credits earned in the current year; and
2211 (ii) on a first-earned first-used basis.
2212 (11) Any tax credit taken in this section may be subject to an annual audit by the
2213 commission.
2214 (12) The Utah Housing Corporation shall provide an annual report to the Revenue and
2215 Taxation Interim Committee which shall include at least:
2216 (a) the purpose and effectiveness of the tax credits; and
2217 (b) the benefits of the tax credits to the state.
2218 (13) The commission may, in consultation with the Utah Housing Corporation,
2219 promulgate rules to implement this section.
2220 Section 33. Section 59-10-1011 , which is renumbered from Section 59-10-130 is
2221 renumbered and amended to read:
2222 [
2223 (1) For purposes of this section:
2224 (a) "Disabled dependent" means a person who:
2225 (i) is disabled under Section 53A-15-301 ;
2226 (ii) attends a public or private kindergarten, elementary, or secondary school; and
2227 (iii) is eligible to receive disability program monies under Section 53A-17a-111 .
2228 (b) (i) "Tutoring" means educational services:
2229 (A) approved by an individual education plan team;
2230 (B) provided to a disabled dependent; and
2231 (C) that supplement classroom instruction the disabled dependent described in
2232 Subsection (1)(b)(i)(B) receives at a public or private kindergarten, elementary, or secondary
2233 school in the state.
2234 (ii) "Tutoring" does not include:
2235 (A) purchases of instructional books and material; or
2236 (B) payments for attendance at extracurricular activities including sporting events,
2237 musical or dramatic events, speech activities, or driver education.
2238 (2) (a) Except as provided in Subsection (2)(b), for taxable years beginning on or after
2239 January 1, 1996, but beginning on or before December 31, 2009, a [
2240 to claim a disabled dependent as a dependent under this section may claim for each disabled
2241 dependent a nonrefundable tutoring tax credit in an amount equal to 25% of the costs paid by
2242 the [
2243 (b) The [
2244 $100.
2245 (3) The [
2246 [
2247 costs for which the tax credit is claimed.
2248 Section 34. Section 59-10-1012 , which is renumbered from Section 59-10-131 is
2249 renumbered and amended to read:
2250 [
2251 the state -- Carry forward -- Commission to report modification or repeal of federal
2252 credits -- Tax Review Commission study.
2253 (1) (a) For taxable years beginning on or after January 1, 1999, but beginning before
2254 December 31, 2010, a [
2255 section shall qualify for the following nonrefundable tax credits for increasing research
2256 activities in this state:
2257 (i) a research tax credit of 6% of the [
2258 research expenses for the current taxable year that exceed the base amount provided for under
2259 Subsection (4); and
2260 (ii) a tax credit for payments to qualified organizations for basic research as provided
2261 in Section 41(e), Internal Revenue Code of 6% for the current taxable year that exceed the base
2262 amount provided for under Subsection (4).
2263 (b) If a [
2264 (1)(a) seeks to claim the tax credit, the [
2265 (i) claim the tax credit or a portion of the tax credit for the taxable year immediately
2266 following the taxable year for which the [
2267 credit;
2268 (ii) carry the tax credit or a portion of the tax credit forward as provided in Subsection
2269 (4)(f); or
2270 (iii) claim a portion of the tax credit and carry forward a portion of the tax credit as
2271 provided in Subsections (1)(b)(i) and (ii).
2272 (c) The tax credits provided for in this section do not include the alternative
2273 incremental credit provided for in Section 41(c)(4), Internal Revenue Code.
2274 (2) For purposes of claiming a tax credit under this section, a unitary group as defined
2275 in Section 59-7-101 is considered to be one [
2276 (3) Except as specifically provided for in this section:
2277 (a) the tax credits authorized under Subsection (1) shall be calculated as provided in
2278 Section 41, Internal Revenue Code; and
2279 (b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
2280 the tax credits authorized under Subsection (1).
2281 (4) For purposes of this section:
2282 (a) the base amount shall be calculated as provided in Sections 41(c) and 41(h),
2283 Internal Revenue Code, except that:
2284 (i) the base amount does not include the calculation of the alternative incremental
2285 credit provided for in Section 41(c)(4), Internal Revenue Code;
2286 (ii) a [
2287 receipts attributable to sources within this state as provided in [
2288
2289 (iii) notwithstanding Section 41(c), Internal Revenue Code, for purposes of calculating
2290 the base amount, a [
2291 (A) may elect to be treated as a start-up company as provided in Section 41(c)(3)(B)
2292 regardless of whether the [
2293 41(c)(3)(B)(i)(I) or (II); and
2294 (B) may not revoke an election to be treated as a start-up company under Subsection
2295 (4)(a)(iii)(A);
2296 (b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
2297 that the term includes only basic research conducted in this state;
2298 (c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
2299 that the term includes only qualified research conducted in this state;
2300 (d) "qualified research expenses" is as defined and calculated in Section 41(b), Internal
2301 Revenue Code, except that the term includes only those expenses incurred in conducting
2302 qualified research in this state;
2303 (e) notwithstanding the provisions of Section 41(h), Internal Revenue Code, the tax
2304 credits provided for in this section shall not terminate if the credits terminate under Section 41,
2305 Internal Revenue Code; and
2306 (f) notwithstanding the provisions of Sections 39 and 41(g), Internal Revenue Code,
2307 governing the carry forward and carry back of federal tax credits, if the amount of a tax credit
2308 claimed by a [
2309 claimant's, estate's, or trust's tax liability under this chapter for a taxable year, the amount of the
2310 tax credit exceeding the liability:
2311 (i) may be carried forward for a period that does not exceed the next 14 taxable years;
2312 and
2313 (ii) may not be carried back to a taxable year preceding the current taxable year.
2314 (5) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
2315 commission may make rules for purposes of this section prescribing a certification process for
2316 qualified organizations to ensure that amounts paid to the qualified organizations are for basic
2317 research conducted in this state.
2318 (6) If a federal [
2319 repealed, the commission shall report the modification or repeal to the Tax Review
2320 Commission within 60 days after the day on which the modification or repeal becomes
2321 effective.
2322 [
2323
2324 [
2325
2326
2327 [
2328 [
2329
2330
2331
2332 [
2333 [
2334 [
2335 [
2336 [
2337 [
2338 [
2339 [
2340 [
2341
2342
2343
2344 Section 35. Section 59-10-1013 , which is renumbered from Section 59-10-132 is
2345 renumbered and amended to read:
2346 [
2347 primarily used for conducting qualified research or basic research -- Carry forward --
2348 Commission to report modification or repeal of federal credits -- Tax Review Commission
2349 study.
2350 (1) As used in this section:
2351 (a) "Basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
2352 that the term includes only basic research conducted in this state.
2353 (b) "Equipment" includes:
2354 (i) computers;
2355 (ii) computer equipment; and
2356 (iii) computer software.
2357 (c) "Purchase price":
2358 (i) includes the cost of installing an item of machinery or equipment; and
2359 (ii) does not include sales or use taxes imposed on an item of machinery or equipment.
2360 (d) "Qualified organization" is as defined in Section 41(e)(6), Internal Revenue Code.
2361 (e) "Qualified research" is as defined in Section 41(d), Internal Revenue Code, except
2362 that the term includes only qualified research conducted in this state.
2363 (2) (a) Except as provided in Subsection (2)(c), for taxable years beginning on or after
2364 January 1, 1999, but beginning before December 31, 2010, a [
2365 trust shall qualify for the following nonrefundable tax credits for the taxable year in which the
2366 machinery, equipment, or both, meets the requirements of either Subsection (2)(a)(i) or
2367 (2)(a)(ii):
2368 (i) a tax credit of 6% of the purchase price of either machinery, equipment, or both:
2369 (A) purchased by the [
2370 (B) that is not exempt from sales or use taxes; and
2371 (C) that is primarily used to conduct qualified research in this state; and
2372 (ii) a tax credit of 6% of the purchase price paid by the [
2373 trust for either machinery, equipment, or both:
2374 (A) purchased by the [
2375 (B) that is not exempt from sales or use taxes;
2376 (C) that is donated to a qualified organization; and
2377 (D) that is primarily used to conduct basic research in this state.
2378 (b) If a [
2379 (2)(a) seeks to claim the tax credit, the [
2380 (i) claim the tax credit or a portion of the tax credit for the taxable year immediately
2381 following the taxable year for which the [
2382 credit;
2383 (ii) carry the tax credit or a portion of the tax credit forward as provided in Subsection
2384 (5); or
2385 (iii) claim a portion of the tax credit and carry forward a portion of the tax credit as
2386 provided in Subsections (2)(b)(i) and (ii).
2387 (c) Notwithstanding Subsection (2)(a), if a [
2388 for a tax credit under Subsection (2)(a) for a purchase of machinery, equipment, or both, the
2389 [
2390 if the machinery, equipment, or both, is primarily used to conduct qualified research in the state
2391 for a time period that is less than 12 consecutive months.
2392 (3) For purposes of claiming a tax credit under this section, a unitary group as defined
2393 in Section 59-7-101 is considered to be one [
2394 (4) Notwithstanding the provisions of Section 41(h), Internal Revenue Code, the tax
2395 credits provided for in this section shall not terminate if the credits terminate under Section 41,
2396 Internal Revenue Code.
2397 (5) Notwithstanding the provisions of Sections 39 and 41(g), Internal Revenue Code,
2398 governing the carry forward and carry back of federal tax credits, if the amount of a tax credit
2399 claimed by a [
2400 claimant's, estate's, or trust's tax liability under this chapter for a taxable year, the amount of the
2401 tax credit exceeding the liability:
2402 (a) may be carried forward for a period that does not exceed the next 14 taxable years;
2403 and
2404 (b) may not be carried back to a taxable year preceding the current taxable year.
2405 (6) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
2406 commission may make rules for purposes of this section prescribing a certification process for
2407 qualified organizations to ensure that either machinery, equipment, or both provided to the
2408 qualified organization is to be primarily used to conduct basic research in this state.
2409 (7) If a federal [
2410 repealed, the commission shall report the modification or repeal to the Tax Review
2411 Commission within 60 days after the day on which the modification or repeal becomes
2412 effective.
2413 [
2414
2415 [
2416
2417
2418 [
2419 [
2420
2421
2422
2423 [
2424 [
2425 [
2426 [
2427 [
2428 [
2429 [
2430 [
2431 [
2432
2433
2434
2435 Section 36. Section 59-10-1014 , which is renumbered from Section 59-10-134 is
2436 renumbered and amended to read:
2437 [
2438 Definitions -- Limitations -- State tax credit in addition to allowable federal credits --
2439 Certification -- Rulemaking authority -- Reimbursement of Uniform School Fund.
2440 (1) As used in this part:
2441 (a) "Active solar system":
2442 (i) means a system of equipment capable of collecting and converting incident solar
2443 radiation into thermal, mechanical, or electrical energy, and transferring these forms of energy
2444 by a separate apparatus to storage or to the point of use; and
2445 (ii) includes water heating, space heating or cooling, and electrical or mechanical
2446 energy generation.
2447 (b) "Biomass system" means any system of apparatus and equipment capable of
2448 converting organic plant, wood, or waste products into electrical and thermal energy and
2449 transferring these forms of energy by a separate apparatus to the point of use or storage.
2450 (c) "Business entity" means any [
2451
2452 transacted.
2453 (d) "Commercial energy system" means any active solar, passive solar, wind,
2454 hydroenergy, or biomass system used to supply energy to a commercial unit or as a commercial
2455 enterprise.
2456 (e) "Commercial enterprise" means a business entity whose purpose is to produce
2457 electrical, mechanical, or thermal energy for sale from a commercial energy system.
2458 (f) (i) "Commercial unit" means any building or structure which a business entity uses
2459 to transact its business, except as provided in Subsection (1)(f)(ii); and
2460 (ii) (A) in the case of an active solar system used for agricultural water pumping or a
2461 wind system, each individual energy generating device shall be a commercial unit; and
2462 (B) if an energy system is the building or structure which a business entity uses to
2463 transact its business, a commercial unit is the complete energy system itself.
2464 (g) "Hydroenergy system" means a system of apparatus and equipment capable of
2465 intercepting and converting kinetic water energy into electrical or mechanical energy and
2466 transferring this form of energy by separate apparatus to the point of use or storage.
2467 [
2468
2469 [
2470 (i) means a direct thermal system which utilizes the structure of a building and its
2471 operable components to provide for collection, storage, and distribution of heating or cooling
2472 during the appropriate times of the year by utilizing the climate resources available at the site;
2473 and
2474 (ii) includes those portions and components of a building that are expressly designed
2475 and required for the collection, storage, and distribution of solar energy.
2476 [
2477 hydroenergy system used to supply energy to or for any residential unit.
2478 [
2479 dwelling unit which serves as a dwelling for a person, group of persons, or a family but does
2480 not include property subject to a fee under:
2481 (i) Section 59-2-404 ;
2482 (ii) Section 59-2-405 ;
2483 (iii) Section 59-2-405.1 ;
2484 (iv) Section 59-2-405.2 ; or
2485 (v) Section 59-2-405.3 .
2486 [
2487 Section 63-73-5 .
2488 [
2489 intercepting and converting wind energy into mechanical or electrical energy and transferring
2490 these forms of energy by a separate apparatus to the point of use or storage.
2491 (2) For taxable years beginning on or after January 1, 2001, but beginning on or before
2492 December 31, 2006, [
2493 nonrefundable tax credit as provided in this section if:
2494 (a) [
2495 purchases and completes or participates in the financing of a residential energy system to
2496 supply all or part of the energy for the [
2497 residential unit in the state; or
2498 (b) (i) a claimant, estate, or trust that is a business entity sells a residential unit to [
2499
2500 making a claim for a tax credit under Subsection (6) or Section 59-7-614 ; and
2501 (ii) the claimant, estate, or trust that is a business entity assigns its right to the tax credit
2502 to the [
2503 Subsection (6)(c) or Subsection 59-7-614 (2)(a)(iii).
2504 (3) (a) [
2505 in Subsection (2) is [
2506 including installation costs, against any income tax liability of the [
2507 claimant, estate, or trust under this chapter for the taxable year in which the residential energy
2508 system is completed and placed in service.
2509 (b) The total amount of the tax credit under this section may not exceed $2,000 per
2510 residential unit.
2511 (c) The tax credit under this section is allowed for any residential energy system
2512 completed and placed in service on or after January 1, 2001, but on or before December 31,
2513 2006.
2514 (4) (a) The tax credit provided for in this section shall be claimed in the return for the
2515 taxable year in which the energy system is completed and placed in service.
2516 (b) Additional residential energy systems or parts of residential energy systems may be
2517 similarly claimed in returns for subsequent taxable years as long as the total amount claimed
2518 does not exceed $2,000 per residential unit.
2519 (c) If the amount of the tax credit under this section exceeds the income tax liability of
2520 the [
2521 that taxable year, then the amount not used may be carried over for a period which does not
2522 exceed the next four taxable years.
2523 (5) (a) [
2524 business entity that leases a residential energy system installed on a residential unit [
2525 eligible for the residential energy tax credits if [
2526 trust confirms that the lessor irrevocably elects not to claim the [
2527 (b) Only the principal recovery portion of the lease payments, which is the cost
2528 incurred by the [
2529 excluding interest charges and maintenance expenses, is eligible for the tax credits.
2530 (c) [
2531 claimant, estate, or trust described in this Subsection (5) may use the tax credits for a period
2532 [
2533 (6) (a) A claimant, estate, or trust that is a business entity that purchases and completes
2534 or participates in the financing of a residential energy system to supply all or part of the energy
2535 required for a residential unit owned or used by the claimant, estate, or trust that is a business
2536 entity and situated in Utah is entitled to a nonrefundable tax credit as provided in this
2537 Subsection (6).
2538 (b) (i) For taxable years beginning on or after January 1, 2001, but beginning on or
2539 before December 31, 2006, a claimant, estate, or trust that is a business entity is entitled to a
2540 tax credit equal to 25% of the costs of a residential energy system installed with respect to each
2541 residential unit it owns or uses, including installation costs, against any tax due under this
2542 chapter for the taxable year in which the energy system is completed and placed in service.
2543 (ii) The total amount of the tax credit under this Subsection (6) may not exceed $2,000
2544 per residential unit.
2545 (iii) The tax credit under this Subsection (6) is allowed for any residential energy
2546 system completed and placed in service on or after January 1, 2001, but on or before December
2547 31, 2006.
2548 (c) If a claimant, estate, or trust that is a business entity sells a residential unit to [
2549
2550 claim for the tax credit under this Subsection (6), the claimant, estate, or trust that is a business
2551 entity may:
2552 (i) assign its right to this tax credit to the [
2553 that is not a business entity; and
2554 (ii) if the claimant, estate, or trust that is a business entity assigns its right to the tax
2555 credit to [
2556 Subsection (6)(c)(i), the [
2557 entity may claim the tax credit as if [
2558 is not a business entity had completed or participated in the costs of the residential energy
2559 system under this section.
2560 (7) (a) A claimant, estate, or trust that is a business entity that purchases or participates
2561 in the financing of a commercial energy system is entitled to a nonrefundable tax credit as
2562 provided in this Subsection (7) if:
2563 (i) the commercial energy system supplies all or part of the energy required by
2564 commercial units owned or used by the claimant, estate, or trust that is a business entity; or
2565 (ii) the claimant, estate, or trust that is a business entity sells all or part of the energy
2566 produced by the commercial energy system as a commercial enterprise.
2567 (b) (i) A claimant, estate, or trust that is a business entity is entitled to a tax credit equal
2568 to 10% of the costs of any commercial energy system installed, including installation costs,
2569 against any tax due under this chapter for the taxable year in which the commercial energy
2570 system is completed and placed in service.
2571 (ii) The total amount of the tax credit under this Subsection (7) may not exceed
2572 $50,000 per commercial unit.
2573 (iii) The tax credit under this Subsection (7) is allowed for any commercial energy
2574 system completed and placed in service on or after January 1, 2001, but on or before December
2575 31, 2006.
2576 (c) A claimant, estate, or trust that is a business entity that leases a commercial energy
2577 system installed on a commercial unit is eligible for the tax credit under this Subsection (7) if
2578 the [
2579 to claim the tax credit.
2580 (d) Only the principal recovery portion of the lease payments, which is the cost
2581 incurred by a claimant, estate, or trust that is not a business entity in acquiring a commercial
2582 energy system, excluding interest charges and maintenance expenses, is eligible for the tax
2583 credit under this Subsection (7).
2584 (e) A claimant, estate, or trust that is a business entity that leases a commercial energy
2585 system is eligible to use the tax credit under this Subsection (7) for a period [
2586 that does not exceed seven years from the initiation of the lease.
2587 (8) (a) A tax credit under this section may be claimed for the taxable year in which the
2588 energy system is completed and placed in service.
2589 (b) Additional energy systems or parts of energy systems may be claimed for
2590 subsequent years.
2591 (c) If the amount of a tax credit under this section exceeds [
2592 liability of the claimant, estate, or trust claiming the tax credit under this [
2593 taxable year, the amount of the tax credit exceeding the tax liability may be carried over for a
2594 period which does not exceed the next four taxable years.
2595 (9) The tax credits provided for under this section are in addition to any tax credits
2596 provided under the laws or rules and regulations of the United States.
2597 (10) (a) The Utah Geological Survey may set standards for residential and commercial
2598 energy systems that cover the safety, reliability, efficiency, leasing, and technical feasibility of
2599 the systems to ensure that the systems eligible for the tax credit use the state's renewable and
2600 nonrenewable energy resources in an appropriate and economic manner.
2601 (b) A tax credit may not be taken under this section until the Utah Geological Survey
2602 has certified that the energy system has been completely installed and is a viable system for
2603 saving or production of energy from renewable resources.
2604 (11) The Utah Geological Survey and the commission are authorized to promulgate
2605 rules in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, which
2606 are necessary to implement this section.
2607 (12) The Uniform School Fund shall be reimbursed by transfers from the General Fund
2608 for any tax credits taken under this section.
2609 Section 37. Section 59-10-1015 , which is renumbered from Section 59-10-134.2 is
2610 renumbered and amended to read:
2611 [
2612 expenses -- Rulemaking authority.
2613 (1) As used in this section:
2614 (a) "human organ" means:
2615 (i) human bone marrow; or
2616 (ii) any part of a human:
2617 (A) intestine;
2618 (B) kidney;
2619 (C) liver;
2620 (D) lung; or
2621 (E) pancreas;
2622 (b) "live organ donation" means that an individual who is living donates one or more of
2623 that individual's human organs:
2624 (i) to another human; and
2625 (ii) to be transplanted:
2626 (A) using a medical procedure; and
2627 (B) to the body of the other human; and
2628 (c) (i) "live organ donation expenses" means the total amount of expenses:
2629 (A) incurred by a [
2630 (B) that:
2631 (I) are not reimbursed to that [
2632 (II) are directly related to a live organ donation by:
2633 (Aa) the [
2634 (Bb) another individual that the [
2635 in accordance with Section 151, Internal Revenue Code; and
2636 (III) are for:
2637 (Aa) travel;
2638 (Bb) lodging; or
2639 (Cc) a lost wage; and
2640 (ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
2641 commission may by rule define "lost wage."
2642 (2) For taxable years beginning on or after January 1, 2005, a [
2643 claim a nonrefundable tax credit:
2644 (a) as provided in this section;
2645 (b) against taxes otherwise due under this chapter;
2646 (c) for live organ donation expenses incurred during the taxable year for which the live
2647 organ donation occurs; and
2648 (d) in an amount equal to the lesser of:
2649 (i) the actual amount of the live organ donation expenses; or
2650 (ii) $10,000.
2651 (3) If the amount of a tax credit under this section exceeds a [
2652 liability under this chapter for a taxable year, the amount of the tax credit that exceeds the
2653 [
2654 next five taxable years.
2655 Section 38. Section 59-10-1016 , which is renumbered from Section 59-10-135 is
2656 renumbered and amended to read:
2657 [
2658 prohibition on claiming or carrying forward a tax credit -- Conditions for removal and
2659 prohibition on claiming or carrying forward a tax credit -- Commission reporting
2660 requirements.
2661 (1) As used in this section[
2662
2663 accordance with this chapter.
2664 (2) Beginning two taxable years after the requirements of Subsection (3) are met:
2665 (a) the commission shall remove a tax credit from each tax return on which the tax
2666 credit appears; and
2667 (b) a [
2668 forward the tax credit.
2669 (3) The commission shall remove a tax credit from a tax return and a [
2670 claimant, estate, or trust filing a tax return may not claim or carry forward a tax credit as
2671 provided in Subsection (2) if:
2672 (a) the total amount of the tax credit claimed or carried forward by all [
2673 claimants, estates, or trusts filing tax returns is less than $10,000 per year for three consecutive
2674 taxable years beginning on or after January 1, 2002; and
2675 (b) less than ten [
2676 consecutive taxable years described in Subsection (3)(a), file a tax return claiming or carrying
2677 forward the tax credit.
2678 (4) The commission shall, on or before the November interim meeting of the year after
2679 the taxable year in which the requirements of Subsection (3) are met:
2680 (a) report to the Revenue and Taxation Interim Committee that in accordance with this
2681 section:
2682 (i) the commission is required to remove a tax credit from each tax return on which the
2683 tax credit appears; and
2684 (ii) a [
2685 forward the tax credit; and
2686 (b) notify each state agency required by statute to assist in the administration of the tax
2687 credit that in accordance with this section:
2688 (i) the commission is required to remove a tax credit from each tax return on which the
2689 tax credit appears; and
2690 (ii) a [
2691 forward the tax credit.
2692 Section 39. Section 59-10-1101 is enacted to read:
2693
2694 59-10-1101. Title.
2695 This part is known as the "Refundable Tax Credit Act."
2696 Section 40. Section 59-10-1102 is enacted to read:
2697 59-10-1102. Definitions.
2698 As used in this part:
2699 (1) (a) Except as provided in Subsection (1)(b) or Subsection 59-10-1103 (1)(a),
2700 "claimant" means a resident or nonresident person.
2701 (b) "Claimant" does not include an estate or trust.
2702 (2) Except as provided in Subsection 59-10-1103 (1)(a), "estate" means a nonresident
2703 estate or a resident estate.
2704 (3) "Refundable tax credit" or "tax credit" means a tax credit that a claimant, estate, or
2705 trust may claim:
2706 (a) as provided by statute; and
2707 (b) regardless of whether the claimant, estate, or trust has a tax liability under this
2708 chapter for a taxable year.
2709 (4) Except as provided in Subsection 59-10-1103 (1)(a), "trust" means a nonresident
2710 trust or a resident trust.
2711 Section 41. Section 59-10-1103 , which is renumbered from Section 59-10-108.2 is
2712 renumbered and amended to read:
2713 [
2714 corporations.
2715 (1) (a) A nonresident shareholder of an S corporation [
2716 a refundable tax credit against the tax otherwise due under this chapter[
2717 shareholder is a:
2718 (i) nonresident claimant;
2719 (ii) nonresident estate; or
2720 (iii) nonresident trust.
2721 (b) The tax credit described in Subsection (1)(a) is equal to the amount paid or
2722 withheld by the S corporation on behalf of the [
2723 in Subsection (1)(a) in accordance with Section 59-7-703 .
2724 (2) A nonresident shareholder [
2725 described in Subsection (1)(a) that has no other Utah source income may elect:
2726 (a) not to claim the tax credit provided in Subsection (1); and
2727 (b) not to file a [
2728 year.
2729 (3) If a nonresident shareholder described in Subsection (1)(a) may claim [
2730 nonrefundable tax credit as defined in Section 59-10-1002 or a refundable tax credit other than
2731 the tax credit described in Subsection (1), the nonresident shareholder described in Subsection
2732 (1)(a) shall file [
2733 nonrefundable tax credits or refundable tax credits.
2734 Section 42. Section 59-10-1104 , which is renumbered from Section 59-10-133 is
2735 renumbered and amended to read:
2736 [
2737 special need.
2738 (1) As used in this section, a "child who has a special need" means a child who meets
2739 at least one of the following conditions:
2740 (a) the child is five years of age or older;
2741 (b) the child:
2742 (i) is under the age of 18; and
2743 (ii) has a physical, emotional, or mental disability; or
2744 (c) the child is a member of a sibling group placed together for adoption.
2745 (2) For taxable years beginning on or after January 1, 2005, a [
2746 adopts in this state a child who has a special need may claim on the [
2747 individual income tax return for the taxable year a refundable tax credit of $1,000 against taxes
2748 otherwise due under this chapter for:
2749 (a) adoptions for which a court issues an order granting the adoption on or after
2750 January 1, 2005;
2751 (b) the taxable year during which a court issues an order granting the adoption; and
2752 (c) each child who has a special need whom the [
2753 (3) The credit provided for in this section may not be carried forward or carried back.
2754 (4) Nothing in this section shall affect the ability of any [
2755 adopts a child who has a special need to receive adoption assistance under Section 62A-4a-907 .
2756 Section 43. Section 59-10-1105 , which is renumbered from Section 59-10-134.1 is
2757 renumbered and amended to read:
2758 [
2759 operations -- Procedures for refund -- Transfers from General Fund to Uniform School
2760 Fund -- Rulemaking authority.
2761 (1) For taxable years beginning on or after January 1, 2004, a [
2762
2763 (a) as provided in this section;
2764 (b) against taxes otherwise due under this chapter; and
2765 (c) in an amount equal to the amount of tax the [
2766 claimant, estate, or trust pays:
2767 (i) on a purchase of a hand tool:
2768 (A) if the purchase is made on or after July 1, 2004;
2769 (B) if the hand tool is used or consumed primarily and directly in a farming operation
2770 in the state; and
2771 (C) if the unit purchase price of the hand tool is more than $250; and
2772 (ii) under Chapter 12, Sales and Use Tax Act, on the purchase described in Subsection
2773 (1)(c)(i).
2774 (2) A [
2775 (a) shall retain the following to establish the amount of tax the [
2776
2777 purchase described in Subsection (1)(c)(i):
2778 (i) a receipt;
2779 (ii) an invoice; or
2780 (iii) a document similar to a document described in Subsection (2)(a)(i) or (ii); and
2781 (b) may not carry forward or carry back a tax credit under this section.
2782 (3) (a) In accordance with any rules prescribed by the commission under Subsection
2783 (3)(b), the commission shall:
2784 (i) make a refund to a [
2785 that claims a tax credit under this section if the amount of the tax credit exceeds the [
2786
2787 (ii) transfer at least annually from the General Fund into the Uniform School Fund an
2788 amount equal to the amount of tax credit claimed under this section.
2789 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
2790 commission may make rules providing procedures for making:
2791 (i) a refund to a [
2792 required by Subsection (3)(a)(i); or
2793 (ii) transfers from the General Fund into the Uniform School Fund as required by
2794 Subsection (3)(a)(ii).
2795 Section 44. Section 59-13-202 is amended to read:
2796 59-13-202. Refund of tax for agricultural uses on income and corporate franchise
2797 tax returns -- Application for permit for refund -- Division of Finance to pay claims --
2798 Rules permitted to enforce part -- Penalties.
2799 (1) As used in this section:
2800 (a) (i) Except at provided in Subsection (1)(a)(ii), "claimant" means a resident or
2801 nonresident person.
2802 (ii) "Claimant" does not include an estate or trust.
2803 (b) "Estate" means a nonresident estate or a resident estate.
2804 (c) "Refundable tax credit" or "tax credit" means a tax credit that a claimant, estate, or
2805 trust may claim:
2806 (i) as provided by statute; and
2807 (ii) regardless of whether, for the taxable year for which the claimant, estate, or trust
2808 claims the tax credit, the claimant, estate, or trust has a tax liability under:
2809 (A) Chapter 7, Corporate Franchise and Income Taxes; or
2810 (B) Chapter 10, Individual Income Tax Act.
2811 (d) "Trust" means a nonresident trust or a resident trust.
2812 [
2813 fuel within the state for the purpose of operating or propelling stationary farm engines and
2814 self-propelled farm machinery used for nonhighway agricultural uses, and [
2815 the tax on the motor fuel as provided by this part, is entitled to a refund of the tax subject to the
2816 conditions and limitations provided under this part.
2817 [
2818 agricultural use refund under this part shall claim the refund as a refundable tax credit on the
2819 [
2820 under:
2821 (i) Chapter 7, Corporate Franchise and Income Taxes; or
2822 (ii) Chapter 10, Individual Income Tax Act.
2823 (b) A [
2824
2825 claims on a calendar year basis.
2826 (c) Any [
2827 under this section is required to furnish any or all of the information outlined in this section
2828 upon request of the commission. [
2829 (d) A refundable tax credit under this section is allowed only on purchases on which
2830 tax is paid during the taxable year covered by the tax return.
2831 [
2832 shall be filed containing:
2833 (a) the name of [
2834 (b) the [
2835 (c) location and number of acres owned and operated, location and number of acres
2836 rented and operated, the latter of which shall be verified by a signed statement from the legal
2837 owner;
2838 (d) number of acres planted to each crop, type of soil, and whether irrigated or dry; and
2839 (e) make, size, type of fuel used, and power rating of each piece of equipment using
2840 fuel. If the [
2841 farm machinery with which the [
2842 custom jobs for other farmers, the application shall include information the commission
2843 requires and shall all be contained in, and be considered part of, the original application. The
2844 [
2845 county assessor showing each piece of equipment using fuel. This original application and all
2846 information contained in it constitutes a permanent file with the commission in the name of the
2847 [
2848 [
2849 fuel tax paid shall file a claim with the commission by April 15 of each year for the refund for
2850 the previous calendar year. The claim shall state the name and address of the claimant, estate,
2851 or trust, the number of gallons of motor fuel purchased for nonhighway agricultural uses, and
2852 the amount paid for the motor fuel. The [
2853 original invoice to support the claim. No more than one claim for a tax refund may be filed
2854 annually by each user of motor fuel purchased for nonhighway agricultural uses.
2855 [
2856 shall pay the amount found due to the claimant, estate, or trust. The total amount of claims for
2857 refunds shall be paid from motor fuel taxes.
2858 [
2859 accept as evidence of purchase or payment any instruments which show alteration or which fail
2860 to indicate the quantity of the purchase, the price of the motor fuel, a statement that it is
2861 purchased for purposes other than transportation, and the date of purchase and delivery. If the
2862 commission is not satisfied with the evidence submitted in connection with the claim, it may
2863 reject the claim or require additional evidence.
2864 [
2865 commission with respect to a refundable tax credit or refund may file a request for agency
2866 action, requesting a hearing before the commission.
2867 [
2868 or statement, [
2869 secure a refund to which the claimant, estate, or trust is not entitled, is subject to the criminal
2870 penalties provided under Section 59-1-401 , and the commission shall initiate the filing of a
2871 complaint for alleged violations of this part. In addition to these penalties, the [
2872 claimant, estate, or trust may not receive any refund as a claimant, estate, or trust or as a
2873 creditor of a claimant, estate, or trust for refund for a period of five years.
2874 [
2875 this part shall be paid from the Transportation Fund.
2876 Section 45. Section 62A-4a-607 is amended to read:
2877 62A-4a-607. Promotion of adoption -- Agency notice to potential adoptive
2878 parents.
2879 (1) (a) The division and all child placing agencies licensed under this part shall
2880 promote adoption when that is a possible and appropriate alternative for a child. Specifically,
2881 in accordance with Section 62A-4a-205.6 , the division shall actively promote the adoption of
2882 all children in its custody who have a final plan for termination of parental rights pursuant to
2883 Section 78-3a-312 or a primary permanency goal of adoption.
2884 (b) Beginning May 1, 2000, the division may not place a child for adoption, either
2885 temporarily or permanently, with any individual or individuals who do not qualify for adoptive
2886 placement pursuant to the requirements of Sections 78-30-1 , 78-30-1.5 , and 78-30-9 .
2887 (2) The division shall obtain or conduct research of prior adoptive families to
2888 determine what families may do to be successful with their adoptive children and shall make
2889 this research available to potential adoptive parents.
2890 (3) (a) A child placing agency licensed under this part shall inform each potential
2891 adoptive parent with whom it is working that:
2892 (i) children in the custody of the state are available for adoption;
2893 (ii) Medicaid coverage for medical, dental, and mental health services may be available
2894 for these children;
2895 (iii) tax benefits, including the tax credit provided for in Section [
2896 59-10-1104 , and financial assistance may be available to defray the costs of adopting these
2897 children;
2898 (iv) training and ongoing support may be available to the adoptive parents of these
2899 children; and
2900 (v) information about individual children may be obtained by contacting the division's
2901 offices or its Internet site as explained by the child placing agency.
2902 (b) A child placing agency shall:
2903 (i) provide the notice required by Subsection (3)(a) at the earliest possible opportunity;
2904 and
2905 (ii) simultaneously distribute a copy of the pamphlet prepared by the division in
2906 accordance with Subsection (3)(d).
2907 (c) As a condition of licensure, the child placing agency shall certify to the Office of
2908 Licensing at the time of license renewal that it has complied with the provisions of this section.
2909 (d) Before July 1, 2000, the division shall:
2910 (i) prepare a pamphlet that explains the information that is required by Subsection
2911 (3)(a); and
2912 (ii) regularly distribute copies of the pamphlet described in Subsection (3)(d)(i) to child
2913 placing agencies.
2914 (e) The division shall respond to any inquiry made as a result of the notice provided in
2915 Subsection (3)(a).
2916 Section 46. Section 63-38f-402 is amended to read:
2917 63-38f-402. Definitions.
2918 As used in this part:
2919 (1) "Business entity" means an entity:
2920 (a) including a claimant, estate, or trust; and
2921 (b) under which business is conducted or transacted.
2922 (2) (a) "Claimant" means a resident or nonresident person that has:
2923 (i) Utah taxable income as defined in Section 59-7-101 ; or
2924 (ii) state taxable income under Title 59, Chapter 10, Part 1, Determination and
2925 Reporting of Tax Liability or Information.
2926 (b) "Claimant" does not include an estate or trust.
2927 [
2928 requirements for designation as an enterprise zone under Section 63-38f-404 .
2929 (4) "Estate" means a nonresident estate or a resident estate that has state taxable
2930 income under Title 59, Chapter 10, Part 2, Trusts and Estates.
2931 [
2932 meets the requirements for designation as an enterprise zone under Section 63-38f-404 .
2933 (6) "Nonrefundable tax credit" or "tax credit" means a tax credit that a claimant, estate,
2934 or trust may:
2935 (a) claim:
2936 (i) as provided by statute; and
2937 (ii) in an amount that does not exceed the claimant's, estate's, or trust's tax liability for a
2938 taxable year under:
2939 (A) Title 59, Chapter 7, Corporate Franchise and Income Taxes; or
2940 (B) Title 59, Chapter 10, Individual Income Tax Act; and
2941 (b) carry forward or carry back:
2942 (i) if allowed by statute; and
2943 (ii) to the extent that the amount of the tax credit exceeds the claimant's, estate's, or
2944 trust's tax liability for a taxable year under:
2945 (A) Title 59, Chapter 7, Corporate Franchise and Income Taxes; or
2946 (B) Title 59, Chapter 10, Individual Income Tax Act.
2947 [
2948 [
2949 (8) "Trust" means a nonresident trust or a resident trust that has state taxable income
2950 under Title 59, Chapter 10, Part 2, Trust and Estates.
2951 Section 47. Section 63-38f-412 is amended to read:
2952 63-38f-412. Businesses qualifying for tax incentives.
2953 The tax incentives described in this part are available only to a business [
2954 which at least 51% of the employees employed at facilities of the [
2955 in the enterprise zone are individuals who, at the time of employment, reside in the county in
2956 which the enterprise zone is located.
2957 Section 48. Section 63-38f-413 is amended to read:
2958 63-38f-413. State tax credits.
2959 (1) Subject to the limitations of Subsections (2) through (4), the following [
2960 nonrefundable tax credits against [
2961
2962 Chapter 10, Individual Income Tax Act, are applicable in an enterprise zone:
2963 (a) a tax credit of $750 may be claimed by a business entity for each new full-time
2964 position filled for not less than six months during a given tax year;
2965 (b) an additional $500 tax credit may be claimed if the new position pays at least 125%
2966 of:
2967 (i) the county average monthly nonagricultural payroll wage for the respective industry
2968 as determined by the Department of Workforce Services; or
2969 (ii) if the county average monthly nonagricultural payroll wage is not available for the
2970 respective industry, the total average monthly nonagricultural payroll wage in the respective
2971 county where the enterprise zone is located;
2972 (c) an additional tax credit of $750 may be claimed if the new position is in a business
2973 entity that adds value to agricultural commodities through manufacturing or processing;
2974 (d) an additional tax credit of $200 may be claimed for two consecutive years for each
2975 new employee who is insured under an employer-sponsored health insurance program if the
2976 employer pays at least 50% of the premium cost for two consecutive years;
2977 (e) a tax credit of 50% of the value of a cash contribution to a private nonprofit
2978 corporation, except that the credit claimed may not exceed $100,000:
2979 (i) that is exempt from federal income taxation under Section 501(c)(3), Internal
2980 Revenue Code;
2981 (ii) whose primary purpose is community and economic development; and
2982 (iii) that has been accredited by the board of directors of the Utah Rural Development
2983 Council;
2984 (f) a tax credit of 25% of the first $200,000 spent on rehabilitating a building in the
2985 enterprise zone that has been vacant for two years or more; and
2986 (g) an annual investment tax credit of 10% of the first $250,000 in investment, and 5%
2987 of the next $1,000,000 qualifying investment in plant, equipment, or other depreciable
2988 property.
2989 (2) (a) Subject to the limitations of Subsection (2)(b), a business entity claiming a tax
2990 credit under Subsections (1)(a) through (d) may claim [
2991 employee positions or less in each of its taxable years.
2992 (b) A business entity that received a tax credit for its full-time employee positions
2993 under Subsections (1)(a) through (d) may claim an additional tax credit for a full-time
2994 employee position under Subsections (1)(a) through (d) if:
2995 (i) the business entity creates a new full-time employee position;
2996 (ii) the total number of full-time employee positions at the business entity is greater
2997 than the number of full-time employee positions previously claimed by the business entity
2998 under Subsections (1)(a) through (d); and
2999 (iii) the total number of tax credits the business entity has claimed for its current
3000 taxable year, including the new full-time employee position for which the claimant, estate, or
3001 trust that is a business entity is claiming a tax credit, is less than or equal to 30.
3002 (c) A business entity existing in an enterprise zone on the date of its designation shall
3003 calculate the number of full-time positions based on the average number of employees reported
3004 to the Department of Workforce Services.
3005 (d) Construction jobs are not eligible for the tax [
3006 (1)(a) through (d).
3007 (3) If the amount of a tax credit under this section exceeds a business entity's tax
3008 liability under this chapter for a taxable year, the amount of the tax credit exceeding the
3009 liability may be carried forward for a period that does not exceed the next three taxable years.
3010 (4) (a) If a business entity is located in a county that met the requirements of
3011 Subsections 63-38f-404 (1)(b) and (c) but did not qualify as an enterprise zone prior to January
3012 1, 1998, because the county was located in a metropolitan statistical area in more than one
3013 state, the business entity:
3014 (i) shall qualify for tax credits for a taxable year beginning on or after January 1, 1997,
3015 but beginning before December 31, 1997;
3016 (ii) may claim a tax credit as described in Subsection (4)(a) in a taxable year beginning
3017 on or after January 1, 1997, but beginning before December 31, 1997; and
3018 (iii) may qualify for tax credits for any taxable year beginning on or after January 1,
3019 1998, if the county is designated as an enterprise zone in accordance with this part.
3020 (b) If a business entity claims a tax credit under Subsection (4)(a)(ii), the business
3021 entity:
3022 (i) may claim the tax credit by filing for the taxable year beginning on or after January
3023 1, 1997, but beginning before December 31, 1997:
3024 [
3025 (A) a return under Title 59, Chapter 7, Corporate Franchise and Income Taxes;
3026 (B) an amended [
3027 Franchise and Income Taxes;
3028 (C) a [
3029 Individual Income Tax Act; or
3030 (D) an amended [
3031 10, Individual Income Tax Act; and
3032 (ii) may carry forward the tax credit to a taxable year beginning on or after January 1,
3033 1998, in accordance with Subsection (3).
3034 (5) The tax credits under Subsections (1)(a) through (g) may not be claimed by a
3035 business entity engaged in retail trade or by a public utilities business.
3036 (6) A business entity may not claim or carry forward a tax credit available under this
3037 part for a taxable year during which the business entity has claimed the targeted business
3038 income tax credit available under Section 63-38f-503 .
3039 Section 49. Section 63-38f-501 is amended to read:
3040 63-38f-501. Definitions.
3041 As used in this part:
3042 (1) "Allocated cap amount" means the total amount of the targeted business income tax
3043 credit that a business applicant is allowed to claim for a taxable year that represents a pro rata
3044 share of the total amount of $300,000 for each fiscal year allowed under Subsection
3045 63-38f-503 (2).
3046 (2) "Business applicant" means a business that:
3047 (a) is a:
3048 (i) claimant;
3049 (ii) estate; or
3050 (iii) trust; and
3051 (b) meets the criteria established in Section 63-38f-502 .
3052 (3) (a) Except as provided in Subsection (3)(b), "claimant" means a resident or
3053 nonresident person.
3054 (b) "Claimant" does not include an estate or trust.
3055 [
3056 the following criteria in addition to the normal operations of the business applicant:
3057 (a) substantial new employment;
3058 (b) new capital development; or
3059 (c) a combination of both Subsections [
3060 [
3061 the office determines a business applicant is eligible for a targeted business income tax credit
3062 for each community investment project.
3063 [
3064 designated as an enterprise zone by the office under Part 4, Enterprise Zone Act.
3065 (7) "Estate" means a nonresident estate or a resident estate.
3066 [
3067 (a) designated by the governing authority of the county or municipal applicant as the
3068 local zone administrator in an enterprise zone application; and
3069 (b) approved by the office as the local zone administrator.
3070 (9) "Refundable tax credit" or "tax credit" means a tax credit that a claimant, estate, or
3071 trust may claim:
3072 (i) as provided by statute; and
3073 (ii) regardless of whether, for the taxable year for which the claimant, estate, or trust
3074 claims the tax credit, the claimant, estate, or trust has a tax liability under:
3075 (A) Title 59, Chapter 7, Corporate Franchise and Income Taxes; or
3076 (B) Title 59, Chapter 10, Individual Income Tax Act.
3077 [
3078 credit available under Section 63-38f-503 .
3079 [
3080 provided annually to the business applicant by the office that complies with the requirements of
3081 Subsection 63-38f-503 (8).
3082 (12) "Trust" means a nonresident trust or a resident trust.
3083 Section 50. Section 63-38f-502 is amended to read:
3084 63-38f-502. Application for targeted business income tax credits.
3085 (1) (a) For taxable years beginning on or after January 1, 2002, a business applicant
3086 may elect to claim a targeted business income tax credit available under Section 63-38f-503 if
3087 the business applicant:
3088 (i) is located in:
3089 (A) an enterprise zone; and
3090 (B) a county with:
3091 (I) a population of less than 25,000; and
3092 (II) an unemployment rate that for six months or more of each calendar year is at least
3093 one percentage point higher than the state average;
3094 (ii) meets the requirements of Section 63-38f-412 ;
3095 (iii) provides:
3096 (A) a community investment project within the enterprise zone; and
3097 (B) a portion of the community investment project during each taxable year for which
3098 the business applicant claims the targeted business tax incentive; and
3099 (iv) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, is
3100 not engaged in the following, as defined by the State Tax Commission by rule:
3101 (A) construction;
3102 (B) retail trade; or
3103 (C) public utility activities.
3104 (b) For a taxable year for which a business applicant claims a targeted business income
3105 tax credit available under this part, the business applicant may not claim or carry forward a tax
3106 credit available under Section 63-38f-413 , 59-7-610 , or [
3107 (2) (a) A business applicant seeking to claim a targeted business income tax credit
3108 under this part shall file an application as provided in Subsection (2)(b) with the local zone
3109 administrator by no later than June 1 of the year in which the business applicant is seeking to
3110 claim a targeted business income tax credit.
3111 (b) The application described in Subsection (2)(a) shall include:
3112 (i) any documentation required by the local zone administrator to demonstrate that the
3113 business applicant meets the requirements of Subsection (1);
3114 (ii) a plan developed by the business applicant that outlines:
3115 (A) if the community investment project includes substantial new employment, the
3116 projected number and anticipated wage level of the jobs that the business applicant plans to
3117 create as the basis for qualifying for a targeted business income tax credit;
3118 (B) if the community investment project includes new capital development, a
3119 description of the capital development the business applicant plans to make as the basis for
3120 qualifying for a targeted business income tax credit; and
3121 (C) a description of how the business applicant's plan coordinates with:
3122 (I) the goals of the enterprise zone in which the business applicant is providing a
3123 community investment project; and
3124 (II) the overall economic development goals of the county or municipality in which the
3125 business applicant is providing a community investment project; and
3126 (iii) any additional information required by the local zone administrator.
3127 (3) (a) The local zone administrator shall:
3128 (i) evaluate an application filed under Subsection (2); and
3129 (ii) determine whether the business applicant is eligible for a targeted business income
3130 tax credit.
3131 (b) If the local zone administrator determines that the business applicant is eligible for
3132 a targeted business income tax credit, the local zone administrator shall:
3133 (i) certify that the business applicant is eligible for the targeted business income tax
3134 credit;
3135 (ii) structure the targeted business income tax credit for the business applicant in
3136 accordance with Section 63-38f-503 ; and
3137 (iii) monitor a business applicant to ensure compliance with this section.
3138 (4) A local zone administrator shall report to the office by no later than June 30 of each
3139 year:
3140 (a) (i) any application approved by the local zone administrator during the last fiscal
3141 year; and
3142 (ii) the information established in Subsections 63-38f-503 (4)(a) through (d) for each
3143 new business applicant; and
3144 (b) (i) the status of any existing business applicants that the local zone administrator
3145 monitors; and
3146 (ii) any information required by the office to determine the status of an existing
3147 business applicant.
3148 (5) (a) By July 15 of each year, the department shall notify the local zone administrator
3149 of the allocated cap amount that each business applicant that the local zone administrator
3150 monitors is eligible to claim.
3151 (b) By September 15 of each year, the local zone administrator shall notify, in writing,
3152 each business applicant that the local zone administrator monitors of the allocated cap amount
3153 determined by the office under Subsection (5)(a) that the business applicant is eligible to claim
3154 for a taxable year.
3155 Section 51. Section 63-38f-503 is amended to read:
3156 63-38f-503. Targeted business income tax credit structure -- Duties of the local
3157 zone administrator -- Duties of the State Tax Commission.
3158 (1) For taxable years beginning on or after January 1, 2002, a business applicant that is
3159 certified under Subsection 63-38f-502 (3) and issued a targeted business tax credit eligibility
3160 form by the office under Subsection (8) may claim a refundable [
3161 (a) against the business applicant's tax liability under:
3162 (i) Title 59, [
3163 and Income Taxes; or
3164 (ii) Title 59, [
3165 Individual Income Tax Act; and
3166 (b) subject to requirements and limitations provided by this part.
3167 (2) The total amount of the targeted business income tax credits allowed under this part
3168 for all business applicants may not exceed $300,000 in any fiscal year.
3169 (3) (a) A targeted business income tax credit allowed under this part for each
3170 community investment project provided by a business applicant may not:
3171 (i) be claimed by a business applicant for more than seven consecutive taxable years
3172 from the date the business applicant first qualifies for a targeted business income tax credit on
3173 the basis of a community investment project;
3174 (ii) be carried forward or carried back;
3175 (iii) exceed $100,000 in total amount for the community investment project period
3176 during which the business applicant is eligible to claim a targeted business income tax credit;
3177 or
3178 (iv) exceed in any year that the targeted business income tax credit is claimed the lesser
3179 of:
3180 (A) 50% of the maximum amount allowed by the local zone administrator; or
3181 (B) the allocated cap amount determined by the office under Subsection 63-38f-502 (5).
3182 (b) A business applicant may apply to the local zone administrator to claim a targeted
3183 business income tax credit allowed under this part for each community investment project
3184 provided by the business applicant as the basis for its eligibility for a targeted business income
3185 tax credit.
3186 (4) Subject to other provisions of this section, the local zone administrator shall
3187 establish for each business applicant that qualifies for a targeted business income tax credit:
3188 (a) criteria for maintaining eligibility for the targeted business income tax credit that
3189 are reasonably related to the community investment project that is the basis for the business
3190 applicant's targeted business income tax credit;
3191 (b) the maximum amount of the targeted business income tax credit the business
3192 applicant is allowed for the community investment project period;
3193 (c) the time period over which the total amount of the targeted business income tax
3194 credit may be claimed;
3195 (d) the maximum amount of the targeted business income tax credit that the business
3196 applicant will be allowed to claim each year; and
3197 (e) requirements for a business applicant to report to the local zone administrator
3198 specifying:
3199 (i) the frequency of the business applicant's reports to the local zone administrator,
3200 which shall be made at least quarterly; and
3201 (ii) the information needed by the local zone administrator to monitor the business
3202 applicant's compliance with this Subsection (4) or Section 63-38f-502 that shall be included in
3203 the report.
3204 (5) In accordance with Subsection (4)(e), a business applicant allowed a targeted
3205 business income tax credit under this part shall report to the local zone administrator.
3206 (6) The amount of a targeted business income tax credit that a business applicant is
3207 allowed to claim for a taxable year shall be reduced by 25% for each quarter in which the office
3208 or the local zone administrator determines that the business applicant has failed to comply with
3209 a requirement of Subsection (3) or Section 63-38f-502 .
3210 (7) The office or local zone administrator may audit a business applicant to ensure:
3211 (a) eligibility for a targeted business income tax credit; or
3212 (b) compliance with Subsection (3) or Section 63-38f-502 .
3213 (8) The office shall issue a targeted business income tax credit eligibility form in a
3214 form jointly developed by the State Tax Commission and the office no later than 30 days after
3215 the last day of the business applicant's taxable year showing:
3216 (a) the maximum amount of the targeted business income tax credit that the business
3217 applicant is eligible for that taxable year;
3218 (b) any reductions in the maximum amount of the targeted business income tax credit
3219 because of failure to comply with a requirement of Subsection (3) or Section 63-38f-502 ;
3220 (c) the allocated cap amount that the business applicant may claim for that taxable
3221 year; and
3222 (d) the actual amount of the targeted business income tax credit that the business
3223 applicant may claim for that taxable year.
3224 (9) (a) A business applicant shall retain the targeted business income tax credit
3225 eligibility form provided by the office under this Subsection (9).
3226 (b) The State Tax Commission may audit a business applicant to ensure:
3227 (i) eligibility for a targeted business income tax credit; or
3228 (ii) compliance with Subsection (3) or Section 63-38f-502 .
3229 Section 52. Section 63-38f-1102 is amended to read:
3230 63-38f-1102. Definitions.
3231 As used in this part:
3232 (1) "Composting" means the controlled decay of landscape waste or sewage sludge and
3233 organic industrial waste, or a mixture of these, by the action of bacteria, fungi, molds, and other
3234 organisms.
3235 (2) "Postconsumer waste material" means any product generated by a business or
3236 consumer that has served its intended end use, and that has been separated from solid waste for
3237 the purposes of collection, recycling, and disposition and that does not include secondary waste
3238 material.
3239 (3) (a) "Recovered materials" means waste materials and by-products that have been
3240 recovered or diverted from solid waste.
3241 (b) "Recovered materials" does not include those materials and by-products generated
3242 from, and commonly reused within, an original manufacturing process.
3243 (4) (a) "Recycling" means the diversion of materials from the solid waste stream and
3244 the beneficial use of the materials and includes a series of activities by which materials that
3245 would become or otherwise remain waste are diverted from the waste stream for collection,
3246 separation, and processing, and are used as raw materials or feedstocks in lieu of or in addition
3247 to virgin materials in the manufacture of goods sold or distributed in commerce or the reuse of
3248 the materials as substitutes for goods made from virgin materials.
3249 (b) "Recycling" does not include burning municipal solid waste for energy recovery.
3250 (5) "Recycling market development zone" or "zone" means an area designated by the
3251 office as meeting the requirements of this part.
3252 (6) (a) "Secondary waste material" means industrial by-products that go to disposal
3253 facilities and waste generated after completion of a manufacturing process.
3254 (b) "Secondary waste material" does not include internally generated scrap commonly
3255 returned to industrial or manufacturing processes, such as home scrap and mill broke.
3256 (7) "State tax incentives," "tax incentives," or "tax benefits" means the nonrefundable
3257 tax credits available under Sections 59-7-608 and [
3258 Section 53. Section 63-38f-1110 is amended to read:
3259 63-38f-1110. Recycling market development zones credit.
3260 For a taxpayer within a recycling market development zone, there are allowed the
3261 nonrefundable credits against tax as provided by Sections 59-7-610 and [
3262 59-10-1007 .
3263 Section 54. Section 63-38f-1203 is amended to read:
3264 63-38f-1203. Definitions.
3265 As used in this part:
3266 (1) "Board" means the Utah Capital Investment Board.
3267 (2) "Certificate" means a contract between the board and a designated investor under
3268 which a contingent tax credit is available and issued to the designated investor.
3269 (3) (a) Except as provided in Subsection (3)(b), "claimant" means a resident or
3270 nonresident person.
3271 (b) "Claimant" does not include an estate or trust.
3272 [
3273 purchase from the board certificates presented to the board for redemption by a designated
3274 investor. Each commitment shall state the dollar amount of contingent tax credits that the
3275 designated purchaser has committed to purchase from the board.
3276 [
3277 that is available against tax liabilities imposed by Title 59, Chapter 7, Corporate Franchise and
3278 Income Taxes, [
3279 in the redemption reserve and the board has not exercised other options for redemption under
3280 Subsection 63-38f-1220 (3)(b).
3281 [
3282 Section 63-38f-1207 .
3283 [
3284 (a) a person who purchases an equity interest in the Utah fund of funds; or
3285 (b) a transferee of a certificate or contingent tax credit.
3286 [
3287 (a) a person who enters into a written undertaking with the board to purchase a
3288 commitment; or
3289 (b) a transferee who assumes the obligations to make the purchase described in the
3290 commitment.
3291 (9) "Estate" means a nonresident estate or a resident estate.
3292 [
3293 corporation, association, organization, business trust, estate, trust, or any other legal or
3294 commercial entity.
3295 [
3296 facilitate the cash redemption of certificates.
3297 (12) "Taxpayer" means a taxpayer:
3298 (a) of an investor; and
3299 (b) if that taxpayer is a:
3300 (i) claimant;
3301 (ii) estate; or
3302 (iii) trust.
3303 (13) "Trust" means a nonresident trust or a resident trust.
3304 [
3305 company established under Section 63-38f-1213 in which a designated investor purchases an
3306 equity interest.
3307 Section 55. Section 63-55-209 is amended to read:
3308 63-55-209. Repeal dates, Title 9.
3309 (1) Title 9, Chapter 1, Part 8, Commission on National and Community Service Act, is
3310 repealed July 1, 2014.
3311 (2) Title 9, Chapter 2, Part 4, Enterprise Zone Act, is repealed July 1, 2008.
3312 (3) (a) Title 9, Chapter 2, Part 16, Recycling Market Development Zone Act, is
3313 repealed July 1, 2010.
3314 (b) Sections 59-7-610 and [
3315 persons in recycling market development zones, are repealed for taxable years beginning on or
3316 after January 1, 2011.
3317 (c) Notwithstanding Subsection (3)(b), a person may not claim a tax credit under
3318 Section 59-7-610 or [
3319 (i) for the purchase price of machinery or equipment described in Section 59-7-610 or
3320 [
3321 or
3322 (ii) for an expenditure described in Subsection 59-7-610 (1)(b) or [
3323 59-10-1007 (1)(b), if the expenditure is made on or after July 1, 2010.
3324 (d) Notwithstanding Subsections (3)(b) and (c), a person may carry forward a tax credit
3325 in accordance with Section 59-7-610 or [
3326 (i) the person is entitled to a tax credit under Section 59-7-610 or [
3327 59-10-1007 ; and
3328 (ii) (A) for the purchase price of machinery or equipment described in Section
3329 59-7-610 or [
3330 June 30, 2010; or
3331 (B) for an expenditure described in Subsection 59-7-610 (1)(b) or [
3332 59-10-1007 (1)(b), the expenditure is made on or before June 30, 2010.
3333 (4) Title 9, Chapter 2, Part 19, Utah Venture Capital Enhancement Act, is repealed July
3334 1, 2008.
3335 (5) Title 9, Chapter 3, Part 3, Heber Valley Historic Railroad Authority, is repealed
3336 July 1, 2009.
3337 (6) Title 9, Chapter 4, Part 9, Utah Housing Corporation Act, is repealed July 1, 2006.
3338 Section 56. Repealer.
3339 This bill repeals:
3340 Section 59-10-107, Credit for tax paid by estate or trust to another state.
3341 Section 59-10-128, Tax credit -- Items using cleaner burning fuels.
3342 Section 59-10-209, Adjustments to state taxable income of resident estates or trusts
3343 and beneficiaries.
3344 Section 57. Retrospective operation.
3345 This bill has retrospective operation for taxable years beginning on or after January 1,
3346 2006.
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