1     
TAX CREDIT AMENDMENTS

2     
2016 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Deidre M. Henderson

5     
House Sponsor: Daniel McCay

6     

7     LONG TITLE
8     Committee Note:
9          The Revenue and Taxation Interim Committee recommended this bill.
10     General Description:
11          This bill amends provisions related to tax credits.
12     Highlighted Provisions:
13          This bill:
14          ▸     repeals a provision that prohibits a person from carrying forward a tax credit if the
15     State Tax Commission is required to remove the tax credit from a tax return;
16          ▸     exempts corporate and individual historic preservation tax credits from provisions
17     requiring the State Tax Commission to remove the tax credits from a tax return
18     under certain circumstances; and
19          ▸     makes technical and conforming changes.
20     Money Appropriated in this Bill:
21          None
22     Other Special Clauses:
23          This bill provides retrospective operation.
24     Utah Code Sections Affected:
25     AMENDS:
26          59-7-903, as last amended by Laws of Utah 2015, Chapter 41
27          59-10-1002.1, as last amended by Laws of Utah 2015, Chapters 30 and 41

28     

29     Be it enacted by the Legislature of the state of Utah:
30          Section 1. Section 59-7-903 is amended to read:
31          59-7-903. Removal of tax credit from tax return -- Prohibition on claiming a tax
32     credit -- Commission publishing requirements.
33          (1) Subject to Subsection (2) and except as provided in Subsection (3), the commission
34     shall remove a tax credit from a tax return and a person filing a tax return may not claim [or
35     carry forward] the tax credit if:
36          (a) the total amount of tax credit claimed or carried forward by all persons who file a
37     tax return is less than $10,000 per taxable year for three consecutive taxable years; and
38          (b) less than 10 persons per year for the three consecutive taxable years described in
39     Subsection (1)(a) file a tax return claiming or carrying forward the tax credit.
40          (2) If the commission determines the requirements of Subsection (1) are met, the
41     commission shall remove a tax credit from a tax return and a person filing a tax return may not
42     claim [or carry forward] the tax credit beginning two taxable years after the January 1
43     immediately following the date the commission determines the requirements of Subsection (1)
44     are met.
45          (3) This section does not apply to a tax credit under Section 59-7-609.
46          [(3)] (4) The commission shall, on or before the November interim meeting of the year
47     after the taxable year in which the commission determines the requirements of Subsection (1)
48     are met, report to the Revenue and Taxation Interim Committee that, in accordance with this
49     section:
50          (a) the commission is required to remove a tax credit from a return on which the tax
51     credit appears; and
52          (b) a person filing a tax return may not claim [or carry forward] the tax credit.
53          [(4)] (5) (a) Within a 30-day period after making the report required by Subsection
54     [(3)] (4), the commission shall publish a list in accordance with Subsection [(4)] (5)(b) stating
55     each tax credit that the commission will remove from a return on which the tax credit appears.
56          (b) The list shall:
57          (i) be published on:
58          (A) the commission's website; and

59          (B) the public legal notice website in accordance with Section 45-1-101;
60          (ii) include a statement that:
61          (A) the commission is required to remove the tax credit from each return on which the
62     tax credit appears; and
63          (B) the tax credit may not be claimed [or carried forward] on a return;
64          (iii) state the taxable year for which the removal described in Subsection [(4)] (5)(a)
65     takes effect; and
66          (iv) remain available for viewing and searching until the commission publishes a new
67     list in accordance with this Subsection [(4)] (5).
68          Section 2. Section 59-10-1002.1 is amended to read:
69          59-10-1002.1. Removal of tax credit from tax return and prohibition on claiming
70     a tax credit -- Conditions for removal and prohibition on claiming a tax credit --
71     Commission publishing requirements.
72          (1) As used in this section, "tax return" means a tax return filed in accordance with this
73     chapter.
74          (2) Except as provided in Subsection (4), beginning two taxable years after the
75     requirements of Subsection (3) are met:
76          (a) the commission shall remove a tax credit allowed under this part from each tax
77     return on which the tax credit appears; and
78          (b) a claimant, estate, or trust filing a tax return may not claim [or carry forward] the
79     tax credit.
80          (3) Except as provided in Subsection (4), the commission shall remove a tax credit
81     allowed under this part from a tax return and a claimant, estate, or trust filing a tax return may
82     not claim [or carry forward] the tax credit as provided in Subsection (2) if:
83          (a) the total amount of the tax credit claimed or carried forward by all claimants,
84     estates, or trusts filing tax returns is less than $10,000 per year for three consecutive taxable
85     years beginning on or after January 1, 2002; and
86          (b) less than 10 claimants, estates, and trusts per year for the three consecutive taxable
87     years described in Subsection (3)(a), file a tax return claiming or carrying forward the tax
88     credit.
89          (4) This section does not apply to a tax credit under Section 59-10-1006 or 59-10-1027.

90          (5) The commission shall, on or before the November interim meeting of the year after
91     the taxable year in which the requirements of Subsection (3) are met, report to the Revenue and
92     Taxation Interim Committee that in accordance with this section:
93          (a) the commission is required to remove a tax credit from each tax return on which the
94     tax credit appears; and
95          (b) a claimant, estate, or trust filing a tax return may not claim [or carry forward] the
96     tax credit.
97          (6) (a) Within a 30-day period after making the report required by Subsection (5), the
98     commission shall publish a list in accordance with Subsection (6)(b) stating each tax credit that
99     the commission will remove from a return on which the tax credit appears.
100          (b) The list shall:
101          (i) be published on:
102          (A) the commission's website; and
103          (B) the public legal notice website in accordance with Section 45-1-101;
104          (ii) include a statement that:
105          (A) the commission is required to remove the tax credit from each return on which the
106     tax credit appears; and
107          (B) the tax credit may not be claimed [or carried forward] on a return;
108          (iii) state the taxable year for which the removal described in Subsection (6)(a) takes
109     effect; and
110          (iv) remain available for viewing and searching until the commission publishes a new
111     list in accordance with this Subsection (6).
112          Section 3. Retrospective operation.
113          This bill has retrospective operation for a taxable year beginning on or after January 1,
114     2016.






Legislative Review Note
Office of Legislative Research and General Counsel