7 LONG TITLE
8 Committee Note:
9 The Revenue and Taxation Interim Committee recommended this bill.
10 General Description:
11 This bill amends individual income tax provisions related to pass-through entities.
12 Highlighted Provisions:
13 This bill:
14 ▸ addresses state taxable income for pass-through entities; and
15 ▸ makes technical and conforming changes.
16 Money Appropriated in this Bill:
18 Other Special Clauses:
19 This bill provides retrospective operation.
20 Utah Code Sections Affected:
22 59-10-117, as last amended by Laws of Utah 2011, Chapter 53
24 Be it enacted by the Legislature of the state of Utah:
25 Section 1. Section 59-10-117 is amended to read:
26 59-10-117. State taxable income derived from Utah sources.
27 (1) For purposes of Section 59-10-116, state taxable income derived from Utah sources
28 includes [
29 (a) the ownership in this state of any interest in real or tangible personal property,
30 including real property or property rights from which gross income from mining as [
31 described by Section 613(c), Internal Revenue Code, is derived;
32 (b) the carrying on of a business, trade, profession, or occupation in this state;
33 (c) an addition to adjusted gross income required by Subsection 59-10-114(1)(c), (d),
34 or (h) to the extent that the addition was previously subtracted from state taxable income;
35 (d) a subtraction from adjusted gross income required by Subsection 59-10-114(2)(c)
36 for a refund described in Subsection 59-10-114(2)(c) to the extent that the refund subtracted is
37 related to a tax imposed by this state; or
38 (e) an adjustment to adjusted gross income required by Section 59-10-115 to the extent
39 the adjustment is related to an item described in Subsections (1)(a) through (d).
40 (2) For [
41 (a) income from intangible personal property, including annuities, dividends, interest,
42 and gains from the disposition of intangible personal property, shall constitute income derived
43 from Utah sources only to the extent that the income is from property employed in a trade,
44 business, profession, or occupation carried on in this state;
45 (b) a deduction with respect to a capital loss, net long-term capital gain, or net
46 operating loss shall be:
47 (i) based solely on income, gain, loss, and deduction connected with Utah sources,
48 under rules prescribed by the commission in accordance with Title 63G, Chapter 3, Utah
49 Administrative Rulemaking Act[
50 (ii) otherwise [
52 (c) a salary, wage, commission, or compensation for personal services rendered outside
53 this state may not be considered to be derived from Utah sources;
54 (d) a [
56 59-10-1402, derived from or connected with Utah sources shall be determined [
57 accordance with Section 59-10-118;
58 (e) a nonresident, other than a dealer holding property primarily for sale to customers
59 in the ordinary course of the dealer's trade or business, may not be considered to carry on a
60 trade, business, profession, or occupation in this state solely by reason of the purchase or sale
61 of property for the nonresident's own account;
62 (f) if a trade, business, profession, or occupation is carried on partly within and partly
63 without this state, an item of income, gain, loss, or a deduction derived from or connected with
64 Utah sources shall be determined in accordance with Section 59-10-118;
69 estate or trust in income, gain, loss, or deduction derived from or connected with Utah sources
70 shall be determined under Section 59-10-207; and
72 estate investment trust, as defined in Section 59-7-101, distributed or allocated to a nonresident
73 investor in the trust, including any shareholder, beneficiary, or owner of a beneficial interest in
74 the trust, shall:
75 (i) be income from intangible personal property under Subsection (2)(a)[
76 (ii) constitute income derived from Utah sources only to the extent the nonresident
77 investor is employing its beneficial interest in the trust in a trade, business, profession, or
78 occupation carried on by the investor in this state.
79 Section 2. Retrospective operation.
80 This bill has retrospective operation for a taxable year beginning on or after January 1,
Legislative Review Note
Office of Legislative Research and General Counsel