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MINUTES OF THE

HOUSE REVENUE AND TAXATION

STANDING COMMITTEE

Room W135 - West Office Building, State Capitol Complex

                     January 24, 2006

MEMBERS PRESENT:     Rep. Wayne A. Harper, Chair
                Rep. Glen A. Donnelson, Vice Chair                 
                Rep. Sheryl L. Allen
                Rep. Tim M. Cosgrove
                 Rep. Craig A. Frank                      
                 Rep. Fred R. Hunsaker
                Rep. Bradley G. Last
                Rep. Rebecca Lockhart
                Rep. Roz McGee
                 Rep. Carol Spackman Moss                
                 Rep. Joseph G. Murray                 
                 Rep. Merlynn T. Newbold
                Rep. Patrick L. Painter
                Rep. Ross I. Romero                         
                Rep. Gordon E. Snow
                
STAFF:            Bryant Howe, Assistant Director
                Rosemary Young, Secretary
                    
Note:    A list of visitors and a copy of handouts are filed with the committee minutes.

Chair Harper called the meeting to order at 2:13 p.m.

MOTION:    Rep. Last moved to approve the minutes of the January 20, 2006 meeting. The motion passed unanimously with Rep. Allen, Rep. Frank, Rep. Lockhart, Rep. McGee, and Rep. Donnelson absent for the vote.

H.B. 265    Due Date for Filing Electronically Filed Withholding Returns (Rep. M. Newbold)

Rep. Newbold introduced the bill and explained it to the committee assisted by Commissioner Bruce Johnson, Utah State Tax Commission.

MOTION:    Rep. Hunsaker moved to transmit the bill with a favorable recommendation. The motion passed unanimously with Rep. Allen, Rep. Frank, Rep. Lockhart, and Rep. Donnelson absent for the vote.

MOTION:    Rep. Newbold moved that H.B. 265 be placed on the consent calendar. The motion passed unanimously with Rep. Allen, Rep. Frank, Rep. Lockhart, and Rep. Donnelson absent for the vote.     

H.B. 53    Apportionment of Business Income to Utah (Rep. W. Harper)

MOTION:    Rep. Harper moved to amend the bill as follows:

1.    Page 1, Lines 19 through 22 :    

             19          .    addresses a taxpayer's ability to
  make or       revoke an election to use a particular method for

             20      apportioning business income to the state;
             21          .    addresses
{  the apportionment of business income if an amount is carried forward or

             22      carried back   }
  a taxpayer's ability to carry forward or carry back an amount under the Corporate Franchise and Income Taxes chapter       ;


2.    Page 3, Lines 62 through 85 :    

             62          (b) (i) If a taxpayer makes the election described in Subsection (3)(a), the
  :

    (A) election shall be made on or before the due date for filing the return for the taxable year, including extensions; and
    (B)  
taxpayer may

             63      not revoke the election for [a period of five taxable years] that taxable year.
             64          (ii)
{  Subject to Subsection (3)(b)(i), if for a taxable year a taxpayer carries forward or

             65      carries back any amount under this chapter, the taxpayer shall calculate the fraction for
             66      apportioning business income under this section using the same method described in
             67      Subsection (2) that the taxpayer used for the taxable year that the taxpayer earned or incurred
             68      the amount that is carried forward or carried back.   }
  If a taxpayer is allowed to carry forward or carry back an amount under any other provision of this chapter, the taxpayer may carry forward or carry back that amount only if the taxpayer's business income for the taxable year to which the amount is carried forward or carried back is calculated using the same method described in Subsection (2) that the taxpayer uses to calculate the amount that the taxpayer seeks to carry forward or carry back.      

             69          
{  (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the

             70      commission may make rules providing procedures for a taxpayer to make the election
             71      described in Subsection (3)(a).   }
             72          (4) (a) For purposes of Subsection (2) and subject to Subsection (4)(b), for taxable

             73      years beginning on or after January 1, 2007, a taxpayer may elect to calculate the fraction for
             74      apportioning business income under this section in accordance with the method described in
             75      Subsection (2)(c).
             76          (b) (i) If a taxpayer makes the election described in Subsection (4)(a), the
  :

    (A) election shall be made on or before the due date for filing the return for the taxable year, including extensions; and
    (B)  
taxpayer may

             77      not revoke the election for a period of five taxable years.
             78          (ii)
{  Subject to Subsection (4)(b)(i), if for a taxable year a taxpayer carries forward or

             79      carries back any amount under this chapter, the taxpayer shall calculate the fraction for
             80      apportioning business income under this section using the same method described in
             81      Subsection (2) that the taxpayer used for the taxable year that the taxpayer earned or incurred
             82      the amount that is carried forward or carried back.   }
  If a taxpayer is allowed to carry forward or carry back an amount under any other provision of this chapter, the taxpayer may carry forward or carry back that amount only if the taxpayer's business income for the taxable year to which the amount is carried forward or carried back is calculated using the same method described in Subsection (2) that the taxpayer uses to calculate the amount that the taxpayer seeks to carry forward or carry back.      

             83          
{  (c)   }       (5)       In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the

             84      commission may make rules
  :

    (a)  
providing procedures for a taxpayer to make the election

             85      described in
  :

    (i) Subsection (3)(a); or
    (ii)  
Subsection (4)(a)      {  .   }       ; or

    (b) to administer this section.  


The motion to amend passed unanimously with Rep. Allen, Rep. Frank, and Rep. Lockhart absent for the vote.

Rep. Harper introduced the amended bill and explained it to the committee assisted by Sen. Bramble. Mike Jerman, Utah Taxpayers Association; Commissioner Bruce Johnson, Utah State

Tax Commission; and Clint Ensign, Sinclair Oil, spoke in favor of the bill. Sarah Wilhelm, Voices For Utah Children, spoke against the bill.

MOTION:    Rep. Allen moved to transmit the amended bill with a favorable recommendation. The motion passed with Rep. McGee and Rep. Romero voting in opposition and Rep. Hunsaker and Rep. Newbold absent for the vote.

H.J.R. 1    Resolution Regarding Property Tax on Personal Property (Rep. J. Dougall)

The resolution was not considered in this meeting.

S.B. 30    Sales and Use Tax Exemption for Semiconductor Fabricating, Processing, Research, or Development Materials (Sen. C. Bramble) (Rep. W. Harper)

Sen. Bramble introduced the bill and explained it to the committee. Sen. Bramble and Rep. Lockhart declared a conflict of interest.

MOTION:    Rep. Snow moved to transmit the bill with a favorable recommendation. The motion passed unanimously with Rep. Hunsaker and Rep. Harper absent for the vote.

S.B. 136    Tax on Insurance Premiums (Sen. C. Bramble) (Rep. W. Harper)

Sen. Bramble introduced the bill and explained it to the committee.

MOTION:    Rep. Frank moved to transmit the bill with a favorable recommendation. The motion passed unanimously with Rep. Hunsaker and Rep. Harper absent for the vote.

S.B. 29    Sales and Use Tax Exemption - Telecommunications (Sen. C. Bramble) (Rep. J. Dougall)

The bill was not considered at this meeting.

MOTION:    Rep. Newbold moved to adjourn. The motion passed unanimously with Rep. Hunsaker and Rep. Harper absent for the vote.

The Vice Chair adjourned the meeting at 2:57 p.m.





                            __________________________
                            Rep. Wayne A. Harper, Chair