S.B. 92

1

AMENDMENTS TO REVENUE AND TAXATION
2 TITLE
3 2010 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Curtis S. Bramble
6 House Sponsor: ____________
7
8 LONG TITLE
9 General Description:
10 This bill amends the Revenue and Taxation title to address penalties, the payment of
11 income taxes, and estimated tax payments under the Individual Income Tax Act.
12 Highlighted Provisions:
13 This bill:
14 . modifies penalties related to a tax under Title 59, Chapter 7, Corporate Franchise
15 and Income Taxes, or Title 59, Chapter 10, Individual Income Tax Act;
16 . addresses the amount of income tax required to be paid to avoid a penalty if a
17 person makes estimated tax payments and receives an extension of time to file a
18 return;
19 . enacts estimated tax payment requirements under Title 59, Chapter 10, Individual
20 Income Tax Act, including:
21 . defining terms;
22 . establishing a required annual payment;
23 . establishing procedures and requirements for making an estimated tax payment;
24 . providing a penalty for failure to pay or underpaying an estimated tax payment;
25 . authorizing the State Tax Commission to waive, reduce, or compromise the
26 penalty for failure to pay or underpaying an estimated tax payment;
27 . granting rulemaking authority to the State Tax Commission under certain

28 circumstances; and
29 . requiring the State Tax Commission to summarize the estimated tax payment
30 provisions in a conspicuous place on the State Tax Commission's website; and
31 . making technical and conforming changes.
32 Monies Appropriated in this Bill:
33 None
34 Other Special Clauses:
35 This bill provides an effective date.
36 Utah Code Sections Affected:
37 AMENDS:
38 59-1-401, as last amended by Laws of Utah 2009, Chapters 31, 203, 212, and 336
39 59-1-1408, as enacted by Laws of Utah 2009, Chapter 212
40 59-7-507, as last amended by Laws of Utah 2007, Chapter 269
41 59-10-516, as last amended by Laws of Utah 2007, Chapter 269
42 ENACTS:
43 59-10-1501, Utah Code Annotated 1953
44 59-10-1502, Utah Code Annotated 1953
45 59-10-1503, Utah Code Annotated 1953
46 59-10-1504, Utah Code Annotated 1953
47 59-10-1505, Utah Code Annotated 1953
48 59-10-1506, Utah Code Annotated 1953
49
50 Be it enacted by the Legislature of the state of Utah:
51 Section 1. Section 59-1-401 is amended to read:
52 59-1-401. Definitions -- Offenses and penalties -- Rulemaking authority -- Statute
53 of limitations -- Commission authority to waive, reduce, or compromise penalty or
54 interest.
55 (1) As used in this section:
56 (a) "Activated tax, fee, or charge" means a tax, fee, or charge with respect to which the
57 commission:
58 (i) has implemented the commission's GenTax system; and

59 (ii) at least 30 days before implementing the commission's GenTax system as described
60 in Subsection (1)(a)(i), has provided notice in a conspicuous place on the commission's website
61 stating:
62 (A) the date the commission will implement the GenTax system with respect to the tax,
63 fee, or charge; and
64 (B) that, at the time the commission implements the GenTax system with respect to the
65 tax, fee, or charge:
66 (I) a person that files a return after the due date as described in Subsection (2)[(b)](a) is
67 subject to the penalty described in Subsection (2)(c)(ii); and
68 (II) a person that fails to pay the tax, fee, or charge as described in Subsection (3)(a) is
69 subject to the penalty described in Subsection (3)(b)(ii).
70 (b) "Activation date for a tax, fee, or charge" means with respect to a tax, fee, or
71 charge, the later of:
72 (i) the date on which the commission implements the commission's GenTax system
73 with respect to the tax, fee, or charge; or
74 (ii) 30 days after the date the commission provides the notice described in Subsection
75 (1)(a)(ii) with respect to the tax, fee, or charge.
76 (c) "Tax, fee, or charge" means:
77 (i) a tax, fee, or charge the commission administers under:
78 (A) this title;
79 (B) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
80 (C) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
81 (D) Section 19-6-410.5 ;
82 (E) Section 19-6-714 ;
83 (F) Section 19-6-805 ;
84 (G) Section 40-6-14 ;
85 (H) Section 69-2-5 ;
86 (I) Section 69-2-5.5 ; or
87 (J) Section 69-2-5.6 ; or
88 (ii) another amount that by statute is subject to a penalty imposed under this section.
89 (d) "Unactivated tax, fee, or charge" means a tax, fee, or charge except for an activated

90 tax, fee, or charge.
91 (2) (a) The due date for filing a return is:
92 (i) if the person filing the return is not allowed by law an extension of time for filing
93 the return, the day on which the return is due as provided by law; or
94 (ii) if the person filing the return is allowed by law an extension of time for filing the
95 return, the earlier of:
96 (A) the date the person files the return; or
97 (B) the last day of that extension of time as allowed by law.
98 (b) A penalty in the amount described in Subsection (2)(c) is imposed if a person files a
99 return after the due date described in Subsection (2)(a).
100 (c) For purposes of Subsection (2)(b), the penalty is an amount equal to the greater of:
101 (i) if the return described in Subsection (2)(b) is filed with respect to an unactivated
102 tax, fee, or charge:
103 (A) $20; or
104 (B) 10% of the unpaid unactivated tax, fee, or charge due on the return; or
105 (ii) if the return described in Subsection (2)(b) is filed with respect to an activated tax,
106 fee, or charge, beginning on the activation date for the tax, fee, or charge:
107 (A) $20; or
108 (B) (I) 2% of the unpaid activated tax, fee, or charge due on the return if the return is
109 filed no later than five days after the due date described in Subsection (2)(a);
110 (II) 5% of the unpaid activated tax, fee, or charge due on the return if the return is filed
111 more than five days after the due date but no later than 15 days after the due date described in
112 Subsection (2)(a); or
113 (III) 10% of the unpaid activated tax, fee, or charge due on the return if the return is
114 filed more than 15 days after the due date described in Subsection (2)(a).
115 (d) This Subsection (2) does not apply to:
116 (i) an amended return; or
117 (ii) a return with no tax due.
118 (3) (a) A person is subject to a penalty for failure to pay a tax, fee, or charge if:
119 (i) the person files a return on or before the due date for filing a return described in
120 Subsection (2)(a), but fails to pay the tax, fee, or charge due on the return on or before that due

121 date;
122 (ii) the person:
123 (A) is subject to a penalty under Subsection (2)(b); and
124 (B) fails to pay the tax, fee, or charge due on a return within a 90-day period after the
125 due date for filing a return described in Subsection (2)(a);
126 (iii) (A) the person is subject to a penalty under Subsection (2)(b); and
127 (B) the commission estimates an amount of tax due for that person in accordance with
128 Subsection 59-1-1406 (2);
129 (iv) the person:
130 (A) is mailed a notice of deficiency; and
131 (B) within a 30-day period after the day on which the notice of deficiency described in
132 Subsection (3)(a)(iv)(A) is mailed:
133 (I) does not file a petition for redetermination or a request for agency action; and
134 (II) fails to pay the tax, fee, or charge due on a return;
135 (v) (A) the commission:
136 (I) issues an order constituting final agency action resulting from a timely filed petition
137 for redetermination or a timely filed request for agency action; or
138 (II) is considered to have denied a request for reconsideration under Subsection
139 63G-4-302 (3)(b) resulting from a timely filed petition for redetermination or a timely filed
140 request for agency action; and
141 (B) the person fails to pay the tax, fee, or charge due on a return within a 30-day period
142 after the date the commission:
143 (I) issues the order constituting final agency action described in Subsection
144 (3)(a)(v)(A)(I); or
145 (II) is considered to have denied the request for reconsideration described in
146 Subsection (3)(a)(v)(A)(II); or
147 (vi) the person fails to pay the tax, fee, or charge within a 30-day period after the date
148 of a final judicial decision resulting from a timely filed petition for judicial review.
149 (b) For purposes of Subsection (3)(a), the penalty is an amount equal to the greater of:
150 (i) if the failure to pay a tax, fee, or charge as described in Subsection (3)(a) is with
151 respect to an unactivated tax, fee, or charge:

152 (A) $20; or
153 (B) 10% of the unpaid unactivated tax, fee, or charge due on the return; [or]
154 (ii) if the failure to pay a tax, fee, or charge as described in Subsection (3)(a) is with
155 respect to an activated tax, fee, or charge except for a tax imposed under Chapter 7, Corporate
156 Franchise and Income Taxes, or Chapter 10, Individual Income Tax Act, beginning on the
157 activation date:
158 (A) $20; or
159 (B) (I) 2% of the unpaid activated tax, fee, or charge due on the return if the activated
160 tax, fee, or charge due on the return is paid no later than five days after the due date for filing a
161 return described in Subsection (2)(a);
162 (II) 5% of the unpaid activated tax, fee, or charge due on the return if the activated tax,
163 fee, or charge due on the return is paid more than five days after the due date for filing a return
164 described in Subsection (2)(a) but no later than 15 days after that due date; or
165 (III) 10% of the unpaid activated tax, fee, or charge due on the return if the activated
166 tax, fee, or charge due on the return is paid more than 15 days after the due date for filing a
167 return described in Subsection (2)(a)[.]; or
168 (iii) if the failure to pay a tax, fee, or charge as described in Subsection (3)(a) is with
169 respect to a tax imposed under Chapter 7, Corporate Franchise and Income Taxes, or Chapter
170 10, Individual Income Tax Act:
171 (A) $20 if the tax due on the return is paid in full after the original due date for filing
172 the return under Section 59-7-505 or 59-10-514 , without extensions; or
173 (B) the lesser of:
174 (I) 25% of the unpaid tax due on the return; or
175 (II) the sum of:
176 (Aa) 0.5% of the unpaid tax per month for the number of months, as determined in
177 accordance with Subsection (3)(c), that the unpaid tax due on the return is not paid in full, for
178 the first six months after the original due date for filing the return under Section 59-7-505 or
179 59-10-514 , without extensions; and
180 (Bb) 1% of the unpaid tax per month, as determined in accordance with Subsection
181 (3)(c), that the unpaid tax due on the return is not paid in full, for any months after the first six
182 months after the original due date for filing the return under Section 59-7-505 or 59-10-514 ,

183 without extensions.
184 (c) For purposes of determining the penalty under Subsection (3)(b)(iii)(B)(II), the
185 number of months shall be calculated by:
186 (i) determining the number of months the unpaid tax due on the return is not paid in
187 full, beginning with the original due date for filing the return under Section 59-7-505 or
188 59-10-514 , without extensions, and ending on the date the unpaid tax is paid in full; and
189 (ii) including any fraction of a month as a full month.
190 (4) (a) [Beginning January 1, 1995, in] In the case of any underpayment of estimated
191 tax or quarterly installments required by [Sections] Section 59-5-107 , 59-5-207 , 59-7-504 ,
192 [and] 59-9-104 , or 59-10-1503 , there shall be added a penalty in an amount determined by
193 applying the interest rate provided under [Section] Subsection 59-1-402 (2) plus [four] three
194 percentage points to the amount of the underpayment for the period of the underpayment.
195 (b) (i) For purposes of Subsection (4)(a), the amount of the underpayment shall be the
196 excess of the required installment over the amount, if any, of the installment paid on or before
197 the due date for the installment.
198 (ii) The period of the underpayment shall run from the due date for the installment to
199 whichever of the following dates is the earlier:
200 (A) the original due date of the tax return, without extensions, for the taxable year; or
201 (B) with respect to any portion of the underpayment, the date on which that portion is
202 paid.
203 (iii) For purposes of this Subsection (4), a payment of estimated tax shall be credited
204 against unpaid required installments in the order in which the installments are required to be
205 paid.
206 [(5) (a) Notwithstanding Subsection (2) and except as provided in Subsection (6), a
207 person allowed by law an extension of time for filing a corporate franchise or income tax return
208 under Chapter 7, Corporate Franchise and Income Taxes, or an individual income tax return
209 under Chapter 10, Individual Income Tax Act, is subject to a penalty in the amount described in
210 Subsection (5)(b) if, on or before the day on which the return is due as provided by law, not
211 including the extension of time, the person fails to pay:]
212 [(i) for a person filing a corporate franchise or income tax return under Chapter 7,
213 Corporate Franchise and Income Taxes, the payment required by Subsection 59-7-507 (1)(b);

214 or]
215 [(ii) for a person filing an individual income tax return under Chapter 10, Individual
216 Income Tax Act, the payment required by Subsection 59-10-516 (2).]
217 [(b) For purposes of Subsection (5)(a), the penalty per month during the period of the
218 extension of time for filing the return is an amount equal to 2% of the tax due on the return,
219 unpaid as of the day on which the return is due as provided by law.]
220 [(6)] (5) If a person does not file a return within an extension of time allowed by
221 Section 59-7-505 or 59-10-516 , the person[: (a) is not subject to a penalty in the amount
222 described in Subsection (5)(b); and (b) ] is subject to a penalty in an amount equal to the sum
223 of:
224 [(i)] (a) a late file penalty in an amount equal to the greater of:
225 [(A)] (i) $20; or
226 [(B)] (ii) 10% of the tax due on the return, unpaid as of the day on which the return is
227 due as provided by law, not including the extension of time; and
228 [(ii)] (b) a late pay penalty in an amount equal to the greater of:
229 [(A)] (i) $20; or
230 [(B)] (ii) 10% of the unpaid tax due on the return, unpaid as of the day on which the
231 return is due as provided by law, not including the extension of time.
232 [(7)] (6) (a) Additional penalties for an underpayment of a tax, fee, or charge are as
233 provided in this Subsection [(7)] (6)(a).
234 (i) Except as provided in Subsection [(7)] (6)(c), if any portion of an underpayment of
235 a tax, fee, or charge is due to negligence, the penalty is 10% of the portion of the underpayment
236 that is due to negligence.
237 (ii) Except as provided in Subsection [(7)] (6)(d), if any portion of an underpayment of
238 a tax, fee, or charge is due to intentional disregard of law or rule, the penalty is 15% of the
239 entire underpayment.
240 (iii) If any portion of an underpayment is due to an intent to evade a tax, fee, or charge,
241 the penalty is the greater of $500 per period or 50% of the entire underpayment.
242 (iv) If any portion of an underpayment is due to fraud with intent to evade a tax, fee, or
243 charge, the penalty is the greater of $500 per period or 100% of the entire underpayment.
244 (b) If the commission determines that a person is liable for a penalty imposed under

245 Subsection [(7)] (6)(a)(ii), (iii), or (iv), the commission shall notify the person of the proposed
246 penalty.
247 (i) The notice of proposed penalty shall:
248 (A) set forth the basis of the assessment; and
249 (B) be mailed by certified mail, postage prepaid, to the person's last-known address.
250 (ii) Upon receipt of the notice of proposed penalty, the person against whom the
251 penalty is proposed may:
252 (A) pay the amount of the proposed penalty at the place and time stated in the notice;
253 or
254 (B) proceed in accordance with the review procedures of Subsection [(7)] (6)(b)(iii).
255 (iii) A person against whom a penalty is proposed in accordance with this Subsection
256 [(7)] (6) may contest the proposed penalty by filing a petition for an adjudicative proceeding
257 with the commission.
258 (iv) (A) If the commission determines that a person is liable for a penalty under this
259 Subsection [(7)] (6), the commission shall assess the penalty and give notice and demand for
260 payment.
261 (B) The commission shall mail the notice and demand for payment described in
262 Subsection [(7)] (6)(b)(iv)(A):
263 (I) to the person's last-known address; and
264 (II) in accordance with Section 59-1-1404 .
265 (c) A seller that voluntarily collects a tax under Subsection 59-12-107 (1)(b) is not
266 subject to the penalty under Subsection [(7)] (6)(a)(i) if on or after July 1, 2001:
267 (i) a court of competent jurisdiction issues a final unappealable judgment or order
268 determining that:
269 (A) the seller meets one or more of the criteria described in Subsection
270 59-12-107 (1)(a); and
271 (B) the commission or a county, city, or town may require the seller to collect a tax
272 under Subsections 59-12-103 (2)(a) through (d); or
273 (ii) the commission issues a final unappealable administrative order determining that:
274 (A) the seller meets one or more of the criteria described in Subsection
275 59-12-107 (1)(a); and

276 (B) the commission or a county, city, or town may require the seller to collect a tax
277 under Subsections 59-12-103 (2)(a) through (d).
278 (d) A seller that voluntarily collects a tax under Subsection 59-12-107 (1)(b) is not
279 subject to the penalty under Subsection [(7)] (6)(a)(ii) if:
280 (i) (A) a court of competent jurisdiction issues a final unappealable judgment or order
281 determining that:
282 (I) the seller meets one or more of the criteria described in Subsection 59-12-107 (1)(a);
283 and
284 (II) the commission or a county, city, or town may require the seller to collect a tax
285 under Subsections 59-12-103 (2)(a) through (d); or
286 (B) the commission issues a final unappealable administrative order determining that:
287 (I) the seller meets one or more of the criteria described in Subsection 59-12-107 (1)(a);
288 and
289 (II) the commission or a county, city, or town may require the seller to collect a tax
290 under Subsections 59-12-103 (2)(a) through (d); and
291 (ii) the seller's intentional disregard of law or rule is warranted by existing law or by a
292 nonfrivolous argument for the extension, modification, or reversal of existing law or the
293 establishment of new law.
294 [(8)] (7) The penalty for failure to file an information return, information report, or a
295 complete supporting schedule is $50 for each information return, information report, or
296 supporting schedule up to a maximum of $1,000.
297 [(9)] (8) If a person, in furtherance of a frivolous position, has a prima facie intent to
298 delay or impede administration of a law relating to a tax, fee, or charge and files a purported
299 return that fails to contain information from which the correctness of reported tax, fee, or
300 charge liability can be determined or that clearly indicates that the tax, fee, or charge liability
301 shown is substantially incorrect, the penalty is $500.
302 [(10)] (9) (a) A seller that fails to remit a tax, fee, or charge monthly as required by
303 Subsection 59-12-108 (1)(a):
304 (i) is subject to a penalty described in Subsection (2); and
305 (ii) may not retain the percentage of sales and use taxes that would otherwise be
306 allowable under Subsection 59-12-108 (2).

307 (b) A seller that fails to remit a tax, fee, or charge by electronic funds transfer as
308 required by Subsection 59-12-108 (1)(a)(ii)(B):
309 (i) is subject to a penalty described in Subsection (2); and
310 (ii) may not retain the percentage of sales and use taxes that would otherwise be
311 allowable under Subsection 59-12-108 (2).
312 [(11)] (10) (a) A person is subject to the penalty provided in Subsection [(11)] (10)(c)
313 if that person:
314 (i) commits an act described in Subsection [(11)] (10)(b) with respect to one or more of
315 the following documents:
316 (A) a return;
317 (B) an affidavit;
318 (C) a claim; or
319 (D) a document similar to Subsections [(11)] (10)(a)(i)(A) through (C);
320 (ii) knows or has reason to believe that the document described in Subsection [(11)]
321 (10)(a)(i) will be used in connection with any material matter administered by the commission;
322 and
323 (iii) knows that the document described in Subsection [(11)] (10)(a)(i), if used in
324 connection with any material matter administered by the commission, would result in an
325 understatement of another person's liability for a tax, fee, or charge.
326 (b) The following acts apply to Subsection [(11)] (10)(a)(i):
327 (i) preparing any portion of a document described in Subsection [(11)] (10)(a)(i);
328 (ii) presenting any portion of a document described in Subsection [(11)] (10)(a)(i);
329 (iii) procuring any portion of a document described in Subsection [(11)] (10)(a)(i);
330 (iv) advising in the preparation or presentation of any portion of a document described
331 in Subsection [(11)] (10)(a)(i);
332 (v) aiding in the preparation or presentation of any portion of a document described in
333 Subsection [(11)] (10)(a)(i);
334 (vi) assisting in the preparation or presentation of any portion of a document described
335 in Subsection [(11)] (10)(a)(i); or
336 (vii) counseling in the preparation or presentation of any portion of a document
337 described in Subsection [(11)] (10)(a)(i).

338 (c) For purposes of Subsection [(11)] (10)(a), the penalty:
339 (i) shall be imposed by the commission;
340 (ii) is $500 for each document described in Subsection [(11)] (10)(a)(i) with respect to
341 which the person described in Subsection [(11)] (10)(a) meets the requirements of Subsection
342 [(11)] (10)(a); and
343 (iii) is in addition to any other penalty provided by law.
344 (d) The commission may seek a court order to enjoin a person from engaging in
345 conduct that is subject to a penalty under this Subsection [(11)] (10).
346 (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
347 commission may make rules prescribing the documents that are similar to Subsections [(11)]
348 (10)(a)(i)(A) through (C).
349 [(12)] (11) (a) As provided in Section 76-8-1101 , criminal offenses and penalties are as
350 provided in Subsections [(12)] (11)(b) through (e).
351 (b) (i) A person who is required by this title or any laws the commission administers or
352 regulates to register with or obtain a license or permit from the commission, who operates
353 without having registered or secured a license or permit, or who operates when the registration,
354 license, or permit is expired or not current, is guilty of a class B misdemeanor.
355 (ii) Notwithstanding Section 76-3-301 , for purposes of Subsection [(12)] (11)(b)(i), the
356 penalty may not:
357 (A) be less than $500; or
358 (B) exceed $1,000.
359 (c) (i) A person who, with intent to evade a tax, fee, or charge or requirement of this
360 title or any lawful requirement of the commission, fails to make, render, sign, or verify a return
361 or to supply information within the time required by law, or who makes, renders, signs, or
362 verifies a false or fraudulent return or statement, or who supplies false or fraudulent
363 information, is guilty of a third degree felony.
364 (ii) Notwithstanding Section 76-3-301 , for purposes of Subsection [(12)] (11)(c)(i), the
365 penalty may not:
366 (A) be less than $1,000; or
367 (B) exceed $5,000.
368 (d) (i) A person who intentionally or willfully attempts to evade or defeat a tax, fee, or

369 charge or the payment of a tax, fee, or charge is, in addition to other penalties provided by law,
370 guilty of a second degree felony.
371 (ii) Notwithstanding Section 76-3-301 , for purposes of Subsection [(12)] (11)(d)(i), the
372 penalty may not:
373 (A) be less than $1,500; or
374 (B) exceed $25,000.
375 (e) (i) A person is guilty of a second degree felony if that person commits an act:
376 (A) described in Subsection [(12)] (11)(e)(ii) with respect to one or more of the
377 following documents:
378 (I) a return;
379 (II) an affidavit;
380 (III) a claim; or
381 (IV) a document similar to Subsections [(12)] (11)(e)(i)(A)(I) through (III); and
382 (B) subject to Subsection [(12)] (11)(e)(iii), with knowledge that the document
383 described in Subsection [(12)] (11)(e)(i)(A):
384 (I) is false or fraudulent as to any material matter; and
385 (II) could be used in connection with any material matter administered by the
386 commission.
387 (ii) The following acts apply to Subsection [(12)] (11)(e)(i):
388 (A) preparing any portion of a document described in Subsection [(12)] (11)(e)(i)(A);
389 (B) presenting any portion of a document described in Subsection [(12)] (11)(e)(i)(A);
390 (C) procuring any portion of a document described in Subsection [(12)] (11)(e)(i)(A);
391 (D) advising in the preparation or presentation of any portion of a document described
392 in Subsection [(12)] (11)(e)(i)(A);
393 (E) aiding in the preparation or presentation of any portion of a document described in
394 Subsection [(12)] (11)(e)(i)(A);
395 (F) assisting in the preparation or presentation of any portion of a document described
396 in Subsection [(12)] (11)(e)(i)(A); or
397 (G) counseling in the preparation or presentation of any portion of a document
398 described in Subsection [(12)] (11)(e)(i)(A).
399 (iii) This Subsection [(12)] (11)(e) applies:

400 (A) regardless of whether the person for which the document described in Subsection
401 [(12)] (11)(e)(i)(A) is prepared or presented:
402 (I) knew of the falsity of the document described in Subsection [(12)] (11)(e)(i)(A); or
403 (II) consented to the falsity of the document described in Subsection [(12)]
404 (11)(e)(i)(A); and
405 (B) in addition to any other penalty provided by law.
406 (iv) Notwithstanding Section 76-3-301 , for purposes of this Subsection [(12)] (11)(e),
407 the penalty may not:
408 (A) be less than $1,500; or
409 (B) exceed $25,000.
410 (v) The commission may seek a court order to enjoin a person from engaging in
411 conduct that is subject to a penalty under this Subsection [(12)] (11)(e).
412 (vi) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
413 the commission may make rules prescribing the documents that are similar to Subsections
414 [(12)] (11)(e)(i)(A)(I) through (III).
415 (f) The statute of limitations for prosecution for a violation of this Subsection [(12)]
416 (11) is the later of six years:
417 (i) from the date the tax should have been remitted; or
418 (ii) after the day on which the person commits the criminal offense.
419 [(13)] (12) Upon making a record of its actions, and upon reasonable cause shown, the
420 commission may waive, reduce, or compromise any of the penalties or interest imposed under
421 this part.
422 Section 2. Section 59-1-1408 is amended to read:
423 59-1-1408. Assessments.
424 (1) Except as provided in Subsections (2) through (4), an assessment is made on the
425 date a liability is posted to the records of the commission.
426 (2) Except as provided in Subsection (4), for purposes of a liability for which the
427 commission mails a notice of deficiency to a person in accordance with Section 59-1-1405 , an
428 assessment is made:
429 (a) if a person has not filed a petition for redetermination of a deficiency under Section
430 59-1-501 , on the date:

431 (i) (A) 30 days after the day on which the commission mails the notice of deficiency to
432 the person; or
433 (B) 90 days after the day on which the commission mails the notice of deficiency to the
434 person if the notice is addressed to a person outside the United States or the District of
435 Columbia; or
436 (ii) the person in writing:
437 (A) agrees with the commission on the existence and amount of the liability; and
438 (B) consents to the assessment of the liability; or
439 (b) if a person files a petition for redetermination of a deficiency under Section
440 59-1-501 , on the date the liability resulting from a final commission decision is posted to the
441 records of the commission.
442 (3) Except as provided in Subsection (4), for purposes of a notice of proposed penalty
443 under Section 59-1-302 or Subsection 59-1-401 [(7)] (6), an assessment is made:
444 (a) if a person has not filed a petition for redetermination of a deficiency under Section
445 59-1-501 , on the date:
446 (i) (A) 30 days after the day on which the commission mails the notice of proposed
447 penalty to the person; or
448 (B) 90 days after the day on which the commission mails the notice of proposed
449 penalty to the person if the notice is addressed to a person outside the United States or the
450 District of Columbia; or
451 (ii) the person in writing:
452 (A) agrees with the commission on the existence and amount of the liability; and
453 (B) consents to the assessment of the liability; or
454 (b) if a person files a petition for redetermination of a deficiency under Section
455 59-1-501 , on the date the liability resulting from a final commission decision is posted to the
456 records of the commission.
457 (4) In the case of interest under Section 59-1-402 that accrues to a tax, fee, or charge,
458 an assessment is considered to have been made on the date the tax, fee, or charge is assessed.
459 (5) The commission may at any time within the time period prescribed for assessment
460 under Section 59-1-1410 , increase or decrease an assessment if the commission ascertains that
461 the assessment is imperfect or incomplete in a material respect.

462 Section 3. Section 59-7-507 is amended to read:
463 59-7-507. Payment of tax.
464 (1) (a) If quarterly estimated payments are not made as provided in Section 59-7-504 ,
465 the amount of tax imposed by this chapter shall be paid no later than the original due date of
466 the return.
467 (b) If an extension of time is necessary for filing a return, as provided in Subsection
468 59-7-505 (3) or Section 59-7-803 , payment must be made no later than the original due date of
469 the return in an amount equal to the [lesser of: (i) The] greater of:
470 [(A)] (i) 90% of the total tax [reported on the return] liability for the current taxable
471 year; or
472 [(B)] (ii) 100% of the minimum tax described in Section 59-7-104 [; or].
473 [(ii) 100% of the total tax liability for the taxable year immediately preceding the
474 current taxable year.]
475 (c) If payment is not made as provided in Subsection (1)(b), the commission shall add
476 [an extension] a penalty as provided in [Section] Subsection 59-1-401 (3)(b)(iii), until the tax is
477 paid [during the period of extension] in full.
478 (2) (a) At the request of the taxpayer, the commission may extend the time for payment
479 of the amount determined as the tax by the taxpayer, or any part of that amount, for a period not
480 to exceed six months from the date prescribed for the payment of the tax.
481 (b) For purposes of Subsection (2)(a), the amount in respect of which the extension is
482 granted shall be paid on or before the date of the expiration of the period of the extension.
483 Section 4. Section 59-10-516 is amended to read:
484 59-10-516. Filing extension -- Payment of tax -- Penalty -- Foreign residency.
485 (1) (a) The commission shall allow a taxpayer an extension of time for filing returns.
486 (b) The extension under Subsection (1)(a) may not exceed six months.
487 (2) (a) Except as provided in Subsection (2)(b), the commission may not impose on a
488 taxpayer during the extension period prescribed under Subsection (1) a penalty under [Section]
489 Subsection 59-1-401 (3)(b)(iii) if the taxpayer pays[,] 90% of the total tax liability for the
490 current taxable year on or before the 15th day of the fourth month following the close of the
491 taxpayer's taxable year[, the lesser of:].
492 [(i) 90% of the total tax reported on the return for the current taxable year; or]

493 [(ii) 100% of the total tax liability for the taxable year immediately preceding the
494 current taxable year.]
495 (b) If a taxpayer fails to meet the requirements of Subsection (2)(a), the commission
496 may apply to the total balance due a penalty as provided in Section 59-1-401 .
497 (3) If any federal income tax return filing is lawfully delayed pending a determination
498 of qualification for federal tax exemption due to residency outside of the United States, a
499 taxpayer shall file a return within 30 days after that determination is made.
500 Section 5. Section 59-10-1501 is enacted to read:
501 Part 15. Estimated Tax Payments Act
502 59-10-1501. Title.
503 This part is known as the "Estimated Tax Payments Act."
504 Section 6. Section 59-10-1502 is enacted to read:
505 59-10-1502. Definitions.
506 As used in this part:
507 (1) "Adjusted state tax liability after withholding" means the difference between:
508 (a) the difference between:
509 (i) the product of:
510 (A) an applicable taxpayer's state taxable income for a taxable year; and
511 (B) the tax rate imposed on the applicable taxpayer's state taxable income under this
512 chapter; and
513 (ii) the sum of:
514 (A) the nonrefundable tax credits and refundable tax credits that the taxpayer claims as
515 allowed for that taxable year on the applicable taxpayer's return filed under this chapter for the
516 taxable year except for a credit described in Subsection (1)(b); and
517 (B) any adjustments the commission makes in accordance with Subsection
518 59-10-1505 (2); and
519 (b) a credit the applicable taxpayer claims on a return as allowed for amounts paid or
520 withheld under:
521 (i) Chapter 6, Mineral Production Tax Withholding, for the taxable year; or
522 (ii) this chapter for the taxable year.
523 (2) "Adjusted state tax liability before withholding" means the difference between:

524 (a) the product of:
525 (i) an applicable taxpayer's state taxable income for a taxable year; and
526 (ii) the tax rate imposed on the applicable taxpayer's state taxable income under this
527 chapter; and
528 (b) the sum of:
529 (i) the nonrefundable tax credits and refundable tax credits that the taxpayer claims as
530 allowed for that taxable year on the applicable taxpayer's return filed under this chapter for the
531 taxable year except for a credit described in Subsection (1)(b); and
532 (ii) any adjustments the commission makes in accordance with Subsection
533 59-10-1505 (2).
534 (3) "Applicable taxpayer" means a calendar year taxpayer or a fiscal year taxpayer.
535 (4) "Calendar year taxpayer" means the following that has a taxable year that begins on
536 January 1 and is for a 12-month period:
537 (a) an individual;
538 (b) an estate;
539 (c) a trust; or
540 (d) an S corporation as defined in Section 59-10-1402 .
541 (5) "Electronic" is as defined in Section 59-10-514.1 .
542 (6) "Farmer" is as defined in Section 6654, Internal Revenue Code.
543 (7) "Fiscal year taxpayer" means the following that has a taxable year that begins on a
544 day other than January 1 and is for a 12-month period:
545 (a) an individual;
546 (b) an estate;
547 (c) a trust; or
548 (d) an S corporation as defined in Section 59-10-1402 .
549 (8) "Fisherman" is as defined in Section 6654, Internal Revenue Code.
550 (9) "Pass-through entity" is as defined in Section 59-10-1402 .
551 (10) "Required annual payment" means:
552 (a) for an applicable taxpayer except for a farmer or fisherman, an amount equal to the
553 lesser of:
554 (i) 90% of the applicable taxpayer's adjusted state tax liability before withholding for

555 the current taxable year; or
556 (ii) 100% of the applicable taxpayer's adjusted state tax liability before withholding for
557 the previous taxable year, if that taxable year was for a 12-month period and the taxpayer filed
558 a return under this chapter for the taxable year; and
559 (b) for a farmer or fisherman, an amount as defined by the commission in accordance
560 with Section 59-10-1505 .
561 (11) "Required annual payment after withholding" means the difference between:
562 (a) an applicable taxpayer's required annual payment; and
563 (b) a credit the applicable taxpayer claims on a return as allowed for amounts paid or
564 withheld under:
565 (i) Chapter 6, Mineral Production Tax Withholding, for the taxable year; or
566 (ii) this chapter for the taxable year.
567 Section 7. Section 59-10-1503 is enacted to read:
568 59-10-1503. Required annual payment -- Estimated tax payments.
569 (1) For a taxable year beginning on or after January 1, 2011, an applicable taxpayer
570 required to file a return under this chapter for the taxable year shall pay to the commission the
571 required annual payment if on the last day of the applicable taxpayer's taxable year the
572 applicable taxpayer's adjusted state tax liability after withholding for the taxable year will be
573 $1,000 or more, regardless of the applicable taxpayer's filing status.
574 (2) The applicable taxpayer shall make the required annual payment described in
575 Subsection (1) by:
576 (a) deduction and withholding under:
577 (i) Chapter 6, Mineral Production Tax Withholding; or
578 (ii) this chapter;
579 (b) the applicable taxpayer making one or more estimated tax payments to the
580 commission as provided in this part; or
581 (c) a combination of Subsections (2)(a) and (b).
582 (3) (a) If an applicable taxpayer makes an estimated tax payment to the commission,
583 the estimated tax payment shall be made in accordance with this Subsection (3) and Subsection
584 (4).
585 (b) Subject to Subsection (3)(f), if, on or before the last day of the third month of the

586 taxable year, the applicable taxpayer's adjusted state tax liability after withholding will be
587 $1,000 or more on the last day of the applicable taxpayer's taxable year, the applicable taxpayer
588 shall pay:
589 (i) 25% of the required annual payment after withholding on or before the 15th day of
590 the fourth month of the taxable year;
591 (ii) 25% of the required annual payment after withholding on or before the 15th day of
592 the sixth month of the taxable year;
593 (iii) 25% of the required annual payment after withholding on or before the 15th day of
594 the ninth month of the taxable year; and
595 (iv) 25% of the required annual payment after withholding on or before the 15th day of
596 the first month of the year after the taxable year.
597 (c) Subject to Subsection (3)(f), if, on or after the first day of the fourth month of the
598 taxable year but on or before the last day of the fifth month of the taxable year, an applicable
599 taxpayer's adjusted state tax liability after withholding will be $1,000 or more on the last day of
600 the applicable taxpayer's taxable year, the applicable taxpayer shall pay:
601 (i) 50% of the required annual payment after withholding on or before the 15th day of
602 the sixth month of the taxable year;
603 (ii) 25% of the required annual payment after withholding on or before the 15th day of
604 the ninth month of the taxable year; and
605 (iii) 25% of the required annual payment after withholding on or before the 15th day of
606 the first month of the year after the taxable year.
607 (d) Subject to Subsection (3)(f), if, on or after the first day of the sixth month but on or
608 before the last day of the eighth month of the taxable year, an applicable taxpayer's adjusted
609 state tax liability after withholding will be $1,000 or more on the last day of the applicable
610 taxpayer's taxable year, the applicable taxpayer shall pay:
611 (i) 75% of the required annual payment after withholding on or before the 15th day of
612 the ninth month of the taxable year; and
613 (ii) 25% of the required annual payment after withholding on or before the 15th day of
614 the first month of the year after the taxable year.
615 (e) Subject to Subsection (3)(f), if, on or after the first day of the ninth month of the
616 taxable year, an applicable taxpayer's adjusted state tax liability after withholding will be

617 $1,000 or more on the last day of the applicable taxpayer's taxable year, the applicable taxpayer
618 shall pay 100% of the required annual payment after withholding on or before the 15th day of
619 the first month of the year after the taxable year.
620 (f) (i) Except as provided in Subsection (3)(f)(ii), if, after making an estimated tax
621 payment, an applicable taxpayer's adjusted state tax liability after withholding changes, the
622 applicable taxpayer shall proportionally increase or decrease the applicable taxpayer's
623 remaining estimated tax payments for the taxable year so that the balance of the required
624 annual payment after withholding is made in equal installments.
625 (ii) If a taxpayer files an amended return for a taxable year after the original due date
626 for filing the return, not including extensions, the applicable taxpayer is not required to:
627 (A) recalculate the applicable taxpayer's adjusted state tax liability for the taxable year
628 for purposes of this part; or
629 (B) proportionally increase or decrease the applicable taxpayer's estimated tax
630 payments for the taxable year under Subsection (3)(f)(i).
631 (4) (a) An applicable taxpayer that makes an estimated tax payment under this section
632 shall make the estimated tax payment by electronic means.
633 (b) Notwithstanding Subsection (4)(a), the commission may waive the requirement of
634 Subsection (4)(a) if the applicable taxpayer demonstrates to the commission that the
635 requirement of Subsection (4)(a) would cause an undue hardship.
636 Section 8. Section 59-10-1504 is enacted to read:
637 59-10-1504. Penalties -- Commission authority to waive, reduce, or compromise
638 penalty.
639 (1) Subject to Subsection 59-10-1505 (1)(c) and except as provided in Subsection (2),
640 an applicable taxpayer shall pay a penalty as provided in Section 59-1-401 if the applicable
641 taxpayer fails to pay or underpays an estimated tax payment in accordance with this part.
642 (2) Subject to Subsection 59-10-1505 (1)(c), in accordance with the procedures and
643 requirements of Section 59-1-401 , the commission may waive, reduce, or compromise the
644 penalty described in Subsection (1).
645 Section 9. Section 59-10-1505 is enacted to read:
646 59-10-1505. Rulemaking authority -- Taxpayer with a taxable year of less than 12
647 months -- Farmer or fisherman -- Nonresident alien -- Exceptions to penalty --

648 Calculation of adjusted state tax liability.
649 (1) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
650 commission shall make rules:
651 (a) providing for estimated tax payments for a taxpayer with a taxable year of less than
652 12 months;
653 (b) establishing the required annual payment and providing for estimated tax payments:
654 (i) for a:
655 (A) farmer or fisherman; or
656 (B) nonresident alien described in Section 6654(j), Internal Revenue Code; and
657 (ii) consistent with Section 6654, Internal Revenue Code; and
658 (c) providing for the following exceptions to the penalty described in Section
659 59-10-1504 :
660 (i) an exception consistent with Section 6654(e)(2), Internal Revenue Code, for an
661 applicable taxpayer that filed a return under this chapter for the prior taxable year;
662 (ii) an exception consistent with Section 6654(e)(3), Internal Revenue Code;
663 (iii) an exception for an applicable taxpayer's failure to pay the final estimated tax
664 payment for a taxable year consistent with Section 6654(h), Internal Revenue Code; and
665 (iv) an exception consistent with Section 6658(a), Internal Revenue Code.
666 (2) (a) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
667 the commission may make rules:
668 (i) except as provided in Subsection (2)(b), allowing for an adjustment to the
669 calculation of adjusted state tax liability after withholding and adjusted state tax liability before
670 withholding for purposes of this part, by adding or subtracting an amount that is added or
671 subtracted on a return filed under this chapter; and
672 (ii) defining the circumstances that constitute an undue hardship to make an estimated
673 tax payment by electronic means described in Section 59-10-1503 .
674 (b) The commission may not make a rule under Subsection (2)(a)(i) that adjusts the
675 calculation of adjusted state tax liability after withholding or adjusted state tax liability before
676 withholding to include:
677 (i) a nonrefundable tax credit or refundable tax credit that is added or subtracted on a
678 return filed under this chapter;

679 (ii) a contribution made in accordance with Part 13, Individual Income Tax
680 Contribution Act; or
681 (iii) an amount of use tax liability under Chapter 12, Sales and Use Tax Act, reported
682 on a return filed under this chapter.
683 Section 10. Section 59-10-1506 is enacted to read:
684 59-10-1506. Commission to summarize requirements of this part on the
685 commission's website.
686 On or before December 1, 2010, the commission shall provide a summary of the
687 requirements of this part in a conspicuous place on the commission's website.
688 Section 11. Effective date.
689 (1) Except as provided in Subsection (2), this bill takes effect for a taxable year
690 beginning on or after January 1, 2011.
691 (2) The following sections take effect on May 11, 2010:
692 (a) Section 59-10-1505 ; and
693 (b) Section 59-10-1506 .




Legislative Review Note
as of 1-14-10 4:24 PM

Office of Legislative Research and General Counsel