1     
AMENDMENTS TO INCOME TAX

2     
2016 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Jim Dabakis

5     
House Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill amends provisions related to income taxes.
10     Highlighted Provisions:
11          This bill:
12          ▸     creates individual income tax brackets;
13          ▸     increases individual income tax rates on taxpayers with state taxable income above
14     certain levels; and
15          ▸     makes technical and conforming changes.
16     Money Appropriated in this Bill:
17          None
18     Other Special Clauses:
19          This bill provides a special effective date.
20     Utah Code Sections Affected:
21     AMENDS:
22          59-10-104, as last amended by Laws of Utah 2008, Chapter 389
23          59-10-116, as last amended by Laws of Utah 2008, Chapters 382 and 389
24          59-10-201, as last amended by Laws of Utah 2010, Chapter 6
25          59-10-205, as last amended by Laws of Utah 2008, Chapter 389
26     

27     Be it enacted by the Legislature of the state of Utah:
28          Section 1. Section 59-10-104 is amended to read:
29          59-10-104. Tax basis -- Tax rate -- Exemption.
30          (1) [For taxable years beginning on or after January 1, 2008, a] A tax is imposed on the
31     state taxable income of a resident individual as provided in this section.
32          (2) For purposes of Subsection (1), for a taxable year, [the tax is an amount equal to the
33     product of: (a)] if the resident individual's state taxable income for that taxable year[; and (b)
34     5%.] is:
35          (a) less than or equal to $250,000, the tax is 5% of state taxable income;
36          (b) greater than $250,000 but less than or equal to $1,000,000, the tax is $12,500 plus
37     6% of state taxable income greater than $250,000; or
38          (c) greater than $1,000,000, the tax is $57,500 plus 7% of state taxable income greater
39     than $1,000,000.
40          (3) This section does not apply to a resident individual exempt from taxation under
41     Section 59-10-104.1.
42          Section 2. Section 59-10-116 is amended to read:
43          59-10-116. Tax on nonresident individual -- Calculation -- Exemption.
44          (1) (a) Except as provided in Subsection (2), a tax is imposed on the state taxable
45     income of a nonresident individual [in an amount equal to the product of the: (a)] as provided
46     in this section.
47          (b) For purposes of Subsection (1)(a), for a taxable year, if the nonresident individual's
48     state taxable income[; and (b) percentage listed in Subsection 59-10-104(2).] is:
49          (i) less than or equal to $250,000, the tax is 5% of state taxable income;
50          (ii) greater than $250,000 but less than or equal to $1,000,000, the tax is $12,500 plus
51     6% of state taxable income greater than $250,000; or
52          (iii) greater than $1,000,000, the tax is $57,500 plus 7% of state taxable income greater
53     than $1,000,000.
54          (2) This section does not apply to a nonresident individual exempt from taxation under
55     Section 59-10-104.1.
56          Section 3. Section 59-10-201 is amended to read:
57          59-10-201. Taxation of resident trusts and estates.
58          (1) (a) Except as provided in Subsection (2), a tax [determined in accordance with the
59     rate prescribed by Subsection 59-10-104(2)(b)] is imposed [for each taxable year] on the state
60     taxable income of [each] a resident estate or trust as provided in this section.
61          (b) For purposes of Subsection (1)(a), for a taxable year, if the state taxable income of
62     the resident estate or trust for that taxable year is:
63          (i) less than or equal to $250,000, the tax is 5% of state taxable income;
64          (ii) greater than $250,000 but less than or equal to $1,000,000, the tax is $12,500 plus
65     6% of state taxable income greater than $250,000; or
66          (iii) greater than $1,000,000, the tax is $57,500 plus 7% of state taxable income greater
67     than $1,000,000.
68          (2) The following are not subject to a tax imposed by this part:
69          (a) a resident estate or trust that is not required to file a federal income tax return for
70     estates and trusts for the taxable year; or
71          (b) a resident trust taxed as a corporation.
72          (3) A resident estate or trust shall be allowed the credit provided in Section
73     59-10-1003, relating to an income tax imposed by another state, except that the limitation shall
74     be computed by reference to the taxable income of the estate or trust.
75          (4) The property of the Utah Educational Savings Plan established in Title 53B,
76     Chapter 8a, Utah Educational Savings Plan, and its income from operations and investments
77     are exempt from all taxation by the state under this chapter.
78          Section 4. Section 59-10-205 is amended to read:
79          59-10-205. Tax on nonresident estate or trust.
80          (1) (a) Except as provided in Subsection (2), a tax is imposed on the state taxable
81     income of a nonresident estate or trust [in an amount equal to the product of: (a) the
82     nonresident estate's or trust's state taxable income as determined under Section 59-10-204; and
83     (b) the percentage listed in Subsection 59-10-104(2).] as provided in this section.
84          (b) For purposes of Subsection (1)(a), for a taxable year, if the state taxable income of
85     the nonresident estate or trust for that taxable year is:
86          (i) less than or equal to $250,000, the tax is 5% of state taxable income;
87          (ii) greater than $250,000 but less than or equal to $1,000,000, the tax is $12,500 plus
88     6% of state taxable income greater than $250,000; or
89          (iii) greater than $1,000,000, the tax is $57,500 plus 7% of state taxable income greater
90     than $1,000,000.
91          (2) The following are not subject to a tax imposed by this part:
92          (a) a nonresident estate or trust that is not required to file a federal income tax return
93     for estates and trusts for the taxable year; or
94          (b) a nonresident trust taxed as a corporation.
95          Section 5. Effective date.
96          This bill takes effect for a taxable year beginning on or after January 1, 2017.




Legislative Review Note
Office of Legislative Research and General Counsel