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First Substitute S.B. 211

Senator Benjamin M. McAdams proposes the following substitute bill:


             1     
EARNED INCOME TAX CREDIT AND RELATED FUNDING

             2     
2012 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Benjamin M. McAdams

             5     
House Sponsor: Brian S. King

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill enacts a state earned income tax credit and provides for transfers from the
             10      General Fund into the Education Fund in the amount of tax credit claimed.
             11      Highlighted Provisions:
             12          This bill:
             13          .    enacts a state earned income tax credit;
             14          .    provides for apportionment of the tax credit;
             15          .    requires transfers from the General Fund into Education Fund in the amount of tax
             16      credit claimed;
             17          .    grants rulemaking authority to the State Tax Commission; and
             18          .    makes technical and conforming changes.
             19      Money Appropriated in this Bill:
             20          None
             21      Other Special Clauses:
             22          This bill has retrospective operation for a taxable year beginning on or after January 1,
             23      2012.
             24      Utah Code Sections Affected:
             25      ENACTS:


             26          59-10-1102.1, Utah Code Annotated 1953
             27          59-10-1110, Utah Code Annotated 1953
             28     
             29      Be it enacted by the Legislature of the state of Utah:
             30          Section 1. Section 59-10-1102.1 is enacted to read:
             31          59-10-1102.1. Apportionment of tax credit.
             32          A nonresident individual or a part-year resident individual that claims a tax credit in
             33      accordance with Section 59-10-1110 may only claim an apportioned amount of the tax credit
             34      equal to the product of:
             35          (1) the state income tax percentage for the nonresident individual or part-year resident
             36      individual; and
             37          (2) the amount of the tax credit that the nonresident individual or part-year resident
             38      individual would have been allowed to claim but for the apportionment requirements of this
             39      section.
             40          Section 2. Section 59-10-1110 is enacted to read:
             41          59-10-1110. State earned income tax credit.
             42          (1) As used in this section, "federal earned income tax credit" means the amount of the
             43      federal earned income tax credit a claimant claims as allowed for a taxable year in accordance
             44      with Section 32, Internal Revenue Code, on the claimant's federal individual income tax return.
             45          (2) Except as provided in Section 59-10-1102.1 and subject to Subsection (3), a
             46      claimant may claim a refundable earned income tax credit equal to 5% of the federal earned
             47      income tax credit.
             48          (3) A claimant may not carry forward or carry back a tax credit provided for under this
             49      section.
             50          (4) In accordance with any rules prescribed by the commission under Subsection
             51      (5)(b), the commission shall transfer at least annually from the General Fund into the Education
             52      Fund an amount equal to the amount of tax credit claimed under this section.
             53          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             54      commission may make rules:
             55          (a) providing procedures for issuing refunds for a tax credit claimed under this section;
             56      and


             57          (b) making a transfer from the General Fund into the Education Fund as required by
             58      Subsection (4).
             59          Section 3. Retrospective operation.
             60          This bill has retrospective operation for a taxable year beginning on or after January 1,
             61      2012.


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