S.B. 29 Enrolled

1

AMENDMENTS TO INDIVIDUAL INCOME TAX
2 DEFINITION OF RESIDENT INDIVIDUAL
3 2010 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Curtis S. Bramble
6 House Sponsor: Wayne A. Harper
7
8 LONG TITLE
9 General Description:
10 This bill amends the Individual Income Tax Act to modify the definition of resident
11 individual.
12 Highlighted Provisions:
13 This bill:
14 . modifies the definition of resident individual to address the circumstances under
15 which an individual who is not domiciled in the state is a resident individual;
16 . grants rulemaking authority to the State Tax Commission; and
17 . makes technical and conforming changes.
18 Monies Appropriated in this Bill:
19 None
20 Other Special Clauses:
21 This bill has retrospective operation for a taxable year beginning on or after January 1,
22 2010.
23 Utah Code Sections Affected:
24 AMENDS:
25 59-10-103, as last amended by Laws of Utah 2009, Chapter 312
26
27 Be it enacted by the Legislature of the state of Utah:
28 Section 1. Section 59-10-103 is amended to read:
29 59-10-103. Definitions.

30 (1) As used in this chapter:
31 (a) "Adjusted gross income":
32 (i) for a resident or nonresident individual, is as defined in Section 62, Internal
33 Revenue Code; or
34 (ii) for a resident or nonresident estate or trust, is as calculated in Section 67(e),
35 Internal Revenue Code.
36 (b) "Corporation" includes:
37 (i) an association;
38 (ii) a joint stock company; and
39 (iii) an insurance company.
40 (c) "Distributable net income" is as defined in Section 643, Internal Revenue Code.
41 (d) "Employee" is as defined in Section 59-10-401 .
42 (e) "Employer" is as defined in Section 59-10-401 .
43 (f) "Federal taxable income":
44 (i) for a resident or nonresident individual, means taxable income as defined by
45 Section 63, Internal Revenue Code; or
46 (ii) for a resident or nonresident estate or trust, is as calculated in Section 641(a) and
47 (b), Internal Revenue Code.
48 (g) "Fiduciary" means:
49 (i) a guardian;
50 (ii) a trustee;
51 (iii) an executor;
52 (iv) an administrator;
53 (v) a receiver;
54 (vi) a conservator; or
55 (vii) any person acting in any fiduciary capacity for any individual.
56 (h) "Guaranteed annuity interest" is as defined in 26 C.F.R. Sec. 1.170A-6(c)(2).
57 (i) "Homesteaded land diminished from the Uintah and Ouray Reservation" means the

58 homesteaded land that was held to have been diminished from the Uintah and Ouray
59 Reservation in Hagen v. Utah, 510 U.S. 399 (1994).
60 (j) "Individual" means a natural person and includes aliens and minors.
61 (k) "Irrevocable trust" means a trust in which the settlor may not revoke or terminate
62 all or part of the trust without the consent of a person who has a substantial beneficial interest
63 in the trust and the interest would be adversely affected by the exercise of the settlor's power to
64 revoke or terminate all or part of the trust.
65 (l) "Military service" is as defined in Pub. L. No. 108-189, Sec. 101.
66 (m) "Nonresident individual" means an individual who is not a resident of this state.
67 (n) "Nonresident trust" or "nonresident estate" means a trust or estate which is not a
68 resident estate or trust.
69 (o) (i) "Partnership" includes a syndicate, group, pool, joint venture, or other
70 unincorporated organization:
71 (A) through or by means of which any business, financial operation, or venture is
72 carried on; and
73 (B) which is not, within the meaning of this chapter:
74 (I) a trust;
75 (II) an estate; or
76 (III) a corporation.
77 (ii) "Partnership" does not include any organization not included under the definition
78 of "partnership" in Section 761, Internal Revenue Code.
79 (iii) "Partner" includes a member in a syndicate, group, pool, joint venture, or
80 organization described in Subsection (1)(o)(i).
81 (p) "Qualified nongrantor charitable lead trust" means a trust:
82 (i) that is irrevocable;
83 (ii) that has a trust term measured by:
84 (A) a fixed term of years; or
85 (B) the life of a person living on the day on which the trust is created;

86 (iii) under which:
87 (A) a portion of the value of the trust assets is distributed during the trust term:
88 (I) to an organization described in Section 170(c), Internal Revenue Code; and
89 (II) as a:
90 (Aa) guaranteed annuity interest; or
91 (Bb) unitrust interest; and
92 (B) assets remaining in the trust at the termination of the trust term are distributed to a
93 beneficiary:
94 (I) designated in the trust; and
95 (II) that is not an organization described in Section 170(c), Internal Revenue Code;
96 (iv) for which the trust is allowed a deduction under Section 642(c), Internal Revenue
97 Code; and
98 (v) under which the grantor of the trust is not treated as the owner of any portion of the
99 trust for federal income tax purposes.
100 (q) (i) "Resident individual" means:
101 (A) an individual who is domiciled in this state for any period of time during the
102 taxable year, but only for the duration of the period during which the individual is domiciled
103 in this state; or
104 (B) an individual who is not domiciled in this state but:
105 (I) maintains a [permanent] place of abode in this state; and
106 (II) spends in the aggregate 183 or more days of the taxable year in this state.
107 [(ii) For purposes of Subsection (1)(q)(i)(B), a fraction of a calendar day shall be
108 counted as a whole day.]
109 (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
110 and for purposes of Subsection (1)(q)(i)(B), the commission shall by rule define what
111 constitutes spending a day of the taxable year in the state.
112 (r) "Resident estate" or "resident trust" is as defined in Section 75-7-103 .
113 (s) "Servicemember" is as defined in Pub. L. No. 108-189, Sec. 101.

114 (t) "State income tax percentage for a nonresident estate or trust" means a percentage
115 equal to a nonresident estate's or trust's state taxable income for the taxable year divided by the
116 nonresident estate's or trust's total adjusted gross income for that taxable year after making the
117 adjustments required by:
118 (i) Section 59-10-202 ;
119 (ii) Section 59-10-207 ;
120 (iii) Section 59-10-209.1 ; or
121 (iv) Section 59-10-210 .
122 (u) "State income tax percentage for a nonresident individual" means a percentage
123 equal to a nonresident individual's state taxable income for the taxable year divided by the
124 difference between:
125 (i) subject to Section 59-10-1405 , the nonresident individual's total adjusted gross
126 income for that taxable year, after making the:
127 (A) additions and subtractions required by Section 59-10-114 ; and
128 (B) adjustments required by Section 59-10-115 ; and
129 (ii) if the nonresident individual described in Subsection (1)(u)(i) is a servicemember,
130 the compensation the servicemember receives for military service if the servicemember is
131 serving in compliance with military orders.
132 (v) "State income tax percentage for a part-year resident individual" means, for a
133 taxable year, a fraction:
134 (i) the numerator of which is the sum of:
135 (A) subject to Section 59-10-1404.5 , for the time period during the taxable year that
136 the part-year resident individual is a resident, the part-year resident individual's total adjusted
137 gross income for that time period, after making the:
138 (I) additions and subtractions required by Section 59-10-114 ; and
139 (II) adjustments required by Section 59-10-115 ; and
140 (B) for the time period during the taxable year that the part-year resident individual is
141 a nonresident, an amount calculated by:

142 (I) determining the part-year resident individual's adjusted gross income for that time
143 period, after making the:
144 (Aa) additions and subtractions required by Section 59-10-114 ; and
145 (Bb) adjustments required by Section 59-10-115 ; and
146 (II) calculating the portion of the amount determined under Subsection (1)(v)(i)(B)(I)
147 that is derived from Utah sources in accordance with Section 59-10-117 ; and
148 (ii) the denominator of which is the difference between:
149 (A) the part-year resident individual's total adjusted gross income for that taxable year,
150 after making the:
151 (I) additions and subtractions required by Section 59-10-114 ; and
152 (II) adjustments required by Section 59-10-115 ; and
153 (B) if the part-year resident individual is a servicemember, any compensation the
154 servicemember receives for military service during the portion of the taxable year that the
155 servicemember is a nonresident if the servicemember is serving in compliance with military
156 orders.
157 (w) "Taxable income" or "state taxable income":
158 (i) subject to Section 59-10-1404.5 , for a resident individual, means the resident
159 individual's adjusted gross income after making the:
160 (A) additions and subtractions required by Section 59-10-114 ; and
161 (B) adjustments required by Section 59-10-115 ;
162 (ii) for a nonresident individual, is an amount calculated by:
163 (A) determining the nonresident individual's adjusted gross income for the taxable
164 year, after making the:
165 (I) additions and subtractions required by Section 59-10-114 ; and
166 (II) adjustments required by Section 59-10-115 ; and
167 (B) calculating the portion of the amount determined under Subsection (1)(w)(ii)(A)
168 that is derived from Utah sources in accordance with Section 59-10-117 ;
169 (iii) for a resident estate or trust, is as calculated under Section 59-10-201.1 ; and

170 (iv) for a nonresident estate or trust, is as calculated under Section 59-10-204 .
171 (x) "Taxpayer" means any individual, estate, trust, or beneficiary of an estate or trust,
172 that has income subject in whole or part to the tax imposed by this chapter.
173 (y) "Trust term" means a time period:
174 (i) beginning on the day on which a qualified nongrantor charitable lead trust is
175 created; and
176 (ii) ending on the day on which the qualified nongrantor charitable lead trust described
177 in Subsection (1)(y)(i) terminates.
178 (z) "Uintah and Ouray Reservation" means the lands recognized as being included
179 within the Uintah and Ouray Reservation in:
180 (i) Hagen v. Utah, 510 U.S. 399 (1994); and
181 (ii) Ute Indian Tribe v. Utah, 114 F.3d 1513 (10th Cir. 1997).
182 (aa) "Unadjusted income" means an amount equal to the difference between:
183 (i) the total income required to be reported by a resident or nonresident estate or trust
184 on the resident or nonresident estate's or trust's federal income tax return for estates and trusts
185 for the taxable year; and
186 (ii) the sum of the following:
187 (A) fees paid or incurred to the fiduciary of a resident or nonresident estate or trust:
188 (I) for administering the resident or nonresident estate or trust; and
189 (II) that the resident or nonresident estate or trust deducts as allowed on the resident or
190 nonresident estate's or trust's federal income tax return for estates and trusts for the taxable
191 year;
192 (B) the income distribution deduction that a resident or nonresident estate or trust
193 deducts under Section 651 or 661, Internal Revenue Code, as allowed on the resident or
194 nonresident estate's or trust's federal income tax return for estates and trusts for the taxable
195 year;
196 (C) the amount that a resident or nonresident estate or trust deducts as a deduction for
197 estate tax or generation skipping transfer tax under Section 691(c), Internal Revenue Code, as

198 allowed on the resident or nonresident estate's or trust's federal income tax return for estates
199 and trusts for the taxable year; and
200 (D) the amount that a resident or nonresident estate or trust deducts as a personal
201 exemption under Section 642(b), Internal Revenue Code, as allowed on the resident or
202 nonresident estate's or trust's federal income tax return for estates and trusts for the taxable
203 year.
204 (bb) "Unitrust interest" is as defined in 26 C.F.R. Sec. 1.170A-6(c)(2).
205 (cc) "Ute tribal member" means a person who is enrolled as a member of the Ute
206 Indian Tribe of the Uintah and Ouray Reservation.
207 (dd) "Ute tribe" means the Ute Indian Tribe of the Uintah and Ouray Reservation.
208 (ee) "Wages" is as defined in Section 59-10-401 .
209 (2) (a) Any term used in this chapter has the same meaning as when used in
210 comparable context in the laws of the United States relating to federal income taxes unless a
211 different meaning is clearly required.
212 (b) Any reference to the Internal Revenue Code or to the laws of the United States
213 shall mean the Internal Revenue Code or other provisions of the laws of the United States
214 relating to federal income taxes that are in effect for the taxable year.
215 (c) Any reference to a specific section of the Internal Revenue Code or other provision
216 of the laws of the United States relating to federal income taxes shall include any
217 corresponding or comparable provisions of the Internal Revenue Code as amended,
218 redesignated, or reenacted.
219 Section 2. Retrospective operation.
220 This bill has retrospective operation for a taxable year beginning on or after January 1,
221 2010.