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[Introduced][Status][Bill Documents][Fiscal Note] [Bills Directory]
H.B. 359 Enrolled
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7 LONG TITLE
8 General Description:
9 This bill amends the Corporate Franchise and Income Taxes chapter, the Individual
10 Income Tax Act, the Sales and Use Tax Act, the Transportation Code, and related
11 provisions to address the income taxation of individuals, estates, and trusts, including
12 real estate investment trusts, a change in a state sales and use tax rate, a sales and use
13 tax exemption, and the expenditure of certain state sales and use tax revenues.
14 Highlighted Provisions:
15 This bill:
16 . defines terms;
17 . addresses the income taxation of a real estate investment trust or income from a real
18 estate investment trust;
19 . repeals provisions imposing an individual income tax on the basis of graduated
20 brackets and rates;
21 . provides that an individual income tax is imposed on the basis of a single tax rate,
22 including:
23 . modifying and repealing definitions;
24 . modifying additions to, subtractions from, and adjustments to adjusted gross
25 income;
26 . addressing the taxation of a nonresident individual or part-year resident
27 individual; and
28 . addressing provisions relating to the determination and reporting of income tax
29 liability and information;
30 . addresses the apportionment of business income for purposes of the individual
31 income tax;
32 . modifies the income taxation of estates and trusts, including:
33 . providing definitions;
34 . providing that the tax is calculated on the basis of unadjusted income;
35 . modifying additions to, subtractions from, and adjustments to unadjusted
36 income;
37 . addressing the taxation of a nonresident estate or trust; and
38 . addressing provisions relating to the determination and reporting of income tax
39 liability and information;
40 . addresses the taxation of pass-through entities, including:
41 . providing definitions; and
42 . renumbering and amending provisions relating to pass-through entities;
43 . renumbers and amends provisions relating to tax credits, including tax credits for:
44 . a taxpayer;
45 . an investment in the Utah Educational Savings Plan Trust; or
46 . retirement income;
47 . provides nonrefundable tax credits for:
48 . a trust or estate;
49 . a contribution to a medical care savings account;
50 . capital gain transactions;
51 . certain amounts paid for insurance under a health benefit plan; or
52 . certain solar projects;
53 . requires the Utah Tax Review Commission to study the solar projects tax credits;
54 . provides that a person may not claim a nonrefundable renewable energy systems tax
55 credit for certain purchases for which the person claims a tax credit for certain solar
56 projects;
57 . modifies the refundable renewable energy tax credit to clarify that an estate or trust
58 may claim the tax credit;
59 . addresses the apportionment of tax credits;
60 . addresses the following relating to a medical care savings account:
61 . taxation;
62 . penalties; and
63 . interest;
64 . amends provisions relating to the taxation of an investment in the Utah Educational
65 Savings Plan Trust;
66 . renumbers and amends the individual income tax contribution provisions;
67 . addresses the administration of income tax contributions;
68 . grants rulemaking authority to:
69 . the State Tax Commission; and
70 . the Insurance Department;
71 . increases a state sales and use tax rate from 4.65% to 4.70%;
72 . provides that a .025% tax rate on certain sales and use transactions shall be
73 deposited into the Critical Highway Needs Fund and the Transportation Investment
74 Fund of 2005;
75 . provides that a .025% tax rate on certain sales and use transactions shall be
76 deposited into the Transportation Fund to be expended to address chokepoints in
77 construction management;
78 . extends the expiration date for certain sales and use tax exemptions;
79 . provides a sales and use tax exemption for sales of fuel to a common carrier that is a
80 railroad for use in a locomotive engine;
81 . provides that state sales and use tax revenues deposited into the Transportation Fund
82 are not appropriated into the class B and class C roads account;
83 . modifies the statutes creating the Transportation Investment Fund of 2005 and the
84 Critical Highway Needs Fund to address the sources of revenue that may be
85 deposited into the funds; and
86 . makes technical changes.
87 Monies Appropriated in this Bill:
88 None
89 Other Special Clauses:
90 This bill provides effective dates.
91 Utah Code Sections Affected:
92 AMENDS:
93 9-4-802, as last amended by Laws of Utah 2003, Chapter 132
94 9-4-803, as last amended by Laws of Utah 2003, Chapter 132
95 23-14-13, as last amended by Laws of Utah 1995, Chapter 211
96 23-14-14.1, as enacted by Laws of Utah 2003, Chapter 162
97 26-18a-3, as last amended by Laws of Utah 1997, Chapter 1
98 26-18a-4, as last amended by Laws of Utah 1997, Chapter 1
99 26-48-102, as enacted by Laws of Utah 2006, Chapter 280
100 31A-32a-101, as enacted by Laws of Utah 1999, Chapter 131
101 31A-32a-103, as enacted by Laws of Utah 1999, Chapter 131
102 31A-32a-104, as enacted by Laws of Utah 1999, Chapter 131
103 31A-32a-105, as enacted by Laws of Utah 1999, Chapter 131
104 31A-32a-106, as last amended by Laws of Utah 2001, Chapter 53
105 31A-32a-107, as enacted by Laws of Utah 1999, Chapter 131
106 48-2c-117, as enacted by Laws of Utah 2001, Chapter 260
107 53B-8a-106, as last amended by Laws of Utah 2007, Chapter 100
108 59-7-101, as last amended by Laws of Utah 2004, Chapter 54
109 59-7-105, as last amended by Laws of Utah 2007, Chapter 100
110 59-7-106, as last amended by Laws of Utah 2007, Chapter 100
111 59-7-116.5, as enacted by Laws of Utah 1995, Chapter 311
112 59-7-402, as last amended by Laws of Utah 2004, Chapter 54
113 59-7-614, as repealed and reenacted by Laws of Utah 2007, Chapter 288
114 59-10-103, as last amended by Laws of Utah 2006, Fourth Special Session, Chapter 2
115 59-10-104, as last amended by Laws of Utah 2007, Chapter 288
116 59-10-104.1, as last amended by Laws of Utah 2006, Fourth Special Session, Chapter 2
117 59-10-110, as renumbered and amended by Laws of Utah 1987, Chapter 2
118 59-10-114, as last amended by Laws of Utah 2007, Chapter 100
119 59-10-115, as last amended by Laws of Utah 2006, Fourth Special Session, Chapter 2
120 59-10-116, as last amended by Laws of Utah 2006, Fourth Special Session, Chapter 2
121 59-10-117, as last amended by Laws of Utah 2006, Fourth Special Session, Chapter 2
122 59-10-118, as last amended by Laws of Utah 1995, Chapter 311
123 59-10-119, as renumbered and amended by Laws of Utah 1987, Chapter 2
124 59-10-120, as renumbered and amended by Laws of Utah 1987, Chapter 2
125 59-10-121, as renumbered and amended by Laws of Utah 1987, Chapter 2
126 59-10-122, as renumbered and amended by Laws of Utah 1987, Chapter 2
127 59-10-123, as renumbered and amended by Laws of Utah 1987, Chapter 2
128 59-10-124, as renumbered and amended by Laws of Utah 1987, Chapter 2
129 59-10-125, as renumbered and amended by Laws of Utah 1987, Chapter 2
130 59-10-126, as last amended by Laws of Utah 1995, Chapter 311
131 59-10-201, as last amended by Laws of Utah 2007, Chapter 100
132 59-10-201.1, as last amended by Laws of Utah 2006, Chapter 223
133 59-10-202, as last amended by Laws of Utah 2007, Chapter 100
134 59-10-204, as last amended by Laws of Utah 2006, Chapter 223
135 59-10-205, as last amended by Laws of Utah 2006, Chapter 223
136 59-10-207, as last amended by Laws of Utah 2006, Chapter 223
137 59-10-209.1, as enacted by Laws of Utah 2006, Chapter 223
138 59-10-210, as last amended by Laws of Utah 2006, Chapter 223
139 59-10-507, as last amended by Laws of Utah 2003, Chapter 198
140 59-10-1014, as last amended by Laws of Utah 2007, Chapters 122 and 288
141 59-10-1106, as enacted by Laws of Utah 2007, Chapter 288
142 59-12-103, as last amended by Laws of Utah 2007, Chapters 9, 101, 126, 206, and 288
143 59-12-104, as last amended by Laws of Utah 2007, Chapters 76, 195, 214, 224, 288,
144 295, and 329
145 72-2-107, as last amended by Laws of Utah 2007, Chapter 126
146 72-2-124, as last amended by Laws of Utah 2006, Chapters 11 and 135
147 72-2-125, as enacted by Laws of Utah 2007, Chapter 206
148 ENACTS:
149 59-7-614.2, Utah Code Annotated 1953
150 59-10-1020, Utah Code Annotated 1953
151 59-10-1021, Utah Code Annotated 1953
152 59-10-1022, Utah Code Annotated 1953
153 59-10-1023, Utah Code Annotated 1953
154 59-10-1024, Utah Code Annotated 1953
155 59-10-1301, Utah Code Annotated 1953
156 59-10-1302, Utah Code Annotated 1953
157 59-10-1303, Utah Code Annotated 1953
158 59-10-1401, Utah Code Annotated 1953
159 59-10-1402, Utah Code Annotated 1953
160 RENUMBERS AND AMENDS:
161 59-10-1002.1, (Renumbered from 59-10-1016, as renumbered and amended by Laws of
162 Utah 2006, Chapter 223)
163 59-10-1002.2, (Renumbered from 59-10-1206.9, as enacted by Laws of Utah 2007,
164 Chapter 288)
165 59-10-1017, (Renumbered from 59-10-1206.1, as enacted by Laws of Utah 2007,
166 Chapter 100)
167 59-10-1018, (Renumbered from 59-10-1206.2, as enacted by Laws of Utah 2007,
168 Chapter 288)
169 59-10-1019, (Renumbered from 59-10-1206.3, as enacted by Laws of Utah 2007,
170 Chapter 288)
171 59-10-1304, (Renumbered from 59-10-551, as last amended by Laws of Utah 2006,
172 Chapter 280)
173 59-10-1305, (Renumbered from 59-10-530, as last amended by Laws of Utah 1997,
174 Chapter 12)
175 59-10-1306, (Renumbered from 59-10-530.5, as last amended by Laws of Utah 2003,
176 Chapter 132)
177 59-10-1307, (Renumbered from 59-10-549, as last amended by Laws of Utah 2005,
178 Chapter 208)
179 59-10-1308, (Renumbered from 59-10-550, as last amended by Laws of Utah 1997,
180 Chapters 1 and 12)
181 59-10-1309, (Renumbered from 59-10-550.1, as enacted by Laws of Utah 2003,
182 Chapter 162)
183 59-10-1310, (Renumbered from 59-10-550.2, as enacted by Laws of Utah 2006,
184 Chapter 280)
185 59-10-1311, (Renumbered from 59-10-547, as last amended by Laws of Utah 1998,
186 Chapter 269)
187 59-10-1312, (Renumbered from 59-10-548, as last amended by Laws of Utah 2002,
188 Chapters 107 and 256)
189 59-10-1403, (Renumbered from 59-10-301, as renumbered and amended by Laws of
190 Utah 1987, Chapter 2)
191 59-10-1404, (Renumbered from 59-10-302, as renumbered and amended by Laws of
192 Utah 1987, Chapter 2)
193 59-10-1405, (Renumbered from 59-10-303, as last amended by Laws of Utah 2006,
194 Fourth Special Session, Chapter 2)
195 REPEALS:
196 59-10-206, as last amended by Laws of Utah 1995, Chapter 345
197 59-10-801, as last amended by Laws of Utah 1997, Chapter 159
198 59-10-1201, as enacted by Laws of Utah 2006, Fourth Special Session, Chapter 2
199 59-10-1202, as last amended by Laws of Utah 2007, Chapters 100 and 288
200 59-10-1203, as last amended by Laws of Utah 2007, Chapters 100 and 288
201 59-10-1204, as enacted by Laws of Utah 2006, Fourth Special Session, Chapter 2
202 59-10-1205, as enacted by Laws of Utah 2006, Fourth Special Session, Chapter 2
203 59-10-1206, as enacted by Laws of Utah 2006, Fourth Special Session, Chapter 2
204 59-10-1207, as enacted by Laws of Utah 2006, Fourth Special Session, Chapter 2
205
206 Be it enacted by the Legislature of the state of Utah:
207 Section 1. Section 9-4-802 is amended to read:
208 9-4-802. Purposes of Homeless Coordinating Committee -- Uses of Pamela
209 Atkinson Homeless Trust Account.
210 (1) (a) The Homeless Coordinating Committee shall work to ensure that services
211 provided to the homeless by state agencies, local governments, and private organizations are
212 provided in a cost-effective manner.
213 (b) Programs funded by the committee shall emphasize emergency housing and
214 self-sufficiency, including placement in meaningful employment or occupational training
215 activities and, where needed, special services to meet the unique needs of the homeless who
216 have families with children, or who are mentally ill, disabled, or suffer from other serious
217 challenges to employment and self-sufficiency.
218 (c) The committee may also fund treatment programs to ameliorate the effects of
219 substance abuse or a disability.
220 (2) The committee members designated in Subsection 9-4-801 (2) shall:
221 (a) award contracts funded by the Pamela Atkinson Homeless Trust Account with the
222 advice and input of those designated in Subsection 9-4-801 (3);
223 (b) consider need, diversity of geographic location, coordination with or enhancement
224 of existing services, and the extensive use of volunteers; and
225 (c) give priority for funding to programs that serve the homeless who are mentally ill
226 and who are in families with children.
227 (3) (a) In any fiscal year, no more than 80% of the funds in the Pamela Atkinson
228 Homeless Trust Account may be allocated to organizations that provide services only in Salt
229 Lake, Davis, Weber, and Utah Counties.
230 (b) The committee may:
231 (i) expend up to 3% of its annual appropriation for administrative costs associated with
232 the allocation of funds from the Pamela Atkinson Homeless Trust Account, and up to 2% of its
233 annual appropriation for marketing the account and soliciting donations to the account; and
234 (ii) pay for the initial costs of the State Tax Commission in implementing Section
235 [
236 (4) (a) The committee may not expend, except as provided in Subsection (4)(b), an
237 amount equal to the greater of $50,000 or 20% of the amount donated to the Pamela Atkinson
238 Homeless Trust Account during fiscal year 1988-89.
239 (b) If there are decreases in contributions to the account, the committee may expend
240 funds held in reserve to provide program stability, but the committee shall reimburse the
241 amounts of those expenditures to the reserve fund.
242 (5) The committee shall make an annual report to the Economic Development and
243 Human Resources Appropriations Subcommittee regarding the programs and services funded
244 by contributions to the Pamela Atkinson Homeless Trust Account.
245 (6) The moneys in the Pamela Atkinson Homeless Trust Account shall be invested by
246 the state treasurer according to the procedures and requirements of Title 51, Chapter 7, State
247 Money Management Act, except that all interest or other earnings derived from the fund
248 moneys shall be deposited in the fund.
249 Section 2. Section 9-4-803 is amended to read:
250 9-4-803. Creation of Pamela Atkinson Homeless Trust Account.
251 (1) There is created a restricted account within the General Fund to be known as the
252 Pamela Atkinson Homeless Trust Account.
253 (2) Private contributions received under this section and Section [
254 59-10-1306 shall be deposited into the account to be used only for programs described in
255 Section 9-4-802 .
256 (3) Money shall be appropriated from the account to the State Homeless Coordinating
257 Committee in accordance with the Utah Budgetary Procedures Act.
258 (4) The State Homeless Coordinating Committee may accept transfers, grants, gifts,
259 bequests, or any money made available from any source to implement this part.
260 Section 3. Section 23-14-13 is amended to read:
261 23-14-13. Wildlife Resources Account.
262 (1) The Wildlife Resources Account [
263 General Fund.
264 (2) The following monies shall be deposited into the Wildlife Resources Account:
265 (a) revenue from the sale of licenses, permits, tags, and certificates of registration issued
266 under this title or a rule or proclamation of the Wildlife Board, except as otherwise provided by
267 this title;
268 (b) revenue from the sale, lease, rental, or other granting of rights of real or personal
269 property acquired with revenue specified in Subsection (2)(a);
270 (c) revenue from fines and forfeitures for violations of this title or any rule,
271 proclamation, or order of the Wildlife Board, minus court costs not to exceed the schedule
272 adopted by the Judicial Council;
273 (d) funds appropriated from the General Fund by the Legislature pursuant to Section
274 23-19-39 ;
275 (e) other monies received by the division under any provision of this title, except as
276 otherwise provided by this title; [
277 (f) contributions made in accordance with Section 59-10-1305 ; and
278 [
279 (3) Monies in the Wildlife Resources Account shall be used for the administration of
280 this title.
281 Section 4. Section 23-14-14.1 is amended to read:
282 23-14-14.1. Wolf Depredation and Management Restricted Account -- Interest --
283 Use of contributions and interest.
284 (1) There is created within the General Fund the Wolf Depredation and Management
285 Restricted Account.
286 (2) The account shall be funded by contributions deposited into the Wolf Depredation
287 and Management Restricted Account in accordance with Section [
288 (3) (a) The Wolf Depredation and Management Restricted Account shall earn interest.
289 (b) Interest earned on the Wolf Depredation and Management Restricted Account shall
290 be deposited into the Wolf Depredation and Management Restricted Account.
291 (4) (a) Subject to Subsection (4)(b), contributions and interest deposited into the Wolf
292 Depredation and Management Restricted Account shall be used by the Division of Wildlife
293 Resources for:
294 (i) payments for livestock depredation by wolves; or
295 (ii) wolf management.
296 (b) Contributions and interest deposited into the Wolf Depredation and Management
297 Restricted Account may be used for the purposes described in Subsection (4)(a) only to the
298 extent permitted by federal law.
299 Section 5. Section 26-18a-3 is amended to read:
300 26-18a-3. Purpose of committee.
301 (1) The committee shall work to:
302 (a) provide financial assistance for initial medical expenses of children who need organ
303 transplants;
304 (b) obtain the assistance of volunteer and public service organizations; and
305 (c) fund activities as the committee designates for the purpose of educating the public
306 about the need for organ donors.
307 (2) (a) The committee is responsible for awarding financial assistance funded by the
308 trust account.
309 (b) The financial assistance awarded by the committee under Subsection (1)(a) shall be
310 in the form of interest free loans. The committee may establish terms for repayment of the
311 loans, including a waiver of the requirement to repay any awards if, in the committee's
312 judgment, repayment of the loan would impose an undue financial burden on the recipient.
313 (c) In making financial awards under Subsection (1)(a), the committee shall consider:
314 (i) need;
315 (ii) coordination with or enhancement of existing services or financial assistance,
316 including availability of insurance or other state aid;
317 (iii) the success rate of the particular organ transplant procedure needed by the child;
318 and
319 (iv) the extent of the threat to the child's life without the organ transplant.
320 (3) The committee may only provide the assistance described in this section to children
321 who have resided in Utah, or whose legal guardians have resided in Utah for at least six months
322 prior to the date of assistance under this section.
323 (4) (a) The committee may expend up to 5% of its annual appropriation for
324 administrative costs associated with the allocation of funds from the trust account.
325 (b) The administrative costs shall be used for the costs associated with staffing the
326 committee and for State Tax Commission costs in implementing Section [
327 59-10-1308 .
328 (5) The committee shall make an annual report to the Health and Human Services
329 Appropriations Subcommittee regarding the programs and services funded by contributions to
330 the trust account.
331 Section 6. Section 26-18a-4 is amended to read:
332 26-18a-4. Creation of Kurt Oscarson Children's Organ Transplant Trust
333 Account.
334 (1) There is created a restricted account within the General Fund pursuant to Section
335 51-5-4 known as the Kurt Oscarson Children's Organ Transplant Trust Account. Private
336 contributions received under this section and Section [
337 deposited into the trust account to be used only for the programs and purposes described in
338 Section 26-18a-3 .
339 (2) Money shall be appropriated from the trust account to the committee in accordance
340 with Title 63, Chapter 38, Budgetary Procedures Act.
341 (3) In addition to funds received under Section [
342 may accept transfers, grants, gifts, bequests, or any money made available from any source to
343 implement this chapter.
344 Section 7. Section 26-48-102 is amended to read:
345 26-48-102. Cat and Dog Community Spay and Neuter Program Restricted
346 Account -- Interest -- Use of contributions and interest.
347 (1) There is created within the General Fund the Cat and Dog Community Spay and
348 Neuter Program Restricted Account.
349 (2) The account shall be funded by contributions deposited into the Cat and Dog
350 Community Spay and Neuter Program Restricted Account in accordance with Section
351 [
352 (3) (a) The Cat and Dog Community Spay and Neuter Program Restricted Account
353 shall earn interest.
354 (b) Interest earned on the Cat and Dog Community Spay and Neuter Program
355 Restricted Account shall be deposited into the Cat and Dog Community Spay and Neuter
356 Program Restricted Account.
357 (4) The department shall distribute contributions and interest deposited into the Cat and
358 Dog Community Spay and Neuter Program Restricted Account to one or more organizations
359 that:
360 (a) are exempt from federal income taxation under Section 501(c)(3), Internal Revenue
361 Code;
362 (b) operate a mobile spay and neuter clinic for cats and dogs;
363 (c) provide annual spay and neuter services at the mobile spay and neuter clinic
364 described in Subsection (4)(b):
365 (i) to one or more communities in at least 20 counties in the state; and
366 (ii) by veterinarians who are licensed by Title 58, Chapter 28, Veterinary Practice Act;
367 and
368 (d) (i) spay and neuter cats and dogs owned by persons having low incomes; and
369 (ii) have established written guidelines for determining what constitutes a person having
370 a low income in accordance with any rules made by the department as authorized by Subsection
371 (5)(c).
372 (5) (a) An organization described in Subsection (4) may apply to the department to
373 receive a distribution in accordance with Subsection (4).
374 (b) An organization that receives a distribution from the department in accordance with
375 Subsection (4):
376 (i) shall expend the distribution only to spay or neuter dogs and cats:
377 (A) owned by persons having low incomes;
378 (B) by veterinarians who are licensed by Title 58, Chapter 28, Veterinary Practice Act;
379 (C) through a statewide voucher program; and
380 (D) at a location that:
381 (I) is not a mobile spay and neuter clinic; and
382 (II) does not receive any funding from a governmental entity; and
383 (ii) may not expend the distribution for any administrative cost relating to an
384 expenditure authorized by Subsection (5)(b)(i).
385 (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
386 department may make rules:
387 (i) providing procedures and requirements for an organization to apply to the
388 department to receive a distribution in accordance with Subsection (4); and
389 (ii) to define what constitutes a person having a low income.
390 Section 8. Section 31A-32a-101 is amended to read:
391 31A-32a-101. Title and scope.
392 (1) This chapter is known as the "Medical Care Savings Account Act."
393 (2) (a) This chapter applies only to a medical care savings [
394 established for the purpose of seeking a tax [
395 59-10-1021 .
396 (b) This chapter does not apply to a medical care savings [
397
398 not claimed under Section 59-10-1021 .
399 Section 9. Section 31A-32a-103 is amended to read:
400 31A-32a-103. Establishing medical care savings accounts.
401 [
402 (1) For a taxable year beginning on or after January 1, 1995:
403 (a) an employer, except as otherwise provided by contract or a collective bargaining
404 agreement, may offer a medical care savings account program to the employer's employees;
405 [
406 (b) a resident individual may establish a medical care savings account program for the
407 individual or for the individual's dependents.
408 (2) (a) A contribution into an account made by an employer on behalf of an employee,
409 or made by an individual account holder may not exceed the greater of:
410 [
411 (ii) an amount of money equal to the sum of all eligible medical expenses paid by the
412 employee or account holder [
413 holder, or the employee's or account holder's spouse or dependents.
414 (b) For purposes of Subsection (2)(a)(ii), eligible medical expenses [
415
416 that an insurance carrier has applied to the employee's or account holder's deductible.
417 (3) An employer that offers a medical care savings account program shall, before
418 making any contributions:
419 (a) inform all employees in writing of the fact that these contributions may not be
420 deductible under the federal tax laws; and
421 (b) obtain from the employee a written election to participate in the medical care
422 savings account program.
423 (4) Except as provided in Sections 31A-32a-105 and 59-10-114 , principal contributed
424 to and interest earned on a medical care savings account and money reimbursed to an employee
425 or account holder for eligible medical expenses are exempt from taxation.
426 (5) (a) An employer may select a single account administrator for all of the employer's
427 employee's medical care savings accounts.
428 (b) If a single account administrator is not selected, an employer may contribute directly
429 to the account holder's individual medical care savings account.
430 Section 10. Section 31A-32a-104 is amended to read:
431 31A-32a-104. Administration of medical care savings account.
432 (1) An account administrator shall administer the medical care savings account from
433 which the payment of claims is made and has a fiduciary duty to the person for whose benefit
434 the account administrator administers an account.
435 (2) (a) Except as provided in Subsection 31A-32a-105 (1), the account administrator
436 shall use the funds held in a medical care savings account solely for the purpose of paying or
437 reimbursing the employee or account holder for eligible medical expenses of the employee or
438 account holder or of the employee's or account holder's dependents.
439 (b) The commissioner shall adopt rules concerning the coordination of benefits between
440 a medical care savings account and medical expenses payable from automobile insurance
441 policies, workers' compensation insurance policies, or other health care insurance policies or
442 contracts.
443 (3) The employee or account holder may submit documentation of eligible medical
444 expenses paid by the employee or account holder in the [
445 administrator, and the account administrator shall reimburse the employee or account holder
446 from the employee's or account holder's account for eligible medical expenses.
447 (4) If an employer makes contributions to a medical care savings account program on a
448 periodic installment basis, the employer may advance to an employee an amount necessary to
449 cover eligible medical expenses incurred that exceed the amount in the employee's medical care
450 savings account at the time the expense is incurred if the employee agrees to repay the advance.
451 Section 11. Section 31A-32a-105 is amended to read:
452 31A-32a-105. Withdrawals -- Termination -- Transfers.
453 (1) Subject to Subsection (3), if the employee or account holder withdraws money for
454 any purpose other than a medical expense at any time in which the balance in the account is
455 below $4,000 [
456 (a) the amount of the withdrawal [
457
458 59-10-114 ; and
459 (b) the administrator shall withhold from the amount of the withdrawal, and on behalf
460 of the employee or account holder shall pay a penalty to the State Tax Commission equal to
461 10% of the amount of the withdrawal.
462 (2) If an employee or account holder withdraws money from the employee's or account
463 holder's medical care savings account for any purpose other than a medical expense, but the
464 withdrawal occurs when the balance in the medical care savings account is over $4,000, and the
465 withdrawal will not result in the account balance dropping below $4,000, the amount of the
466 withdrawal:
467 (a) is not subject to the penalties described in Subsection (1)(b); and
468 [
469 (b) shall be added to adjusted gross income in accordance with Section 59-10-114 .
470 (3) The amount of a disbursement of any assets of a medical care savings account
471 pursuant to a filing for protection under [
472 101 to 1330, by an employee, account holder, or person for whose benefit the account was
473 established:
474 (a) is not considered a withdrawal for purposes of this section; and
475 [
476 (b) shall be added to adjusted gross income in accordance with Section 59-10-114 .
477 (4) (a) Upon the death of the employee or account holder, the account administrator
478 shall distribute the principal and accumulated interest of the medical care savings account to the
479 estate of the employee or account holder.
480 (b) A distribution under this Subsection (4) is not subject to the penalties described in
481 Subsection (1)(b).
482 (5) (a) If an employee is no longer employed by an employer that participates in a
483 medical care savings account program, and if the employee's account is administered by the
484 employer's account administrator, the money in the medical care savings account may be used
485 for the benefit of the employee or the employee's dependents in accordance with this chapter,
486 and [
487 59-10-114 if the employee, not more than 60 days after the employee's final day of employment:
488 (i) transfers the account to a new account administrator; or
489 (ii) (A) requests in writing to the former employer's account administrator that the
490 account remain with that administrator; and
491 (B) the account administrator agrees to retain the account.
492 (b) Not more than 30 days after the expiration of the 60 days described in Subsection
493 (5)(a), if an account administrator has not accepted the former employee's account, the
494 employer shall mail a check to the former employee at the employee's last-known address equal
495 to the amount in the account on that day.
496 (c) The amount mailed to the employee [
497
498 Section 59-10-114 , but is not subject to the penalties under Subsection (1)(b).
499 (d) If an employee becomes employed with a different employer that participates in a
500 medical care savings account program, the employee may transfer the employee's medical care
501 savings account to that new employer's account administrator.
502 (e) If an account holder becomes an employee of an employer that participates in a
503 medical care savings account program, the account holder may transfer the account holder's
504 account to the employer's account administrator.
505 Section 12. Section 31A-32a-106 is amended to read:
506 31A-32a-106. Regulation of account administrators -- Administration of addition
507 to adjusted gross income and tax credit -- Rulemaking authority.
508 (1) The department shall regulate account administrators and may adopt rules necessary
509 to administer this chapter.
510 (2) The State Tax Commission may adopt rules necessary to monitor and implement the
511 [
512 (a) amounts required to be added to adjusted gross income in accordance with Sections
513 31A-32a-105 and 59-10-114 ; or
514 (b) amount claimed as a tax credit in accordance with Section 59-10-1021 .
515 Section 13. Section 31A-32a-107 is amended to read:
516 31A-32a-107. Penalties for noncompliance with tax provisions.
517 (1) An account administrator who fails to comply with [
518
519 Subsection (2) is subject to:
520 [
521 [
522 (2) The following provisions apply to Subsection (1):
523 (a) a provision of this chapter relating to:
524 (i) an addition to income made in accordance with Section 59-10-114 ; or
525 (ii) a tax credit allowed by Section 59-10-1021 ; or
526 (b) a provision of Title 59, Chapter 10, Individual Income Tax Act, relating to:
527 (i) an addition to income made in accordance with Section 59-10-114 ; or
528 (ii) a tax credit allowed by Section 59-10-1021 .
529 Section 14. Section 48-2c-117 is amended to read:
530 48-2c-117. Taxation of limited liability companies.
531 A company established under this chapter or a foreign company transacting business in
532 this state shall be taxed as provided in [
533 Section 15. Section 53B-8a-106 is amended to read:
534 53B-8a-106. Account agreements.
535 The Utah Educational Savings Plan Trust may enter into account agreements with
536 account owners on behalf of beneficiaries under the following terms and agreements:
537 (1) (a) An account agreement may require an account owner to agree to invest a
538 specific amount of money in the Utah Educational Savings Plan Trust for a specific period of
539 time for the benefit of a specific beneficiary, not to exceed an amount determined by the
540 program administrator.
541 (b) Account agreements may be amended to provide for adjusted levels of payments
542 based upon changed circumstances or changes in educational plans.
543 (c) An account owner may make additional optional payments as long as the total
544 payments for a specific beneficiary do not exceed the total estimated higher education costs as
545 determined by the program administrator.
546 (d) Subject to Subsection (1)(f), the maximum amount of a qualified investment that a
547 corporation that is an account owner may subtract from unadjusted income for a taxable year in
548 accordance with Title 59, Chapter 7, Corporate Franchise and Income Taxes, is [
549 $1,650 for each individual beneficiary for the taxable year beginning on or after January 1,
550 [
551 (e) Subject to Subsection (1)(f), the maximum amount of a qualified investment that
552 may be [
553
554
555 credit [
556 [
557 (i) for a resident or nonresident estate or trust that is an account owner, [
558 $1,650 for each individual beneficiary for the taxable year beginning on or after January 1,
559 [
560 (ii) for a resident or nonresident individual that is an account owner, other than a
561 husband and wife who are account owners and file a single return jointly under Title 59,
562 Chapter 10, Individual Income Tax Act, [
563 taxable year beginning on or after January 1, [
564 31, [
565 (iii) for a husband and wife who are account owners and file a single return jointly
566 under Title 59, Chapter 10, Individual Income Tax Act, [
567 beneficiary:
568 (A) for the taxable year beginning on or after January 1, [
569 or before December 31, [
570 (B) regardless of whether the Utah Educational Savings Plan Trust has entered into:
571 (I) a separate account agreement with each spouse; or
572 (II) a single account agreement with both spouses jointly.
573 (f) (i) For taxable years beginning on or after January 1, [
574 administrator shall increase or decrease the maximum amount of a qualified investment
575 described in Subsections (1)(d) and (1)(e)(i) and (ii), by a percentage equal to the percentage
576 difference between the consumer price index for the preceding calendar year and the consumer
577 price index for the calendar year [
578 (ii) After making an increase or decrease required by Subsection (1)(f)(i), the program
579 administrator shall:
580 (A) round the maximum amount of the qualified investments described in Subsections
581 (1)(d) and (1)(e)(i) and (ii) increased or decreased under Subsection (1)(f)(i) to the nearest ten
582 dollar increment; and
583 (B) increase or decrease the maximum amount of the qualified investment described in
584 Subsection (1)(e)(iii) so that the maximum amount of the qualified investment described in
585 Subsection (1)(e)(iii) is equal to the product of:
586 (I) the maximum amount of the qualified investment described in Subsection (1)(e)(ii)
587 as rounded under Subsection (1)(f)(ii)(A); and
588 (II) two.
589 (iii) For purposes of Subsections (1)(f)(i) and (ii), the program administrator shall
590 calculate the consumer price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue
591 Code.
592 (2) (a) (i) Beneficiaries designated in account agreements must be designated after birth
593 and before age 19 for an account owner to:
594 (A) subtract a qualified investment from income under[
595 Corporate Franchise and Income Taxes; or
596 [
597 [
598 (B) use a qualified investment as the basis for claiming a tax credit in accordance with
599 Section [
600 (ii) If the beneficiary is designated after birth and before age 19, the payment of benefits
601 provided under the account agreement must begin not later than the beneficiary's 27th birthday.
602 (b) (i) Account owners may designate [
603 investments for [
604
605 (A) subtracted from income under Title 59, Chapter 7, Corporate Franchise and Income
606 Taxes; or
607 (B) used as the basis for claiming a tax credit in accordance with Section 59-10-1017 .
608 (ii) If a beneficiary age 19 or older is designated, the payment of benefits provided
609 under the account agreement must begin not later than ten years from the account agreement
610 date.
611 (3) Each account agreement shall state clearly that there are no guarantees regarding
612 moneys in the Utah Educational Savings Plan Trust as to the return of principal and that losses
613 could occur.
614 (4) Each account agreement shall provide that:
615 (a) [
616 not direct the investment of any contributions or earnings on contributions;
617 (b) [
618 and
619 (c) [
620 Trust.
621 (5) The execution of an account agreement by the trust may not guarantee in any way
622 that higher education costs will be equal to projections and estimates provided by the Utah
623 Educational Savings Plan Trust or that the beneficiary named in any participation agreement
624 will:
625 (a) be admitted to an institution of higher education;
626 (b) if admitted, be determined a resident for tuition purposes by the institution of higher
627 education, unless the account agreement is vested;
628 (c) be allowed to continue attendance at the institution of higher education following
629 admission; or
630 (d) graduate from the institution of higher education.
631 (6) [
632 regulations of the board upon written request of the account owner prior to the date of
633 admission of any beneficiary under an account agreement by an institution of higher education
634 so long as the substitute beneficiary is eligible for participation.
635 (7) [
636 [
637 owner to increase or decrease the level of participation, change the designation of beneficiaries,
638 and carry out similar matters as authorized by rule.
639 (8) Each account agreement shall provide that:
640 (a) the account agreement may be canceled upon the terms and conditions, and upon
641 payment of the fees and costs set forth and contained in the board's rules and regulations; and
642 (b) the program administrator may amend the agreement unilaterally and retroactively,
643 if necessary, to maintain the Utah Educational Savings Plan Trust as a qualified tuition program
644 under Section 529, Internal Revenue Code.
645 Section 16. Section 59-7-101 is amended to read:
646 59-7-101. Definitions.
647 As used in this chapter:
648 (1) "Adjusted income" means unadjusted income as modified by Sections 59-7-105 and
649 59-7-106 .
650 (2) (a) "Affiliated group" means one or more chains of corporations that are connected
651 through stock ownership with a common parent corporation that meet the following
652 requirements:
653 (i) at least 80% of the stock of each of the corporations in the group, excluding the
654 common parent corporation, is owned by one or more of the other corporations in the group;
655 and
656 (ii) the common parent directly owns at least 80% of the stock of at least one of the
657 corporations in the group.
658 (b) "Affiliated group" does not include corporations that are qualified to do business but
659 are not otherwise doing business in this state.
660 (c) For purposes of this Subsection (2), "stock" does not include nonvoting stock which
661 is limited and preferred as to dividends.
662 (3) "Apportionable income" means adjusted income less nonbusiness income net of
663 related expenses, to the extent included in adjusted income.
664 (4) "Apportioned income" means apportionable income multiplied by the apportionment
665 fraction as determined in Section 59-7-311 .
666 (5) "Business income" is as defined in Section 59-7-302 .
667 (6) (a) "Captive real estate investment trust" means a real estate investment trust if:
668 (i) the shares or beneficial interests of the real estate investment trust are not regularly
669 traded on an established securities market; and
670 (ii) more than 50% of the voting power or value of the shares or beneficial interests of
671 the real estate investment trust are directly, indirectly, or constructively:
672 (A) owned by a controlling entity of the real estate investment trust; or
673 (B) controlled by a controlling entity of the real estate investment trust.
674 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
675 commission may make rules defining "established securities market."
676 (7) (a) "Controlling entity of a captive real estate investment trust" means an entity that:
677 (i) is treated as an association taxable as a corporation under the Internal Revenue
678 Code;
679 (ii) is not exempt from federal income taxation under Section 501(a), Internal Revenue
680 Code; and
681 (iii) directly, indirectly, or constructively holds more than 50% of:
682 (A) the voting power of a captive real estate investment trust; or
683 (B) the value of the shares or beneficial interests of a captive real estate investment
684 trust.
685 (b) "Controlling entity of a captive real estate investment trust" does not include:
686 (i) a real estate investment trust, except for a captive real estate investment trust;
687 (ii) a qualified real estate investment subsidiary described in Section 856(i), Internal
688 Revenue Code, except for a qualified real estate investment trust subsidiary of a captive real
689 estate investment trust; or
690 (iii) a foreign real estate investment trust.
691 (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
692 commission may make rules defining "established securities market."
693 [
694 more than 50% of the outstanding voting stock of:
695 (i) a parent-subsidiary controlled group as defined in Section 1563, Internal Revenue
696 Code, except that 50% shall be substituted for 80%;
697 (ii) a brother-sister controlled group as defined in Section 1563, Internal Revenue
698 Code, except that 50% shall be substituted for 80%; or
699 (iii) three or more corporations each of which is a member of a group of corporations
700 described in Subsection (2)(a)(i) or (2)(a)(ii), and one of which is:
701 (A) a common parent corporation included in a group of corporations described in
702 Subsection (2)(a)(i); and
703 (B) included in a group of corporations described in Subsection (2)(a)(ii).
704 (b) Ownership of outstanding voting stock shall be determined by Section 1563,
705 Internal Revenue Code.
706 [
707 [
708 (a) entities defined as corporations under Sections 7701(a) and 7704, Internal Revenue
709 Code; and
710 (b) other organizations that are taxed as corporations for federal income tax purposes
711 under the Internal Revenue Code.
712 [
713 property, made by a corporation to its shareholders out of its earnings or profits accumulated
714 after December 31, 1930.
715 [
716 a domestic corporation, or by a foreign corporation qualified to do or doing intrastate business
717 in this state.
718 (b) Except as provided in Subsection 59-7-102 (2), "doing business" includes:
719 (i) the right to do business through incorporation or qualification;
720 (ii) the owning, renting, or leasing of real or personal property within this state; and
721 (iii) the participation in joint ventures, working and operating agreements, the
722 performance of which takes place in this state.
723 [
724 organized under the laws of this state.
725 [
726 organization that is:
727 (i) (A) an association, corporation, or other organization of:
728 (I) farmers; or
729 (II) fruit growers; or
730 (B) an association, corporation, or other organization that is similar to an association,
731 corporation, or organization described in Subsection [
732 (ii) organized and operated on a cooperative basis to:
733 (A) (I) market the products of members of the cooperative or the products of other
734 producers; and
735 (II) return to the members of the cooperative or other producers the proceeds of sales
736 less necessary marketing expenses on the basis of the quantity of the products of a member or
737 producer or the value of the products of a member or producer; or
738 (B) (I) purchase supplies and equipment for the use of members of the cooperative or
739 other persons; and
740 (II) turn over the supplies and equipment described in Subsection [
741 (14)(a)(ii)(B)(I) at actual costs plus necessary expenses to the members of the cooperative or
742 other persons.
743 (b) (i) Subject to Subsection [
744 (14), the commission by rule, made in accordance with Title 63, Chapter 46a, Utah
745 Administrative Rulemaking Act, shall define:
746 (A) the terms:
747 (I) "member"; and
748 (II) "producer"; and
749 (B) what constitutes an association, corporation, or other organization that is similar to
750 an association, corporation, or organization described in Subsection [
751 (ii) The rules made under this Subsection [
752 filing requirements under federal law for a farmers' cooperative.
753 [
754 organized under the laws of this state.
755 [
756 (i) is incorporated in the United States; and
757 (ii) 80% or more of whose business activity, as determined under Section 59-7-401 , is
758 conducted outside the United States.
759 (b) "Foreign operating company" does not include a corporation that qualifies for the
760 Puerto Rico and Possession Tax Credit as provided in Section 936, Internal Revenue Code.
761 (17) (a) "Foreign real estate investment trust" means:
762 (i) a business entity organized outside the laws of the United States if:
763 (A) at least 75% of the business entity's total asset value at the close of the business
764 entity's taxable year is represented by:
765 (I) real estate assets, as defined in Section 856(c)(5)(B), Internal Revenue Code;
766 (II) cash or cash equivalents; or
767 (III) one or more securities issued or guaranteed by the United States;
768 (B) the business entity is:
769 (I) not subject to income taxation:
770 (Aa) on amounts distributed to the business entity's beneficial owners; and
771 (Bb) in the jurisdiction in which the business entity is organized; or
772 (II) exempt from income taxation on an entity level in the jurisdiction in which the
773 business entity is organized;
774 (C) the business entity distributes at least 85% of the business entity's taxable income,
775 as computed in the jurisdiction in which the business entity is organized, to the holders of the
776 business entity's:
777 (I) shares or beneficial interests; and
778 (II) on an annual basis;
779 (D) (I) not more than 10% of the following is held directly, indirectly, or constructively
780 by a single person:
781 (Aa) the voting power of the business entity; or
782 (Bb) the value of the shares or beneficial interests of the business entity; or
783 (II) the shares of the business entity are regularly traded on an established securities
784 market; and
785 (E) the business entity is organized in a country that has a tax treaty with the United
786 States; or
787 (ii) a listed Australian property trust.
788 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
789 commission may make rules defining:
790 (i) "cash or cash equivalents";
791 (ii) "established securities market"; or
792 (iii) "listed Australian property trust."
793 [
794 [
795 effective during the year in which Utah taxable income is determined.
796 [
797 [
798 on the last day of the taxable year of the S corporation, is:
799 (a) an individual not domiciled in Utah; or
800 (b) a nonresident trust or nonresident estate, as defined in Section 59-10-103 .
801 (22) "Real estate investment trust" is as defined in Section 856, Internal Revenue Code.
802 [
803 (a) expenses directly attributable to nonbusiness income; and
804 (b) the portion of interest or other expense indirectly attributable to both nonbusiness
805 and business income which bears the same ratio to the aggregate amount of such interest or
806 other expense, determined without regard to this Subsection [
807 of the asset producing the nonbusiness income bears to the average amount of all assets of the
808 taxpayer within the taxable year.
809 [
810 not a nonresident shareholder.
811 [
812 Section 168, Internal Revenue Code.
813 [
814 Revenue Code.
815 [
816 Columbia [
817 [
818 such calendar year upon the basis of which the adjusted income is computed.
819 (b) In the case of a return made for a fractional part of a year under this chapter or
820 under rules prescribed by the commission, "taxable year" includes the period for which such
821 return is made.
822 [
823 chapter.
824 [
825 States equal to or greater than 20% of the corporation's total business activity as determined
826 under Section 59-7-401 .
827 [
828 separate return basis before intercompany eliminations as determined by the Internal Revenue
829 Code, before the net operating loss deduction and special deductions for dividends received.
830 [
831 (i) are related through common ownership; and
832 (ii) by a preponderance of the evidence as determined by a court of competent
833 jurisdiction or the commission, are economically interdependent with one another as
834 demonstrated by the following factors:
835 (A) centralized management;
836 (B) functional integration; and
837 (C) economies of scale.
838 (b) "Unitary group" includes a captive real estate investment trust.
839 [
840 (33) "United States" includes the 50 states and the District of Columbia.
841 [
842 loss deduction, if determined to be less than zero.
843 [
844 taxable years that may be carried back or carried forward to the current taxable year in
845 accordance with Section 59-7-110 .
846 [
847 deduction less Utah net loss deduction.
848 (b) "Utah taxable income" includes income from tangible or intangible property located
849 or having situs in this state, regardless of whether carried on in intrastate, interstate, or foreign
850 commerce.
851 [
852 plus nonbusiness income allocable to Utah net of related expenses.
853 [
854 and activities of:
855 (i) all members of a unitary group that are:
856 (A) corporations organized or incorporated in the United States, including those
857 corporations qualifying for the Puerto Rico and Possession Tax Credit as provided in Section
858 936, Internal Revenue Code, in accordance with Subsection [
859 (B) corporations organized or incorporated outside of the United States meeting the
860 threshold level of business activity; and
861 (ii) an affiliated group electing to file a water's edge combined report under Subsection
862 59-7-402 (2).
863 (b) There is a rebuttable presumption that a corporation which qualifies for the Puerto
864 Rico and Possession Tax Credit provided in Section 936, Internal Revenue Code, is part of a
865 unitary group.
866 [
867 activities of all members of a unitary group irrespective of the country in which the corporations
868 are incorporated or conduct business activity.
869 Section 17. Section 59-7-105 is amended to read:
870 59-7-105. Additions to unadjusted income.
871 In computing adjusted income the following amounts shall be added to unadjusted
872 income:
873 (1) interest from bonds, notes, and other evidences of indebtedness issued by any state
874 of the United States, including any agency and instrumentality of a state of the United States;
875 (2) the amount of any deduction taken on a corporation's federal return for taxes paid
876 by a corporation:
877 (a) to Utah for taxes imposed by this chapter; and
878 (b) to another state of the United States, a foreign country, a United States possession,
879 or the Commonwealth of Puerto Rico for taxes imposed for the privilege of doing business, or
880 exercising its corporate franchise, including income, franchise, corporate stock and business and
881 occupation taxes;
882 (3) the safe harbor lease adjustment required under Subsections 59-7-111 (1)(a) and
883 (2)(a);
884 (4) capital losses that have been deducted on a Utah corporate return in previous years;
885 (5) any deduction on the federal return that has been previously deducted on the Utah
886 return;
887 (6) the amount of contributions claimed as a tax credit pursuant to Section 59-7-602 ;
888 (7) the amount of the deduction taken pursuant to Section 59-7-603 for sophisticated
889 technological equipment;
890 (8) charitable contributions, to the extent deducted on the federal return when
891 determining federal taxable income;
892 (9) the amount of gain or loss determined under Section 59-7-114 relating to a target
893 corporation under Section 338, Internal Revenue Code, unless such gain or loss has already
894 been included in the unadjusted income of the target corporation;
895 (10) the amount of gain or loss determined under Section 59-7-115 relating to
896 corporations treated for federal purposes as having disposed of its assets under Section 336(e),
897 Internal Revenue Code, unless such gain or loss has already been included in the unadjusted
898 income of the target corporation;
899 (11) adjustments to gains, losses, depreciation expense, amortization expense, and
900 similar items due to a difference between basis for federal purposes and basis as computed
901 under Section 59-7-107 ; [
902 (12) the amount withdrawn under Title 53B, Chapter 8a, Higher Education Savings
903 Incentive Program, from the account of a corporation that is an account owner as defined in
904 Section 53B-8a-102 , for the taxable year for which the amount is withdrawn, if that amount
905 withdrawn from the account of the corporation that is the account owner:
906 (a) is not expended for higher education costs as defined in Section 53B-8a-102 ; and
907 (b) is subtracted by the corporation:
908 (i) that is the account owner; and
909 (ii) in accordance with Subsection 59-7-106 (18)[
910 (13) the amount of the deduction for dividends paid, as defined in Section 561, Internal
911 Revenue Code, that is allowed under Section 857(b)(2)(B), Internal Revenue Code, in
912 computing the taxable income of a captive real estate investment trust, if that captive real estate
913 investment trust is subject to federal income taxation.
914 Section 18. Section 59-7-106 is amended to read:
915 59-7-106. Subtractions from unadjusted income.
916 In computing adjusted income the following amounts shall be subtracted from
917 unadjusted income:
918 (1) the foreign dividend gross-up included in gross income for federal income tax
919 purposes under Section 78, Internal Revenue Code;
920 (2) the net capital loss, as defined for federal purposes, if the taxpayer elects to deduct
921 the loss on the current Utah return. The deduction shall be made by claiming the deduction on
922 the current Utah return which shall be filed by the due date of the return, including extensions.
923 For the purposes of this Subsection (2) all capital losses in a given year must be:
924 (a) deducted in the year incurred; or
925 (b) carried forward as provided in Sections 1212(a)(1)(B) and (C), Internal Revenue
926 Code;
927 (3) the decrease in salary expense deduction for federal income tax purposes due to
928 claiming the federal jobs credit under Section 51, Internal Revenue Code;
929 (4) the decrease in qualified research and basic research expense deduction for federal
930 income tax purposes due to claiming the federal research and development credit under Section
931 41, Internal Revenue Code;
932 (5) the decrease in qualified clinical testing expense deduction for federal income tax
933 purposes due to claiming the federal orphan drug credit under Section 28, Internal Revenue
934 Code;
935 (6) any decrease in any expense deduction for federal income tax purposes due to
936 claiming any other federal credit;
937 (7) the safe harbor lease adjustment required under Subsections 59-7-111 (1)(b) and
938 (2)(b);
939 (8) any income on the federal corporate return that has been previously taxed by Utah;
940 (9) amounts included in federal taxable income that are due to refunds of taxes imposed
941 for the privilege of doing business, or exercising a corporate franchise, including income,
942 franchise, corporate stock and business and occupation taxes paid by the corporation to Utah,
943 another state of the United States, a foreign country, a United States possession, or the
944 Commonwealth of Puerto Rico to the extent that the taxes were added to unadjusted income
945 under Section 59-7-105 ;
946 (10) charitable contributions, to the extent allowed as a subtraction under Section
947 59-7-109 ;
948 (11) (a) 50% of the dividends deemed received or received from subsidiaries which are
949 members of the unitary group and are organized or incorporated outside of the United States
950 unless such subsidiaries are included in a combined report under Section 59-7-402 or 59-7-403 .
951 In arriving at the amount of the dividend exclusion, the taxpayer shall first deduct from the
952 dividends deemed received or received, the expense directly attributable to those dividends.
953 Interest expense attributable to excluded dividends shall be determined by multiplying interest
954 expense by a fraction, the numerator of which is the taxpayer's average investment in such
955 dividend paying subsidiaries, and the denominator of which is the taxpayer's average total
956 investment in assets;
957 (b) in determining income apportionable to this state, a portion of the factors of a
958 foreign subsidiary whose dividends are partially excluded under Subsection (11)(a) shall be
959 included in the combined report factors. The portion to be included shall be determined by
960 multiplying each factor of the foreign subsidiary by a fraction, but not to exceed 100%, the
961 numerator of which is the amount of the dividend paid by the foreign subsidiary which is
962 included in adjusted income, and the denominator of which is the current year earnings and
963 profits of the foreign subsidiary as determined under the Internal Revenue Code;
964 (12) (a) 50% of the adjusted income of a foreign operating company unless the taxpayer
965 has elected to file a worldwide combined report as provided in Section 59-7-403 . For purposes
966 of this Subsection (12), when calculating the adjusted income of a foreign operating company, a
967 foreign operating company may not deduct the subtractions allowable under this Subsection
968 (12) and Subsection (11);
969 (b) in determining income apportionable to this state, the factors for a foreign operating
970 company shall be included in the combined report factors in the same percentage its adjusted
971 income is included in the combined adjusted income;
972 (13) the amount of gain or loss which is included in unadjusted income but not
973 recognized for federal purposes on stock sold or exchanged by a member of a selling
974 consolidated group as defined in Section 338, Internal Revenue Code, if an election has been
975 made pursuant to Section 338(h)(10), Internal Revenue Code;
976 (14) the amount of gain or loss which is included in unadjusted income but not
977 recognized for federal purposes on stock sold, exchanged, or distributed by a corporation
978 pursuant to Section 336(e), Internal Revenue Code, if an election under Section 336(e), Internal
979 Revenue Code, has been made for federal purposes;
980 (15) (a) adjustments to gains, losses, depreciation expense, amortization expense, and
981 similar items due to a difference between basis for federal purposes and basis as computed
982 under Section 59-7-107 ; and
983 (b) if there has been a reduction in federal basis for a federal tax credit where there is no
984 corresponding Utah tax credit, the amount of the reduction in basis shall be allowed as an
985 expense in the year of the federal credit;
986 (16) any interest expense not deducted on the federal corporate return under Section
987 265(b) or 291(e), Internal Revenue Code;
988 (17) 100% of the dividends received from subsidiaries which are insurance companies
989 exempt from this chapter under Subsection 59-7-102 (1)(c) and are under "common ownership"
990 as defined by Subsection 59-7-101 [
991 (18) subject to Subsection 59-7-105 (12), the amount of a qualified investment as
992 defined in Section 53B-8a-102 that:
993 (a) a corporation that is an account owner as defined in Section 53B-8a-102 makes
994 during the taxable year;
995 (b) the corporation described in Subsection (18)(a) does not deduct on a federal
996 corporation income tax return; and
997 (c) does not exceed the maximum amount of the qualified investment that may be
998 subtracted from unadjusted income for a taxable year in accordance with Subsections
999 53B-8a-106 (1)(d) and (f)[
1000 (19) for purposes of income included in a combined report under Part 4, Combined
1001 Reporting, the entire amount of the dividends a member of a unitary group receives or is
1002 considered to receive from a captive real estate investment trust.
1003 Section 19. Section 59-7-116.5 is amended to read:
1004 59-7-116.5. Real estate investment trusts.
1005 (1) A real estate investment trust[
1006 that is not a captive real estate investment trust shall be taxed on the same income taxed for
1007 federal purposes under the Internal Revenue Code.
1008 (2) Any income taxable under this section shall be taxed at the same rate and in the
1009 same manner provided for in this chapter.
1010 Section 20. Section 59-7-402 is amended to read:
1011 59-7-402. Water's edge combined report.
1012 (1) Except as provided in Section 59-7-403 , if any corporation listed in Subsection
1013 59-7-101 [
1014 combined report.
1015 (2) (a) A group of corporations that are not otherwise a unitary group may elect to file
1016 a water's edge combined report if each member of the group is:
1017 (i) doing business in Utah;
1018 (ii) part of the same affiliated group; and
1019 (iii) qualified, under Section 1501, Internal Revenue Code, to file a federal consolidated
1020 return.
1021 (b) Each corporation within the affiliated group that is doing business in Utah must
1022 consent to filing a combined report. If an affiliated group elects to file a combined report, each
1023 corporation within the affiliated group that is doing business in Utah must file a combined
1024 report.
1025 (c) Corporations that elect to file a water's edge combined report under this section may
1026 not thereafter elect to file a separate return without the consent of the commission.
1027 Section 21. Section 59-7-614 is amended to read:
1028 59-7-614. Renewable energy systems tax credit -- Definitions -- Limitations --
1029 Certification -- Rulemaking authority.
1030 (1) As used in this section:
1031 (a) "Active solar system":
1032 (i) means a system of equipment capable of collecting and converting incident solar
1033 radiation into thermal, mechanical, or electrical energy, and transferring these forms of energy
1034 by a separate apparatus to storage or to the point of use; and
1035 (ii) includes water heating, space heating or cooling, and electrical or mechanical energy
1036 generation.
1037 (b) "Biomass system" means any system of apparatus and equipment for use in
1038 converting material into biomass energy, as defined in Section 59-12-102 , and transporting that
1039 energy by separate apparatus to the point of use or storage.
1040 (c) "Business entity" means any sole proprietorship, estate, trust, partnership,
1041 association, corporation, cooperative, or other entity under which business is conducted or
1042 transacted.
1043 (d) "Commercial energy system" means any active solar, passive solar, geothermal
1044 electricity, direct-use geothermal, geothermal heat-pump system, wind, hydroenergy, or biomass
1045 system used to supply energy to a commercial unit or as a commercial enterprise.
1046 (e) "Commercial enterprise" means a business entity whose purpose is to produce
1047 electrical, mechanical, or thermal energy for sale from a commercial energy system.
1048 (f) (i) "Commercial unit" means any building or structure that a business entity uses to
1049 transact its business.
1050 (ii) Notwithstanding Subsection (1)(f)(i):
1051 (A) in the case of an active solar system used for agricultural water pumping or a wind
1052 system, each individual energy generating device shall be a commercial unit; and
1053 (B) if an energy system is the building or structure that a business entity uses to transact
1054 its business, a commercial unit is the complete energy system itself.
1055 (g) "Direct-use geothermal system" means a system of apparatus and equipment
1056 enabling the direct use of thermal energy, generally between 100 and 300 degrees Fahrenheit,
1057 that is contained in the earth to meet energy needs, including heating a building, an industrial
1058 process, and aquaculture.
1059 (h) "Geothermal electricity" means energy contained in heat that continuously flows
1060 outward from the earth that is used as a sole source of energy to produce electricity.
1061 (i) "Geothermal heat-pump system" means a system of apparatus and equipment
1062 enabling the use of thermal properties contained in the earth at temperatures well below 100
1063 degrees Fahrenheit to help meet heating and cooling needs of a structure.
1064 (j) "Hydroenergy system" means a system of apparatus and equipment capable of
1065 intercepting and converting kinetic water energy into electrical or mechanical energy and
1066 transferring this form of energy by separate apparatus to the point of use or storage.
1067 (k) "Individual taxpayer" means any person who is a taxpayer as defined in Section
1068 59-10-103 and an individual as defined in Section 59-10-103 .
1069 (l) "Passive solar system":
1070 (i) means a direct thermal system that utilizes the structure of a building and its operable
1071 components to provide for collection, storage, and distribution of heating or cooling during the
1072 appropriate times of the year by utilizing the climate resources available at the site; and
1073 (ii) includes those portions and components of a building that are expressly designed
1074 and required for the collection, storage, and distribution of solar energy.
1075 (m) "Residential energy system" means any active solar, passive solar, biomass,
1076 direct-use geothermal, geothermal heat-pump system, wind, or hydroenergy system used to
1077 supply energy to or for any residential unit.
1078 (n) "Residential unit" means any house, condominium, apartment, or similar dwelling
1079 unit that serves as a dwelling for a person, group of persons, or a family but does not include
1080 property subject to a fee under:
1081 (i) Section 59-2-404 ;
1082 (ii) Section 59-2-405 ;
1083 (iii) Section 59-2-405.1 ;
1084 (iv) Section 59-2-405.2 ; or
1085 (v) Section 59-2-405.3 .
1086 (o) "Utah Geological Survey" means the Utah Geological Survey established in Section
1087 63-73-5 .
1088 (p) "Wind system" means a system of apparatus and equipment capable of intercepting
1089 and converting wind energy into mechanical or electrical energy and transferring these forms of
1090 energy by a separate apparatus to the point of use, sale, or storage.
1091 (2) (a) (i) For taxable years beginning on or after January 1, 2007, a business entity that
1092 purchases and completes or participates in the financing of a residential energy system to supply
1093 all or part of the energy required for a residential unit owned or used by the business entity and
1094 situated in Utah is entitled to a nonrefundable tax credit as provided in this Subsection (2)(a).
1095 (ii) (A) A business entity is entitled to a tax credit equal to 25% of the reasonable costs
1096 of each residential energy system installed with respect to each residential unit it owns or uses,
1097 including installation costs, against any tax due under this chapter for the taxable year in which
1098 the energy system is completed and placed in service.
1099 (B) The total amount of each credit under this Subsection (2)(a) may not exceed $2,000
1100 per residential unit.
1101 (C) The credit under this Subsection (2)(a) is allowed for any residential energy system
1102 completed and placed in service on or after January 1, 2007.
1103 (iii) If a business entity sells a residential unit to an individual taxpayer before making a
1104 claim for the tax credit under this Subsection (2)(a), the business entity may:
1105 (A) assign its right to this tax credit to the individual taxpayer; and
1106 (B) if the business entity assigns its right to the tax credit to an individual taxpayer
1107 under Subsection (2)(a)(iii)(A), the individual taxpayer may claim the tax credit as if the
1108 individual taxpayer had completed or participated in the costs of the residential energy system
1109 under Section 59-10-1014 .
1110 (b) (i) For taxable years beginning on or after January 1, 2007, a business entity that
1111 purchases or participates in the financing of a commercial energy system situated in Utah is
1112 entitled to a refundable tax credit as provided in this Subsection (2)(b) if the commercial energy
1113 system does not use wind, geothermal electricity, or biomass equipment capable of producing a
1114 total of 660 or more kilowatts of electricity, and:
1115 (A) the commercial energy system supplies all or part of the energy required by
1116 commercial units owned or used by the business entity; or
1117 (B) the business entity sells all or part of the energy produced by the commercial energy
1118 system as a commercial enterprise.
1119 (ii) (A) A business entity is entitled to a tax credit of up to 10% of the reasonable costs
1120 of any commercial energy system installed, including installation costs, against any tax due
1121 under this chapter for the taxable year in which the commercial energy system is completed and
1122 placed in service.
1123 (B) Notwithstanding Subsection (2)(b)(ii)(A), the total amount of the credit under this
1124 Subsection (2)(b) may not exceed $50,000 per commercial unit.
1125 (C) The credit under this Subsection (2)(b) is allowed for any commercial energy
1126 system completed and placed in service on or after January 1, 2007.
1127 (iii) A business entity that leases a commercial energy system installed on a commercial
1128 unit is eligible for the tax credit under this Subsection (2)(b) if the lessee can confirm that the
1129 lessor irrevocably elects not to claim the credit.
1130 (iv) Only the principal recovery portion of the lease payments, which is the cost
1131 incurred by a business entity in acquiring a commercial energy system, excluding interest
1132 charges and maintenance expenses, is eligible for the tax credit under this Subsection (2)(b).
1133 (v) A business entity that leases a commercial energy system is eligible to use the tax
1134 credit under this Subsection (2)(b) for a period no greater than seven years from the initiation of
1135 the lease.
1136 (vi) A tax credit allowed by this Subsection (2)(b) may not be carried forward or carried
1137 back.
1138 (c) (i) For taxable years beginning on or after January 1, 2007, a business entity that
1139 owns a commercial energy system situated in Utah using wind, geothermal electricity, or
1140 biomass equipment capable of producing a total of 660 or more kilowatts of electricity is
1141 entitled to a refundable tax credit as provided in this Subsection (2)(c) if:
1142 (A) the commercial energy system supplies all or part of the energy required by
1143 commercial units owned or used by the business entity; or
1144 (B) the business entity sells all or part of the energy produced by the commercial energy
1145 system as a commercial enterprise.
1146 (ii) (A) A business entity is entitled to a tax credit under this section equal to the
1147 product of:
1148 (I) 0.35 cents; and
1149 (II) the kilowatt hours of electricity produced and either used or sold during the taxable
1150 year.
1151 (B) (I) The credit calculated under Subsection (2)(c)(ii)(A) may be claimed for
1152 production occurring during a period of 48 months beginning with the month in which the
1153 commercial energy system is placed in commercial service.
1154 (II) The credit allowed by this Subsection (2)(c) for each year may not be carried
1155 forward or carried back.
1156 (C) The credit under this Subsection (2)(c) is allowed for any commercial energy
1157 system completed and placed in service on or after January 1, 2007.
1158 (iii) A business entity that leases a commercial energy system installed on a commercial
1159 unit is eligible for the tax credit under this Subsection (2)(c) if the lessee can confirm that the
1160 lessor irrevocably elects not to claim the credit.
1161 (d) (i) A tax credit under Subsection (2)(a) or (b) may be claimed for the taxable year in
1162 which the energy system is completed and placed in service.
1163 (ii) Additional energy systems or parts of energy systems may be claimed for
1164 subsequent years.
1165 (iii) If the amount of a tax credit under Subsection (2)(a) exceeds a business entity's tax
1166 liability under this chapter for a taxable year, the amount of the credit exceeding the liability may
1167 be carried forward for a period which does not exceed the next four taxable years.
1168 (3) (a) [
1169 Subsection (2) are in addition to any tax credits provided under the laws or rules and
1170 regulations of the United States.
1171 (b) A purchaser of one or more solar units that claims a tax credit under Section
1172 59-7-614.2 for the purchase of the one or more solar units may not claim a tax credit under this
1173 section for that purchase.
1174 [
1175 commercial energy systems claiming a credit under Subsections (2)(a) and (b) that cover the
1176 safety, reliability, efficiency, leasing, and technical feasibility of the systems to ensure that the
1177 systems eligible for the tax credit use the state's renewable and nonrenewable energy resources
1178 in an appropriate and economic manner.
1179 (ii) The Utah Geological Survey may set standards for residential and commercial
1180 energy systems that establish the reasonable costs of an energy system, as used in Subsections
1181 (2)(a)(ii)(A) and (2)(b)(ii)(A), as an amount per unit of energy production.
1182 (iii) A tax credit may not be taken under Subsection (2) until the Utah Geological
1183 Survey has certified that the energy system has been completely installed and is a viable system
1184 for saving or production of energy from renewable resources.
1185 [
1186 accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, that are necessary
1187 to implement this section.
1188 (4) (a) On or before October 1, 2012, and every five years thereafter, the Utah Tax
1189 Review Commission shall review each tax credit provided by this section and make
1190 recommendations to the Revenue and Taxation Interim Committee concerning whether the
1191 credit should be continued, modified, or repealed.
1192 (b) The Utah Tax Review Commission's report under Subsection (4)(a) shall include
1193 information concerning the cost of the credit, the purpose and effectiveness of the credit, and
1194 the state's benefit from the credit.
1195 Section 22. Section 59-7-614.2 is enacted to read:
1196 59-7-614.2. Nonrefundable tax credit for qualifying solar projects.
1197 (1) As used in this section:
1198 (a) "Active solar system" is as defined in Section 59-7-614 .
1199 (b) "Purchaser" means a taxpayer that purchases one or more solar units from a
1200 qualifying political subdivision.
1201 (c) "Qualifying political subdivision" means:
1202 (i) a city or town in this state;
1203 (ii) an interlocal entity created under Title 11, Chapter 13, Interlocal Cooperation Act;
1204 or
1205 (iii) a special service district created under Title 17A, Chapter 2, Part 13, Utah Special
1206 Service District Act.
1207 (d) "Qualifying solar project" means the portion of an active solar system:
1208 (i) that a qualifying political subdivision:
1209 (A) constructs;
1210 (B) controls; or
1211 (C) owns;
1212 (ii) with respect to which the qualifying political subdivision described in Subsection
1213 (1)(c)(i) sells one or more solar units; and
1214 (iii) that generates electrical output that is furnished:
1215 (A) to one or more residential units; or
1216 (B) for the benefit of one or more residential units.
1217 (e) "Residential unit" is as defined in Section 59-7-614 .
1218 (f) "Solar unit" means a portion of the electrical output:
1219 (i) of a qualifying solar project;
1220 (ii) that a qualifying political subdivision sells to a purchaser; and
1221 (iii) the purchase of which requires that the purchaser agree to bear a proportionate
1222 share of the expense of the qualifying solar project:
1223 (A) in accordance with a written agreement between the purchaser and the qualifying
1224 political subdivision;
1225 (B) in exchange for a credit on the purchaser's electrical bill; and
1226 (C) as determined by a formula established by the qualifying political subdivision.
1227 (2) Subject to Subsection (3), for taxable years beginning on or after January 1, 2008, a
1228 purchaser may claim a nonrefundable tax credit equal to the product of:
1229 (a) the amount the purchaser pays to purchase one or more solar units during the
1230 taxable year; and
1231 (b) 25%.
1232 (3) For a taxable year, a tax credit under this section may not exceed $2,000 on a
1233 return.
1234 (4) A purchaser may carry forward a tax credit under this section for a period that does
1235 not exceed the next four taxable years if:
1236 (a) the purchaser is allowed to claim a tax credit under this section for a taxable year;
1237 and
1238 (b) the amount of the tax credit exceeds the purchaser's tax liability under this chapter
1239 for that taxable year.
1240 (5) Subject to Section 59-7-614 , a tax credit under this section is in addition to any
1241 other tax credit allowed by this chapter.
1242 (6) (a) On or before October 1, 2012, and every five years after October 1, 2012, the
1243 Utah Tax Review Commission shall review the tax credit allowed by this section and make
1244 recommendations to the Revenue and Taxation Interim Committee concerning whether the tax
1245 credit should be continued, modified, or repealed.
1246 (b) The Utah Tax Review Commission's report under Subsection (6)(a) shall include
1247 information concerning the cost of the tax credit, the purpose and effectiveness of the tax credit,
1248 and the state's benefit from the tax credit.
1249 Section 23. Section 59-10-103 is amended to read:
1250 59-10-103. Definitions.
1251 (1) As used in this chapter:
1252 (a) "Adjusted gross income":
1253 (i) for a resident or nonresident individual, is as defined in Section 62, Internal Revenue
1254 Code; or
1255 (ii) for a resident or nonresident estate or trust, is as calculated in Section 67(e),
1256 Internal Revenue Code.
1257 [
1258 [
1259
1260 [
1261 [
1262 [
1263 [
1264 [
1265 [
1266 [
1267
1268 [
1269 [
1270
1271 [
1272 [
1273
1274 [
1275 [
1276 [
1277
1278 [
1279
1280 [
1281 (i) [
1282 (ii) a joint stock [
1283 (iii) an insurance [
1284 [
1285
1286 [
1287
1288 [
1289 [
1290 [
1291 [
1292 [
1293 [
1294 [
1295 [
1296 [
1297 [
1298 [
1299 [
1300 [
1301
1302 [
1303
1304 [
1305 [
1306
1307 [
1308
1309 [
1310 [
1311 [
1312 [
1313 Code.
1314 [
1315 [
1316 [
1317 (i) for a resident or nonresident individual, means taxable income as defined by Section
1318 63, Internal Revenue Code; or
1319 (ii) for a resident or nonresident estate or trust, is as calculated in Section 641(a) and
1320 (b), Internal Revenue Code.
1321 [
1322 (i) a guardian;
1323 (ii) a trustee;
1324 (iii) an executor;
1325 (iv) an administrator;
1326 (v) a receiver;
1327 (vi) a conservator; or
1328 (vii) any person acting in any fiduciary capacity for any individual.
1329 (h) "Guaranteed annuity interest" is as defined in 26 C.F.R. Sec. 1.170A-6(c)(2).
1330 [
1331 the homesteaded land that was held to have been diminished from the Uintah and Ouray
1332 Reservation in Hagen v. Utah, 510 U.S. 399 (1994).
1333 [
1334 [
1335 terminate all or part of the trust without the consent of a person who has a substantial beneficial
1336 interest in the trust and the interest would be adversely affected by the exercise of the settlor's
1337 power to revoke or terminate all or part of the trust.
1338 [
1339
1340 (l) "Military service" is as defined in Pub. L. No. 108-189, Sec. 101.
1341 [
1342 state.
1343 [
1344 a resident estate or trust.
1345 [
1346 unincorporated organization:
1347 (A) through or by means of which any business, financial operation, or venture is
1348 carried on; and
1349 (B) which is not, within the meaning of this chapter:
1350 (I) a trust;
1351 (II) an estate; or
1352 (III) a corporation.
1353 (ii) "Partnership" does not include any organization not included under the definition of
1354 "partnership" in Section 761, Internal Revenue Code.
1355 (iii) "Partner" includes a member in a syndicate, group, pool, joint venture, or
1356 organization described in Subsection (1)[
1357 [
1358 [
1359 [
1360 [
1361 [
1362 [
1363 [
1364 [
1365 [
1366 [
1367 [
1368 [
1369 [
1370 [
1371 [
1372
1373 [
1374 [
1375
1376
1377 [
1378 [
1379 [
1380 [
1381 [
1382 [
1383 (p) "Qualified nongrantor charitable lead trust" means a trust:
1384 (i) that is irrevocable;
1385 (ii) that has a trust term measured by:
1386 (A) a fixed term of years; or
1387 (B) the life of a person living on the day on which the trust is created;
1388 (iii) under which:
1389 (A) a portion of the value of the trust assets is distributed during the trust term:
1390 (I) to an organization described in Section 170(c), Internal Revenue Code; and
1391 (II) as a:
1392 (Aa) guaranteed annuity interest; or
1393 (Bb) unitrust interest; and
1394 (B) assets remaining in the trust at the termination of the trust term are distributed to a
1395 beneficiary:
1396 (I) designated in the trust; and
1397 (II) that is not an organization described in Section 170(c), Internal Revenue Code;
1398 (iv) for which the trust is allowed a deduction under Section 642(c), Internal Revenue
1399 Code; and
1400 (v) under which the grantor of the trust is not treated as the owner of any portion of the
1401 trust for federal income tax purposes.
1402 [
1403 (A) an individual who is domiciled in this state for any period of time during the taxable
1404 year, but only for the duration of the period during which the individual is domiciled in this
1405 state; or
1406 (B) an individual who is not domiciled in this state but:
1407 (I) maintains a permanent place of abode in this state; and
1408 (II) spends in the aggregate 183 or more days of the taxable year in this state.
1409 (ii) For purposes of Subsection (1)[
1410 counted as a whole day.
1411 [
1412 [
1413
1414 (s) "Servicemember" is as defined in Pub. L. No. 108-189, Sec. 101.
1415 (t) "State income tax percentage for a nonresident estate or trust" means a percentage
1416 equal to a nonresident estate's or trust's state taxable income for the taxable year divided by the
1417 nonresident estate's or trust's total adjusted gross income for that taxable year after making the
1418 adjustments required by:
1419 (i) Section 59-10-202 ;
1420 (ii) Section 59-10-207 ;
1421 (iii) Section 59-10-209.1 ; or
1422 (iv) Section 59-10-210 .
1423 (u) "State income tax percentage for a nonresident individual" means a percentage equal
1424 to a nonresident individual's state taxable income for the taxable year divided by the difference
1425 between:
1426 (i) the nonresident individual's total adjusted gross income for that taxable year, after
1427 making the:
1428 (A) additions and subtractions required by Section 59-10-114 ; and
1429 (B) adjustments required by Section 59-10-115 ; and
1430 (ii) if the nonresident individual described in Subsection (1)(u)(i) is a servicemember,
1431 the compensation the servicemember receives for military service if the servicemember is
1432 serving in compliance with military orders.
1433 (v) "State income tax percentage for a part-year resident individual" means, for a
1434 taxable year, a fraction:
1435 (i) the numerator of which is the sum of:
1436 (A) subject to Subsections 59-10-1404 (3) and (4), for the time period during the
1437 taxable year that the part-year resident individual is a resident, the part-year resident individual's
1438 total adjusted gross income for that time period, after making the:
1439 (I) additions and subtractions required by Section 59-10-114 ; and
1440 (II) adjustments required by Section 59-10-115 ; and
1441 (B) for the time period during the taxable year that the part-year resident individual is a
1442 nonresident, an amount calculated by:
1443 (I) determining the part-year resident individual's adjusted gross income for that time
1444 period, after making the:
1445 (Aa) additions and subtractions required by Section 59-10-114 ; and
1446 (Bb) adjustments required by Section 59-10-115 ; and
1447 (II) calculating the portion of the amount determined under Subsection (1)(v)(i)(B)(I)
1448 that is derived from Utah sources in accordance with Section 59-10-117 ; and
1449 (ii) the denominator of which is the difference between:
1450 (A) the part-year resident individual's total adjusted gross income for that taxable year,
1451 after making the:
1452 (I) additions and subtractions required by Section 59-10-114 ; and
1453 (II) adjustments required by Section 59-10-115 ; and
1454 (B) if the part-year resident individual is a servicemember, any compensation the
1455 servicemember receives for military service during the portion of the taxable year that the
1456 servicemember is a nonresident if the servicemember is serving in compliance with military
1457 orders.
1458 [
1459 (i) subject to Subsection [
1460
1461 [
1462 (A) additions and subtractions required by Section 59-10-114 ; and
1463 (B) adjustments required by Section 59-10-115 ;
1464 (ii) for a nonresident individual [
1465
1466 (A) determining the nonresident individual's adjusted gross income for the taxable year,
1467 after making the:
1468 (I) additions and subtractions required by Section 59-10-114 ; and
1469 (II) adjustments required by Section 59-10-115 ; and
1470 (B) calculating the portion of the amount determined under Subsection (1)(w)(ii)(A)
1471 that is derived from Utah sources in accordance with Section 59-10-117 ;
1472 [
1473
1474 [
1475 [
1476 [
1477 or trust, [
1478 chapter.
1479 (y) "Trust term" means a time period:
1480 (i) beginning on the day on which a qualified nongrantor charitable lead trust is created;
1481 and
1482 (ii) ending on the day on which the qualified nongrantor charitable lead trust described
1483 in Subsection (1)(y)(i) terminates.
1484 [
1485 within the Uintah and Ouray Reservation in:
1486 (i) Hagen v. Utah, 510 U.S. 399 (1994); and
1487 (ii) Ute Indian Tribe v. Utah, 114 F.3d 1513 (10th Cir. 1997).
1488 [
1489 [
1490
1491 [
1492
1493 [
1494 [
1495
1496
1497
1498
1499 (aa) "Unadjusted income" means an amount equal to the difference between:
1500 (i) the total income required to be reported by a resident or nonresident estate or trust
1501 on the resident or nonresident estate's or trust's federal income tax return for estates and trusts
1502 for the taxable year; and
1503 (ii) the sum of the following:
1504 (A) fees paid or incurred to the fiduciary of a resident or nonresident estate or trust:
1505 (I) for administering the resident or nonresident estate or trust; and
1506 (II) that the resident or nonresident estate or trust deducts as allowed on the resident or
1507 nonresident estate's or trust's federal income tax return for estates and trusts for the taxable
1508 year;
1509 (B) the income distribution deduction that a resident or nonresident estate or trust
1510 deducts under Section 651 or 661, Internal Revenue Code, as allowed on the resident or
1511 nonresident estate's or trust's federal income tax return for estates and trusts for the taxable
1512 year;
1513 (C) the amount that a resident or nonresident estate or trust deducts as a deduction for
1514 estate tax or generation skipping transfer tax under Section 691(c), Internal Revenue Code, as
1515 allowed on the resident or nonresident estate's or trust's federal income tax return for estates
1516 and trusts for the taxable year; and
1517 (D) the amount that a resident or nonresident estate or trust deducts as a personal
1518 exemption under Section 642(b), Internal Revenue Code, as allowed on the resident or
1519 nonresident estate's or trust's federal income tax return for estates and trusts for the taxable
1520 year.
1521 (bb) "Unitrust interest" is as defined in 26 C.F.R. Sec. 1.170A-6(c)(2).
1522 (cc) "Ute tribal member" means a person who is enrolled as a member of the Ute Indian
1523 Tribe of the Uintah and Ouray Reservation.
1524 (dd) "Ute tribe" means the Ute Indian Tribe of the Uintah and Ouray Reservation.
1525 (ee) "Wages" is as defined in Section 59-10-401 .
1526 (2) (a) Any term used in this chapter has the same meaning as when used in comparable
1527 context in the laws of the United States relating to federal income taxes unless a different
1528 meaning is clearly required.
1529 (b) Any reference to the Internal Revenue Code or to the laws of the United States shall
1530 mean the Internal Revenue Code or other provisions of the laws of the United States relating to
1531 federal income taxes that are in effect for the taxable year.
1532 (c) Any reference to a specific section of the Internal Revenue Code or other provision
1533 of the laws of the United States relating to federal income taxes shall include any corresponding
1534 or comparable provisions of the Internal Revenue Code as [
1535 or reenacted.
1536 Section 24. Section 59-10-104 is amended to read:
1537 59-10-104. Tax basis -- Tax rate -- Exemption.
1538 (1) [
1539
1540
1541 resident individual as provided in this section.
1542 [
1543
1544
1545 [
1546 [
1547 [
1548 [
1549 [
1550 [
1551 [
1552 [
1553 [
1554 [
1555 [
1556 [
1557 [
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1559
1560 [
1561 [
1562 [
1563 [
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1575
1576
1577 [
1578
1579 [
1580
1581
1582
1583 [
1584 [
1585 [
1586 [
1587
1588 [
1589
1590 [
1591
1592 [
1593
1594 (2) For purposes of Subsection (1), for a taxable year, the tax is an amount equal to the
1595 product of:
1596 (a) the resident individual's state taxable income for that taxable year; and
1597 (b) 5%.
1598 [
1599 under Section 59-10-104.1 .
1600 Section 25. Section 59-10-104.1 is amended to read:
1601 59-10-104.1. Exemption from taxation.
1602 (1) For purposes of this section:
1603 (a) "Personal exemptions" means the total exemption amount an individual is allowed to
1604 claim for the taxable year under Section 151, Internal Revenue Code, for:
1605 (i) the individual;
1606 (ii) the individual's spouse; and
1607 (iii) the individual's dependents.
1608 (b) "Standard deduction":
1609 (i) [
1610 individual is allowed to claim for the taxable year under Section 63, Internal Revenue Code; and
1611 (ii) notwithstanding Subsection (1)(b)(i), does not include an additional amount allowed
1612 under Section 63(f), Internal Revenue Code, for an individual or an individual's spouse who is:
1613 (A) blind; or
1614 (B) 65 years of age or older.
1615 (2) For taxable years beginning on or after January 1, 2002, an individual is exempt
1616 from a tax imposed by Section 59-10-104 or 59-10-116 [
1617 the individual's adjusted gross income on the individual's federal individual income tax return for
1618 the taxable year is less than or equal to the sum of the individual's:
1619 (a) personal exemptions for that taxable year; and
1620 (b) standard deduction for that taxable year.
1621 Section 26. Section 59-10-110 is amended to read:
1622 59-10-110. Disallowance of federal tax credits.
1623 [
1624 purposes [
1625 in calculating the tax due under this chapter.
1626 Section 27. Section 59-10-114 is amended to read:
1627 59-10-114. Additions to and subtractions from adjusted gross income of an
1628 individual.
1629 (1) There shall be added to [
1630 nonresident individual:
1631 [
1632
1633
1634
1635 [
1636 income on the taxpayer's federal individual income tax return for the taxable year;
1637 [
1638 child's income calculated under Subsection [
1639 (i) a parent elects to report on the parent's federal individual income tax return for the
1640 taxable year; and
1641 (ii) the parent does not include in adjusted gross income on the parent's federal
1642 individual income tax return for the taxable year;
1643 [
1644
1645 [
1646 [
1647 [
1648 amounts on the resident or nonresident individual's federal individual income tax return
1649 [
1650 [
1651 [
1652 (I) subtracted on a return the resident or nonresident individual [
1653
1654 (II) used as the basis for a resident or nonresident individual to claim a tax credit under
1655 Section 59-10-1021 ;
1656 (ii) a disbursement required to be added to adjusted gross income in accordance with
1657 Subsection 31A-32a-105 (3); or
1658 (iii) an amount required to be added to adjusted gross income in accordance with
1659 Subsection 31A-32a-105 (5)(c);
1660 [
1661 Incentive Program, from the account of a resident or nonresident individual who is an account
1662 owner as defined in Section 53B-8a-102 , for the taxable year for which the amount is
1663 withdrawn, if that amount withdrawn from the account of the resident or nonresident individual
1664 who is the account owner:
1665 (i) is not expended for higher education costs as defined in Section 53B-8a-102 ; and
1666 (ii) is:
1667 (A) subtracted by the resident or nonresident individual:
1668 (I) who is the account owner; and
1669 [
1670 (II) on the resident or nonresident individual's return filed under this chapter for a
1671 taxable year beginning on or before December 31, 2007; or
1672 (B) used as the basis for the resident or nonresident individual who is the account
1673 owner to claim a tax credit under Section [
1674 [
1675
1676 January 1, 2003, the interest from bonds, notes, and other evidences of indebtedness issued by
1677 one or more of the following entities:
1678 (i) a state other than this state;
1679 (ii) the District of Columbia;
1680 (iii) a political subdivision of a state other than this state; or
1681 (iv) an agency or instrumentality of an entity described in Subsections (1)[
1682 through (iii);
1683 [
1684 beneficiary of a resident trust of income that was taxed at the trust level for federal tax
1685 purposes, but was subtracted from state taxable income of the trust pursuant to Subsection
1686 59-10-202 (2)[
1687 [
1688 undistributed distributable net income realized by the trust on or after January 1, 2004, if that
1689 undistributed distributable net income was taxed at the trust level for federal tax purposes, but
1690 was not taxed at the trust level by any state, with undistributed distributable net income
1691 considered to be distributed from the most recently accumulated undistributed distributable net
1692 income; and
1693 [
1694 (i) for which a resident or nonresident individual receives reimbursement from another
1695 person; and
1696 (ii) to the extent to which the resident or nonresident individual [
1697 adoption expense:
1698 [
1699 (A) on a return filed under this chapter for a taxable year beginning on or before
1700 December 31, 2007; or
1701 (B) from federal taxable income on a federal individual income tax return.
1702 (2) There shall be subtracted from [
1703 or nonresident individual:
1704 (a) the difference between:
1705 [
1706 of the United States [
1707 instrumentality, or possession of the United States, to the extent that interest or dividend is:
1708 (A) included in adjusted gross income for federal income tax purposes for the taxable
1709 year [
1710 (B) exempt from state income taxes under the laws of the United States[
1711
1712 (ii) any interest on indebtedness incurred or continued to purchase or carry the
1713 [
1714
1715
1716
1717 [
1718
1719
1720 [
1721
1722 [
1723
1724 [
1725 [
1726 [
1727 [
1728
1729 [
1730
1731
1732
1733
1734
1735
1736 [
1737
1738 [
1739
1740
1741 [
1742
1743 [
1744 [
1745 [
1746 [
1747 [
1748
1749 [
1750
1751
1752
1753
1754
1755
1756 [
1757
1758 [
1759
1760
1761
1762 [
1763
1764 [
1765 [
1766 [
1767
1768 [
1769
1770 [
1771
1772 [
1773
1774
1775 [
1776
1777
1778
1779 [
1780 Subsection [
1781 (i) during a time period that the Ute tribal member resides on homesteaded land
1782 diminished from the Uintah and Ouray Reservation; and
1783 (ii) from a source within the Uintah and Ouray Reservation;
1784 [
1785
1786
1787 [
1788 [
1789 [
1790 [
1791
1792 [
1793
1794
1795 [
1796
1797 [
1798 [
1799
1800
1801 [
1802
1803
1804 [
1805 [
1806 [
1807 [
1808
1809 [
1810 received by a resident or nonresident beneficiary of a resident trust:
1811 (i) if that amount or distribution constitutes a refund of taxes imposed by:
1812 (A) a state; or
1813 (B) the District of Columbia; and
1814 (ii) to the extent that amount or distribution is included in adjusted gross income for
1815 that taxable year on the federal individual income tax return of the resident or nonresident
1816 individual or resident or nonresident beneficiary of a resident trust;
1817 [
1818 (i) paid:
1819 (A) in accordance with The Railroad Retirement Act of 1974, 45 U.S.C. Sec. 231 et
1820 seq.;
1821 (B) to a resident or nonresident individual; and
1822 (C) for the taxable year; and
1823 (ii) to the extent that railroad retirement benefit is included in adjusted gross income on
1824 that resident or nonresident individual's federal individual income tax return for that taxable
1825 year; and
1826 [
1827 (i) received by an enrolled member of an American Indian tribe; and
1828 (ii) to the extent that the state is not authorized or permitted to impose a tax under this
1829 part on that amount in accordance with:
1830 (A) federal law;
1831 (B) a treaty; or
1832 (C) a final decision issued by a court of competent jurisdiction.
1833 [
1834
1835
1836 [
1837
1838
1839 [
1840
1841
1842 [
1843
1844
1845 [
1846
1847 [
1848
1849
1850 [
1851
1852
1853 [
1854
1855 [
1856
1857
1858 [
1859
1860
1861
1862
1863 [
1864
1865 [
1866
1867
1868 [
1869
1870 [
1871 only if:
1872 (i) the taxpayer is a Ute tribal member; and
1873 (ii) the governor and the Ute tribe execute and maintain an agreement meeting the
1874 requirements of this Subsection [
1875 (b) The agreement described in Subsection [
1876 (i) may not:
1877 (A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
1878 (B) provide a subtraction under this section greater than or different from the
1879 subtraction described in Subsection (2)[
1880 (C) affect the power of the state to establish rates of taxation; and
1881 (ii) shall:
1882 (A) provide for the implementation of the subtraction described in Subsection
1883 (2)[
1884 (B) be in writing;
1885 (C) be signed by:
1886 (I) the governor; and
1887 (II) the chair of the Business Committee of the Ute tribe;
1888 (D) be conditioned on obtaining any approval required by federal law; and
1889 (E) state the effective date of the agreement.
1890 (c) (i) The governor shall report to the commission by no later than February 1 of each
1891 year regarding whether or not an agreement meeting the requirements of this Subsection [
1892 (3) is in effect.
1893 (ii) If an agreement meeting the requirements of this Subsection [
1894 the subtraction permitted under Subsection (2)[
1895 beginning on or after the January 1 following the termination of the agreement.
1896 (d) For purposes of Subsection (2)[
1897 46a, Utah Administrative Rulemaking Act, the commission may make rules:
1898 (i) for determining whether income is derived from a source within the Uintah and
1899 Ouray Reservation; and
1900 (ii) that are substantially similar to how adjusted gross income derived from Utah
1901 sources is determined under Section 59-10-117 .
1902 [
1903 (i) the federal individual income tax Form 8814, Parents' Election To Report Child's
1904 Interest and Dividends; or
1905 (ii) (A) [
1906 the commission in accordance with Subsection [
1907 to 2000 Form 8814 if for purposes of federal individual income taxes the information contained
1908 on 2000 Form 8814 is reported on a form other than Form 8814; and
1909 (B) for purposes of Subsection [
1910 Chapter 46a, Utah Administrative Rulemaking Act, the commission may make rules designating
1911 a form as being substantially similar to 2000 Form 8814 if for purposes of federal individual
1912 income taxes the information contained on 2000 Form 8814 is reported on a form other than
1913 Form 8814.
1914 (b) The amount of a child's income added to adjusted gross income under Subsection
1915 (1)[
1916 (i) the lesser of:
1917 (A) the base amount specified on Form 8814; and
1918 (B) the sum of the following reported on Form 8814:
1919 (I) the child's taxable interest;
1920 (II) the child's ordinary dividends; and
1921 (III) the child's capital gain distributions; and
1922 (ii) the amount not taxed that is specified on Form 8814.
1923 [
1924 evidences of indebtedness issued by an entity described in Subsections (1)[
1925 may not be added to [
1926 individual if, as annually determined by the commission:
1927 (a) for an entity described in Subsection (1)[
1928 political subdivisions, agencies, or instrumentalities of the entity do not impose a tax based on
1929 income on any part of the bonds, notes, and other evidences of indebtedness of this state; or
1930 (b) for an entity described in Subsection (1)[
1931 impose a tax based on income on any part of the bonds, notes, and other evidences of
1932 indebtedness of this state:
1933 (i) the entity; or
1934 (ii) (A) the state in which the entity is located; or
1935 (B) the District of Columbia, if the entity is located within the District of Columbia.
1936 Section 28. Section 59-10-115 is amended to read:
1937 59-10-115. Adjustments to adjusted gross income.
1938 (1) The commission shall allow an adjustment to [
1939 income of a [
1940 nonresident individual would otherwise:
1941 (a) receive a double tax benefit under this part; or
1942 (b) suffer a double tax detriment under this part.
1943 (2) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
1944 commission may make rules to allow for the adjustment to [
1945 income required by Subsection (1).
1946 Section 29. Section 59-10-116 is amended to read:
1947 59-10-116. Tax on nonresident individual -- Calculation -- Exemption.
1948 [
1949 [
1950 [
1951 [
1952
1953
1954 [
1955 [
1956
1957
1958 [
1959
1960 [
1961 [
1962 [
1963 [
1964 [
1965 [
1966
1967
1968 [
1969 [
1970
1971 product of the [
1972 [
1973 [
1974 (a) nonresident individual's state taxable income; and
1975 (b) percentage listed in Subsection 59-10-104 (2).
1976 [
1977 under Section 59-10-104.1 .
1978 [
1979
1980
1981 Section 30. Section 59-10-117 is amended to read:
1982 59-10-117. State taxable income derived from Utah sources.
1983 (1) For purposes of Section 59-10-116 , [
1984
1985 attributable to or resulting from:
1986 (a) the ownership in this state of any interest in real or tangible personal property,
1987 including real property or property rights from which [
1988 defined by Section 613(c), Internal Revenue Code, is derived; or
1989 (b) the carrying on of a business, trade, profession, or occupation in this state.
1990 (2) For the purposes of Subsection (1):
1991 (a) income from intangible personal property, including annuities, dividends, interest,
1992 and gains from the disposition of intangible personal property shall constitute income derived
1993 from Utah sources only to the extent that [
1994 trade, business, profession, or occupation carried on in this state;
1995 (b) [
1996 [
1997 deduction connected with Utah sources, under rules prescribed by the commission in
1998 accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, but otherwise
1999 shall be determined in the same manner as the corresponding federal deductions;
2000 (c) [
2001 for personal services rendered outside this state [
2002 from Utah sources;
2003 (d) a nonresident shareholder's distributive share of ordinary income, gain, loss, and
2004 deduction derived from or connected with Utah sources shall be determined under Section
2005 59-10-118 ;
2006 (e) a nonresident, other than a dealer holding property primarily for sale to customers in
2007 the ordinary course of the dealer's trade or business, may not be considered to carry on a trade,
2008 business, profession, or occupation in this state solely by reason of the purchase or sale of
2009 property for the nonresident's own account;
2010 (f) if a trade, business, profession, or occupation is carried on partly within and partly
2011 without this state, [
2012 from or connected with Utah sources shall be determined in accordance with [
2013 Section 59-10-118 ;
2014 (g) a nonresident partner's distributive share of partnership income, gain, loss, and
2015 deduction derived from or connected with Utah sources shall be determined under Section
2016 [
2017 (h) the share of a nonresident estate or trust [
2018 nonresident beneficiary of any estate or trust in income, gain, loss, [
2019 from or connected with Utah sources shall be determined under Section 59-10-207 ; and
2020 (i) any dividend, interest, or distributive share of income, gain, or loss from a real estate
2021 investment trust, as defined in Section [
2022 nonresident investor in the trust, including any shareholder, beneficiary, or owner of a beneficial
2023 interest in the trust, shall be income from intangible personal property under Subsection (2)(a),
2024 and shall constitute income derived from Utah sources only to the extent the nonresident
2025 investor is employing its beneficial interest in the trust in a trade, business, profession, or
2026 occupation carried on by the investor in this state.
2027 Section 31. Section 59-10-118 is amended to read:
2028 59-10-118. Division of income for tax purposes.
2029 (1) As used in this section [
2030 (a) "Business income" means income arising from transactions and activity in the
2031 regular course of [
2032 intangible property if the acquisition, management, and disposition of the property constitutes
2033 integral parts of the taxpayer's regular trade or business operations.
2034 (b) "Commercial domicile" means the principal place from which the trade or business
2035 of [
2036 [
2037
2038 [
2039 [
2040 Subsections (3) through (7).
2041 [
2042 commonwealth of Puerto Rico, [
2043 (2) [
2044 without this state, shall allocate and apportion [
2045 section.
2046 (3) Rents and royalties from real or tangible personal property, capital gains, interest,
2047 dividends, or patent or copyright royalties, to the extent that they constitute nonbusiness
2048 income, shall be allocated as provided in Subsections (4) through (7).
2049 (4) (a) Net rents and royalties from real property located in this state are allocable to
2050 this state.
2051 (b) Net rents and royalties from tangible personal property are allocable to this state:
2052 (i) if and to the extent that the property is utilized in this state; or
2053 (ii) in their entirety if the taxpayer's commercial domicile is in this state and the taxpayer
2054 is not organized under the laws of or taxable in the state in which the property is utilized.
2055 (c) The extent of utilization of tangible personal property in a state is determined by
2056 multiplying the rents and royalties by a fraction, the numerator of which is the number of days
2057 of physical location of the property in the state during the rental or royalty period in the taxable
2058 year and the denominator of which is the number of days of physical location of the property
2059 everywhere during all rental or royalty periods in the taxable year. If the physical location of the
2060 property during the rental or royalty period is unknown or unascertainable by the taxpayer,
2061 tangible personal property is utilized in the state in which the property was located at the time
2062 the rental or royalty payer obtained possession.
2063 (5) (a) Capital gains and losses from sales of real property located in this state are
2064 allocable to this state.
2065 (b) Capital gains and losses from sales of tangible personal property are allocable to this
2066 state if:
2067 (i) the property [
2068 (ii) the taxpayer's commercial domicile is in this state and the taxpayer is not taxable in
2069 the state in which the property had a situs.
2070 (c) Capital gains and losses from sales of intangible personal property are allocable to
2071 this state if the taxpayer's commercial domicile is in this state.
2072 (6) Interest and dividends are allocable to this state if the taxpayer's commercial
2073 domicile is in this state.
2074 (7) (a) Patent and copyright royalties are allocable to this state:
2075 (i) if and to the extent that the patent or copyright is utilized by the payer in this state;
2076 or
2077 (ii) if and to the extent that the patent or copyright is utilized by the payer in a state in
2078 which the taxpayer is not taxable and the taxpayer's commercial domicile is in this state.
2079 (b) A patent is utilized in a state to the extent that it is employed in production,
2080 fabrication, manufacturing, or other processing in the state or to the extent that a patented
2081 product is produced in the state. If the basis of receipts from patent royalties does not permit
2082 allocation to states or if the accounting procedures do not reflect states of utilization, the patent
2083 is utilized in the state in which the taxpayer's commercial domicile is located.
2084 (8) All business income shall be apportioned to this state [
2085
2086
2087 requirements of Sections 59-7-311 through 59-7-320 .
2088 [
2089
2090
2091
2092 [
2093
2094
2095
2096 [
2097
2098
2099
2100 [
2101
2102
2103 [
2104 [
2105 [
2106
2107 [
2108 [
2109
2110 [
2111
2112
2113 [
2114
2115
2116 [
2117
2118
2119 [
2120 [
2121 [
2122
2123
2124 [
2125
2126
2127
2128 [
2129 [
2130 [
2131
2132 [
2133
2134 Section 32. Section 59-10-119 is amended to read:
2135 59-10-119. Returns by husband and wife if husband or wife is a nonresident.
2136 (1) If the [
2137 both nonresidents of this state[
2138 tax returns, [
2139 determined.
2140 (2) If the [
2141 both nonresidents[
2142 tax return [
2143 joint return.
2144 (3) (a) If [
2145 spouse is a resident of this state, separate taxes shall be determined on [
2146 separate state taxable incomes on [
2147
2148 commission.
2149 (b) Notwithstanding Subsection (3)(a), a husband and wife may elect to be considered
2150 to be residents of this state for purposes of determining state taxable income for a taxable year.
2151 (c) If [
2152 who is a nonresident of this state and the other spouse who is a resident of this state file a joint
2153 federal income tax return, but determine [
2154 spouses shall compute their taxable incomes in this state as if their [
2155 gross incomes had been determined separately.
2156 Section 33. Section 59-10-120 is amended to read:
2157 59-10-120. Change of status as resident or nonresident.
2158 (1) If an individual changes [
2159 from resident to nonresident or from nonresident to resident, the commission may by rule, made
2160 in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, require [
2161 the individual to file one return for the portion of the taxable year during which [
2162 individual is a resident and another return for the portion of the taxable year during which [
2163 the individual is a nonresident.
2164 (2) [
2165 described in Subsection (1) shall be determined as provided in this chapter for residents and for
2166 nonresidents as if the individual's taxable year for federal income tax purposes were limited to
2167 the period of [
2168 [
2169
2170
2171
2172
2173 Section 34. Section 59-10-121 is amended to read:
2174 59-10-121. Proration when two returns required.
2175 [
2176 file two returns for a taxable year under Section 59-10-120 :
2177 (1) personal exemptions and the standard deduction as used on the federal individual
2178 income tax return shall be prorated between the two returns, under rules prescribed by the
2179 commission in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, to
2180 reflect the proportions of the taxable year during which the individual was a resident and a
2181 nonresident; and
2182 (2) the total amount of the taxes due [
2183 than the total amount of the taxes that would be due if the total of the taxable incomes reported
2184 on the two returns [
2185 Section 35. Section 59-10-122 is amended to read:
2186 59-10-122. Taxable year.
2187 (1) For purposes of [
2188 of a resident or nonresident individual or resident or nonresident estate or trust shall be the same
2189 as [
2190 estate or trust for federal income tax purposes.
2191 (2) (a) If [
2192 resident or nonresident estate or trust is changed for federal income tax purposes, [
2193 taxable year for purposes of [
2194 the same manner as the change for federal income tax purposes.
2195 (b) If a change in a taxable year results in a taxable period of less than 12 months for
2196 federal income tax purposes, [
2197 tax imposed by this chapter.
2198 Section 36. Section 59-10-123 is amended to read:
2199 59-10-123. Accounting method.
2200 (1) For purposes of [
2201 nonresident individual's or resident or nonresident estate's or trust's method of accounting shall
2202 be the same as the method [
2203 resident or nonresident estate or trust uses for federal income tax purposes.
2204 (2) If a [
2205 estate's or trust's method of accounting is changed for federal income tax purposes, [
2206 resident or nonresident individual's or resident or nonresident estate's or trust's method of
2207 accounting shall be [
2208
2209 (a) for purposes of a tax imposed by this chapter; and
2210 (b) for any taxable year for which [
2211 [
2212 Section 37. Section 59-10-124 is amended to read:
2213 59-10-124. Adjustments between taxable years after change in accounting
2214 method.
2215 (1) In computing [
2216 nonresident estate's or trust's state taxable income for [
2217 accounting different from the method under which the [
2218 individual's or resident or nonresident estate's or trust's state taxable income [
2219
2220
2221
2222
2223 income shall be increased or decreased:
2224 (a) to prevent double inclusion or exclusion of an item of gross income as a result of the
2225 change in the method of accounting; or
2226 (b) to prevent double allowance or disallowance of a subtraction from or addition to
2227 gross income as a result of the change in the method of accounting.
2228 (2) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
2229 commission may make rules for making an increase or decrease required by Subsection (1).
2230 Section 38. Section 59-10-125 is amended to read:
2231 59-10-125. Adjustment after change of accounting method.
2232 (1) If a taxpayer's method of accounting is changed, other than from an accrual to an
2233 installment method, any additional tax that results from adjustments determined to be necessary
2234 solely by reason of the change [
2235 ratably allocated and included for the taxable year of the change and the preceding taxable
2236 years, not in excess of two, during which the taxpayer used the method of accounting from
2237 which the change is made.
2238 (2) If a taxpayer's method of accounting is changed from an accrual to an installment
2239 method, any additional tax for the taxable year of [
2240 accounting and for any subsequent taxable year that is attributable to the receipt of installment
2241 payments properly accrued in a prior taxable year, shall be reduced by the portion of tax for any
2242 prior taxable year attributable to the accrual of such installment payments, under rules
2243 prescribed by the commission in accordance with Title 63, Chapter 46a, Utah Administrative
2244 Rulemaking Act.
2245 Section 39. Section 59-10-126 is amended to read:
2246 59-10-126. Business entities not subject to tax -- Exceptions.
2247 (1) [
2248 is taxable as a corporation for federal income tax purposes [
2249 (a) may not be subject to the tax imposed by this chapter[
2250 (b) is subject to [
2251 Income Taxes.
2252 [
2253
2254
2255
2256
2257 (2) A business entity that is exempt from federal income taxation is exempt from the tax
2258 imposed by this chapter.
2259 (3) Notwithstanding Subsection (2), if a business entity that is exempt from federal
2260 income taxation has income that is subject to federal income taxation, that income is subject to
2261 taxation under Chapter 7, Corporate Franchise and Income Taxes.
2262 Section 40. Section 59-10-201 is amended to read:
2263 59-10-201. Taxation of resident trusts and estates.
2264 (1) [
2265 [
2266 59-10-104 (2)(b) is imposed for each taxable year on the state taxable income of each resident
2267 estate or trust[
2268 (2) The following are not subject to a tax imposed by this part:
2269 (a) a resident estate or trust that is not required to file a federal income tax return for
2270 estates and trusts for the taxable year; or
2271 (b) a resident trust taxed as [
2272 [
2273 59-10-1003 , relating to an income tax imposed by another state, except that the limitation shall
2274 be computed by reference to the taxable income of the estate or trust.
2275 [
2276 53B, Chapter 8a, Higher Education Savings Incentive Program, and its income from operations
2277 and investments are exempt from all taxation by the state under this chapter.
2278 Section 41. Section 59-10-201.1 is amended to read:
2279 59-10-201.1. State taxable income of a resident estate or trust defined.
2280 [
2281
2282
2283 59-10-202 , 59-10-209.1 , and 59-10-210 .
2284 Section 42. Section 59-10-202 is amended to read:
2285 59-10-202. Additions to and subtractions from unadjusted income of a resident
2286 or nonresident estate or trust.
2287 (1) There shall be added to[
2288 nonresident estate or trust:
2289 [
2290
2291
2292
2293
2294 [
2295
2296 Revenue Code, in determining adjusted gross income;
2297 [
2298
2299 January 1, 2003, the interest from bonds, notes, and other evidences of indebtedness issued by
2300 one or more of the following entities:
2301 (i) a state other than this state;
2302 (ii) the District of Columbia;
2303 (iii) a political subdivision of a state other than this state; or
2304 (iv) an agency or instrumentality of an entity described in Subsections (1)[
2305 through (iii);
2306 [
2307 income is derived from stock:
2308 (i) in an S corporation; and
2309 (ii) that is held by an electing small business trust;
2310 [
2311 Savings Incentive Program, from the account of a resident or nonresident estate or trust that is
2312 an account owner as defined in Section 53B-8a-102 , for the taxable year for which the amount
2313 is withdrawn, if that amount withdrawn from the account of the resident or nonresident estate
2314 or trust that is the account owner:
2315 [
2316 and
2317 [
2318 (A) subtracted by the resident or nonresident estate or trust:
2319 (I) that is the account owner; and
2320 [
2321 [
2322
2323
2324
2325
2326 [
2327 [
2328 [
2329 [
2330 (II) on the resident or nonresident estate's or trust's return filed under this chapter for a
2331 taxable year beginning on or before December 31, 2007; or
2332 (B) used as the basis for the resident or nonresident estate or trust that is the account
2333 owner to claim a tax credit under Section 59-10-1017 ; and
2334 [
2335 (2) There shall be subtracted from [
2336 nonresident estate or trust:
2337 (a) the interest or a dividend on obligations or securities of the United States and its
2338 possessions or of any authority, commission, or instrumentality of the United States, to the
2339 extent that interest or dividend is included in gross income for federal income tax purposes for
2340 the taxable year but exempt from state income taxes under the laws of the United States, but the
2341 amount subtracted under this Subsection (2) shall be reduced by any interest on indebtedness
2342 incurred or continued to purchase or carry the obligations or securities described in this
2343 Subsection (2), and by any expenses incurred in the production of interest or dividend income
2344 described in this Subsection (2) to the extent that such expenses, including amortizable bond
2345 premiums, are deductible in determining federal taxable income;
2346 [
2347
2348
2349 [
2350 (i) the income would not be treated as state taxable income derived from Utah sources
2351 under Section 59-10-204 if received by a nonresident trust;
2352 (ii) the trust first became a resident trust on or after January 1, 2004;
2353 (iii) no assets of the trust were held, at any time after January 1, 2003, in another
2354 resident irrevocable trust created by the same settlor or the spouse of the same settlor;
2355 (iv) the trustee of the trust is a trust company as defined in Subsection 7-5-1 (1)(d);
2356 (v) the amount subtracted under this Subsection (2)(b) is reduced to the extent the
2357 settlor or any other person is treated as an owner of any portion of the trust under Subtitle A,
2358 Subchapter J, Subpart E of the Internal Revenue Code; and
2359 (vi) the amount subtracted under this Subsection (2)(b) is reduced by any interest on
2360 indebtedness incurred or continued to purchase or carry the assets generating the income
2361 described in this Subsection (2)(b), and by any expenses incurred in the production of income
2362 described in this Subsection (2)(b), to the extent that those expenses, including amortizable
2363 bond premiums, are deductible in determining federal taxable income;
2364 [
2365 resident or nonresident estate or trust derived from a deceased Ute tribal member:
2366 (i) during a time period that the Ute tribal member resided on homesteaded land
2367 diminished from the Uintah and Ouray Reservation; and
2368 (ii) from a source within the Uintah and Ouray Reservation;
2369 [
2370
2371
2372 [
2373 [
2374 [
2375 [
2376
2377 [
2378
2379
2380 [
2381
2382 [
2383 [
2384
2385
2386 [
2387
2388
2389 [
2390 [
2391 [
2392 [
2393
2394 [
2395 (i) received by a resident or nonresident estate or trust;
2396 (ii) that constitutes a refund of taxes imposed by:
2397 (A) a state; or
2398 (B) the District of Columbia; and
2399 (iii) to the extent that amount is included in total income on that resident or nonresident
2400 estate's or trust's federal tax return for estates and trusts for that taxable year;
2401 [
2402 (i) paid:
2403 (A) in accordance with The Railroad Retirement Act of 1974, 45 U.S.C. Sec. 231 et
2404 seq.;
2405 (B) to a resident or nonresident estate or trust derived from a deceased resident or
2406 nonresident individual; and
2407 (C) for the taxable year; and
2408 (ii) to the extent that railroad retirement benefit is included in total income on that
2409 resident or nonresident estate's or trust's federal tax return for estates and trusts;
2410 [
2411 (i) received by a resident or nonresident estate or trust if that amount is derived from a
2412 deceased enrolled member of an American Indian tribe; and
2413 (ii) to the extent that the state is not authorized or permitted to impose a tax under this
2414 part on that amount in accordance with:
2415 (A) federal law;
2416 (B) a treaty; or
2417 (C) a final decision issued by a court of competent jurisdiction;
2418 [
2419
2420 [
2421
2422 [
2423
2424 [
2425
2426
2427 [
2428
2429
2430
2431
2432 [
2433
2434
2435
2436
2437 [
2438
2439
2440 [
2441
2442 [
2443
2444 [
2445
2446 [
2447 (g) the amount that a qualified nongrantor charitable lead trust deducts under Section
2448 642(c), Internal Revenue Code, as a charitable contribution deduction, as allowed on the
2449 qualified nongrantor charitable lead trust's federal income tax return for estates and trusts for
2450 the taxable year; and
2451 [
2452 (3) Notwithstanding Subsection (1)[
2453 evidences of indebtedness issued by an entity described in Subsections (1)[
2454 may not be added to [
2455 trust if, as annually determined by the commission:
2456 (a) for an entity described in Subsection (1)[
2457 political subdivisions, agencies, or instrumentalities of the entity do not impose a tax based on
2458 income on any part of the bonds, notes, and other evidences of indebtedness of this state; or
2459 (b) for an entity described in Subsection (1)[
2460 impose a tax based on income on any part of the bonds, notes, and other evidences of
2461 indebtedness of this state:
2462 (i) the entity; or
2463 (ii) (A) the state in which the entity is located; or
2464 (B) the District of Columbia, if the entity is located within the District of Columbia.
2465 (4) (a) A subtraction for an amount described in Subsection (2)[
2466 if:
2467 (i) the income is derived from a deceased Ute tribal member; and
2468 (ii) the governor and the Ute tribe execute and maintain an agreement meeting the
2469 requirements of this Subsection (4).
2470 (b) The agreement described in Subsection (4)(a):
2471 (i) may not:
2472 (A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
2473 (B) provide a subtraction under this section greater than or different from the
2474 subtraction described in Subsection (2)[
2475 (C) affect the power of the state to establish rates of taxation; and
2476 (ii) shall:
2477 (A) provide for the implementation of the subtraction described in Subsection
2478 (2)[
2479 (B) be in writing;
2480 (C) be signed by:
2481 (I) the governor; and
2482 (II) the chair of the Business Committee of the Ute tribe;
2483 (D) be conditioned on obtaining any approval required by federal law; and
2484 (E) state the effective date of the agreement.
2485 (c) (i) The governor shall report to the commission by no later than February 1 of each
2486 year regarding whether or not an agreement meeting the requirements of this Subsection (4) is
2487 in effect.
2488 (ii) If an agreement meeting the requirements of this Subsection (4) is terminated, the
2489 subtraction permitted under Subsection (2)[
2490 or after the January 1 following the termination of the agreement.
2491 (d) For purposes of Subsection (2)[
2492 46a, Utah Administrative Rulemaking Act, the commission may make rules:
2493 (i) for determining whether income is derived from a source within the Uintah and
2494 Ouray Reservation; and
2495 (ii) that are substantially similar to how adjusted gross income derived from Utah
2496 sources is determined under Section 59-10-117 .
2497 Section 43. Section 59-10-204 is amended to read:
2498 59-10-204. State taxable income of a nonresident estate or trust.
2499 [
2500
2501 (1) determining the unadjusted income [
2502 nonresident estate or trust for that taxable year after making the adjustments required by:
2503 (a) Section 59-10-202 ;
2504 (b) Section 59-10-207 ;
2505 (c) Section 59-10-209.1 ; or
2506 (d) Section 59-10-210 ; and
2507 (2) calculating the portion of the amount determined under Subsection (1) that is
2508 derived from Utah sources determined in accordance with the principles of Section 59-10-117 [
2509
2510 Section 44. Section 59-10-205 is amended to read:
2511 59-10-205. Tax on nonresident estate or trust.
2512 [
2513 estate or trust in an amount equal to the product of:
2514 (a) the nonresident estate's or trust's state taxable income[
2515
2516
2517
2518
2519 59-10-204 ; and
2520 (b) the percentage listed in Subsection 59-10-104 (2).
2521 (2) The following are not subject to a tax imposed by this part:
2522 (a) a nonresident estate or trust that is not required to file a federal income tax return
2523 for estates and trusts for the taxable year; or
2524 (b) a nonresident trust taxed as a corporation.
2525 Section 45. Section 59-10-207 is amended to read:
2526 59-10-207. Share of a nonresident estate or trust and beneficiaries in state taxable
2527 income.
2528 (1) The following shall be determined as provided in this section:
2529 [
2530 a nonresident beneficiary of a nonresident estate or trust in an item of income, gain, loss, [
2531 or deduction [
2532
2533 (b) for purposes of Section 59-10-116 , the share of a nonresident beneficiary of any
2534 estate or trust in estate or trust income, gain, loss, [
2535
2536 (2) (a) [
2537 added to or subtracted from the amount of [
2538 deduction that [
2539
2540
2541 [
2542 [
2543 (b) A modification [
2544
2545 distributable net income.
2546 [
2547 among the estate or trust and [
2548
2549 proportion to [
2550 distributable net income. [
2551 (b) An amount allocated in accordance with Subsection (3)(a) has the same character as
2552 for federal income tax purposes.
2553 [
2554 income for the taxable year, the share of each beneficiary in the [
2555 Subsection [
2556 income for [
2557 that is required to be distributed currently and any other amounts of [
2558 distributed in [
2559 (b) For purposes of this Subsection (4), any balance of [
2560 allocated to the estate or trust.
2561 [
2562 Rulemaking Act, the commission may by rule establish [
2563 methods of determining the [
2564 an estate or trust in [
2565 (i) income derived from sources in this state[
2566 (ii) modifications related [
2567 income, gain, loss, or deduction.
2568 (b) A fiduciary may elect to use [
2569 this Subsection (5) only [
2570
2571 (i) results in an inequity in the allocation [
2572 (ii) the inequity described in Subsection (5)(b)(i) is substantial [
2573 (A) in amount; and
2574 (B) in relation to the total amount of the modifications [
2575 Subsection [
2576 Section 46. Section 59-10-209.1 is amended to read:
2577 59-10-209.1. Adjustments to unadjusted income.
2578 (1) The commission shall allow an adjustment to [
2579 resident or nonresident estate or trust if the resident or nonresident estate or trust would
2580 otherwise:
2581 (a) receive a double tax benefit under this chapter; or
2582 (b) suffer a double tax detriment under this chapter.
2583 (2) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
2584 commission may make rules to allow for the adjustment to [
2585 required by Subsection (1).
2586 Section 47. Section 59-10-210 is amended to read:
2587 59-10-210. Fiduciary adjustments.
2588 (1) A share of the fiduciary adjustments described in Subsection (2) shall be added to or
2589 subtracted from [
2590 (a) of:
2591 (i) a resident or nonresident estate or trust; or
2592 (ii) a resident or nonresident beneficiary of a resident or nonresident estate or trust; and
2593 (b) as provided in this section.
2594 (2) For purposes of Subsection (1), the fiduciary adjustments are the following
2595 amounts:
2596 (a) the additions to and subtractions from [
2597 resident or nonresident estate or trust required by Section 59-10-202 [
2598
2599 (b) a tax credit claimed by a resident or nonresident estate or trust as allowed by:
2600 (i) Section 59-6-102 ;
2601 (ii) Part 10, Nonrefundable Tax Credit Act;
2602 (iii) Part 11, Refundable Tax Credit Act;
2603 (iv) Section 59-13-202 ;
2604 (v) Section 63-38f-413 ; or
2605 (vi) Section 63-38f-503 .
2606 (3) (a) The respective shares of an estate or trust and its beneficiaries, including for the
2607 purpose of this allocation a nonresident beneficiary, in the state fiduciary adjustments, shall be
2608 allocated in proportion to their respective shares of federal distributable net income of the estate
2609 or trust.
2610 (b) If the estate or trust described in Subsection (3)(a) has no federal distributable net
2611 income for the taxable year, the share of each beneficiary in the fiduciary adjustments shall be
2612 allocated in proportion to that beneficiary's share of the estate or trust income for the taxable
2613 year that is, under state law or the governing instrument, required to be distributed currently
2614 plus any other amounts of that income distributed in that taxable year.
2615 (c) After making the allocations required by Subsections (3)(a) and (b), any balance of
2616 the fiduciary adjustments shall be allocated to the estate or trust.
2617 (4) (a) The commission shall allow a fiduciary to use a method for determining the
2618 allocation of the fiduciary adjustments described in Subsection (2) other than the method
2619 described in Subsection (3) if using the method described in Subsection (3) results in an
2620 inequity:
2621 (i) in allocating the fiduciary adjustments described in Subsection (2); and
2622 (ii) if the inequity is substantial:
2623 (A) in amount; and
2624 (B) in relation to the total amount of the fiduciary adjustments described in Subsection
2625 (2).
2626 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
2627 commission may make rules authorizing a fiduciary to use a method for determining the
2628 allocation of the fiduciary adjustments described in Subsection (2) other than the method
2629 described in Subsection (3) if using the method described in Subsection (3) results in an
2630 inequity:
2631 (i) in allocating the fiduciary adjustments described in Subsection (2); and
2632 (ii) if the inequity is substantial:
2633 (A) in amount; and
2634 (B) in relation to the total amount of the fiduciary adjustments described in Subsection
2635 (2).
2636 Section 48. Section 59-10-507 is amended to read:
2637 59-10-507. Return by a pass-through entity.
2638 (1) [
2639 (a) "Pass-through entity" is as defined in Section 59-10-1402 .
2640 (b) "Taxable year" means a year or other time period that would be a taxable year of a
2641 [
2642 taxation under this chapter.
2643 (2) A [
2644 state shall make a return for the taxable year as prescribed by the commission.
2645 (3) For purposes of Subsection (2), a [
2646 derived from sources in this state shall be determined in accordance with [
2647 the principles of Section 59-10-1405 .
2648 Section 49. Section 59-10-1002.1 , which is renumbered from Section 59-10-1016 is
2649 renumbered and amended to read:
2650 [
2651 prohibition on claiming or carrying forward a tax credit -- Conditions for removal and
2652 prohibition on claiming or carrying forward a tax credit -- Commission reporting
2653 requirements.
2654 (1) As used in this section, "tax return" means a tax return filed in accordance with this
2655 chapter.
2656 (2) Beginning two taxable years after the requirements of Subsection (3) are met:
2657 (a) the commission shall remove a tax credit allowed under this part from each tax
2658 return on which the tax credit appears; and
2659 (b) a claimant, estate, or trust filing a tax return may not claim or carry forward the tax
2660 credit.
2661 (3) The commission shall remove a tax credit allowed under this part from a tax return
2662 and a claimant, estate, or trust filing a tax return may not claim or carry forward [
2663 credit as provided in Subsection (2) if:
2664 (a) the total amount of the tax credit claimed or carried forward by all claimants,
2665 estates, or trusts filing tax returns is less than $10,000 per year for three consecutive taxable
2666 years beginning on or after January 1, 2002; and
2667 (b) less than ten claimants, estates, and trusts per year for the three consecutive taxable
2668 years described in Subsection (3)(a), file a tax return claiming or carrying forward the tax credit.
2669 (4) The commission shall, on or before the November interim meeting of the year after
2670 the taxable year in which the requirements of Subsection (3) are met:
2671 (a) report to the Revenue and Taxation Interim Committee that in accordance with this
2672 section:
2673 (i) the commission is required to remove a tax credit from each tax return on which the
2674 tax credit appears; and
2675 (ii) a claimant, estate, or trust filing a tax return may not claim or carry forward the tax
2676 credit; and
2677 (b) notify each state agency required by statute to assist in the administration of the tax
2678 credit that in accordance with this section:
2679 (i) the commission is required to remove a tax credit from each tax return on which the
2680 tax credit appears; and
2681 (ii) a claimant, estate, or trust filing a tax return may not claim or carry forward the tax
2682 credit.
2683 Section 50. Section 59-10-1002.2 , which is renumbered from Section 59-10-1206.9 is
2684 renumbered and amended to read:
2685 [
2686 (1) A nonresident individual or a part-year resident individual that claims a tax credit in
2687 accordance with Section [
2688 59-10-1018 , 59-10-1019 , 59-10-1021 , 59-10-1022 , 59-10-1023 , or 59-10-1024 , may only
2689 claim an apportioned amount of the tax credit equal to:
2690 [
2691 [
2692 [
2693 allowed to claim but for the apportionment requirements of this section; or
2694 [
2695 [
2696 [
2697 been allowed to claim but for the apportionment requirements of this section.
2698 (2) A nonresident estate or trust that claims a tax credit in accordance with Section
2699 59-10-1017 , 59-10-1020 , 59-10-1022 , or 59-10-1024 , may only claim an apportioned amount
2700 of the tax credit equal to the product of:
2701 (a) the state income tax percentage for the nonresident estate or trust; and
2702 (b) the amount of the tax credit that the nonresident estate or trust would have been
2703 allowed to claim but for the apportionment requirements of this section.
2704 Section 51. Section 59-10-1014 is amended to read:
2705 59-10-1014. Renewable energy systems tax credit -- Definitions -- Limitations --
2706 Certification -- Rulemaking authority.
2707 (1) As used in this part:
2708 (a) "Active solar system":
2709 (i) means a system of equipment capable of collecting and converting incident solar
2710 radiation into thermal, mechanical, or electrical energy, and transferring these forms of energy
2711 by a separate apparatus to storage or to the point of use; and
2712 (ii) includes water heating, space heating or cooling, and electrical or mechanical energy
2713 generation.
2714 (b) "Biomass system" means any system of apparatus and equipment for use in
2715 converting material into biomass energy, as defined in Section 59-12-102 , and transporting that
2716 energy by separate apparatus to the point of use or storage.
2717 (c) "Business entity" means any entity under which business is conducted or transacted.
2718 (d) "Direct-use geothermal system" means a system of apparatus and equipment
2719 enabling the direct use of thermal energy, generally between 100 and 300 degrees Fahrenheit,
2720 that is contained in the earth to meet energy needs, including heating a building, an industrial
2721 process, and aquaculture.
2722 (e) "Geothermal electricity" means energy contained in heat that continuously flows
2723 outward from the earth that is used as a sole source of energy to produce electricity.
2724 (f) "Geothermal heat-pump system" means a system of apparatus and equipment
2725 enabling the use of thermal properties contained in the earth at temperatures well below 100
2726 degrees Fahrenheit to help meet heating and cooling needs of a structure.
2727 (g) "Hydroenergy system" means a system of apparatus and equipment capable of
2728 intercepting and converting kinetic water energy into electrical or mechanical energy and
2729 transferring this form of energy by separate apparatus to the point of use or storage.
2730 (h) "Passive solar system":
2731 (i) means a direct thermal system that utilizes the structure of a building and its operable
2732 components to provide for collection, storage, and distribution of heating or cooling during the
2733 appropriate times of the year by utilizing the climate resources available at the site; and
2734 (ii) includes those portions and components of a building that are expressly designed
2735 and required for the collection, storage, and distribution of solar energy.
2736 (i) "Residential energy system" means any active solar, passive solar, biomass,
2737 direct-use geothermal, geothermal heat-pump system, wind, or hydroenergy system used to
2738 supply energy to or for any residential unit.
2739 (j) "Residential unit" means any house, condominium, apartment, or similar dwelling
2740 unit that serves as a dwelling for a person, group of persons, or a family but does not include
2741 property subject to a fee under:
2742 (i) Section 59-2-404 ;
2743 (ii) Section 59-2-405 ;
2744 (iii) Section 59-2-405.1 ;
2745 (iv) Section 59-2-405.2 ; or
2746 (v) Section 59-2-405.3 .
2747 (k) "Utah Geological Survey" means the Utah Geological Survey established in Section
2748 63-73-5 .
2749 (l) "Wind system" means a system of apparatus and equipment capable of intercepting
2750 and converting wind energy into mechanical or electrical energy and transferring these forms of
2751 energy by a separate apparatus to the point of use or storage.
2752 (2) For taxable years beginning on or after January 1, 2007, a claimant, estate, or trust
2753 may claim a nonrefundable tax credit as provided in this section if:
2754 (a) a claimant, estate, or trust that is not a business entity purchases and completes or
2755 participates in the financing of a residential energy system to supply all or part of the energy for
2756 the claimant's, estate's, or trust's residential unit in the state; or
2757 (b) (i) a claimant, estate, or trust that is a business entity sells a residential unit to
2758 another claimant, estate, or trust that is not a business entity before making a claim for a tax
2759 credit under Subsection (6) or Section 59-7-614 ; and
2760 (ii) the claimant, estate, or trust that is a business entity assigns its right to the tax credit
2761 to the claimant, estate, or trust that is not a business entity as provided in Subsection (6)(c) or
2762 Subsection 59-7-614 (2)(a)(iii).
2763 (3) (a) The tax credit described in Subsection (2) is equal to 25% of the reasonable
2764 costs of each residential energy system, including installation costs, against any income tax
2765 liability of the claimant, estate, or trust under this chapter for the taxable year in which the
2766 residential energy system is completed and placed in service.
2767 (b) The total amount of each tax credit under this section may not exceed $2,000 per
2768 residential unit.
2769 (c) The tax credit under this section is allowed for any residential energy system
2770 completed and placed in service on or after January 1, 2007.
2771 (4) (a) The tax credit provided for in this section shall be claimed in the return for the
2772 taxable year in which the residential energy system is completed and placed in service.
2773 (b) Additional residential energy systems or parts of residential energy systems may be
2774 similarly claimed in returns for subsequent taxable years as long as the total amount claimed
2775 does not exceed $2,000 per residential unit.
2776 (c) If the amount of the tax credit under this section exceeds the income tax liability of
2777 the claimant, estate, or trust claiming the tax credit under this section for that taxable year, then
2778 the amount not used may be carried over for a period that does not exceed the next four taxable
2779 years.
2780 (5) (a) A claimant, estate, or trust that is not a business entity that leases a residential
2781 energy system installed on a residential unit is eligible for the residential energy tax credit if that
2782 claimant, estate, or trust confirms that the lessor irrevocably elects not to claim the tax credit.
2783 (b) Only the principal recovery portion of the lease payments, which is the cost incurred
2784 by the claimant, estate, or trust in acquiring the residential energy system excluding interest
2785 charges and maintenance expenses, is eligible for the tax credits.
2786 (c) A claimant, estate, or trust described in this Subsection (5) may use the tax credits
2787 for a period that does not exceed seven years from the initiation of the lease.
2788 (6) (a) A claimant, estate, or trust that is a business entity that purchases and completes
2789 or participates in the financing of a residential energy system to supply all or part of the energy
2790 required for a residential unit owned or used by the claimant, estate, or trust that is a business
2791 entity and situated in Utah is entitled to a nonrefundable tax credit as provided in this
2792 Subsection (6).
2793 (b) (i) For taxable years beginning on or after January 1, 2007, a claimant, estate, or
2794 trust that is a business entity is entitled to a nonrefundable tax credit equal to 25% of the
2795 reasonable costs of a residential energy system installed with respect to each residential unit it
2796 owns or uses, including installation costs, against any tax due under this chapter for the taxable
2797 year in which the energy system is completed and placed in service.
2798 (ii) The total amount of the tax credit under this Subsection (6) may not exceed $2,000
2799 per residential unit.
2800 (iii) The tax credit under this Subsection (6) is allowed for any residential energy system
2801 completed and placed in service on or after January 1, 2007.
2802 (c) If a claimant, estate, or trust that is a business entity sells a residential unit to a
2803 claimant, estate, or trust that is not a business entity before making a claim for the tax credit
2804 under this Subsection (6), the claimant, estate, or trust that is a business entity may:
2805 (i) assign its right to this tax credit to the claimant, estate, or trust that is not a business
2806 entity; and
2807 (ii) if the claimant, estate, or trust that is a business entity assigns its right to the tax
2808 credit to a claimant, estate, or trust that is not a business entity under Subsection (6)(c)(i), the
2809 claimant, estate, or trust that is not a business entity may claim the tax credit as if that claimant,
2810 estate, or trust that is not a business entity had completed or participated in the costs of the
2811 residential energy system under this section.
2812 (7) (a) A tax credit under this section may be claimed for the taxable year in which the
2813 residential energy system is completed and placed in service.
2814 (b) Additional residential energy systems or parts of residential energy systems may be
2815 claimed for subsequent years.
2816 (c) If the amount of a tax credit under this section exceeds the tax liability of the
2817 claimant, estate, or trust claiming the tax credit under this section for a taxable year, the amount
2818 of the tax credit exceeding the tax liability may be carried over for a period which does not
2819 exceed the next four taxable years.
2820 (8) (a) [
2821 this section are in addition to any tax credits provided under the laws or rules and regulations of
2822 the United States.
2823 (b) A purchaser of one or more solar units that claims a tax credit under Section
2824 59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this
2825 section for that purchase.
2826 (9) (a) The Utah Geological Survey may set standards for residential energy systems
2827 that cover the safety, reliability, efficiency, leasing, and technical feasibility of the systems to
2828 ensure that the systems eligible for the tax credit use the state's renewable and nonrenewable
2829 energy resources in an appropriate and economic manner.
2830 (b) The Utah Geological Survey may set standards for residential and commercial
2831 energy systems that establish the reasonable costs of an energy system, as used in Subsections
2832 (3)(a) and (6)(b)(i), as an amount per unit of energy production.
2833 (c) A tax credit may not be taken under this section until the Utah Geological Survey
2834 has certified that the energy system has been completely installed and is a viable system for
2835 saving or production of energy from renewable resources.
2836 (10) The Utah Geological Survey and the commission may make rules in accordance
2837 with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, that are necessary to
2838 implement this section.
2839 (11) (a) On or before October 1, 2012, and every five years thereafter, the Utah Tax
2840 Review Commission shall review each tax credit provided by this section and make
2841 recommendations to the Revenue and Taxation Interim Committee concerning whether the
2842 credit should be continued, modified, or repealed.
2843 (b) The Utah Tax Review Commission's report under Subsection (11)(a) shall include
2844 information concerning the cost of the credit, the purpose and effectiveness of the credit, and
2845 the state's benefit from the credit.
2846 Section 52. Section 59-10-1017 , which is renumbered from Section 59-10-1206.1 is
2847 renumbered and amended to read:
2848 [
2849 (1) As used in this section:
2850 (a) "Account owner" is as defined in Section 53B-8a-102 .
2851 [
2852
2853 [
2854 [
2855 taxable year:
2856 (i) for a claimant, estate, or trust that is an account owner, if that claimant, estate, or
2857 trust is [
2858 the maximum amount of a qualified investment:
2859 (A) listed in Subsection 53B-8a-106 (1)(e)(ii); and
2860 (B) increased or decreased for that taxable year in accordance with Subsection
2861 53B-8a-106 (1)(f); or
2862 (ii) for claimants who are husband and wife account owners who file a single return
2863 jointly, the maximum amount of a qualified investment:
2864 (A) listed in Subsection 53B-8a-106 (1)(e)(iii); and
2865 (B) increased or decreased for that taxable year in accordance with Subsection
2866 53B-8a-106 (1)(f).
2867 [
2868 (2) [
2869 Section 59-10-1002.2 , a claimant, estate, or trust that is an account owner may claim a
2870 nonrefundable tax credit equal to the product of:
2871 (a) the lesser of:
2872 (i) the amount of a qualified investment the claimant, estate, or trust:
2873 (A) makes during the taxable year; and
2874 (B) does not deduct:
2875 (I) for a claimant, on the claimant's federal individual income tax return; or
2876 (II) for an estate or trust, on the estate's or trust's federal income tax return for estates
2877 and trusts; or
2878 (ii) the maximum amount of a qualified investment for the taxable year if the amount
2879 described in Subsection (2)(a)(i) is greater than the maximum amount of a qualified investment
2880 for the taxable year; and
2881 [
2882
2883 [
2884 (b) 5%.
2885 (3) A tax credit under this section may not be carried forward or carried back.
2886 Section 53. Section 59-10-1018 , which is renumbered from Section 59-10-1206.2 is
2887 renumbered and amended to read:
2888 [
2889 credits.
2890 (1) As used in this section:
2891 [
2892
2893 [
2894 Section 2(b), Internal Revenue Code, who files a single federal individual income tax return for
2895 the taxable year.
2896 [
2897 (i) a husband and wife who file a single return jointly under this chapter for a taxable
2898 year; or
2899 (ii) a surviving spouse, as defined in Section 2(a), Internal Revenue Code, who files a
2900 single federal individual income tax return for the taxable year.
2901 [
2902 (i) a single individual who files a single federal individual income tax return for the
2903 taxable year; or
2904 (ii) a married individual who:
2905 (A) does not file a single federal individual income tax return jointly with that married
2906 individual's spouse for the taxable year; and
2907 (B) files a single federal individual income tax return for the taxable year.
2908 (2) Except as provided in Section [
2909 Subsections (3) through (5), [
2910 claimant may claim a nonrefundable tax credit against taxes otherwise due under this part equal
2911 to the sum of:
2912 (a) (i) for a claimant that deducts the standard deduction on the claimant's federal
2913 individual income tax return for the taxable year, 6% of the amount the claimant deducts as
2914 allowed as the standard deduction on the claimant's federal individual income tax return for that
2915 taxable year; or
2916 (ii) for a claimant that itemizes deductions on the claimant's federal individual income
2917 tax return for the taxable year, the product of:
2918 (A) the difference between:
2919 (I) the amount the claimant deducts as allowed as an itemized deduction on the
2920 claimant's federal individual income tax return for that taxable year; and
2921 (II) any amount of state or local income taxes the claimant deducts as allowed as an
2922 itemized deduction on the claimant's federal individual income tax return for that taxable year;
2923 and
2924 (B) 6%; and
2925 (b) [
2926 (i) 75% of the total amount the claimant [
2927 allowed as a personal exemption deduction on the claimant's [
2928 tax return [
2929
2930 (ii) 6%.
2931 (3) A claimant may not carry forward or carry back a tax credit under this section.
2932 (4) The tax credit allowed by Subsection (2) shall be reduced by $.013 for each dollar
2933 by which a claimant's state taxable income exceeds:
2934 (a) for a claimant who has a single filing status, $12,000;
2935 (b) for a claimant who has a head of household filing status, $18,000; or
2936 (c) for a claimant who has a joint filing status, $24,000.
2937 (5) (a) For taxable years beginning on or after January 1, 2009, the commission shall
2938 increase or decrease the following dollar amounts by a percentage equal to the percentage
2939 difference between the consumer price index for the preceding calendar year and the consumer
2940 price index for calendar year 2007:
2941 (i) the dollar amount listed in Subsection (4)(a); and
2942 (ii) the dollar amount listed in Subsection (4)(b).
2943 (b) After the commission increases or decreases the dollar amounts listed in Subsection
2944 (5)(a), the commission shall round those dollar amounts listed in Subsection (5)(a) to the
2945 nearest whole dollar.
2946 (c) After the commission rounds the dollar amounts as required by Subsection (5)(b),
2947 the commission shall increase or decrease the dollar amount listed in Subsection (4)(c) so that
2948 the dollar amount listed in Subsection (4)(c) is equal to the product of:
2949 (i) the dollar amount listed in Subsection (4)(a); and
2950 (ii) two.
2951 (d) For purposes of Subsection (5)(a), the commission shall calculate the consumer
2952 price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
2953 Section 54. Section 59-10-1019 , which is renumbered from Section 59-10-1206.3 is
2954 renumbered and amended to read:
2955 [
2956 credits.
2957 (1) As used in this section:
2958 (a) "Eligible age 65 or older retiree" means a [
2959 claimant, regardless of whether that [
2960 (i) is 65 years of age or older; and
2961 (ii) was born on or before December 31, 1952[
2962 [
2963 (b) (i) "Eligible retirement income" means income received by an eligible under age 65
2964 retiree as a pension or annuity if that pension or annuity is:
2965 (A) paid to the eligible under age 65 retiree or the surviving spouse of an eligible under
2966 age 65 retiree; and
2967 (B) (I) paid from an annuity contract purchased by an employer under a plan that meets
2968 the requirements of Section 404(a)(2), Internal Revenue Code;
2969 (II) purchased by an employee under a plan that meets the requirements of Section 408,
2970 Internal Revenue Code; or
2971 (III) paid by:
2972 (Aa) the United States;
2973 (Bb) a state or a political subdivision of a state; or
2974 (Cc) the District of Columbia.
2975 (ii) "Eligible retirement income" does not include amounts received by the spouse of a
2976 living eligible under age 65 retiree because of the eligible under age 65 retiree's having been
2977 employed in a community property state.
2978 (c) "Eligible under age 65 retiree" means a [
2979 regardless of whether that [
2980 (i) is younger than 65 years of age;
2981 (ii) was born on or before December 31, 1952; and
2982 (iii) has eligible retirement income for the taxable year for which a tax credit is claimed
2983 under this section[
2984 [
2985 (d) "Head of household filing status" is as defined in Section [
2986 59-10-1018 .
2987 (e) "Joint filing status" is as defined in Section [
2988 (f) "Married filing separately status" means a married individual who:
2989 (i) does not file a single federal individual income tax return jointly with that married
2990 individual's spouse for the taxable year; and
2991 (ii) files a single federal individual income tax return for the taxable year.
2992 (g) "Modified adjusted gross income" means the sum of an eligible age 65 or older
2993 retiree's or eligible under age 65 retiree's:
2994 (i) adjusted gross income for the taxable year for which a tax credit is claimed under
2995 this section; [
2996 (ii) any interest income that is not included in adjusted gross income for the taxable year
2997 described in Subsection (1)(g)(i)[
2998 (iii) any addition to adjusted gross income required by Section 59-10-114 for the
2999 taxable year described in Subsection (1)(g)(i).
3000 (h) "Single filing status" means a single individual who files a single federal individual
3001 income tax return for the taxable year.
3002 (2) Except as provided in Section [
3003 Subsections (3) through (6)[
3004 (a) each eligible age 65 or older retiree may claim a nonrefundable tax credit of $450
3005 against taxes otherwise due under this part; or
3006 (b) each eligible under age 65 retiree may claim a nonrefundable tax credit against taxes
3007 otherwise due under this part in an amount equal to the lesser of:
3008 (i) $288; or
3009 (ii) the product of:
3010 (A) the eligible under age 65 retiree's eligible retirement income for the taxable year for
3011 which the eligible under age 65 retiree claims a tax credit under this section; and
3012 (B) 6%.
3013 (3) A tax credit under this section may not be carried forward or carried back.
3014 (4) The sum of the tax credits allowed by Subsection (2)[
3015 filed under this part shall be reduced by $.025 for each dollar by which [
3016
3017 (a) for [
3018 return that is allowed a married filing separately status, $16,000;
3019 (b) for [
3020 return that is allowed a single filing status, $25,000; [
3021 (c) for [
3022 return that is allowed a head of household filing status [
3023 (d) for a return under this chapter that is allowed a joint filing status, $32,000.
3024 [
3025
3026
3027 [
3028
3029 [
3030 [
3031
3032 [
3033 under this section, common law doctrine shall be applied in all cases even though some items of
3034 retirement income may have originated from service or investments in a community property
3035 state.
3036 Section 55. Section 59-10-1020 is enacted to read:
3037 59-10-1020. Nonrefundable estate or trust tax credit.
3038 (1) For taxable years beginning on or after January 1, 2008, an estate or trust may claim
3039 a nonrefundable tax credit against taxes otherwise due under Part 2, Trusts and Estates, equal
3040 to the product of:
3041 (a) the sum of:
3042 (i) the amount that a resident or nonresident estate or trust deducts under Section 163,
3043 Internal Revenue Code, for interest paid or accrued, as allowed on the resident or nonresident
3044 estate's or trust's federal income tax return for estates and trusts for the taxable year;
3045 (ii) the amount that a resident or nonresident estate or trust deducts under Section 164,
3046 Internal Revenue Code, for taxes paid or accrued other than for any amount paid or accrued for
3047 state or local income taxes for the taxable year, as allowed on the resident or nonresident
3048 estate's or trust's federal income tax return for estates and trusts for the taxable year;
3049 (iii) the amount that a resident or nonresident estate or trust other than a qualified
3050 nongrantor charitable lead trust deducts under Section 642(c), Internal Revenue Code, as a
3051 charitable contribution deduction, as allowed on the resident or nonresident estate's or trust's
3052 federal income tax return for estates and trusts for the taxable year;
3053 (iv) subject to Subsection (3), the amount that a resident or nonresident estate or trust
3054 deducts as an attorney, accountant, or return preparer fee, as allowed on the resident or
3055 nonresident estate's or trust's federal income tax return for estates and trusts for the taxable
3056 year; and
3057 (v) subject to Subsection (3), the amount that a resident or nonresident estate or trust
3058 deducts as an other deduction or miscellaneous itemized deduction, as allowed on the resident
3059 or nonresident estate's or trust's federal income tax return for estates and trusts for the taxable
3060 year; and
3061 (b) 6%.
3062 (2) An estate or trust may not carry forward or carry back a tax credit under this
3063 section.
3064 (3) The tax credit allowed by Subsection (1) shall be reduced by $.013 for each dollar
3065 by which an estate's or trust's taxable income exceeds $12,000.
3066 (4) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act:
3067 (a) for purposes of Subsection (1)(a)(iv), the commission may make rules for
3068 determining what constitutes an attorney, accountant, or return preparer fee if that attorney,
3069 accountant, or return preparer fee is consistent with an attorney, accountant, or return preparer
3070 fee that may be deducted on a federal income tax return for estates and trusts; or
3071 (b) for purposes of Subsection (1)(a)(v), the commission may make rules for
3072 determining what constitutes an other deduction or miscellaneous itemized deduction if that
3073 other deduction or miscellaneous itemized deduction is consistent with an other deduction or
3074 miscellaneous itemized deduction that may be deducted on a federal income tax return for
3075 estates and trusts.
3076 Section 56. Section 59-10-1021 is enacted to read:
3077 59-10-1021. Nonrefundable medical care savings account tax credit.
3078 (1) As used in this section:
3079 (a) "Account administrator" is as defined in Section 31A-32a-102 .
3080 (b) "Account holder" is as defined in Section 31A-32a-102 .
3081 (c) "Eligible medical expense" is as defined in Section 31A-32a-102 .
3082 (d) "Eligible spouse claimants" means claimants who are spouses if:
3083 (i) the claimants file a single return jointly as husband and wife;
3084 (ii) neither spouse is covered by:
3085 (A) health care insurance as defined in Section 31A-1-301 ; or
3086 (B) a self-funded plan that covers the other spouse; and
3087 (iii) each spouse is an account holder.
3088 (e) "Medical care savings account" is as defined in Section 31A-32a-102 .
3089 (2) Except as provided in Section 59-10-1002.2 and subject to Subsections (3) and (4),
3090 for taxable years beginning on or after January 1, 2008, a claimant may claim a nonrefundable
3091 tax credit for:
3092 (a) a contribution:
3093 (i) made during the taxable year;
3094 (ii) made to a medical care savings account in accordance with Title 31A, Chapter 32a,
3095 Medical Care Savings Account Act;
3096 (iii) that is accepted by the account administrator; and
3097 (iv) that the claimant does not deduct on the claimant's federal individual income tax
3098 return under Section 220, Internal Revenue Code; and
3099 (b) interest on the contribution described in Subsection (2)(a).
3100 (3) (a) For eligible spouse claimants, a tax credit under this section is equal to the
3101 product of:
3102 (i) the greater of:
3103 (A) the sum of:
3104 (I) the amount contributed in accordance with Title 31A, Chapter 32a, Medical Care
3105 Savings Account Act, by or on behalf of the husband, not to exceed the amount described in
3106 Subsection 31A-32a-103 (2)(a)(i); and
3107 (II) the amount contributed in accordance with Title 31A, Chapter 32a, Medical Care
3108 Savings Account Act, by or on behalf of the wife, not to exceed the amount described in
3109 Subsection 31A-32a-103 (2)(a)(i); or
3110 (B) an amount equal to the sum of all eligible medical expenses paid by the eligible
3111 spouse claimants on behalf of:
3112 (I) the husband;
3113 (II) the wife; or
3114 (III) a dependent of the:
3115 (Aa) husband; or
3116 (Bb) wife; and
3117 (ii) 5%.
3118 (b) For a claimant other than eligible spouse claimants, a tax credit under this section is
3119 equal to the product of:
3120 (i) the greater of:
3121 (A) the amount contributed by or on behalf of the claimant, not to exceed the amount
3122 described in Subsection 31A-32a-103 (2)(a)(i); or
3123 (B) an amount equal to the sum of all eligible medical expenses paid by the claimant on
3124 behalf of:
3125 (I) the claimant;
3126 (II) the claimant's spouse; or
3127 (III) a dependent of the claimant; and
3128 (ii) 5%.
3129 (4) A tax credit under this section may not be carried forward or carried back.
3130 Section 57. Section 59-10-1022 is enacted to read:
3131 59-10-1022. Nonrefundable tax credit for capital gain transactions.
3132 (1) As used in this section:
3133 (a) (i) "Capital gain transaction" means a transaction that results in a:
3134 (A) short-term capital gain; or
3135 (B) long-term capital gain.
3136 (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
3137 commission may by rule define the term "transaction."
3138 (b) "Commercial domicile" means the principal place from which the trade or business
3139 of a Utah small business corporation is directed or managed.
3140 (c) "Long-term capital gain" is as defined in Section 1222, Internal Revenue Code.
3141 (d) "Qualifying stock" means stock that is:
3142 (i) (A) common; or
3143 (B) preferred;
3144 (ii) as defined by the commission by rule made in accordance with Title 63, Chapter
3145 46a, Utah Administrative Rulemaking Act, originally issued to:
3146 (A) a claimant, estate, or trust; or
3147 (B) a partnership if the claimant, estate, or trust that claims a tax credit under this
3148 section:
3149 (I) was a partner on the day on which the stock was issued; and
3150 (II) remains a partner until the last day of the taxable year for which the claimant,
3151 estate, or trust claims a tax credit under this section; and
3152 (iii) issued:
3153 (A) by a Utah small business corporation;
3154 (B) on or after January 1, 2008; and
3155 (C) for:
3156 (I) money; or
3157 (II) other property, except for stock or securities.
3158 (e) "Short-term capital gain" is as defined in Section 1222, Internal Revenue Code.
3159 (f) (i) "Utah small business corporation" means a corporation that:
3160 (A) except as provided in Subsection (1)(f)(ii), is a small business corporation as
3161 defined in Section 1244(c)(3), Internal Revenue Code;
3162 (B) except as provided in Subsection (1)(f)(iii), meets the requirements of Section
3163 1244(c)(1)(C), Internal Revenue Code; and
3164 (C) has its commercial domicile in this state.
3165 (ii) The dollar amount listed in Section 1244(c)(3)(A) is considered to be $2,500,000.
3166 (iii) The phrase "the date the loss on such stock was sustained" in Sections
3167 1244(c)(1)(C) and 1244(c)(2), Internal Revenue Code, is considered to be "the last day of the
3168 taxable year for which the claimant, estate, or trust claims a tax credit under this section."
3169 (2) For taxable years beginning on or after January 1, 2008, a claimant, estate, or trust
3170 that meets the requirements of Subsection (3) may claim a nonrefundable tax credit equal to the
3171 product of:
3172 (a) the total amount of the claimant's, estate's, or trust's short-term capital gain or
3173 long-term capital gain on a capital gain transaction that occurs on or after January 1, 2008; and
3174 (b) 5%.
3175 (3) For purposes of Subsection (2), a claimant, estate, or trust may claim the
3176 nonrefundable tax credit allowed by Subsection (2) if:
3177 (a) 70% or more of the gross proceeds of the capital gain transaction are expended:
3178 (i) to purchase qualifying stock in a Utah small business corporation; and
3179 (ii) within a 12-month period after the day on which the capital gain transaction occurs;
3180 and
3181 (b) prior to the purchase of the qualifying stock described in Subsection (3)(a)(i), the
3182 claimant, estate, or trust did not have an ownership interest in the Utah small business
3183 corporation that issued the qualifying stock.
3184 (4) A claimant, estate, or trust may not carry forward or carry back a tax credit under
3185 this section.
3186 (5) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
3187 commission may make rules:
3188 (a) defining the term "gross proceeds"; and
3189 (b) prescribing the circumstances under which a claimant, estate, or trust has an
3190 ownership interest in a Utah small business corporation.
3191 Section 58. Section 59-10-1023 is enacted to read:
3192 59-10-1023. Nonrefundable tax credit for amounts paid under a health benefit
3193 plan.
3194 (1) As used in this section:
3195 (a) "Claimant with dependents" means a claimant:
3196 (i) regardless of the claimant's filing status for purposes of filing a federal individual
3197 income tax return for the taxable year; and
3198 (ii) who claims one or more dependents under Section 151, Internal Revenue Code, as
3199 allowed on the claimant's federal individual income tax return for the taxable year.
3200 (b) "Eligible insured individual" means:
3201 (i) the claimant who is insured under a health benefit plan;
3202 (ii) the spouse of the claimant described in Subsection (1)(b)(i) if:
3203 (A) the claimant files a single return jointly under this chapter with the claimant's spouse
3204 for the taxable year; and
3205 (B) the spouse is insured under the health benefit plan described in Subsection (1)(b)(i);
3206 or
3207 (iii) a dependent of the claimant described in Subsection (1)(b)(i) if:
3208 (A) the claimant claims the dependent under Section 151, Internal Revenue Code, as
3209 allowed on the claimant's federal individual income tax return for the taxable year; and
3210 (B) the dependent is insured under the health benefit plan described in Subsection
3211 (1)(b)(i).
3212 (c) "Excluded expenses" means an amount a claimant pays for insurance offered under a
3213 health benefit plan for a taxable year if:
3214 (i) the claimant claims a tax credit for that amount under Section 35, Internal Revenue
3215 Code:
3216 (A) on the claimant's federal individual income tax return for the taxable year; and
3217 (B) with respect to an eligible insured individual;
3218 (ii) the claimant deducts that amount under Section 162 or 213, Internal Revenue Code:
3219 (A) on the claimant's federal individual income tax return for the taxable year; and
3220 (B) with respect to an eligible insured individual; or
3221 (iii) the claimant excludes that amount from gross income under Section 106 or 125,
3222 Internal Revenue Code, with respect to an eligible insured individual.
3223 (d) (i) "Health benefit plan" is as defined in Section 31A-1-301 .
3224 (ii) "Health benefit plan" does not include equivalent self-insurance as defined by the
3225 Insurance Department by rule made in accordance with Title 63, Chapter 46a, Utah
3226 Administrative Rulemaking Act.
3227 (e) "Joint claimant with no dependents" means a husband and wife who:
3228 (i) file a single return jointly under this chapter for the taxable year; and
3229 (ii) do not claim a dependent under Section 151, Internal Revenue Code, on the
3230 husband's and wife's federal individual income tax return for the taxable year.
3231 (f) "Single claimant with no dependents" means:
3232 (i) a single individual who:
3233 (A) files a single federal individual income tax return for the taxable year; and
3234 (B) does not claim a dependent under Section 151, Internal Revenue Code, on the
3235 single individual's federal individual income tax return for the taxable year;
3236 (ii) a head of household:
3237 (A) as defined in Section 2(b), Internal Revenue Code, who files a single federal
3238 individual income tax return for the taxable year; and
3239 (B) who does not claim a dependent under Section 151, Internal Revenue Code, on the
3240 head of household's federal individual income tax return for the taxable year; or
3241 (iii) a married individual who:
3242 (A) does not file a single federal individual income tax return jointly with that married
3243 individual's spouse for the taxable year; and
3244 (B) does not claim a dependent under Section 151, Internal Revenue Code, on that
3245 married individual's federal individual income tax return for the taxable year.
3246 (2) Subject to Subsection (3), and except as provided in Subsection (4), for taxable
3247 years beginning on or after January 1, 2009, a claimant may claim a nonrefundable tax credit
3248 equal to the product of:
3249 (a) the difference between:
3250 (i) the total amount the claimant pays during the taxable year for:
3251 (A) insurance offered under a health benefit plan; and
3252 (B) an eligible insured individual; and
3253 (ii) excluded expenses; and
3254 (b) 5%.
3255 (3) The maximum amount of a tax credit described in Subsection (2) a claimant may
3256 claim on a return for a taxable year is:
3257 (a) for a single claimant with no dependents, $300;
3258 (b) for a joint claimant with no dependents, $600; or
3259 (c) for a claimant with dependents, $900.
3260 (4) A claimant may not claim a tax credit under this section if the claimant is eligible to
3261 participate in insurance offered under a health benefit plan maintained and funded in whole or in
3262 part by:
3263 (a) the claimant's employer; or
3264 (b) another person's employer.
3265 (5) A claimant may not carry forward or carry back a tax credit under this section.
3266 Section 59. Section 59-10-1024 is enacted to read:
3267 59-10-1024. Nonrefundable tax credit for qualifying solar projects.
3268 (1) As used in this section:
3269 (a) "Active solar system" is as defined in Section 59-10-1014 .
3270 (b) "Purchaser" means a claimant, estate, or trust that purchases one or more solar units
3271 from a qualifying political subdivision.
3272 (c) "Qualifying political subdivision" means:
3273 (i) a city or town in this state;
3274 (ii) an interlocal entity created under Title 11, Chapter 13, Interlocal Cooperation Act;
3275 or
3276 (iii) a special service district created under Title 17A, Chapter 2, Part 13, Utah Special
3277 Service District Act.
3278 (d) "Qualifying solar project" means the portion of an active solar system:
3279 (i) that a qualifying political subdivision:
3280 (A) constructs;
3281 (B) controls; or
3282 (C) owns;
3283 (ii) with respect to which the qualifying political subdivision described in Subsection
3284 (1)(c)(i) sells one or more solar units; and
3285 (iii) that generates electrical output that is furnished:
3286 (A) to one or more residential units; or
3287 (B) for the benefit of one or more residential units.
3288 (e) "Residential unit" is as defined in Section 59-10-1014 .
3289 (f) "Solar unit" means a portion of the electrical output:
3290 (i) of a qualifying solar project;
3291 (ii) that a qualifying political subdivision sells to a purchaser; and
3292 (iii) the purchase of which requires that the purchaser agree to bear a proportionate
3293 share of the expense of the qualifying solar project:
3294 (A) in accordance with a written agreement between the purchaser and the qualifying
3295 political subdivision;
3296 (B) in exchange for a credit on the purchaser's electrical bill; and
3297 (C) as determined by a formula established by the qualifying political subdivision.
3298 (2) Subject to Subsection (3), for taxable years beginning on or after January 1, 2009, a
3299 purchaser may claim a nonrefundable tax credit equal to the product of:
3300 (a) the amount the purchaser pays to purchase one or more solar units during the
3301 taxable year; and
3302 (b) 25%.
3303 (3) For a taxable year, a tax credit under this section may not exceed $2,000 on a
3304 return.
3305 (4) A purchaser may carry forward a tax credit under this section for a period that does
3306 not exceed the next four taxable years if:
3307 (a) the purchaser is allowed to claim a tax credit under this section for a taxable year;
3308 and
3309 (b) the amount of the tax credit exceeds the purchaser's tax liability under this chapter
3310 for that taxable year.
3311 (5) Subject to Section 59-10-1014 , a tax credit under this section is in addition to any
3312 other tax credit allowed by this chapter.
3313 (6) (a) On or before October 1, 2012, and every five years after October 1, 2012, the
3314 Utah Tax Review Commission shall review the tax credit allowed by this section and make
3315 recommendations to the Revenue and Taxation Interim Committee concerning whether the tax
3316 credit should be continued, modified, or repealed.
3317 (b) The Utah Tax Review Commission's report under Subsection (6)(a) shall include
3318 information concerning the cost of the tax credit, the purpose and effectiveness of the tax credit,
3319 and the state's benefit from the tax credit.
3320 Section 60. Section 59-10-1106 is amended to read:
3321 59-10-1106. Refundable renewable energy tax credit.
3322 (1) As used in this section:
3323 (a) "Active solar system" is as defined in Section 59-10-1014 .
3324 (b) "Biomass system" is as defined in Section 59-10-1014 .
3325 (c) "Business entity" is as defined in Section 59-10-1014 .
3326 (d) "Commercial energy system" means any active solar, passive solar, geothermal
3327 electricity, direct-use geothermal, geothermal heat-pump system, wind, hydroenergy, or biomass
3328 system used to supply energy to a commercial unit or as a commercial enterprise.
3329 (e) "Commercial enterprise" means a business entity [
3330 that:
3331 (i) is a claimant, estate, or trust; and
3332 (ii) has the purpose of producing electrical, mechanical, or thermal energy for sale from
3333 a commercial energy system.
3334 (f) (i) "Commercial unit" means any building or structure that a business entity that is a
3335 claimant, estate, or trust uses to transact its business.
3336 (ii) Notwithstanding Subsection (1)(f)(i):
3337 (A) in the case of an active solar system used for agricultural water pumping or a wind
3338 system, each individual energy generating device shall be a commercial unit; and
3339 (B) if an energy system is the building or structure that a business entity that is a
3340 claimant, estate, or trust uses to transact its business, a commercial unit is the complete energy
3341 system itself.
3342 (g) "Direct-use geothermal system" is as defined in Section 59-10-1014 .
3343 (h) "Geothermal electricity" is as defined in Section 59-10-1014 .
3344 (i) "Geothermal heat-pump system" is as defined in Section 59-10-1014 .
3345 (j) "Hydroenergy system" is as defined in Section 59-10-1014 .
3346 [
3347
3348 [
3349 [
3350 Section 63-73-5 .
3351 [
3352 (2) (a) (i) [
3353 that is a claimant, estate, or trust that purchases or participates in the financing of a commercial
3354 energy system situated in Utah is entitled to a refundable tax credit as provided in this
3355 Subsection (2)(a) if the commercial energy system does not use wind, geothermal electricity, or
3356 biomass equipment capable of producing a total of 660 or more kilowatts of electricity and:
3357 (A) the commercial energy system supplies all or part of the energy required by
3358 commercial units owned or used by the business entity that is a claimant, estate, or trust; or
3359 (B) the business entity that is a claimant, estate, or trust sells all or part of the energy
3360 produced by the commercial energy system as a commercial enterprise.
3361 (ii) (A) A business entity that is a claimant, estate, or trust is entitled to a tax credit of
3362 up to 10% of the reasonable costs of any commercial energy system installed, including
3363 installation costs, against any tax due under this chapter for the taxable year in which the
3364 commercial energy system is completed and placed in service.
3365 (B) Notwithstanding Subsection (2)(a)(ii)(A), the total amount of the credit under this
3366 Subsection (2)(a) may not exceed $50,000 per commercial unit.
3367 (C) The credit under this Subsection (2)(a) is allowed for any commercial energy
3368 system completed and placed in service on or after January 1, 2007.
3369 (iii) A business entity that is a claimant, estate, or trust that leases a commercial energy
3370 system installed on a commercial unit is eligible for the tax credit under this Subsection (2)(a) if
3371 the lessee can confirm that the lessor irrevocably elects not to claim the credit.
3372 (iv) Only the principal recovery portion of the lease payments, which is the cost
3373 incurred by a business entity that is a claimant, estate, or trust in acquiring a commercial energy
3374 system, excluding interest charges and maintenance expenses, is eligible for the tax credit under
3375 this Subsection (2)(a).
3376 (v) A business entity that is a claimant, estate, or trust that leases a commercial energy
3377 system is eligible to use the tax credit under this Subsection (2)(a) for a period no greater than
3378 seven years from the initiation of the lease.
3379 (b) (i) [
3380 is a claimant, estate, or trust that owns a commercial energy system situated in Utah using wind,
3381 geothermal electricity, or biomass equipment capable of producing a total of 660 or more
3382 kilowatts of electricity is entitled to a refundable tax credit as provided in this section if:
3383 (A) the commercial energy system supplies all or part of the energy required by
3384 commercial units owned or used by the business entity that is a claimant, estate, or trust; or
3385 (B) the business entity that is a claimant, estate, or trust sells all or part of the energy
3386 produced by the commercial energy system as a commercial enterprise.
3387 (ii) A business entity that is a claimant, estate, or trust is entitled to a tax credit under
3388 this Subsection (2)(b) equal to the product of:
3389 (A) 0.35 cents; and
3390 (B) the kilowatt hours of electricity produced and either used or sold during the taxable
3391 year.
3392 (iii) The credit allowed by this Subsection (2)(b):
3393 (A) may be claimed for production occurring during a period of 48 months beginning
3394 with the month in which the commercial energy system is placed in service; and
3395 (B) may not be carried forward or back.
3396 (iv) A business entity that is a claimant, estate, or trust that leases a commercial energy
3397 system installed on a commercial unit is eligible for the tax credit under this section if the lessee
3398 can confirm that the lessor irrevocably elects not to claim the credit.
3399 (3) The tax credits provided for under this section are in addition to any tax credits
3400 provided under the laws or rules and regulations of the United States.
3401 (4) (a) The Utah Geological Survey may set standards for commercial energy systems
3402 claiming a tax credit under Subsection (2)(a) that cover the safety, reliability, efficiency, leasing,
3403 and technical feasibility of the systems to ensure that the systems eligible for the tax credit use
3404 the state's renewable and nonrenewable energy resources in an appropriate and economic
3405 manner.
3406 (b) A tax credit may not be taken under this section until the Utah Geological Survey
3407 has certified that the commercial energy system has been completely installed and is a viable
3408 system for saving or production of energy from renewable resources.
3409 (5) The Utah Geological Survey and the commission may make rules in accordance
3410 with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, that are necessary to
3411 implement this section.
3412 (6) (a) On or before October 1, 2012, and every five years thereafter, the Utah Tax
3413 Review Commission shall review each tax credit provided by this section and make
3414 recommendations to the Revenue and Taxation Interim Committee concerning whether the
3415 credit should be continued, modified, or repealed.
3416 (b) The Utah Tax Review Commission's report under Subsection (6)(a) shall include
3417 information concerning the cost of the credit, the purpose and effectiveness of the credit, and
3418 the state's benefit from the credit.
3419 Section 61. Section 59-10-1301 is enacted to read:
3420
3421 59-10-1301. Title.
3422 This part is known as the "Individual Income Tax Contribution Act."
3423 Section 62. Section 59-10-1302 is enacted to read:
3424 59-10-1302. Definitions.
3425 As used in this part, "contribution" means a contribution a resident or nonresident
3426 individual makes on an individual income tax return as allowed by this part.
3427 Section 63. Section 59-10-1303 is enacted to read:
3428 59-10-1303. Contributions -- Amount -- Procedure for designating a contribution
3429 -- Joint return -- Contribution irrevocable.
3430 (1) A resident or nonresident individual that makes a contribution under this part, other
3431 than Section 59-10-1311 , may designate as the contribution any whole dollar amount of $1 or
3432 more.
3433 (2) If a resident or nonresident individual designating a contribution under this part
3434 other than Section 59-10-1311 :
3435 (a) is owed an individual income tax refund for the taxable year, the amount of the
3436 contribution under this part shall be deducted from the resident or nonresident individual's
3437 individual income tax refund; or
3438 (b) is not owed an individual income tax refund for the taxable year, the resident or
3439 nonresident individual may remit a contribution under this part with the resident or nonresident
3440 individual's individual income tax return.
3441 (3) If a husband and wife file a single individual income tax return jointly, a contribution
3442 under this part, other than Section 59-10-1311 , shall be a joint contribution.
3443 (4) A contribution under this part is irrevocable for the taxable year for which the
3444 resident or nonresident individual makes the contribution.
3445 Section 64. Section 59-10-1304 , which is renumbered from Section 59-10-551 is
3446 renumbered and amended to read:
3447 [
3448 collection for certain contributions on income tax form -- Conditions for removal and
3449 prohibitions on collection -- Commission reporting requirements.
3450 (1) (a) If a contribution or combination of contributions described in Subsection (1)(b)
3451 generate less than $30,000 per year for three consecutive years, the commission shall remove
3452 the designation for the contribution from the individual income tax return and may not collect
3453 the contribution from a resident or nonresident individual beginning two taxable years after the
3454 three-year period for which the contribution generates less than $30,000 per year.
3455 (b) The following contributions apply to Subsection (1)(a):
3456 (i) the contribution provided for in Section [
3457 (ii) the contribution provided for in Section [
3458 (iii) the sum of the contributions provided for in Subsection [
3459 59-10-1307 (1)(a);
3460 (iv) the contribution provided for in Subsection [
3461 (v) the contribution provided for in Section [
3462 (vi) the contribution provided for in Section [
3463 (vii) the contribution provided for in Section [
3464 (2) If the commission removes the designation for a contribution under Subsection (1),
3465 the commission shall report to the Revenue and Taxation Interim Committee that the
3466 commission removed the designation on or before the November interim meeting of the year in
3467 which the commission determines to remove the designation.
3468 Section 65. Section 59-10-1305 , which is renumbered from Section 59-10-530 is
3469 renumbered and amended to read:
3470 [
3471 Wildlife Resources Account.
3472 [
3473
3474
3475
3476
3477
3478
3479
3480
3481
3482
3483
3484
3485
3486 (1) As used in this section, "nongame wildlife" means wildlife species that are:
3487 (a) (i) protected;
3488 (ii) endangered; or
3489 (iii) threatened with extinction;
3490 (b) under the jurisdiction of the Division of Wildlife Resources, including:
3491 (i) aquatic wildlife;
3492 (ii) a crustacean;
3493 (iii) an invertebrate;
3494 (iv) a mollusk; or
3495 (v) specialized habitat wildlife, including an aquatic or terrestrial type of specialized
3496 habitat wildlife;
3497 (c) not commonly pursued, killed, or consumed for sport or profit; and
3498 (d) not nuisance predators presently being brought under control by the state.
3499 (2) Except as provided in Section [
3500
3501 files an individual income tax return under this chapter may designate on the resident or
3502 nonresident individual's individual income tax return a contribution [
3503
3504 provided in this part to preserve, protect, perpetuate, and enhance nongame wildlife resources
3505 of the state through preservation of a satisfactory environment and an ecological balance. [
3506
3507
3508
3509 [
3510 [
3511 (a) determine annually the total amount of contributions designated [
3512 accordance with this section; and [
3513
3514 (b) credit the amount described in Subsection (3)(a) to the Wildlife Resources Account
3515 [
3516 [
3517
3518
3519 Section 66. Section 59-10-1306 , which is renumbered from Section 59-10-530.5 is
3520 renumbered and amended to read:
3521 [
3522 Atkinson Homeless Trust Account.
3523 (1) [
3524
3525
3526 individual that files an individual income tax return under this chapter may designate on the
3527 resident or nonresident individual's individual income tax return a contribution to the Pamela
3528 Atkinson Homeless Trust Account as provided in this part.
3529 [
3530
3531 [
3532
3533 [
3534 [
3535 [
3536 (a) determine annually the total amount of contributions designated [
3537 accordance with this section; and [
3538
3539 (b) credit the amount described in Subsection (2)(a) to the Pamela Atkinson Homeless
3540 Trust Account [
3541 [
3542
3543
3544 Section 67. Section 59-10-1307 , which is renumbered from Section 59-10-549 is
3545 renumbered and amended to read:
3546 [
3547 (1) Except as provided in Section [
3548
3549 income tax return under this chapter may designate on the resident or nonresident individual's
3550 individual income tax return a contribution as provided in this [
3551 (a) (i) the foundation of any school district if that foundation is exempt from federal
3552 income taxation under Section 501(c)(3), Internal Revenue Code; or
3553 (ii) a school district described in Title 53A, Chapter 2, School Districts, if the school
3554 district has not established a foundation; or
3555 (b) a college campus of the Utah College of Applied Technology listed in Section
3556 53B-2a-105 [
3557 [
3558
3559 [
3560
3561 [
3562
3563
3564 [
3565
3566
3567 [
3568
3569 [
3570
3571 [
3572 contribution under:
3573 (a) Subsection (1)(a)(i), but does not designate a particular school district foundation to
3574 receive the contribution, the contribution shall be made to the Utah State Office of Education to
3575 be distributed to one or more associations of foundations:
3576 (i) if those foundations that are members of the association are established in
3577 accordance with Section 53A-4-205 ; and
3578 (ii) as determined by the Utah State Office of Education; or
3579 (b) Subsection (1)(a)(ii), but does not designate a particular school district to receive
3580 the contribution, the contribution shall be made to the Utah State Office of Education.
3581 [
3582
3583 [
3584 (a) determine annually the total amount of contributions designated to each entity
3585 described in Subsection (1) in accordance with this section; and
3586 [
3587 [
3588
3589 [
3590
3591
3592 [
3593
3594 Section 68. Section 59-10-1308 , which is renumbered from Section 59-10-550 is
3595 renumbered and amended to read:
3596 [
3597 Credit to Kurt Oscarson Children's Organ Transplant Trust Account.
3598 (1) Except as provided in Section [
3599
3600 income tax return under this chapter may designate on the resident or nonresident individual's
3601 individual income tax return a contribution [
3602
3603 Transplant Trust Account created by Section 26-18a-4 .
3604 [
3605
3606
3607
3608 [
3609 [
3610 (a) determine annually the total amount of contributions designated [
3611 accordance with this section; and [
3612 (b) credit the amount described in Subsection (2)(a) to the [
3613 Oscarson Children's Organ Transplant Trust Account created [
3614 [
3615
3616
3617 Section 69. Section 59-10-1309 , which is renumbered from Section 59-10-550.1 is
3618 renumbered and amended to read:
3619 [
3620 Management Restricted Account.
3621 (1) Except as provided in Section [
3622
3623 tax return under this chapter may designate on the resident or nonresident individual's individual
3624 income tax return a contribution as provided in this section to be:
3625 (a) deposited into the Wolf Depredation and Management Restricted Account created
3626 by Section 23-14-14.1 ; and
3627 (b) used for the purposes described in Section 23-14-14.1 .
3628 [
3629
3630 [
3631
3632 [
3633
3634
3635 [
3636
3637
3638 [
3639
3640 [
3641
3642 [
3643 (a) determine annually the total amount of contributions designated in accordance with
3644 this section; and
3645 (b) credit the amount described in Subsection [
3646 Management Restricted Account created by Section 23-14-14.1 .
3647 Section 70. Section 59-10-1310 , which is renumbered from Section 59-10-550.2 is
3648 renumbered and amended to read:
3649 [
3650 and Neuter Program Restricted Account.
3651 (1) Except as provided in Section [
3652
3653 tax return under this chapter may designate on the resident or nonresident individual's individual
3654 income tax return a contribution as provided in this section to be:
3655 (a) deposited into the Cat and Dog Community Spay and Neuter Program Restricted
3656 Account created by Section 26-48-102 ; and
3657 (b) distributed by the Department of Health as provided in Section 26-48-102 .
3658 [
3659
3660 [
3661
3662 [
3663
3664
3665 [
3666
3667
3668 [
3669
3670 [
3671
3672 [
3673 (a) determine annually the total amount of contributions designated in accordance with
3674 this section; and
3675 (b) credit the amount described in Subsection [
3676 Community Spay and Neuter Program Restricted Account created by Section 26-48-102 .
3677 Section 71. Section 59-10-1311 , which is renumbered from Section 59-10-547 is
3678 renumbered and amended to read:
3679 [
3680 Transfer from General Fund -- Form and procedure.
3681 [
3682
3683
3684 (1) (a) A resident or nonresident individual, other than a nonresident alien, may
3685 designate on the resident or nonresident individual's individual income tax return a contribution
3686 of $2 to the Election Campaign Fund created by Section 59-10-1312 , if the resident or
3687 nonresident individual:
3688 (i) has a liability under this chapter for a taxable year of $2 or more; and
3689 (ii) files a return under this chapter.
3690 (b) The commission shall transfer $2 from the General Fund to the Election Campaign
3691 Fund for each [
3692 under this Subsection (1).
3693 (c) The transfer described in Subsection (1)(b) shall [
3694 generated from [
3695 Sales and Use Tax Act.
3696 (2) (a) A [
3697 any taxable year at the time [
3698 that taxable year.
3699 (b) The [
3700
3701 (i) on a return under this chapter; and
3702 (ii) for any political party as defined by Section 20A-1-102 that has qualified as a
3703 political party in the first six months of the calendar year for which the return is prepared.
3704 [
3705 [
3706
3707
3708 [
3709 (c) The commission shall place a political party described in Subsection (2)(b) on a
3710 return described in Subsection (2)(b) in alphabetical order.
3711 (d) The commission shall include on a return described in Subsection (2)(b):
3712 (i) the option for a resident or nonresident individual to indicate that no contribution is
3713 to be made to any political party[
3714 (ii) a statement that a contribution a resident or nonresident individual, other than a
3715 nonresident alien, makes under this section may not:
3716 (A) increase the resident or nonresident individual's tax liability under this chapter; or
3717 (B) reduce the resident or nonresident individual's refund under this chapter.
3718 Section 72. Section 59-10-1312 , which is renumbered from Section 59-10-548 is
3719 renumbered and amended to read:
3720 [
3721 for account -- Disbursement and distribution -- State treasurer requirement to provide a
3722 list of contributions designated to each political party.
3723 (1) (a) As used in this section, "fund" means the Election Campaign Fund created by
3724 this section.
3725 [
3726 "Election Campaign Fund."
3727 [
3728 accordance with Section [
3729 (2) On or before four months after the due date [
3730 required by this chapter in which [
3731 contribution is made in accordance with Section 59-10-1311 , the state treasurer shall:
3732 (a) disburse that portion of the amounts deposited in the fund since the last
3733 disbursement:
3734 (i) that [
3735 (ii) to the political party to which [
3736 (b) provide to the political party described in Subsection (2)(a)(ii) a list disclosing, for
3737 each county, the total amount designated by [
3738 other than nonresident aliens, in that county.
3739 Section 73. Section 59-10-1401 is enacted to read:
3740
3741 59-10-1401. Title.
3742 This part is known as the "Income Tax Treatment of Pass-Through Entities Act."
3743 Section 74. Section 59-10-1402 is enacted to read:
3744 59-10-1402. Definitions.
3745 As used in this part:
3746 (1) "Limited liability company" includes a foreign limited liability company.
3747 (2) (a) "Pass-through entity" means a business entity that is:
3748 (i) a general partnership;
3749 (ii) a limited liability company;
3750 (iii) a limited liability partnership;
3751 (iv) a limited partnership; or
3752 (v) a business entity similar to Subsections (2)(a)(i) through (iv):
3753 (A) with respect to which the business entity's income or losses are divided among and
3754 passed through to taxpayers; and
3755 (B) as defined by the commission by rule made in accordance with Title 63, Chapter
3756 46a, Utah Administrative Rulemaking Act.
3757 (b) "Pass-through entity" does not include a trust.
3758 (3) "Taxpayer" means:
3759 (a) for a general partnership, a partner;
3760 (b) for a limited liability company, a member;
3761 (c) for a limited liability partnership, a partner;
3762 (d) for a limited partnership, a partner; or
3763 (e) for a business entity described in Subsection (2)(a)(v), a member, partner,
3764 shareholder, or other title designated by the commission by rule made in accordance with Title
3765 63, Chapter 46a, Utah Administrative Rulemaking Act.
3766 Section 75. Section 59-10-1403 , which is renumbered from Section 59-10-301 is
3767 renumbered and amended to read:
3768 [
3769 Returns -- Limited liability companies.
3770 [
3771 [
3772
3773 (2) The income or losses of a pass-through entity shall be divided among and passed
3774 through to taxpayers.
3775 (3) A pass-through entity is subject to the return filing requirements of Section
3776 59-10-507 .
3777 (4) A pass-through entity that is a limited liability company that transacts business in the
3778 state shall be classified for purposes of taxation under this title in the same manner as the limited
3779 liability company is classified for federal income tax purposes.
3780 Section 76. Section 59-10-1404 , which is renumbered from Section 59-10-302 is
3781 renumbered and amended to read:
3782 [
3783 deduction.
3784 (1) Each item of [
3785 has the same character for a [
3786 gain, loss, or deduction has for federal income tax purposes. [
3787 (2) If an item of income, gain, loss, or deduction described in Subsection (1) is not
3788 characterized for federal income tax purposes, [
3789 has the same character for a [
3790 is:
3791 (a) realized directly from the source from which the item of income, gain, loss, or
3792 deduction is realized by the [
3793 (b) incurred in the same manner as incurred by the [
3794 [
3795 taxpayer, any addition or subtraction described in Section 59-10-114 [
3796 item of [
3797 accordance with the [
3798 (a) of the [
3799
3800 (b) for federal income tax purposes.
3801 (4) If a taxpayer's distributive share of [
3802 deduction described in Subsection (3) is not required to be taken into account separately for
3803 federal income tax purposes, the [
3804 income, gain, loss, or deduction shall be determined in accordance with [
3805 distributive share[
3806 (a) of [
3807 (b) for federal income tax purposes.
3808 Section 77. Section 59-10-1405 , which is renumbered from Section 59-10-303 is
3809 renumbered and amended to read:
3810 [
3811 loss, or deduction of a pass-through entity.
3812 (1) [
3813 nonresident [
3814 adjusted by only that portion of the taxpayer's distributive share of an item of income, gain, loss,
3815 or deduction of a pass-through entity derived from or connected with sources in this state [
3816
3817
3818
3819 (2) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
3820 commission may make rules for determining the adjustment required by Subsection (1) if those
3821 rules are consistent with the principles of Section 59-10-116 .
3822 [
3823 income, [
3824 following provisions in a pass-through entity agreement may not be considered:
3825 (a) a provision that characterizes [
3826 being for [
3827 (i) a service; or
3828 (ii) the use of capital[
3829 (b) except as provided in Subsection (5), a provision that allocates to the [
3830 taxpayer, as income or gain from [
3831 the [
3832 entity than the ratio of [
3833 outside this state to [
3834
3835 [
3836 taxpayer a greater proportion of [
3837 entity connected with sources in this state than the [
3838
3839
3840 (i) relating to the pass-through entity; and
3841 (ii) for federal income tax purposes.
3842 [
3843 relates to an item of [
3844 shall be made in accordance with the [
3845
3846
3847 (a) of the portion of the item of income, gain, loss, or deduction required to be added or
3848 subtracted under Section 59-10-114 that is derived from or connected with sources in the state;
3849 and
3850 (b) for federal income tax purposes.
3851 [
3852 by rule, made in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
3853 authorize the use of [
3854 Subsections (1) through (4), for determining:
3855 (i) a nonresident [
3856 gain, loss, or deduction of a pass-through entity derived from or connected with sources in
3857 [
3858
3859 (ii) the portion of an item of income, gain, loss, or deduction required to be added or
3860 subtracted under Section 59-10-114 that is derived from or connected with sources in the state.
3861 (b) For purposes of Subsection (5)(a), the commission may authorize the use of one or
3862 more methods, other than a method described in Subsections (1) through (4), if:
3863 (i) the commission finds that the use of the method is appropriate and equitable; and
3864 (ii) the taxpayer applies to the commission.
3865 [
3866 income, gain, loss, or deduction shall be determined [
3867 accordance with the principles of Subsections 59-10-1404 (3) and (4).
3868 (b) The character of [
3869 nonresident [
3870 accordance with the principles of Subsections 59-10-1404 (1) and (2).
3871 Section 78. Section 59-12-103 is amended to read:
3872 59-12-103. Sales and use tax base -- Rates -- Effective dates -- Use of sales and use
3873 tax revenues.
3874 (1) A tax is imposed on the purchaser as provided in this part for amounts paid or
3875 charged for the following transactions:
3876 (a) retail sales of tangible personal property made within the state;
3877 (b) amounts paid:
3878 (i) to a:
3879 (A) telephone service provider regardless of whether the telephone service provider is
3880 municipally or privately owned; or
3881 (B) telegraph corporation:
3882 (I) as defined in Section 54-2-1 ; and
3883 (II) regardless of whether the telegraph corporation is municipally or privately owned;
3884 and
3885 (ii) for:
3886 (A) telephone service, other than mobile telecommunications service, that originates
3887 and terminates within the boundaries of this state;
3888 (B) mobile telecommunications service that originates and terminates within the
3889 boundaries of one state only to the extent permitted by the Mobile Telecommunications
3890 Sourcing Act, 4 U.S.C. Sec. 116 et seq.; or
3891 (C) telegraph service;
3892 (c) sales of the following for commercial use:
3893 (i) gas;
3894 (ii) electricity;
3895 (iii) heat;
3896 (iv) coal;
3897 (v) fuel oil; or
3898 (vi) other fuels;
3899 (d) sales of the following for residential use:
3900 (i) gas;
3901 (ii) electricity;
3902 (iii) heat;
3903 (iv) coal;
3904 (v) fuel oil; or
3905 (vi) other fuels;
3906 (e) sales of prepared food;
3907 (f) except as provided in Section 59-12-104 , amounts paid or charged as admission or
3908 user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
3909 exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries, fairs,
3910 races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit
3911 television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf
3912 driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails, tennis
3913 courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises,
3914 horseback rides, sports activities, or any other amusement, entertainment, recreation, exhibition,
3915 cultural, or athletic activity;
3916 (g) amounts paid or charged for services for repairs or renovations of tangible personal
3917 property, unless Section 59-12-104 provides for an exemption from sales and use tax for:
3918 (i) the tangible personal property; and
3919 (ii) parts used in the repairs or renovations of the tangible personal property described
3920 in Subsection (1)(g)(i), whether or not any parts are actually used in the repairs or renovations
3921 of that tangible personal property;
3922 (h) except as provided in Subsection 59-12-104 (7), amounts paid or charged for
3923 assisted cleaning or washing of tangible personal property;
3924 (i) amounts paid or charged for tourist home, hotel, motel, or trailer court
3925 accommodations and services that are regularly rented for less than 30 consecutive days;
3926 (j) amounts paid or charged for laundry or dry cleaning services;
3927 (k) amounts paid or charged for leases or rentals of tangible personal property if within
3928 this state the tangible personal property is:
3929 (i) stored;
3930 (ii) used; or
3931 (iii) otherwise consumed;
3932 (l) amounts paid or charged for tangible personal property if within this state the
3933 tangible personal property is:
3934 (i) stored;
3935 (ii) used; or
3936 (iii) consumed; and
3937 (m) amounts paid or charged for prepaid telephone calling cards.
3938 (2) (a) Except as provided in Subsections (2)(b) through (e), a state tax and a local tax
3939 is imposed on a transaction described in Subsection (1) equal to the sum of:
3940 (i) a state tax imposed on the transaction at a tax rate of [
3941 (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
3942 transaction under this chapter other than this part.
3943 (b) Except as provided in Subsection (2)(d) or (e), a state tax and a local tax is imposed
3944 on a transaction described in Subsection (1)(d) equal to the sum of:
3945 (i) a state tax imposed on the transaction at a tax rate of 2%; and
3946 (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
3947 transaction under this chapter other than this part.
3948 (c) Except as provided in Subsection (2)(d) or (e), beginning on January 1, 2007, a
3949 state tax and a local tax is imposed on amounts paid or charged for food and food ingredients
3950 equal to the sum of:
3951 (i) a state tax imposed on the amounts paid or charged for food and food ingredients at
3952 a tax rate of 1.75%; and
3953 (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
3954 amounts paid or charged for food and food ingredients under this chapter other than this part.
3955 (d) Except as provided in Subsection (2)(e), if a seller collects a tax in accordance with
3956 Subsection 59-12-107 (1)(b) on a transaction described in Subsection (1), a state tax and a local
3957 tax is imposed on the transaction equal to the sum of:
3958 (i) a state tax imposed on the transaction at a tax rate of:
3959 (A) [
3960 (2)(d)(i)(B) or (2)(d)(i)(C);
3961 (B) 2% for a transaction described in Subsection (1)(d); or
3962 (C) beginning on January 1, 2007, 1.75% on the amounts paid or charged for food and
3963 food ingredients; and
3964 (ii) a local tax imposed on the transaction at a tax rate equal to the sum of the following
3965 tax rates:
3966 (A) the tax rate authorized by Section 59-12-204 , but only if all of the counties, cities,
3967 and towns in the state impose the tax authorized by Section 59-12-204 ; and
3968 (B) the tax rate authorized by Section 59-12-1102 , but only if all of the counties in the
3969 state impose the tax authorized by Section 59-12-1102 .
3970 (e) (i) A state tax and a local tax is imposed on an entire bundled transaction as
3971 provided in this Subsection (2)(e) if the bundled transaction is attributable to food and food
3972 ingredients and tangible personal property other than food and food ingredients.
3973 (ii) If the tax on a bundled transaction described in Subsection (2)(e)(i) is collected by a
3974 seller other than a seller that collects a tax in accordance with Subsection 59-12-107 (1)(b),
3975 beginning on January 1, 2007, a state tax and a local tax is imposed on the entire bundled
3976 transaction equal to the sum of:
3977 (A) a state tax imposed on the entire bundled transaction at the tax rate described in
3978 Subsection (2)(a)(i); and
3979 (B) a local tax imposed on the entire bundled transaction at the sum of the tax rates
3980 described in Subsection (2)(a)(ii).
3981 (iii) If the tax on a bundled transaction described in Subsection (2)(e)(i) is collected by a
3982 seller in accordance with Subsection 59-12-107 (1)(b), beginning on January 1, 2007, a state tax
3983 and a local tax is imposed on the entire bundled transaction equal to the sum of:
3984 (A) a state tax imposed on the entire bundled transaction at the tax rate described in
3985 Subsection (2)(d)(i)(A); and
3986 (B) a local tax imposed on the entire bundled transaction at a tax rate equal to the sum
3987 of the following tax rates:
3988 (I) the tax rate authorized by Section 59-12-204 , but only if all of the counties, cities,
3989 and towns in the state impose the tax authorized by Section 59-12-204 ; and
3990 (II) the tax rate authorized by Section 59-12-1102 , but only if all of the counties in the
3991 state impose the tax authorized by Section 59-12-1102 .
3992 (f) Subject to Subsections (2)(g) and (h), a tax rate repeal or tax rate change for a tax
3993 rate imposed under the following shall take effect on the first day of a calendar quarter:
3994 (i) Subsection (2)(a)(i);
3995 (ii) Subsection (2)(b)(i);
3996 (iii) Subsection (2)(c)(i);
3997 (iv) Subsection (2)(d)(i);
3998 (v) Subsection (2)(e)(ii)(A); or
3999 (vi) Subsection (2)(e)(iii)(A).
4000 (g) (i) For a transaction described in Subsection (2)(g)(iii), a tax rate increase shall take
4001 effect on the first day of the first billing period that begins after the effective date of the tax rate
4002 increase if the billing period for the transaction begins before the effective date of a tax rate
4003 increase imposed under:
4004 (A) Subsection (2)(a)(i);
4005 (B) Subsection (2)(b)(i);
4006 (C) Subsection (2)(c)(i);
4007 (D) Subsection (2)(d)(i);
4008 (E) Subsection (2)(e)(ii)(A); or
4009 (F) Subsection (2)(e)(iii)(A).
4010 (ii) For a transaction described in Subsection (2)(g)(iii), the repeal of a tax or a tax rate
4011 decrease shall take effect on the first day of the last billing period that began before the effective
4012 date of the repeal of the tax or the tax rate decrease if the billing period for the transaction
4013 begins before the effective date of the repeal of the tax or the tax rate decrease imposed under:
4014 (A) Subsection (2)(a)(i);
4015 (B) Subsection (2)(b)(i);
4016 (C) Subsection (2)(c)(i);
4017 (D) Subsection (2)(d)(i);
4018 (E) Subsection (2)(e)(ii)(A); or
4019 (F) Subsection (2)(e)(iii)(A).
4020 (iii) Subsections (2)(g)(i) and (ii) apply to transactions subject to a tax under:
4021 (A) Subsection (1)(b);
4022 (B) Subsection (1)(c);
4023 (C) Subsection (1)(d);
4024 (D) Subsection (1)(e);
4025 (E) Subsection (1)(f);
4026 (F) Subsection (1)(g);
4027 (G) Subsection (1)(h);
4028 (H) Subsection (1)(i);
4029 (I) Subsection (1)(j); or
4030 (J) Subsection (1)(k).
4031 (h) (i) For a tax rate described in Subsection (2)(h)(ii), if a tax due on a catalogue sale is
4032 computed on the basis of sales and use tax rates published in the catalogue, a tax rate repeal or
4033 change in a tax rate takes effect:
4034 (A) on the first day of a calendar quarter; and
4035 (B) beginning 60 days after the effective date of the tax rate repeal or tax rate change.
4036 (ii) Subsection (2)(h)(i) applies to the tax rates described in the following:
4037 (A) Subsection (2)(a)(i);
4038 (B) Subsection (2)(b)(i);
4039 (C) Subsection (2)(c)(i);
4040 (D) Subsection (2)(d)(i);
4041 (E) Subsection (2)(e)(ii)(A); or
4042 (F) Subsection (2)(e)(iii)(A).
4043 (iii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
4044 commission may by rule define the term "catalogue sale."
4045 (3) (a) [
4046 taxes shall be deposited into the General Fund:
4047 (i) the tax imposed by Subsection (2)(a)(i);
4048 (ii) the tax imposed by Subsection (2)(b)(i);
4049 (iii) the tax imposed by Subsection (2)(c)(i);
4050 (iv) the tax imposed by Subsection (2) (d)(i);
4051 (v) the tax imposed by Subsection (2)(e)(ii)(A); and
4052 (vi) the tax imposed by Subsection (2)(e)(iii)(A).
4053 (b) The following local taxes shall be distributed to a county, city, or town as provided
4054 in this chapter:
4055 (i) the tax imposed by Subsection (2)(a)(ii);
4056 (ii) the tax imposed by Subsection (2)(b)(ii);
4057 (iii) the tax imposed by Subsection (2)(c)(ii); and
4058 (iv) the tax imposed by Subsection (2)(e)(ii)(B).
4059 (c) (i) Notwithstanding any provision of this chapter, each county, city, or town in the
4060 state shall receive the county's, city's, or town's proportionate share of the revenues generated
4061 by the following local taxes as provided in Subsection (3)(c)(ii):
4062 (A) the local tax described in Subsection (2)(d)(ii); and
4063 (B) the local tax described in Subsection (2)(e)(iii)(B).
4064 (ii) For revenues generated by a tax described in Subsection (3)(c)(i), the commission
4065 shall determine a county's, city's, or town's proportionate share of the revenues by:
4066 (A) calculating an amount equal to the population of the unincorporated area of the
4067 county, city, or town divided by the total population of the state; and
4068 (B) multiplying the amount determined under Subsection (3)(c)(ii)(A) by the total
4069 amount of revenues generated by the taxes described in Subsection (3)(c)(i) for all counties,
4070 cities, and towns.
4071 (iii) (A) Except as provided in Subsection (3)(c)(iii)(B), population figures for purposes
4072 of this section shall be derived from the most recent official census or census estimate of the
4073 United States Census Bureau.
4074 (B) If a needed population estimate is not available from the United States Census
4075 Bureau, population figures shall be derived from the estimate from the Utah Population
4076 Estimates Committee created by executive order of the governor.
4077 (4) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
4078 2003, the lesser of the following amounts shall be used as provided in Subsections (4)(b)
4079 through (g):
4080 (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
4081 (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
4082 (B) for the fiscal year; or
4083 (ii) $17,500,000.
4084 (b) (i) For a fiscal year beginning on or after July 1, 2003, 14% of the amount described
4085 in Subsection (4)(a) shall be transferred each year as dedicated credits to the Department of
4086 Natural Resources to:
4087 (A) implement the measures described in Subsections 63-34-14 (4)(a) through (d) to
4088 protect sensitive plant and animal species; or
4089 (B) award grants, up to the amount authorized by the Legislature in an appropriations
4090 act, to political subdivisions of the state to implement the measures described in Subsections
4091 63-34-14 (4)(a) through (d) to protect sensitive plant and animal species.
4092 (ii) Money transferred to the Department of Natural Resources under Subsection
4093 (4)(b)(i) may not be used to assist the United States Fish and Wildlife Service or any other
4094 person to list or attempt to have listed a species as threatened or endangered under the
4095 Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.
4096 (iii) At the end of each fiscal year:
4097 (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
4098 Conservation and Development Fund created in Section 73-10-24 ;
4099 (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
4100 Program Subaccount created in Section 73-10c-5 ; and
4101 (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
4102 Program Subaccount created in Section 73-10c-5 .
4103 (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
4104 Subsection (4)(a) shall be deposited each year in the Agriculture Resource Development Fund
4105 created in Section 4-18-6 .
4106 (d) (i) For a fiscal year beginning on or after July 1, 2003, 1% of the amount described
4107 in Subsection (4)(a) shall be transferred each year as dedicated credits to the Division of Water
4108 Rights to cover the costs incurred in hiring legal and technical staff for the adjudication of water
4109 rights.
4110 (ii) At the end of each fiscal year:
4111 (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
4112 Conservation and Development Fund created in Section 73-10-24 ;
4113 (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
4114 Program Subaccount created in Section 73-10c-5 ; and
4115 (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
4116 Program Subaccount created in Section 73-10c-5 .
4117 (e) (i) For a fiscal year beginning on or after July 1, 2003, 41% of the amount described
4118 in Subsection (4)(a) shall be deposited in the Water Resources Conservation and Development
4119 Fund created in Section 73-10-24 for use by the Division of Water Resources.
4120 (ii) In addition to the uses allowed of the Water Resources Conservation and
4121 Development Fund under Section 73-10-24 , the Water Resources Conservation and
4122 Development Fund may also be used to:
4123 (A) conduct hydrologic and geotechnical investigations by the Division of Water
4124 Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
4125 quantifying surface and ground water resources and describing the hydrologic systems of an
4126 area in sufficient detail so as to enable local and state resource managers to plan for and
4127 accommodate growth in water use without jeopardizing the resource;
4128 (B) fund state required dam safety improvements; and
4129 (C) protect the state's interest in interstate water compact allocations, including the
4130 hiring of technical and legal staff.
4131 (f) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
4132 in Subsection (4)(a) shall be deposited in the Utah Wastewater Loan Program Subaccount
4133 created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater projects.
4134 (g) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
4135 in Subsection (4)(a) shall be deposited in the Drinking Water Loan Program Subaccount created
4136 in Section 73-10c-5 for use by the Division of Drinking Water to:
4137 (i) provide for the installation and repair of collection, treatment, storage, and
4138 distribution facilities for any public water system, as defined in Section 19-4-102 ;
4139 (ii) develop underground sources of water, including springs and wells; and
4140 (iii) develop surface water sources.
4141 (5) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
4142 2006, the difference between the following amounts shall be expended as provided in this
4143 Subsection (5), if that difference is greater than $1:
4144 (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated for the
4145 fiscal year by a 1/16% tax rate on the transactions described in Subsection (1); and
4146 (ii) $17,500,000.
4147 (b) (i) The first $500,000 of the difference described in Subsection (5)(a) shall be:
4148 (A) transferred each fiscal year to the Department of Natural Resources as dedicated
4149 credits; and
4150 (B) expended by the Department of Natural Resources for watershed rehabilitation or
4151 restoration.
4152 (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
4153 in Subsection (5)(b)(i) shall lapse to the Water Resources Conservation and Development Fund
4154 created in Section 73-10-24 .
4155 (c) (i) After making the transfer required by Subsection (5)(b)(i), $150,000 of the
4156 remaining difference described in Subsection (5)(a) shall be:
4157 (A) transferred each fiscal year to the Division of Water Resources as dedicated credits;
4158 and
4159 (B) expended by the Division of Water Resources for cloud-seeding projects authorized
4160 by Title 73, Chapter 15, Modification of Weather.
4161 (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
4162 in Subsection (5)(c)(i) shall lapse to the Water Resources Conservation and Development Fund
4163 created in Section 73-10-24 .
4164 (d) After making the transfers required by Subsections (5)(b) and (c), 94% of the
4165 remaining difference described in Subsection (5)(a) shall be deposited into the Water Resources
4166 Conservation and Development Fund created in Section 73-10-24 for use by the Division of
4167 Water Resources for:
4168 (i) preconstruction costs:
4169 (A) as defined in Subsection 73-26-103 (6) for projects authorized by Title 73, Chapter
4170 26, Bear River Development Act; and
4171 (B) as defined in Subsection 73-28-103 (8) for the Lake Powell Pipeline project
4172 authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act;
4173 (ii) the cost of employing a civil engineer to oversee any project authorized by Title 73,
4174 Chapter 26, Bear River Development Act;
4175 (iii) the cost of employing a civil engineer to oversee the Lake Powell Pipeline project
4176 authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act; and
4177 (iv) other uses authorized under Sections 73-10-24 , 73-10-25.1 , 73-10-30 , and
4178 Subsection (4)(e)(ii) after funding the uses specified in Subsections (5)(d)(i) through (iii).
4179 (e) Any unexpended monies described in Subsection (5)(d) that remain in the Water
4180 Resources Conservation and Development Fund at the end of the fiscal year are nonlapsing.
4181 (f) After making the transfers required by Subsections (5)(b) and (c) and subject to
4182 Subsection (5)(g), 6% of the remaining difference described in Subsection (5)(a) shall be
4183 transferred each year as dedicated credits to the Division of Water Rights to cover the costs
4184 incurred for employing additional technical staff for the administration of water rights.
4185 (g) At the end of each fiscal year, any unexpended dedicated credits described in
4186 Subsection (5)(f) over $150,000 lapse to the Water Resources Conservation and Development
4187 Fund created in Section 73-10-24 .
4188 (6) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
4189 2003, and for taxes listed under Subsection (3)(a), the amount of revenue generated by a 1/16%
4190 tax rate on the transactions described in Subsection (1) for the fiscal year shall be deposited in
4191 the Transportation Fund created by Section 72-2-102 .
4192 (7) (a) Notwithstanding Subsection (3)(a) and until Subsection (7)(b) applies, beginning
4193 on January 1, 2000, the Division of Finance shall deposit into the Centennial Highway Fund
4194 Restricted Account created in Section 72-2-118 a portion of the taxes listed under Subsection
4195 (3)(a) equal to the revenues generated by a 1/64% tax rate on the taxable transactions under
4196 Subsection (1).
4197 (b) Notwithstanding Subsection (3)(a), when the highway general obligation bonds have
4198 been paid off and the highway projects completed that are intended to be paid from revenues
4199 deposited in the Centennial Highway Fund Restricted Account as determined by the Executive
4200 Appropriations Committee under Subsection 72-2-118 (6)(d), the Division of Finance shall
4201 deposit into the Transportation Investment Fund of 2005 created by Section 72-2-124 a portion
4202 of the taxes listed under Subsection (3)(a) equal to the revenues generated by a 1/64% tax rate
4203 on the taxable transactions under Subsection (1).
4204 (8) (a) Notwithstanding Subsection (3)(a), for fiscal years beginning on or after fiscal
4205 year 2004-05, the commission shall each year on or before the September 30 immediately
4206 following the last day of the fiscal year deposit the difference described in Subsection (8)(b) into
4207 the Remote Sales Restricted Account created in Section 59-12-103.2 if that difference is greater
4208 than $0.
4209 (b) The difference described in Subsection (8)(a) is equal to the difference between:
4210 (i) the total amount of the revenues the commission received from sellers collecting the
4211 taxes described in Subsections (2)(d)(i) and (2)(e)(iii)(A) for the fiscal year immediately
4212 preceding the September 30 described in Subsection (8)(a); and
4213 (ii) $7,279,673.
4214 (9) (a) Notwithstanding Subsection (3)(a), in addition to the amount deposited in
4215 Subsection (7)(a), and until Subsection (9)(b) applies, for a fiscal year beginning on or after July
4216 1, 2007, the Division of Finance shall deposit into the Centennial Highway Fund Restricted
4217 Account created by Section 72-2-118 a portion of the taxes listed under Subsection (3)(a) equal
4218 to 8.3% of the revenues collected from the following taxes, which represents a portion of the
4219 approximately 17% of sales and use tax revenues generated annually by the sales and use tax on
4220 vehicles and vehicle-related products:
4221 (i) the tax imposed by Subsection (2)(a)(i);
4222 (ii) the tax imposed by Subsection (2)(b)(i);
4223 (iii) the tax imposed by Subsection (2)(c)(i); and
4224 (iv) the tax imposed by Subsection (2)(e)(ii)(A).
4225 (b) Notwithstanding Subsection (3)(a) and in addition to the amounts deposited under
4226 Subsection (7)(b), when the highway general obligation bonds have been paid off and the
4227 highway projects completed that are intended to be paid from revenues deposited in the
4228 Centennial Highway Fund Restricted Account as determined by the Executive Appropriations
4229 Committee under Subsection 72-2-118 (6)(d), the Division of Finance shall deposit into the
4230 Transportation Investment Fund of 2005 created by Section 72-2-124 a portion of the taxes
4231 listed under Subsection (3)(a) equal to 8.3% of the revenues collected from the following taxes,
4232 which represents a portion of the approximately 17% of sales and use tax revenues generated
4233 annually by the sales and use tax on vehicles and vehicle-related products:
4234 (i) the tax imposed by Subsection (2)(a)(i);
4235 (ii) the tax imposed by Subsection (2)(b)(i);
4236 (iii) the tax imposed by Subsection (2)(c)(i); and
4237 (iv) the tax imposed by Subsection (2)(e)(ii)(A).
4238 (10) (a) Notwithstanding Subsection (3)(a) and until Subsection (10)(b) applies, the
4239 Division of Finance shall annually deposit $90,000,000 of the revenues generated by the taxes
4240 listed under Subsection (3)(a) into the Critical Highway Needs Fund created by Section
4241 72-2-125 .
4242 (b) Notwithstanding Subsection (3)(a) and in addition to any amounts deposited under
4243 Subsections (7) and (9), when the general obligation bonds authorized by Section 63B-16-101
4244 have been paid off and the highway projects completed that are included in the prioritized
4245 project list under Subsection 72-2-125 (4) as determined in accordance with Subsection
4246 72-2-125 (6), the Division of Finance shall annually deposit $90,000,000 of the revenues
4247 generated by the taxes listed under Subsection (3)(a) into the Transportation Investment Fund
4248 of 2005 created by Section 72-2-124 .
4249 (11) (a) (i) Notwithstanding Subsection (3)(a), except as provided in Subsection
4250 (11)(a)(ii), and until Subsection (11)(b) applies, beginning on January 1, 2009, the Division of
4251 Finance shall deposit into the Critical Highway Needs Fund created by Section 72-2-125 the
4252 amount of tax revenue generated by a .025% tax rate on the transactions described in
4253 Subsection (1).
4254 (ii) For purposes of Subsection (11)(a)(i), the Division of Finance may not deposit into
4255 the Critical Highway Needs Fund any tax revenue generated by amounts paid or charged for
4256 food and food ingredients, except for tax revenue generated by a bundled transaction
4257 attributable to food and food ingredients and tangible personal property other than food and
4258 food ingredients described in Subsection (2)(e).
4259 (b) (i) Notwithstanding Subsection (3)(a), except as provided in Subsection (11)(b)(ii),
4260 and in addition to any amounts deposited under Subsections (7), (9), and (10), when the general
4261 obligation bonds authorized by Section 63B-16-101 have been paid off and the highway
4262 projects completed that are included in the prioritized project list under Subsection 72-2-125 (4)
4263 as determined in accordance with Subsection 72-2-125 (6), the Division of Finance shall deposit
4264 into the Transportation Investment Fund of 2005 created by Section 72-2-124 the amount of
4265 tax revenue generated by a .025% tax rate on the transactions described in Subsection (1).
4266 (ii) For purposes of Subsection (11)(b)(i), the Division of Finance may not deposit into
4267 the Transportation Investment Fund of 2005 any tax revenue generated by amounts paid or
4268 charged for food and food ingredients, except for tax revenue generated by a bundled
4269 transaction attributable to food and food ingredients and tangible personal property other than
4270 food and food ingredients described in Subsection (2)(e).
4271 (12) (a) Notwithstanding Subsection (3)(a), and except as provided in Subsection
4272 (12)(b), beginning on January 1, 2009, the Division of Finance shall deposit into the
4273 Transportation Fund created by Section 72-2-102 the amount of tax revenue generated by a
4274 .025% tax rate on the transactions described in Subsection (1) to be expended to address
4275 chokepoints in construction management.
4276 (b) For purposes of Subsection (12)(a), the Division of Finance may not deposit into the
4277 Transportation Fund any tax revenue generated by amounts paid or charged for food and food
4278 ingredients, except for tax revenue generated by a bundled transaction attributable to food and
4279 food ingredients and tangible personal property other than food and food ingredients described
4280 in Subsection (2)(e).
4281 Section 79. Section 59-12-104 is amended to read:
4282 59-12-104. Exemptions.
4283 The following sales and uses are exempt from the taxes imposed by this chapter:
4284 (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
4285 under Chapter 13, Motor and Special Fuel Tax Act;
4286 (2) sales to the state, its institutions, and its political subdivisions; however, this
4287 exemption does not apply to sales of:
4288 (a) construction materials except:
4289 (i) construction materials purchased by or on behalf of institutions of the public
4290 education system as defined in Utah Constitution Article X, Section 2, provided the
4291 construction materials are clearly identified and segregated and installed or converted to real
4292 property which is owned by institutions of the public education system; and
4293 (ii) construction materials purchased by the state, its institutions, or its political
4294 subdivisions which are installed or converted to real property by employees of the state, its
4295 institutions, or its political subdivisions; or
4296 (b) tangible personal property in connection with the construction, operation,
4297 maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities
4298 providing additional project capacity, as defined in Section 11-13-103 ;
4299 (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
4300 (i) the proceeds of each sale do not exceed $1; and
4301 (ii) the seller or operator of the vending machine reports an amount equal to 150% of
4302 the cost of the item described in Subsection (3)(b) as goods consumed; and
4303 (b) Subsection (3)(a) applies to:
4304 (i) food and food ingredients; or
4305 (ii) prepared food;
4306 (4) sales of the following to a commercial airline carrier for in-flight consumption:
4307 (a) food and food ingredients;
4308 (b) prepared food; or
4309 (c) services related to Subsection (4)(a) or (b);
4310 (5) sales of parts and equipment for installation in aircraft operated by common carriers
4311 in interstate or foreign commerce;
4312 (6) sales of commercials, motion picture films, prerecorded audio program tapes or
4313 records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
4314 exhibitor, distributor, or commercial television or radio broadcaster;
4315 (7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
4316 property if the cleaning or washing of the tangible personal property is not assisted cleaning or
4317 washing of tangible personal property;
4318 (b) if a seller that sells at the same business location assisted cleaning or washing of
4319 tangible personal property and cleaning or washing of tangible personal property that is not
4320 assisted cleaning or washing of tangible personal property, the exemption described in
4321 Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning or
4322 washing of the tangible personal property; and
4323 (c) for purposes of Subsection (7)(b) and in accordance with Title 63, Chapter 46a,
4324 Utah Administrative Rulemaking Act, the commission may make rules:
4325 (i) governing the circumstances under which sales are at the same business location; and
4326 (ii) establishing the procedures and requirements for a seller to separately account for
4327 sales of assisted cleaning or washing of tangible personal property;
4328 (8) sales made to or by religious or charitable institutions in the conduct of their regular
4329 religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
4330 fulfilled;
4331 (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
4332 this state if the vehicle is:
4333 (a) not registered in this state; and
4334 (b) (i) not used in this state; or
4335 (ii) used in this state:
4336 (A) if the vehicle is not used to conduct business, for a time period that does not exceed
4337 the longer of:
4338 (I) 30 days in any calendar year; or
4339 (II) the time period necessary to transport the vehicle to the borders of this state; or
4340 (B) if the vehicle is used to conduct business, for the time period necessary to transport
4341 the vehicle to the borders of this state;
4342 (10) (a) amounts paid for an item described in Subsection (10)(b) if:
4343 (i) the item is intended for human use; and
4344 (ii) (A) a prescription was issued for the item; or
4345 (B) the item was purchased by a hospital or other medical facility; and
4346 (b) (i) Subsection (10)(a) applies to:
4347 (A) a drug;
4348 (B) a syringe; or
4349 (C) a stoma supply; and
4350 (ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
4351 commission may by rule define the terms:
4352 (A) "syringe"; or
4353 (B) "stoma supply";
4354 (11) sales or use of property, materials, or services used in the construction of or
4355 incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
4356 (12) (a) sales of an item described in Subsection (12)(c) served by:
4357 (i) the following if the item described in Subsection (12)(c) is not available to the
4358 general public:
4359 (A) a church; or
4360 (B) a charitable institution;
4361 (ii) an institution of higher education if:
4362 (A) the item described in Subsection (12)(c) is not available to the general public; or
4363 (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
4364 offered by the institution of higher education; or
4365 (b) sales of an item described in Subsection (12)(c) provided for a patient by:
4366 (i) a medical facility; or
4367 (ii) a nursing facility; and
4368 (c) Subsections (12)(a) and (b) apply to:
4369 (i) food and food ingredients;
4370 (ii) prepared food; or
4371 (iii) alcoholic beverages;
4372 (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
4373 by a person:
4374 (i) regardless of the number of transactions involving the sale of that tangible personal
4375 property by that person; and
4376 (ii) not regularly engaged in the business of selling that type of tangible personal
4377 property;
4378 (b) this Subsection (13) does not apply if:
4379 (i) the sale is one of a series of sales of a character to indicate that the person is
4380 regularly engaged in the business of selling that type of tangible personal property;
4381 (ii) the person holds that person out as regularly engaged in the business of selling that
4382 type of tangible personal property;
4383 (iii) the person sells an item of tangible personal property that the person purchased as a
4384 sale that is exempt under Subsection (25); or
4385 (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
4386 this state in which case the tax is based upon:
4387 (A) the bill of sale or other written evidence of value of the vehicle or vessel being sold;
4388 or
4389 (B) in the absence of a bill of sale or other written evidence of value, the fair market
4390 value of the vehicle or vessel being sold at the time of the sale as determined by the commission;
4391 and
4392 (c) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
4393 commission shall make rules establishing the circumstances under which:
4394 (i) a person is regularly engaged in the business of selling a type of tangible personal
4395 property;
4396 (ii) a sale of tangible personal property is one of a series of sales of a character to
4397 indicate that a person is regularly engaged in the business of selling that type of tangible
4398 personal property; or
4399 (iii) a person holds that person out as regularly engaged in the business of selling a type
4400 of tangible personal property;
4401 (14) (a) except as provided in Subsection (14)(b), amounts paid or charged on or after
4402 July 1, 2006, for a purchase or lease by a manufacturing facility other than a cogeneration
4403 facility, for the following:
4404 (i) machinery and equipment that:
4405 (A) is used:
4406 (I) for a manufacturing facility other than a manufacturing facility that is a scrap
4407 recycler described in Subsection 59-12-102 (48)(b):
4408 (Aa) in the manufacturing process; and
4409 (Bb) to manufacture an item sold as tangible personal property; or
4410 (II) for a manufacturing facility that is a scrap recycler described in Subsection
4411 59-12-102 (48)(b), to process an item sold as tangible personal property; and
4412 (B) has an economic life of three or more years; and
4413 (ii) normal operating repair or replacement parts that:
4414 (A) have an economic life of three or more years; and
4415 (B) are used:
4416 (I) for a manufacturing facility in the state other than a manufacturing facility that is a
4417 scrap recycler described in Subsection 59-12-102 (48)(b), in the manufacturing process; or
4418 (II) for a manufacturing facility in the state that is a scrap recycler described in
4419 Subsection 59-12-102 (48)(b), to process an item sold as tangible personal property;
4420 (b) (i) amounts paid or charged on or after July 1, 2005, for a purchase or lease by a
4421 manufacturing facility that is a cogeneration facility placed in service on or after May 1, 2006,
4422 for the following:
4423 (A) machinery and equipment that:
4424 (I) is used:
4425 (Aa) in the manufacturing process; and
4426 (Bb) to manufacture an item sold as tangible personal property; and
4427 (II) has an economic life of three or more years; and
4428 (B) normal operating repair or replacement parts that:
4429 (I) are used in the manufacturing process in a manufacturing facility in the state; and
4430 (II) have an economic life of three or more years; and
4431 (ii) for amounts paid or charged on or after July 1, 2005, but on or before June 30,
4432 2006, for a purchase or lease described in Subsection (14)(b)(i), a cogeneration facility may
4433 claim the exemption allowed by Subsection (14)(b)(i) by filing for a refund:
4434 (A) for sales and use taxes paid under this chapter on the purchase or lease payment;
4435 and
4436 (B) in accordance with Section 59-12-110 ;
4437 (c) amounts paid or charged for a purchase or lease made on or after January 1, 2008,
4438 by an establishment described in NAICS Subsector 212, Mining (except Oil and Gas), or
4439 NAICS Code 213113, Support Activities for Coal Mining, 213114, Support Activities for
4440 Metal Mining, or 213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining,
4441 of the 2002 North American Industry Classification System of the federal Executive Office of
4442 the President, Office of Management and Budget:
4443 (i) machinery and equipment that:
4444 (A) are used in:
4445 (I) the production process, other than the production of real property; or
4446 (II) research and development; and
4447 (B) have an economic life of three or more years; and
4448 (ii) normal operating repair or replacement parts that:
4449 (A) have an economic life of three or more years; and
4450 (B) are used in:
4451 (I) the production process, other than the production of real property, in an
4452 establishment described in this Subsection (14)(c) in the state; or
4453 (II) research and development in an establishment described in this Subsection (14)(c)
4454 in the state;
4455 (d) for purposes of this Subsection (14) and in accordance with Title 63, Chapter 46a,
4456 Utah Administrative Rulemaking Act, the commission:
4457 (i) shall by rule define the term "establishment"; and
4458 (ii) may by rule define what constitutes:
4459 (A) processing an item sold as tangible personal property;
4460 (B) the production process, other than the production of real property; or
4461 (C) research and development; and
4462 (e) on or before October 1, 2011, and every five years after October 1, 2011, the
4463 commission shall:
4464 (i) review the exemptions described in this Subsection (14) and make recommendations
4465 to the Revenue and Taxation Interim Committee concerning whether the exemptions should be
4466 continued, modified, or repealed; and
4467 (ii) include in its report:
4468 (A) the cost of the exemptions;
4469 (B) the purpose and effectiveness of the exemptions; and
4470 (C) the benefits of the exemptions to the state;
4471 (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
4472 (i) tooling;
4473 (ii) special tooling;
4474 (iii) support equipment;
4475 (iv) special test equipment; or
4476 (v) parts used in the repairs or renovations of tooling or equipment described in
4477 Subsections (15)(a)(i) through (iv); and
4478 (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
4479 (i) the tooling, equipment, or parts are used or consumed exclusively in the performance
4480 of any aerospace or electronics industry contract with the United States government or any
4481 subcontract under that contract; and
4482 (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
4483 title to the tooling, equipment, or parts is vested in the United States government as evidenced
4484 by:
4485 (A) a government identification tag placed on the tooling, equipment, or parts; or
4486 (B) listing on a government-approved property record if placing a government
4487 identification tag on the tooling, equipment, or parts is impractical;
4488 (16) sales of newspapers or newspaper subscriptions;
4489 (17) (a) except as provided in Subsection (17)(b), tangible personal property traded in
4490 as full or part payment of the purchase price, except that for purposes of calculating sales or use
4491 tax upon vehicles not sold by a vehicle dealer, trade-ins are limited to other vehicles only, and
4492 the tax is based upon:
4493 (i) the bill of sale or other written evidence of value of the vehicle being sold and the
4494 vehicle being traded in; or
4495 (ii) in the absence of a bill of sale or other written evidence of value, the then existing
4496 fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
4497 commission; and
4498 (b) notwithstanding Subsection (17)(a), Subsection (17)(a) does not apply to the
4499 following items of tangible personal property traded in as full or part payment of the purchase
4500 price:
4501 (i) money;
4502 (ii) electricity;
4503 (iii) water;
4504 (iv) gas; or
4505 (v) steam;
4506 (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
4507 used or consumed primarily and directly in farming operations, regardless of whether the
4508 tangible personal property:
4509 (A) becomes part of real estate; or
4510 (B) is installed by a:
4511 (I) farmer;
4512 (II) contractor; or
4513 (III) subcontractor; or
4514 (ii) sales of parts used in the repairs or renovations of tangible personal property if the
4515 tangible personal property is exempt under Subsection (18)(a)(i); and
4516 (b) notwithstanding Subsection (18)(a), amounts paid or charged for the following
4517 tangible personal property are subject to the taxes imposed by this chapter:
4518 (i) (A) subject to Subsection (18)(b)(i)(B), the following tangible personal property if
4519 the tangible personal property is used in a manner that is incidental to farming:
4520 (I) machinery;
4521 (II) equipment;
4522 (III) materials; or
4523 (IV) supplies; and
4524 (B) tangible personal property that is considered to be used in a manner that is
4525 incidental to farming includes:
4526 (I) hand tools; or
4527 (II) maintenance and janitorial equipment and supplies;
4528 (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property if the tangible
4529 personal property is used in an activity other than farming; and
4530 (B) tangible personal property that is considered to be used in an activity other than
4531 farming includes:
4532 (I) office equipment and supplies; or
4533 (II) equipment and supplies used in:
4534 (Aa) the sale or distribution of farm products;
4535 (Bb) research; or
4536 (Cc) transportation; or
4537 (iii) a vehicle required to be registered by the laws of this state during the period ending
4538 two years after the date of the vehicle's purchase;
4539 (19) sales of hay;
4540 (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
4541 garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
4542 garden, farm, or other agricultural produce is sold by:
4543 (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
4544 agricultural produce;
4545 (b) an employee of the producer described in Subsection (20)(a); or
4546 (c) a member of the immediate family of the producer described in Subsection (20)(a);
4547 (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
4548 under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
4549 (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
4550 nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
4551 wholesaler, or retailer for use in packaging tangible personal property to be sold by that
4552 manufacturer, processor, wholesaler, or retailer;
4553 (23) property stored in the state for resale;
4554 (24) (a) purchases of property if:
4555 (i) the property is:
4556 (A) purchased outside of this state;
4557 (B) brought into this state:
4558 (I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
4559 (II) by a nonresident person who is not living or working in this state at the time of the
4560 purchase;
4561 (C) used for the personal use or enjoyment of the nonresident person described in
4562 Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
4563 (D) not used in conducting business in this state; and
4564 (ii) for:
4565 (A) property other than the property described in Subsection (24)(a)(ii)(B), the first use
4566 of the property for a purpose for which the property is designed occurs outside of this state;
4567 (B) a boat, the boat is registered outside of this state; or
4568 (C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
4569 outside of this state;
4570 (b) the exemption provided for in Subsection (24)(a) does not apply to:
4571 (i) a lease or rental of property; or
4572 (ii) a sale of a vehicle exempt under Subsection (33); and
4573 (c) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, for
4574 purposes of Subsection (24)(a), the commission may by rule define what constitutes the
4575 following:
4576 (i) conducting business in this state if that phrase has the same meaning in this
4577 Subsection (24) as in Subsection (66);
4578 (ii) the first use of property if that phrase has the same meaning in this Subsection (24)
4579 as in Subsection (66); or
4580 (iii) a purpose for which property is designed if that phrase has the same meaning in this
4581 Subsection (24) as in Subsection (66);
4582 (25) property purchased for resale in this state, in the regular course of business, either
4583 in its original form or as an ingredient or component part of a manufactured or compounded
4584 product;
4585 (26) property upon which a sales or use tax was paid to some other state, or one of its
4586 subdivisions, except that the state shall be paid any difference between the tax paid and the tax
4587 imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
4588 the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
4589 Act;
4590 (27) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
4591 person for use in compounding a service taxable under the subsections;
4592 (28) purchases made in accordance with the special supplemental nutrition program for
4593 women, infants, and children established in 42 U.S.C. Sec. 1786;
4594 (29) beginning on July 1, 1999, through June 30, 2014, sales or leases of rolls, rollers,
4595 refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
4596 of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification Manual
4597 of the federal Executive Office of the President, Office of Management and Budget;
4598 (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
4599 Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:
4600 (a) not registered in this state; and
4601 (b) (i) not used in this state; or
4602 (ii) used in this state:
4603 (A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a
4604 time period that does not exceed the longer of:
4605 (I) 30 days in any calendar year; or
4606 (II) the time period necessary to transport the boat, boat trailer, or outboard motor to
4607 the borders of this state; or
4608 (B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
4609 period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
4610 state;
4611 (31) sales of aircraft manufactured in Utah if sold for delivery and use outside Utah
4612 where a sales or use tax is not imposed, even if the title is passed in Utah;
4613 (32) amounts paid for the purchase of telephone service for purposes of providing
4614 telephone service;
4615 (33) sales, leases, or uses of the following:
4616 (a) a vehicle by an authorized carrier; or
4617 (b) tangible personal property that is installed on a vehicle:
4618 (i) sold or leased to or used by an authorized carrier; and
4619 (ii) before the vehicle is placed in service for the first time;
4620 (34) (a) 45% of the sales price of any new manufactured home; and
4621 (b) 100% of the sales price of any used manufactured home;
4622 (35) sales relating to schools and fundraising sales;
4623 (36) sales or rentals of durable medical equipment if:
4624 (a) a person presents a prescription for the durable medical equipment; and
4625 (b) the durable medical equipment is used for home use only;
4626 (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
4627 Section 72-11-102 ; and
4628 (b) the commission shall by rule determine the method for calculating sales exempt
4629 under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
4630 (38) sales to a ski resort of:
4631 (a) snowmaking equipment;
4632 (b) ski slope grooming equipment;
4633 (c) passenger ropeways as defined in Section 72-11-102 ; or
4634 (d) parts used in the repairs or renovations of equipment or passenger ropeways
4635 described in Subsections (38)(a) through (c);
4636 (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
4637 (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
4638 amusement, entertainment, or recreation an unassisted amusement device as defined in Section
4639 59-12-102 ;
4640 (b) if a seller that sells or rents at the same business location the right to use or operate
4641 for amusement, entertainment, or recreation one or more unassisted amusement devices and one
4642 or more assisted amusement devices, the exemption described in Subsection (40)(a) applies if
4643 the seller separately accounts for the sales or rentals of the right to use or operate for
4644 amusement, entertainment, or recreation for the assisted amusement devices; and
4645 (c) for purposes of Subsection (40)(b) and in accordance with Title 63, Chapter 46a,
4646 Utah Administrative Rulemaking Act, the commission may make rules:
4647 (i) governing the circumstances under which sales are at the same business location; and
4648 (ii) establishing the procedures and requirements for a seller to separately account for
4649 the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for
4650 assisted amusement devices;
4651 (41) (a) sales of photocopies by:
4652 (i) a governmental entity; or
4653 (ii) an entity within the state system of public education, including:
4654 (A) a school; or
4655 (B) the State Board of Education; or
4656 (b) sales of publications by a governmental entity;
4657 (42) amounts paid for admission to an athletic event at an institution of higher
4658 education that is subject to the provisions of Title IX of the Education Amendments of 1972, 20
4659 U.S.C. Sec. 1681 et seq.;
4660 (43) sales of telephone service charged to a prepaid telephone calling card;
4661 (44) (a) sales of:
4662 (i) hearing aids;
4663 (ii) hearing aid accessories; or
4664 (iii) except as provided in Subsection (44)(b), parts used in the repairs or renovations of
4665 hearing aids or hearing aid accessories; and
4666 (b) for purposes of this Subsection (44), notwithstanding Subsection (44)(a)(iii), "parts"
4667 does not include batteries;
4668 (45) (a) sales made to or by:
4669 (i) an area agency on aging; or
4670 (ii) a senior citizen center owned by a county, city, or town; or
4671 (b) sales made by a senior citizen center that contracts with an area agency on aging;
4672 (46) sales or leases of semiconductor fabricating, processing, research, or development
4673 materials regardless of whether the semiconductor fabricating, processing, research, or
4674 development materials:
4675 (a) actually come into contact with a semiconductor; or
4676 (b) ultimately become incorporated into real property;
4677 (47) an amount paid by or charged to a purchaser for accommodations and services
4678 described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under Section
4679 59-12-104.2 ;
4680 (48) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
4681 sports event registration certificate in accordance with Section 41-3-306 for the event period
4682 specified on the temporary sports event registration certificate;
4683 (49) sales or uses of electricity, if the sales or uses are:
4684 (a) made under a tariff adopted by the Public Service Commission of Utah only for
4685 purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
4686 source, as designated in the tariff by the Public Service Commission of Utah; and
4687 (b) for an amount of electricity that is:
4688 (i) unrelated to the amount of electricity used by the person purchasing the electricity
4689 under the tariff described in Subsection (49)(a); and
4690 (ii) equivalent to the number of kilowatthours specified in the tariff described in
4691 Subsection (49)(a) that may be purchased under the tariff described in Subsection (49)(a);
4692 (50) sales or rentals of mobility enhancing equipment if a person presents a prescription
4693 for the mobility enhancing equipment;
4694 (51) sales of water in a:
4695 (a) pipe;
4696 (b) conduit;
4697 (c) ditch; or
4698 (d) reservoir;
4699 (52) sales of currency or coinage that constitute legal tender of the United States or of a
4700 foreign nation;
4701 (53) (a) sales of an item described in Subsection (53)(b) if the item:
4702 (i) does not constitute legal tender of any nation; and
4703 (ii) has a gold, silver, or platinum content of 80% or more; and
4704 (b) Subsection (53)(a) applies to a gold, silver, or platinum:
4705 (i) ingot;
4706 (ii) bar;
4707 (iii) medallion; or
4708 (iv) decorative coin;
4709 (54) amounts paid on a sale-leaseback transaction;
4710 (55) sales of a prosthetic device:
4711 (a) for use on or in a human;
4712 (b) for which a prescription is issued; and
4713 (c) to a person that presents a prescription for the prosthetic device;
4714 (56) (a) except as provided in Subsection (56)(b), purchases, leases, or rentals of
4715 machinery or equipment by an establishment described in Subsection (56)(c) if the machinery or
4716 equipment is primarily used in the production or postproduction of the following media for
4717 commercial distribution:
4718 (i) a motion picture;
4719 (ii) a television program;
4720 (iii) a movie made for television;
4721 (iv) a music video;
4722 (v) a commercial;
4723 (vi) a documentary; or
4724 (vii) a medium similar to Subsections (56)(a)(i) through (vi) as determined by the
4725 commission by administrative rule made in accordance with Subsection (56)(d); or
4726 (b) notwithstanding Subsection (56)(a), purchases, leases, or rentals of machinery or
4727 equipment by an establishment described in Subsection (56)(c) that is used for the production or
4728 postproduction of the following are subject to the taxes imposed by this chapter:
4729 (i) a live musical performance;
4730 (ii) a live news program; or
4731 (iii) a live sporting event;
4732 (c) the following establishments listed in the 1997 North American Industry
4733 Classification System of the federal Executive Office of the President, Office of Management
4734 and Budget, apply to Subsections (56)(a) and (b):
4735 (i) NAICS Code 512110; or
4736 (ii) NAICS Code 51219; and
4737 (d) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
4738 commission may by rule:
4739 (i) prescribe what constitutes a medium similar to Subsections (56)(a)(i) through (vi);
4740 or
4741 (ii) define:
4742 (A) "commercial distribution";
4743 (B) "live musical performance";
4744 (C) "live news program"; or
4745 (D) "live sporting event";
4746 (57) (a) leases of seven or more years or purchases made on or after July 1, 2004 but
4747 on or before June 30, [
4748 (i) is leased or purchased for or by a facility that:
4749 (A) is a renewable energy production facility;
4750 (B) is located in the state; and
4751 (C) (I) becomes operational on or after July 1, 2004; or
4752 (II) has its generation capacity increased by one or more megawatts on or after July 1,
4753 2004 as a result of the use of the machinery or equipment;
4754 (ii) has an economic life of five or more years; and
4755 (iii) is used to make the facility or the increase in capacity of the facility described in
4756 Subsection (57)(a)(i) operational up to the point of interconnection with an existing
4757 transmission grid including:
4758 (A) a wind turbine;
4759 (B) generating equipment;
4760 (C) a control and monitoring system;
4761 (D) a power line;
4762 (E) substation equipment;
4763 (F) lighting;
4764 (G) fencing;
4765 (H) pipes; or
4766 (I) other equipment used for locating a power line or pole; and
4767 (b) this Subsection (57) does not apply to:
4768 (i) machinery or equipment used in construction of:
4769 (A) a new renewable energy production facility; or
4770 (B) the increase in the capacity of a renewable energy production facility;
4771 (ii) contracted services required for construction and routine maintenance activities; and
4772 (iii) unless the machinery or equipment is used or acquired for an increase in capacity of
4773 the facility described in Subsection (57)(a)(i)(C)(II), machinery or equipment used or acquired
4774 after:
4775 (A) the renewable energy production facility described in Subsection (57)(a)(i) is
4776 operational as described in Subsection (57)(a)(iii); or
4777 (B) the increased capacity described in Subsection (57)(a)(i) is operational as described
4778 in Subsection (57)(a)(iii);
4779 (58) (a) leases of seven or more years or purchases made on or after July 1, 2004 but
4780 on or before June 30, [
4781 (i) is leased or purchased for or by a facility that:
4782 (A) is a waste energy production facility;
4783 (B) is located in the state; and
4784 (C) (I) becomes operational on or after July 1, 2004; or
4785 (II) has its generation capacity increased by one or more megawatts on or after July 1,
4786 2004 as a result of the use of the machinery or equipment;
4787 (ii) has an economic life of five or more years; and
4788 (iii) is used to make the facility or the increase in capacity of the facility described in
4789 Subsection (58)(a)(i) operational up to the point of interconnection with an existing
4790 transmission grid including:
4791 (A) generating equipment;
4792 (B) a control and monitoring system;
4793 (C) a power line;
4794 (D) substation equipment;
4795 (E) lighting;
4796 (F) fencing;
4797 (G) pipes; or
4798 (H) other equipment used for locating a power line or pole; and
4799 (b) this Subsection (58) does not apply to:
4800 (i) machinery or equipment used in construction of:
4801 (A) a new waste energy facility; or
4802 (B) the increase in the capacity of a waste energy facility;
4803 (ii) contracted services required for construction and routine maintenance activities; and
4804 (iii) unless the machinery or equipment is used or acquired for an increase in capacity
4805 described in Subsection (58)(a)(i)(C)(II), machinery or equipment used or acquired after:
4806 (A) the waste energy facility described in Subsection (58)(a)(i) is operational as
4807 described in Subsection (58)(a)(iii); or
4808 (B) the increased capacity described in Subsection (58)(a)(i) is operational as described
4809 in Subsection (58)(a)(iii);
4810 (59) (a) leases of five or more years or purchases made on or after July 1, 2004 but on
4811 or before June 30, [
4812 (i) is leased or purchased for or by a facility that:
4813 (A) is located in the state;
4814 (B) produces fuel from biomass energy including:
4815 (I) methanol; or
4816 (II) ethanol; and
4817 (C) (I) becomes operational on or after July 1, 2004; or
4818 (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004 as
4819 a result of the installation of the machinery or equipment;
4820 (ii) has an economic life of five or more years; and
4821 (iii) is installed on the facility described in Subsection (59)(a)(i);
4822 (b) this Subsection (59) does not apply to:
4823 (i) machinery or equipment used in construction of:
4824 (A) a new facility described in Subsection (59)(a)(i); or
4825 (B) the increase in capacity of the facility described in Subsection (59)(a)(i); or
4826 (ii) contracted services required for construction and routine maintenance activities; and
4827 (iii) unless the machinery or equipment is used or acquired for an increase in capacity
4828 described in Subsection (59)(a)(i)(C)(II), machinery or equipment used or acquired after:
4829 (A) the facility described in Subsection (59)(a)(i) is operational; or
4830 (B) the increased capacity described in Subsection (59)(a)(i) is operational;
4831 (60) amounts paid to a purchaser as a rebate from the manufacturer of a new vehicle for
4832 purchasing the new vehicle;
4833 (61) (a) subject to Subsection (61)(b), sales of tangible personal property to persons
4834 within this state that is subsequently shipped outside the state and incorporated pursuant to
4835 contract into and becomes a part of real property located outside of this state, except to the
4836 extent that the other state or political entity imposes a sales, use, gross receipts, or other similar
4837 transaction excise tax on it against which the other state or political entity allows a credit for
4838 taxes imposed by this chapter; and
4839 (b) the exemption provided for in Subsection (61)(a):
4840 (i) is allowed only if the exemption is applied:
4841 (A) in calculating the purchase price of the tangible personal property; and
4842 (B) to a written contract that is in effect on July 1, 2004; and
4843 (ii) (A) does not apply beginning on the day on which the contract described in
4844 Subsection (61)(b)(i):
4845 (I) is substantially modified; or
4846 (II) terminates; and
4847 (B) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
4848 commission may by rule prescribe the circumstances under which a contract is substantially
4849 modified;
4850 (62) purchases:
4851 (a) of one or more of the following items in printed or electronic format:
4852 (i) a list containing information that includes one or more:
4853 (A) names; or
4854 (B) addresses; or
4855 (ii) a database containing information that includes one or more:
4856 (A) names; or
4857 (B) addresses; and
4858 (b) used to send direct mail;
4859 (63) redemptions or repurchases of property by a person if that property was:
4860 (a) delivered to a pawnbroker as part of a pawn transaction; and
4861 (b) redeemed or repurchased within the time period established in a written agreement
4862 between the person and the pawnbroker for redeeming or repurchasing the property;
4863 (64) (a) purchases or leases of an item described in Subsection (64)(b) if the item:
4864 (i) is purchased or leased by, or on behalf of, a telephone service provider; and
4865 (ii) has a useful economic life of one or more years; and
4866 (b) the following apply to Subsection (64)(a):
4867 (i) telecommunications enabling or facilitating equipment, machinery, or software;
4868 (ii) telecommunications equipment, machinery, or software required for 911 service;
4869 (iii) telecommunications maintenance or repair equipment, machinery, or software;
4870 (iv) telecommunications switching or routing equipment, machinery, or software; or
4871 (v) telecommunications transmission equipment, machinery, or software;
4872 (65) (a) beginning on July 1, 2006, and ending on June 30, 2016, purchases of tangible
4873 personal property used in the research and development of coal-to-liquids, oil shale, or tar sands
4874 technology; and
4875 (b) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
4876 commission may, for purposes of Subsection (65)(a), make rules defining what constitutes
4877 tangible personal property used in the research and development of coal-to-liquids, oil shale,
4878 and tar sands technology;
4879 (66) (a) purchases of property if:
4880 (i) the property is:
4881 (A) purchased outside of this state;
4882 (B) brought into this state at any time after the purchase described in Subsection
4883 (66)(a)(i)(A); and
4884 (C) used in conducting business in this state; and
4885 (ii) for:
4886 (A) property other than the property described in Subsection (66)(a)(ii)(B), the first use
4887 of the property for a purpose for which the property is designed occurs outside of this state; or
4888 (B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
4889 outside of this state;
4890 (b) the exemption provided for in Subsection (66)(a) does not apply to:
4891 (i) a lease or rental of property; or
4892 (ii) a sale of a vehicle exempt under Subsection (33); and
4893 (c) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, for
4894 purposes of Subsection (66)(a), the commission may by rule define what constitutes the
4895 following:
4896 (i) conducting business in this state if that phrase has the same meaning in this
4897 Subsection (66) as in Subsection (24);
4898 (ii) the first use of property if that phrase has the same meaning in this Subsection (66)
4899 as in Subsection (24); or
4900 (iii) a purpose for which property is designed if that phrase has the same meaning in this
4901 Subsection (66) as in Subsection (24);
4902 (67) sales of disposable home medical equipment or supplies if:
4903 (a) a person presents a prescription for the disposable home medical equipment or
4904 supplies;
4905 (b) the disposable home medical equipment or supplies are used exclusively by the
4906 person to whom the prescription described in Subsection (67)(a) is issued; and
4907 (c) the disposable home medical equipment and supplies are listed as eligible for
4908 payment under:
4909 (i) Title XVIII, federal Social Security Act; or
4910 (ii) the state plan for medical assistance under Title XIX, federal Social Security Act;
4911 [
4912 (68) sales to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit
4913 District Act, or to a subcontractor of a public transit district, including sales of construction
4914 materials that are to be installed or converted to real property owned by the public transit
4915 district[
4916 (69) sales of fuel to a common carrier that is a railroad for use in a locomotive engine.
4917 Section 80. Section 72-2-107 is amended to read:
4918 72-2-107. Appropriation from Transportation Fund -- Deposit in class B and
4919 class C roads account.
4920 (1) There is appropriated to the department from the Transportation Fund annually an
4921 amount equal to 30% of an amount which the director of finance shall compute in the following
4922 manner: The total revenue deposited into the Transportation Fund during the fiscal year from
4923 state highway-user taxes and fees, minus:
4924 (a) those amounts appropriated or transferred from the Transportation Fund during the
4925 same fiscal year to:
4926 (i) the Department of Public Safety;
4927 (ii) the State Tax Commission;
4928 (iii) the Division of Finance;
4929 (iv) the Utah Travel Council; and
4930 (v) any other amounts appropriated or transferred for any other state agencies not a
4931 part of the department; and
4932 (b) the amount of sales and use tax revenue deposited in the Transportation Fund in
4933 accordance with [
4934 (2) All of this money shall be placed in an account to be known as the class B and class
4935 C roads account to be used as provided in this title.
4936 (3) Each quarter of every year the director of finance shall make the necessary
4937 accounting entries to transfer the money appropriated under this section to the class B and class
4938 C roads account.
4939 (4) The funds in the class B and class C roads account shall be expended under the
4940 direction of the department as the Legislature shall provide.
4941 Section 81. Section 72-2-124 is amended to read:
4942 72-2-124. Transportation Investment Fund of 2005.
4943 (1) There is created a special revenue fund entitled the Transportation Investment Fund
4944 of 2005.
4945 (2) The fund consists of monies generated from the following sources:
4946 (a) any voluntary contributions received for the maintenance, construction,
4947 reconstruction, or renovation of state and federal highways; [
4948 (b) appropriations made to the fund by the Legislature[
4949 (c) the sales and use tax revenues deposited into the fund in accordance with Section
4950 59-12-103 .
4951 (3) When the highway general obligation bonds have been paid off and the highway
4952 projects completed that are intended to be paid from revenues deposited in the Centennial
4953 Highway Fund Restricted Account as determined by the Executive Appropriations Committee
4954 under Subsection 72-2-118 (6)(d), the fund shall also consist of monies generated from the
4955 following sources:
4956 (a) registration fees designated under Subsection 41-1a-1201 (6)(a);
4957 (b) the clean special fuel tax certificate surcharge under Subsection 59-13-304 (3); and
4958 (c) the sales and use tax amounts provided for in Section 59-12-103 .
4959 (4) (a) The fund shall earn interest.
4960 (b) All interest earned on fund monies shall be deposited into the fund.
4961 (5) (a) Except as provided in Subsections (5)(b) and (c), the executive director may use
4962 fund monies only to pay the costs of maintenance, construction, reconstruction, or renovation to
4963 state and federal highways prioritized by the Transportation Commission through the
4964 prioritization process for new transportation capacity projects adopted under Section 72-1-304 .
4965 (b) The executive director may use fund monies deposited into the fund in fiscal year
4966 2006 only to pay the costs of maintenance, construction, reconstruction, or renovation to state
4967 and federal highways prioritized by the Transportation Commission.
4968 (c) The executive director may use fund monies to exchange for an equal or greater
4969 amount of federal transportation funds to be used as provided in Subsection (5)(a).
4970 Section 82. Section 72-2-125 is amended to read:
4971 72-2-125. Critical Highway Needs Fund.
4972 (1) There is created a restricted special revenue fund entitled the Critical Highway
4973 Needs Fund.
4974 (2) The fund consists of monies generated from the following sources:
4975 (a) any voluntary contributions received for the maintenance, construction,
4976 reconstruction, or renovation of state and federal highways;
4977 (b) appropriations made to the fund by the Legislature; and
4978 (c) the sales and use tax revenues deposited into the fund in accordance with
4979 [
4980 (3) (a) The fund shall earn interest.
4981 (b) All interest earned on fund monies shall be deposited into the fund.
4982 (4) (a) The executive director shall use monies deposited into the fund to pay:
4983 (i) the costs of right-of-way acquisition, maintenance, construction, reconstruction, or
4984 renovation to state and federal highways identified by the department and prioritized by the
4985 commission in accordance with this Subsection (4); and
4986 (ii) principal, interest, and issuance costs of bonds authorized by Section 63B-16-101 .
4987 (b) (i) The department shall:
4988 (A) establish a complete list of projects to be maintained, constructed, reconstructed, or
4989 renovated using the funding described in Subsection (4)(a) based on the following criteria:
4990 (I) the highway construction project is a high priority project due to high growth in the
4991 surrounding area;
4992 (II) the highway construction project addresses critical access needs that have a high
4993 impact due to commercial and energy development;
4994 (III) the highway construction project mitigates congestion;
4995 (IV) whether local matching funds are available for the highway construction project;
4996 and
4997 (V) the highway construction project is a critical alternative route for priority Interstate
4998 15 reconstruction projects; and
4999 (B) submit the list of projects to the commission for prioritization in accordance with
5000 Subsection (4)(c).
5001 (ii) A project that is included in the list under this Subsection (4):
5002 (A) is not required to be currently listed in the statewide long-range plan; and
5003 (B) is not required to be prioritized through the prioritization process for new
5004 transportation capacity projects adopted under Section 72-1-304 .
5005 (c) The commission shall prioritize the project list submitted by the department in
5006 accordance with Subsection (4)(b).
5007 (d) (i) Expenditures by the department for the construction of highway projects
5008 prioritized under this Subsection (4) may not exceed $1,000,000,000.
5009 (ii) Monies expended from the fund for principal, interest, and issuance costs of bonds
5010 issued under Section 63B-16-101 are not considered expenditures for purposes of the
5011 $1,000,000,000 cap under Subsection (4)(d)(i).
5012 (e) (i) Before bonds authorized by Section 63B-16-101 may be issued in any fiscal year,
5013 the department and the commission shall appear before the Executive Appropriations
5014 Committee of the Legislature and present:
5015 (A) the commission's current list of projects established and prioritized in accordance
5016 with this Subsection (4); and
5017 (B) the amount of bond proceeds that the department needs to provide funding for
5018 projects on the project list prioritized in accordance with this Subsection (4) for the next fiscal
5019 year.
5020 (ii) The Executive Appropriations Committee of the Legislature shall review and
5021 comment on the prioritized project list and the amount of bond proceeds needed to fund the
5022 projects on the prioritized list.
5023 (f) The Division of Finance shall, from monies deposited into the fund, transfer the
5024 amount of funds necessary to pay principal, interest, and issuance costs of bonds authorized by
5025 Section 63B-16-101 in the current fiscal year to the appropriate debt service or sinking fund.
5026 (5) When the general obligation bonds authorized by Section 63B-16-101 have been
5027 paid off and the highway projects completed that are included in the prioritized project list
5028 under Subsection (4), the Division of Finance shall transfer any existing balance in the fund into
5029 the Transportation Investment Fund of 2005 created by Section 72-2-124 .
5030 (6) (a) The Division of Finance shall monitor the general obligation bonds authorized by
5031 Section 63B-16-101 .
5032 (b) The department shall monitor the highway construction or reconstruction projects
5033 that are included in the prioritized project list under Subsection (4).
5034 (c) Upon request by the Executive Appropriations Committee of the Legislature:
5035 (i) the Division of Finance shall report to the committee the status of all general
5036 obligation bonds issued under Section 63B-16-101 ; and
5037 (ii) the department shall report to the committee the status of all highway construction
5038 or reconstruction projects that are included in the prioritized project list under Subsection (4).
5039 (d) When the Division of Finance has reported that the general obligation bonds issued
5040 by Section 63B-16-101 have been paid off and the department has reported that projects
5041 included in the prioritized project list are complete to the Executive Appropriations Committee
5042 of the Legislature, the Division of Finance shall transfer any existing fund balance in accordance
5043 with Subsection (5).
5044 Section 83. Repealer.
5045 This bill repeals:
5046 Section 59-10-206, Character of state taxable income of nonresident estate or trust.
5047 Section 59-10-801, Taxation of limited liability companies.
5048 Section 59-10-1201, Title.
5049 Section 59-10-1202, Definitions.
5050 Section 59-10-1203, Single rate tax for resident or nonresident individual -- Tax
5051 rate -- Contributions -- Exemption -- Amended returns.
5052 Section 59-10-1204, Additions to and subtractions from adjusted gross income of a
5053 resident or nonresident individual.
5054 Section 59-10-1205, Adjustments to adjusted gross income of a resident or
5055 nonresident individual.
5056 Section 59-10-1206, Tax credits.
5057 Section 59-10-1207, Administration, collection, and enforcement of tax.
5058 Section 84. Retrospective operation -- Effective date.
5059 (1) Except as provided in Subsection (2), this bill has retrospective operation for
5060 taxable years beginning on or after January 1, 2008.
5061 (2) The amendments to the following sections take effect on January 1, 2009:
5062 (a) Section 59-12-103 ;
5063 (b) Section 59-12-104 ;
5064 (c) Section 72-2-107 ;
5065 (d) Section 72-2-124 ; and
5066 (e) Section 72-2-125 .
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