H.B. 422

1

TAX CHANGES
2 2011 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: David Litvack
5 Senate Sponsor: ____________
6
7 LONG TITLE
8 General Description:
9 This bill amends the Revenue and Taxation title to address penalties, the payment of
10 taxes, and estimated tax payments for individual income tax purposes.
11 Highlighted Provisions:
12 This bill:
13 . modifies penalties related to certain taxes;
14 . enacts estimated tax payment requirements under Title 59, Chapter 10, Individual
15 Income Tax Act, including:
16 . defining terms;
17 . establishing a required annual payment;
18 . establishing procedures and requirements for making an estimated tax payment;
19 . providing a penalty for failure to pay or underpaying an estimated tax payment;
20 . authorizing the State Tax Commission to waive, reduce, or compromise the
21 penalty for failure to pay or underpaying an estimated tax payment;
22 . granting rulemaking authority to the State Tax Commission under certain
23 circumstances; and
24 . requiring the State Tax Commission to summarize the estimated tax payment
25 provisions in a conspicuous place on the State Tax Commission's website; and
26 . makes technical and conforming changes.
27 Money Appropriated in this Bill:

28 None
29 Other Special Clauses:
30 This bill provides effective dates.
31 Utah Code Sections Affected:
32 AMENDS:
33 59-1-401, as last amended by Laws of Utah 2010, Chapter 233
34 ENACTS:
35 59-10-1501, Utah Code Annotated 1953
36 59-10-1502, Utah Code Annotated 1953
37 59-10-1503, Utah Code Annotated 1953
38 59-10-1504, Utah Code Annotated 1953
39 59-10-1505, Utah Code Annotated 1953
40 59-10-1506, Utah Code Annotated 1953
41
42 Be it enacted by the Legislature of the state of Utah:
43 Section 1. Section 59-1-401 is amended to read:
44 59-1-401. Definitions -- Offenses and penalties -- Rulemaking authority -- Statute
45 of limitations -- Commission authority to waive, reduce, or compromise penalty or
46 interest.
47 (1) As used in this section:
48 (a) "Activated tax, fee, or charge" means a tax, fee, or charge with respect to which the
49 commission:
50 (i) has implemented the commission's GenTax system; and
51 (ii) at least 30 days before implementing the commission's GenTax system as described
52 in Subsection (1)(a)(i), has provided notice in a conspicuous place on the commission's website
53 stating:
54 (A) the date the commission will implement the GenTax system with respect to the tax,
55 fee, or charge; and
56 (B) that, at the time the commission implements the GenTax system with respect to the
57 tax, fee, or charge:
58 (I) a person that files a return after the due date as described in Subsection (2)(a) is

59 subject to the penalty described in Subsection (2)(c)(ii); and
60 (II) a person that fails to pay the tax, fee, or charge as described in Subsection (3)(a) is
61 subject to the penalty described in Subsection (3)(b)(ii).
62 (b) "Activation date for a tax, fee, or charge" means with respect to a tax, fee, or
63 charge, the later of:
64 (i) the date on which the commission implements the commission's GenTax system
65 with respect to the tax, fee, or charge; or
66 (ii) 30 days after the date the commission provides the notice described in Subsection
67 (1)(a)(ii) with respect to the tax, fee, or charge.
68 (c) (i) Except as provided in Subsection (1)(c)(ii), "tax, fee, or charge" means:
69 (A) a tax, fee, or charge the commission administers under:
70 (I) this title;
71 (II) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
72 (III) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
73 (IV) Section 19-6-410.5 ;
74 (V) Section 19-6-714 ;
75 (VI) Section 19-6-805 ;
76 (VII) Section 34A-2-202 ;
77 (VIII) Section 40-6-14 ;
78 (IX) Section 69-2-5 ;
79 (X) Section 69-2-5.5 ; or
80 (XI) Section 69-2-5.6 ; or
81 (B) another amount that by statute is subject to a penalty imposed under this section.
82 (ii) "Tax, fee, or charge" does not include a tax, fee, or charge imposed under:
83 (A) Title 41, Chapter 1a, Motor Vehicle Act, except for Section 41-1a-301 ;
84 (B) Title 41, Chapter 3, Motor Vehicle Business Regulation Act;
85 (C) Chapter 2, Property Tax Act, except for Section 59-2-1309 ;
86 (D) Chapter 3, Tax Equivalent Property Act; or
87 (E) Chapter 4, Privilege Tax.
88 (d) "Unactivated tax, fee, or charge" means a tax, fee, or charge except for an activated
89 tax, fee, or charge.

90 (2) (a) The due date for filing a return is:
91 (i) if the person filing the return is not allowed by law an extension of time for filing
92 the return, the day on which the return is due as provided by law; or
93 (ii) if the person filing the return is allowed by law an extension of time for filing the
94 return, the earlier of:
95 (A) the date the person files the return; or
96 (B) the last day of that extension of time as allowed by law.
97 (b) A penalty in the amount described in Subsection (2)(c) is imposed if:
98 (i) a person files a return after the due date described in Subsection (2)(a)[.]; or
99 (ii) (A) a person fails to file a return; and
100 (B) the commission estimates a tax, fee, or charge due in accordance with Section
101 59-1-1406 .
102 (c) For purposes of Subsection (2)(b), the penalty is an amount equal to the greater of:
103 (i) if the return described in Subsection (2)(b) is filed with respect to an unactivated
104 tax, fee, or charge:
105 (A) $20; or
106 (B) 10% of the unpaid unactivated tax, fee, or charge due on the return; or
107 (ii) if the return described in Subsection (2)(b) is filed with respect to an activated tax,
108 fee, or charge, beginning on the activation date for the tax, fee, or charge:
109 (A) $20; or
110 (B) (I) 2% of the unpaid activated tax, fee, or charge due on the return if the return is
111 filed no later than five days after the due date described in Subsection (2)(a);
112 (II) 5% of the unpaid activated tax, fee, or charge due on the return if the return is filed
113 more than five days after the due date but no later than 15 days after the due date described in
114 Subsection (2)(a); or
115 (III) 10% of the unpaid activated tax, fee, or charge due on the return if the return is
116 filed more than 15 days after the due date described in Subsection (2)(a).
117 (d) This Subsection (2) does not apply to:
118 (i) an amended return; or
119 (ii) a return with no tax due.
120 (3) (a) A person is subject to a penalty for failure to pay a tax, fee, or charge if:

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

152 (i) if the failure to pay a tax, fee, or charge as described in Subsection (3)(a) is with
153 respect to an unactivated tax, fee, or charge:
154 (A) $20; or
155 (B) 10% of the unpaid unactivated tax, fee, or charge due on the return; or
156 (ii) if the failure to pay a tax, fee, or charge as described in Subsection (3)(a) is with
157 respect to an activated tax, fee, or charge, beginning on the 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).
168 (4) (a) [Beginning January 1, 1995, in the case of any underpayment of] If a person
169 underpays an estimated tax or quarterly [installments] payment or installment required by
170 [Sections] Section 59-5-107 , 59-5-207 , 59-7-504 , [and] 59-9-104 , or 59-10-1503 , there shall be
171 added a penalty in an amount determined by applying the interest rate provided under [Section]
172 Subsection 59-1-402 (2) plus four percentage points to the amount of the underpayment for the
173 period of the underpayment.
174 (b) (i) For purposes of Subsection (4)(a), the amount of the underpayment shall be the
175 excess of the required installment over the amount, if any, of the installment paid on or before
176 the due date for the installment.
177 (ii) The period of the underpayment shall run from the due date for the installment to
178 whichever of the following dates is the earlier:
179 (A) the original due date of the tax return, without extensions, for the taxable year; or
180 (B) with respect to any portion of the underpayment, the date on which that portion is
181 paid.
182 (iii) For purposes of this Subsection (4), a payment of estimated tax shall be credited

183 against unpaid required installments in the order in which the installments are required to be
184 paid.
185 (5) (a) Notwithstanding Subsection (2) and except as provided in Subsection (6), a
186 person allowed by law an extension of time for filing a corporate franchise or income tax return
187 under Chapter 7, Corporate Franchise and Income Taxes, or an individual income tax return
188 under Chapter 10, Individual Income Tax Act, is subject to a penalty in the amount described in
189 Subsection (5)(b) if, on or before the day on which the return is due as provided by law, not
190 including the extension of time, the person fails to pay:
191 (i) for a person filing a corporate franchise or income tax return under Chapter 7,
192 Corporate Franchise and Income Taxes, the payment required by Subsection 59-7-507 (1)(b); or
193 (ii) for a person filing an individual income tax return under Chapter 10, Individual
194 Income Tax Act, the payment required by Subsection 59-10-516 (2).
195 (b) For purposes of Subsection (5)(a), the penalty per month during the period of the
196 extension of time for filing the return is an amount equal to 2% of the tax due on the return,
197 unpaid as of the day on which the return is due as provided by law.
198 (6) If a person does not file a return within an extension of time allowed by Section
199 59-7-505 or 59-10-516 , the person:
200 (a) is not subject to a penalty in the amount described in Subsection (5)(b); and
201 (b) is subject to a penalty in an amount equal to the sum of:
202 (i) a late file penalty in an amount equal to the greater of:
203 (A) $20; or
204 (B) 10% of the tax due on the return, unpaid as of the day on which the return is due as
205 provided by law, not including the extension of time; and
206 (ii) a late pay penalty in an amount equal to the greater of:
207 (A) $20; or
208 (B) 10% of the unpaid tax due on the return, unpaid as of the day on which the return is
209 due as provided by law, not including the extension of time.
210 (7) (a) Additional penalties for an underpayment of a tax, fee, or charge are as provided
211 in this Subsection (7)(a).
212 (i) Except as provided in Subsection (7)(c), if any portion of an underpayment of a tax,
213 fee, or charge is due to negligence, the penalty is 10% of the portion of the underpayment that

214 is due to negligence.
215 (ii) Except as provided in Subsection (7)(d), if any portion of an underpayment of a
216 tax, fee, or charge is due to intentional disregard of law or rule, the penalty is 15% of the entire
217 underpayment.
218 (iii) If any portion of an underpayment is due to an intent to evade a tax, fee, or charge,
219 the penalty is the greater of $500 per period or 50% of the entire underpayment.
220 (iv) If any portion of an underpayment is due to fraud with intent to evade a tax, fee, or
221 charge, the penalty is the greater of $500 per period or 100% of the entire underpayment.
222 (b) If the commission determines that a person is liable for a penalty imposed under
223 Subsection (7)(a)(ii), (iii), or (iv), the commission shall notify the person of the proposed
224 penalty.
225 (i) The notice of proposed penalty shall:
226 (A) set forth the basis of the assessment; and
227 (B) be mailed by certified mail, postage prepaid, to the person's last-known address.
228 (ii) Upon receipt of the notice of proposed penalty, the person against whom the
229 penalty is proposed may:
230 (A) pay the amount of the proposed penalty at the place and time stated in the notice;
231 or
232 (B) proceed in accordance with the review procedures of Subsection (7)(b)(iii).
233 (iii) A person against whom a penalty is proposed in accordance with this Subsection
234 (7) may contest the proposed penalty by filing a petition for an adjudicative proceeding with
235 the commission.
236 (iv) (A) If the commission determines that a person is liable for a penalty under this
237 Subsection (7), the commission shall assess the penalty and give notice and demand for
238 payment.
239 (B) The commission shall mail the notice and demand for payment described in
240 Subsection (7)(b)(iv)(A):
241 (I) to the person's last-known address; and
242 (II) in accordance with Section 59-1-1404 .
243 (c) A seller that voluntarily collects a tax under Subsection 59-12-107 (1)(b) is not
244 subject to the penalty under Subsection (7)(a)(i) if on or after July 1, 2001:

245 (i) a court of competent jurisdiction issues a final unappealable judgment or order
246 determining that:
247 (A) the seller meets one or more of the criteria described in Subsection
248 59-12-107 (1)(a); and
249 (B) the commission or a county, city, or town may require the seller to collect a tax
250 under Subsections 59-12-103 (2)(a) through (d); or
251 (ii) the commission issues a final unappealable administrative order determining that:
252 (A) the seller meets one or more of the criteria described in Subsection
253 59-12-107 (1)(a); and
254 (B) the commission or a county, city, or town may require the seller to collect a tax
255 under Subsections 59-12-103 (2)(a) through (d).
256 (d) A seller that voluntarily collects a tax under Subsection 59-12-107 (1)(b) is not
257 subject to the penalty under Subsection (7)(a)(ii) if:
258 (i) (A) a court of competent jurisdiction issues a final unappealable judgment or order
259 determining that:
260 (I) the seller meets one or more of the criteria described in Subsection 59-12-107 (1)(a);
261 and
262 (II) the commission or a county, city, or town may require the seller to collect a tax
263 under Subsections 59-12-103 (2)(a) through (d); or
264 (B) the commission issues a final unappealable administrative order determining that:
265 (I) the seller meets one or more of the criteria described in Subsection 59-12-107 (1)(a);
266 and
267 (II) the commission or a county, city, or town may require the seller to collect a tax
268 under Subsections 59-12-103 (2)(a) through (d); and
269 (ii) the seller's intentional disregard of law or rule is warranted by existing law or by a
270 nonfrivolous argument for the extension, modification, or reversal of existing law or the
271 establishment of new law.
272 (8) The penalty for failure to file an information return, information report, or a
273 complete supporting schedule is $50 for each information return, information report, or
274 supporting schedule up to a maximum of $1,000.
275 (9) If a person, in furtherance of a frivolous position, has a prima facie intent to delay

276 or impede administration of a law relating to a tax, fee, or charge and files a purported return
277 that fails to contain information from which the correctness of reported tax, fee, or charge
278 liability can be determined or that clearly indicates that the tax, fee, or charge liability shown is
279 substantially incorrect, the penalty is $500.
280 (10) (a) A seller that fails to remit a tax, fee, or charge monthly as required by
281 Subsection 59-12-108 (1)(a):
282 (i) is subject to a penalty described in Subsection (2); and
283 (ii) may not retain the percentage of sales and use taxes that would otherwise be
284 allowable under Subsection 59-12-108 (2).
285 (b) A seller that fails to remit a tax, fee, or charge by electronic funds transfer as
286 required by Subsection 59-12-108 (1)(a)(ii)(B):
287 (i) is subject to a penalty described in Subsection (2); and
288 (ii) may not retain the percentage of sales and use taxes that would otherwise be
289 allowable under Subsection 59-12-108 (2).
290 (11) (a) A person is subject to the penalty provided in Subsection (11)(c) if that person:
291 (i) commits an act described in Subsection (11)(b) with respect to one or more of the
292 following documents:
293 (A) a return;
294 (B) an affidavit;
295 (C) a claim; or
296 (D) a document similar to Subsections (11)(a)(i)(A) through (C);
297 (ii) knows or has reason to believe that the document described in Subsection (11)(a)(i)
298 will be used in connection with any material matter administered by the commission; and
299 (iii) knows that the document described in Subsection (11)(a)(i), if used in connection
300 with any material matter administered by the commission, would result in an understatement of
301 another person's liability for a tax, fee, or charge.
302 (b) The following acts apply to Subsection (11)(a)(i):
303 (i) preparing any portion of a document described in Subsection (11)(a)(i);
304 (ii) presenting any portion of a document described in Subsection (11)(a)(i);
305 (iii) procuring any portion of a document described in Subsection (11)(a)(i);
306 (iv) advising in the preparation or presentation of any portion of a document described

307 in Subsection (11)(a)(i);
308 (v) aiding in the preparation or presentation of any portion of a document described in
309 Subsection (11)(a)(i);
310 (vi) assisting in the preparation or presentation of any portion of a document described
311 in Subsection (11)(a)(i); or
312 (vii) counseling in the preparation or presentation of any portion of a document
313 described in Subsection (11)(a)(i).
314 (c) For purposes of Subsection (11)(a), the penalty:
315 (i) shall be imposed by the commission;
316 (ii) is $500 for each document described in Subsection (11)(a)(i) with respect to which
317 the person described in Subsection (11)(a) meets the requirements of Subsection (11)(a); and
318 (iii) is in addition to any other penalty provided by law.
319 (d) The commission may seek a court order to enjoin a person from engaging in
320 conduct that is subject to a penalty under this Subsection (11).
321 (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
322 commission may make rules prescribing the documents that are similar to Subsections
323 (11)(a)(i)(A) through (C).
324 (12) (a) As provided in Section 76-8-1101 , criminal offenses and penalties are as
325 provided in Subsections (12)(b) through (e).
326 (b) (i) A person who is required by this title or any laws the commission administers or
327 regulates to register with or obtain a license or permit from the commission, who operates
328 without having registered or secured a license or permit, or who operates when the registration,
329 license, or permit is expired or not current, is guilty of a class B misdemeanor.
330 (ii) Notwithstanding Section 76-3-301 , for purposes of Subsection (12)(b)(i), the
331 penalty may not:
332 (A) be less than $500; or
333 (B) exceed $1,000.
334 (c) (i) A person who, with intent to evade a tax, fee, or charge or requirement of this
335 title or any lawful requirement of the commission, fails to make, render, sign, or verify a return
336 or to supply information within the time required by law, or who makes, renders, signs, or
337 verifies a false or fraudulent return or statement, or who supplies false or fraudulent

338 information, is guilty of a third degree felony.
339 (ii) Notwithstanding Section 76-3-301 , for purposes of Subsection (12)(c)(i), the
340 penalty may not:
341 (A) be less than $1,000; or
342 (B) exceed $5,000.
343 (d) (i) A person who intentionally or willfully attempts to evade or defeat a tax, fee, or
344 charge or the payment of a tax, fee, or charge is, in addition to other penalties provided by law,
345 guilty of a second degree felony.
346 (ii) Notwithstanding Section 76-3-301 , for purposes of Subsection (12)(d)(i), the
347 penalty may not:
348 (A) be less than $1,500; or
349 (B) exceed $25,000.
350 (e) (i) A person is guilty of a second degree felony if that person commits an act:
351 (A) described in Subsection (12)(e)(ii) with respect to one or more of the following
352 documents:
353 (I) a return;
354 (II) an affidavit;
355 (III) a claim; or
356 (IV) a document similar to Subsections (12)(e)(i)(A)(I) through (III); and
357 (B) subject to Subsection (12)(e)(iii), with knowledge that the document described in
358 Subsection (12)(e)(i)(A):
359 (I) is false or fraudulent as to any material matter; and
360 (II) could be used in connection with any material matter administered by the
361 commission.
362 (ii) The following acts apply to Subsection (12)(e)(i):
363 (A) preparing any portion of a document described in Subsection (12)(e)(i)(A);
364 (B) presenting any portion of a document described in Subsection (12)(e)(i)(A);
365 (C) procuring any portion of a document described in Subsection (12)(e)(i)(A);
366 (D) advising in the preparation or presentation of any portion of a document described
367 in Subsection (12)(e)(i)(A);
368 (E) aiding in the preparation or presentation of any portion of a document described in

369 Subsection (12)(e)(i)(A);
370 (F) assisting in the preparation or presentation of any portion of a document described
371 in Subsection (12)(e)(i)(A); or
372 (G) counseling in the preparation or presentation of any portion of a document
373 described in Subsection (12)(e)(i)(A).
374 (iii) This Subsection (12)(e) applies:
375 (A) regardless of whether the person for which the document described in Subsection
376 (12)(e)(i)(A) is prepared or presented:
377 (I) knew of the falsity of the document described in Subsection (12)(e)(i)(A); or
378 (II) consented to the falsity of the document described in Subsection (12)(e)(i)(A); and
379 (B) in addition to any other penalty provided by law.
380 (iv) Notwithstanding Section 76-3-301 , for purposes of this Subsection (12)(e), the
381 penalty may not:
382 (A) be less than $1,500; or
383 (B) exceed $25,000.
384 (v) The commission may seek a court order to enjoin a person from engaging in
385 conduct that is subject to a penalty under this Subsection (12)(e).
386 (vi) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
387 the commission may make rules prescribing the documents that are similar to Subsections
388 (12)(e)(i)(A)(I) through (III).
389 (f) The statute of limitations for prosecution for a violation of this Subsection (12) is
390 the later of six years:
391 (i) from the date the tax should have been remitted; or
392 (ii) after the day on which the person commits the criminal offense.
393 (13) Upon making a record of its actions, and upon reasonable cause shown, the
394 commission may waive, reduce, or compromise any of the penalties or interest imposed under
395 this part.
396 Section 2. Section 59-10-1501 is enacted to read:
397 Part 15. Estimated Tax Payments Act
398 59-10-1501. Title.
399 This part is known as the "Estimated Tax Payments Act."

400 Section 3. Section 59-10-1502 is enacted to read:
401 59-10-1502. Definitions.
402 As used in this part:
403 (1) "Adjusted state tax liability after withholding" means the difference between:
404 (a) the difference between:
405 (i) the product of:
406 (A) an applicable taxpayer's state taxable income for a taxable year; and
407 (B) the tax rate imposed on the applicable taxpayer's state taxable income under this
408 chapter; and
409 (ii) the sum of:
410 (A) the nonrefundable tax credits and refundable tax credits that the taxpayer claims as
411 allowed for that taxable year on the applicable taxpayer's return filed under this chapter for the
412 taxable year except for a credit described in Subsection (1)(b); and
413 (B) any adjustments the commission makes in accordance with Subsection
414 59-10-1505 (2); and
415 (b) a credit the applicable taxpayer claims on a return as allowed for amounts paid or
416 withheld under:
417 (i) Chapter 6, Mineral Production Tax Withholding, for the taxable year; or
418 (ii) this chapter for the taxable year.
419 (2) "Adjusted state tax liability before withholding" means the difference between:
420 (a) the product of:
421 (i) an applicable taxpayer's state taxable income for a taxable year; and
422 (ii) the tax rate imposed on the applicable taxpayer's state taxable income under this
423 chapter; and
424 (b) the sum of:
425 (i) the nonrefundable tax credits and refundable tax credits that the taxpayer claims as
426 allowed for that taxable year on the applicable taxpayer's return filed under this chapter for the
427 taxable year except for a credit described in Subsection (1)(b); and
428 (ii) any adjustments the commission makes in accordance with Subsection
429 59-10-1505 (2).
430 (3) "Applicable taxpayer" means a calendar year taxpayer or a fiscal year taxpayer.

431 (4) "Calendar year taxpayer" means an individual, an estate, or a trust that has a taxable
432 year that:
433 (a) begins on January 1; and
434 (b) is for a 12-month period.
435 (5) "Electronic" is as defined in Section 59-10-514.1 .
436 (6) "Farmer" is as defined in Section 6654, Internal Revenue Code.
437 (7) "Fiscal year taxpayer" means an individual, an estate, or a trust that has a taxable
438 year that:
439 (a) begins on a day other than January 1; and
440 (b) is for a 12-month period.
441 (8) "Fisherman" is as defined in Section 6654, Internal Revenue Code.
442 (9) "Required annual payment" means:
443 (a) for an applicable taxpayer except for a farmer or fisherman, an amount equal to the
444 lesser of:
445 (i) 90% of the applicable taxpayer's adjusted state tax liability before withholding for
446 the current taxable year; or
447 (ii) 100% of the applicable taxpayer's adjusted state tax liability before withholding for
448 the previous taxable year, if that taxable year was for a 12-month period and the taxpayer filed
449 a return under this chapter for the taxable year; and
450 (b) for a farmer or fisherman, an amount as defined by the commission in accordance
451 with Section 59-10-1505 .
452 (10) "Required annual payment after withholding" means the difference between:
453 (a) an applicable taxpayer's required annual payment; and
454 (b) a credit the applicable taxpayer claims on a return as allowed for amounts paid or
455 withheld under:
456 (i) Chapter 6, Mineral Production Tax Withholding, for the taxable year; or
457 (ii) this chapter for the taxable year.
458 Section 4. Section 59-10-1503 is enacted to read:
459 59-10-1503. Required annual payment -- Estimated tax payments.
460 (1) For a taxable year beginning on or after January 1, 2012, an applicable taxpayer
461 required to file a return under this chapter for a taxable year shall pay to the commission the

462 required annual payment if on the last day of the applicable taxpayer's taxable year the
463 applicable taxpayer's adjusted state tax liability after withholding for the taxable year will be
464 $1,000 or more, regardless of the applicable taxpayer's filing status.
465 (2) The applicable taxpayer shall make the required annual payment described in
466 Subsection (1) by:
467 (a) deduction and withholding under:
468 (i) Chapter 6, Mineral Production Tax Withholding; or
469 (ii) this chapter;
470 (b) the applicable taxpayer making one or more estimated tax payments to the
471 commission as provided in this part; or
472 (c) a combination of Subsections (2)(a) and (b).
473 (3) (a) If an applicable taxpayer makes an estimated tax payment to the commission,
474 the estimated tax payment shall be made in accordance with this Subsection (3) and Subsection
475 (4).
476 (b) Subject to Subsection (3)(f), if, on or before the last day of the third month of the
477 taxable year, the applicable taxpayer's adjusted state tax liability after withholding will be
478 $1,000 or more on the last day of the applicable taxpayer's taxable year, the applicable taxpayer
479 shall pay:
480 (i) 25% of the required annual payment after withholding on or before the 15th day of
481 the fourth month of the taxable year;
482 (ii) 25% of the required annual payment after withholding on or before the 15th day of
483 the sixth month of the taxable year;
484 (iii) 25% of the required annual payment after withholding on or before the 15th day of
485 the ninth month of the taxable year; and
486 (iv) 25% of the required annual payment after withholding on or before the 15th day of
487 the first month of the year after the taxable year.
488 (c) Subject to Subsection (3)(f), if, on or after the first day of the fourth month of the
489 taxable year but on or before the last day of the fifth month of the taxable year, an applicable
490 taxpayer's adjusted state tax liability after withholding will be $1,000 or more on the last day of
491 the applicable taxpayer's taxable year, the applicable taxpayer shall pay:
492 (i) 50% of the required annual payment after withholding on or before the 15th day of

493 the sixth month of the taxable year;
494 (ii) 25% of the required annual payment after withholding on or before the 15th day of
495 the ninth month of the taxable year; and
496 (iii) 25% of the required annual payment after withholding on or before the 15th day of
497 the first month of the year after the taxable year.
498 (d) Subject to Subsection (3)(f), if, on or after the first day of the sixth month but on or
499 before the last day of the eighth month of the taxable year, an applicable taxpayer's adjusted
500 state tax liability after withholding will be $1,000 or more on the last day of the applicable
501 taxpayer's taxable year, the applicable taxpayer shall pay:
502 (i) 75% of the required annual payment after withholding on or before the 15th day of
503 the ninth month of the taxable year; and
504 (ii) 25% of the required annual payment after withholding on or before the 15th day of
505 the first month of the year after the taxable year.
506 (e) Subject to Subsection (3)(f), if, on or after the first day of the ninth month of the
507 taxable year, an applicable taxpayer's adjusted state tax liability after withholding will be
508 $1,000 or more on the last day of the applicable taxpayer's taxable year, the applicable taxpayer
509 shall pay 100% of the required annual payment after withholding on or before the 15th day of
510 the first month of the year after the taxable year.
511 (f) (i) Except as provided in Subsection (3)(f)(ii), if, after making an estimated tax
512 payment, an applicable taxpayer's adjusted state tax liability after withholding changes, the
513 applicable taxpayer shall proportionally increase or decrease the applicable taxpayer's
514 remaining estimated tax payments for the taxable year so that the balance of the required
515 annual payment after withholding is made in equal installments.
516 (ii) If a taxpayer files an amended return for a taxable year after the original due date
517 for filing the return, not including extensions, the applicable taxpayer is not required to:
518 (A) recalculate the applicable taxpayer's adjusted state tax liability for the taxable year
519 for purposes of this part; or
520 (B) proportionally increase or decrease the applicable taxpayer's estimated tax
521 payments for the taxable year under Subsection (3)(f)(i).
522 (4) (a) An applicable taxpayer that makes an estimated tax payment under this section
523 shall make the estimated tax payment by electronic means.

524 (b) Notwithstanding Subsection (4)(a), the commission may waive the requirement of
525 Subsection (4)(a) if the applicable taxpayer demonstrates to the commission that the
526 requirement of Subsection (4)(a) would cause an undue hardship.
527 Section 5. Section 59-10-1504 is enacted to read:
528 59-10-1504. Penalties -- Commission authority to waive, reduce, or compromise
529 penalty.
530 (1) Subject to Subsection 59-10-1505 (1)(c) and except as provided in Subsection (2),
531 an applicable taxpayer shall pay a penalty as provided in Section 59-1-401 if the applicable
532 taxpayer fails to pay or underpays an estimated tax payment in accordance with this part.
533 (2) Subject to Subsection 59-10-1505 (1)(c), in accordance with the procedures and
534 requirements of Section 59-1-401 , the commission may waive, reduce, or compromise the
535 penalty described in Subsection (1).
536 Section 6. Section 59-10-1505 is enacted to read:
537 59-10-1505. Rulemaking authority -- Taxpayer with a taxable year of less than 12
538 months -- Farmer or fisherman -- Nonresident alien -- Exceptions to penalty --
539 Calculation of adjusted state tax liability.
540 (1) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
541 commission shall make rules:
542 (a) providing for estimated tax payments for a taxpayer with a taxable year of less than
543 12 months;
544 (b) establishing the required annual payment and providing for estimated tax payments:
545 (i) for a:
546 (A) farmer or fisherman; or
547 (B) nonresident alien described in Section 6654(j), Internal Revenue Code; and
548 (ii) consistent with Section 6654, Internal Revenue Code; and
549 (c) providing for the following exceptions to the penalty described in Section
550 59-10-1504 :
551 (i) an exception consistent with Section 6654(e)(2), Internal Revenue Code, for an
552 applicable taxpayer that filed a return under this chapter for the prior taxable year;
553 (ii) an exception consistent with Section 6654(e)(3), Internal Revenue Code;
554 (iii) an exception for an applicable taxpayer's failure to pay the final estimated tax

555 payment for a taxable year consistent with Section 6654(h), Internal Revenue Code; and
556 (iv) an exception consistent with Section 6658(a), Internal Revenue Code.
557 (2) (a) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
558 the commission may make rules:
559 (i) except as provided in Subsection (2)(b), allowing for an adjustment to the
560 calculation of adjusted state tax liability after withholding and adjusted state tax liability before
561 withholding for purposes of this part, by adding or subtracting an amount that is added or
562 subtracted on a return filed under this chapter; and
563 (ii) defining the circumstances that constitute an undue hardship to make an estimated
564 tax payment by electronic means described in Section 59-10-1503 .
565 (b) The commission may not make a rule under Subsection (2)(a)(i) that adjusts the
566 calculation of adjusted state tax liability after withholding or adjusted state tax liability before
567 withholding to include:
568 (i) a nonrefundable tax credit or refundable tax credit that is added or subtracted on a
569 return filed under this chapter;
570 (ii) a contribution made in accordance with Part 13, Individual Income Tax
571 Contribution Act; or
572 (iii) an amount of use tax liability under Chapter 12, Sales and Use Tax Act, reported
573 on a return filed under this chapter.
574 Section 7. Section 59-10-1506 is enacted to read:
575 59-10-1506. Commission to summarize requirements of this part on the
576 commission's website.
577 On or before December 1, 2011, the commission shall provide a summary of the
578 requirements of this part in a conspicuous place on the commission's website.
579 Section 8. Effective dates.
580 (1) The amendments to Sections 59-10-1505 and 59-10-1506 take effect on May 10,
581 2011.
582 (2) The following sections take effect for a taxable year beginning on or after January
583 1, 2012:
584 (a) Section 59-10-1501 ;
585 (b) Section 59-10-1502 ;

586 (c) Section 59-10-1503 ; and
587 (d) Section 59-10-1504 .
588 (3) The amendments to Section 59-1-401 take effect on January 1, 2012.




Legislative Review Note
as of 2-24-11 11:12 AM

Office of Legislative Research and General Counsel