1     
AMENDMENTS TO TAX LAW

2     
2018 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Daniel McCay

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill amends the state's income tax provisions.
10     Highlighted Provisions:
11          This bill:
12          ▸     reduces the state's corporate and individual income tax rates;
13          ▸     defines terms; and
14          ▸     modifies the calculation of the taxpayer tax credit.
15     Money Appropriated in this Bill:
16          None
17     Other Special Clauses:
18          This bill provides retrospective operation.
19     Utah Code Sections Affected:
20     AMENDS:
21          59-7-104, as repealed and reenacted by Laws of Utah 1993, Chapter 169
22          59-7-201, as last amended by Laws of Utah 1993, Chapter 169
23          59-10-104, as last amended by Laws of Utah 2008, Chapter 389
24          59-10-1018, as last amended by Laws of Utah 2012, Chapter 295
25     

26     Be it enacted by the Legislature of the state of Utah:
27          Section 1. Section 59-7-104 is amended to read:
28          59-7-104. Tax -- Minimum tax.
29          (1) Each domestic and foreign corporation, except [those exempted] a corporation that
30     is exempt under Section 59-7-102, shall pay an annual tax to the state based on [its] the
31     corporation's Utah taxable income for the taxable year for the privilege of exercising [its] the
32     corporation's corporate franchise or for the privilege of doing business in the state.
33          (2) The tax shall be [5%] 4.925% of a corporation's Utah taxable income.
34          (3) The minimum tax a corporation shall pay under this chapter is $100.
35          Section 2. Section 59-7-201 is amended to read:
36          59-7-201. Tax -- Minimum tax.
37          (1) There is imposed upon each corporation, except [those] a corporation that is
38     exempt under Section 59-7-102 [for each taxable year], a tax upon [its] the corporation's Utah
39     taxable income for the taxable year that is derived from sources within this state other than
40     income for any period [which] that the corporation is required to include in [its] the
41     corporation's tax base under Section 59-7-104.
42          (2) The tax imposed by Subsection (1) shall be [5%] 4.925% of a corporation's Utah
43     taxable income.
44          (3) In no case shall the tax be less than $100.
45          Section 3. Section 59-10-104 is amended to read:
46          59-10-104. Tax basis -- Tax rate -- Exemption.
47          (1) [For taxable years beginning on or after January 1, 2008, a] A tax is imposed on the
48     state taxable income of a resident individual as provided in this section.
49          (2) For purposes of Subsection (1), for a taxable year, the tax is an amount equal to the
50     product of:
51          (a) the resident individual's state taxable income for that taxable year; and
52          (b) [5%] 4.925%.
53          (3) This section does not apply to a resident individual exempt from taxation under
54     Section 59-10-104.1.
55          Section 4. Section 59-10-1018 is amended to read:
56          59-10-1018. Definitions -- Nonrefundable taxpayer tax credits.
57          (1) As used in this section:
58          [(a) "Dependent adult with a disability" means an individual who:]
59          [(i) a claimant claims as a dependent under Section 151, Internal Revenue Code, on the
60     claimant's federal individual income tax return for the taxable year;]
61          [(ii) is not the claimant or the claimant's spouse; and]
62          [(iii) is:]
63          [(A) 18 years of age or older;]
64          [(B) eligible for services under Title 62A, Chapter 5, Services for People with
65     Disabilities; and]
66          [(C) not enrolled in an education program for students with disabilities that is
67     authorized under Section 53A-15-301.]
68          [(b) "Dependent child with a disability" means an individual 21 years of age or younger
69     who:]
70          [(i) a claimant claims as a dependent under Section 151, Internal Revenue Code, on the
71     claimant's federal individual income tax return for the taxable year;]
72          [(ii) is not the claimant or the claimant's spouse; and]
73          [(iii) is:]
74          [(A) an eligible student with a disability; or]
75          [(B) identified under guidelines of the Department of Health as qualified for Early
76     Intervention or Infant Development Services.]
77          [(c) "Eligible student with a disability" means an individual who is:]
78          [(i) diagnosed by a school district representative under rules the State Board of
79     Education adopts in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
80     Act, as having a disability classified as autism, deafness, preschool developmental delay, dual
81     sensory impairment, hearing impairment, intellectual disability, multidisability, orthopedic
82     impairment, other health impairment, traumatic brain injury, or visual impairment;]
83          [(ii) not receiving residential services from the Division of Services for People with
84     Disabilities created under Section 62A-5-102 or a school established under Title 53A, Chapter
85     25b, Utah Schools for the Deaf and the Blind; and]
86          [(iii) (A) enrolled in an education program for students with disabilities that is
87     authorized under Section 53A-15-301; or]
88          [(B) a recipient of a scholarship awarded under Title 53A, Chapter 1a, Part 7, Carson
89     Smith Scholarships for Students with Special Needs Act.]
90          [(d)] (a) "Head of household filing status" means a head of household, as defined in
91     Section 2(b), Internal Revenue Code, who files a single federal individual income tax return for
92     the taxable year.
93          [(e)] (b) "Joint filing status" means:
94          (i) [a husband and wife] spouses who file a single return jointly under this chapter for a
95     taxable year; or
96          (ii) a surviving spouse, as defined in Section 2(a), Internal Revenue Code, who files a
97     single federal individual income tax return for the taxable year.
98          [(f)] (c) "Single filing status" means:
99          (i) a single individual who files a single federal individual income tax return for the
100     taxable year; or
101          (ii) a married individual who:
102          (A) does not file a single federal individual income tax return jointly with that married
103     individual's spouse for the taxable year; and
104          (B) files a single federal individual income tax return for the taxable year.
105          (d) "State or local income tax" means the lesser of:
106          (i) the amount of state or local income tax that the claimant:
107          (A) pays for the taxable year; and
108          (B) reports on the claimant's federal individual income tax return for the taxable year,
109     regardless of whether the claimant is allowed an itemized deduction on the claimant's federal
110     individual income tax return for the taxable year for the full amount of state or local income tax
111     paid; and
112          (ii) $10,000.
113          (e) (i) "Utah itemized deduction" means the amount the claimant deducts as allowed as
114     an itemized deduction on the claimant's federal individual income tax return for that taxable
115     year minus any amount of state or local income tax for the taxable year.
116          (ii) "Utah itemized deduction" does not include any amount of qualified business
117     income that the claimant subtracts as allowed by Section 199A, Internal Revenue Code, on the
118     claimant's federal income tax return for that taxable year.
119          (2) Except as provided in Section 59-10-1002.2, and subject to Subsections (3) through
120     (5), a claimant may claim a nonrefundable tax credit against taxes otherwise due under this part
121     equal to [the sum of]:
122          (a) [(i)] for a claimant that deducts the standard deduction on the claimant's federal
123     individual income tax return for the taxable year, 6% of the amount the claimant deducts as
124     allowed as the standard deduction on the claimant's federal individual income tax return for
125     that taxable year; or
126          [(ii)] (b) for a claimant that itemizes deductions on the claimant's federal individual
127     income tax return for the taxable year, [the product of:] the claimant's Utah itemized deduction.
128          [(A) the difference between:]
129          [(I) the amount the claimant deducts as allowed as an itemized deduction on the
130     claimant's federal individual income tax return for that taxable year; and]
131          [(II) any amount of state or local income taxes the claimant deducts as allowed as an
132     itemized deduction on the claimant's federal individual income tax return for that taxable year;
133     and]
134          [(B) 6%; and]
135          [(b) the product of:]
136          [(i) 75% of the total amount the claimant deducts as allowed as a personal exemption
137     deduction on the claimant's federal individual income tax return for that taxable year, plus an
138     additional 75% of the amount the claimant deducts as allowed as a personal exemption
139     deduction on the claimant's federal individual income tax return for that taxable year with
140     respect to each dependent adult with a disability or dependent child with a disability; and]
141          [(ii) 6%.]
142          (3) A claimant may not carry forward or carry back a tax credit under this section.
143          (4) The tax credit allowed by Subsection (2) shall be reduced by $.013 for each dollar
144     by which a claimant's state taxable income exceeds:
145          (a) for a claimant who has a single filing status, $12,000;
146          (b) for a claimant who has a head of household filing status, $18,000; or
147          (c) for a claimant who has a joint filing status, $24,000.
148          (5) (a) For [taxable years] a taxable year beginning on or after January 1, 2009, the
149     commission shall increase or decrease annually the following dollar amounts by a percentage
150     equal to the percentage difference between the consumer price index for the preceding calendar
151     year and the consumer price index for calendar year 2007:
152          (i) the dollar amount listed in Subsection (4)(a); and
153          (ii) the dollar amount listed in Subsection (4)(b).
154          (b) After the commission increases or decreases the dollar amounts listed in Subsection
155     (5)(a), the commission shall round those dollar amounts listed in Subsection (5)(a) to the
156     nearest whole dollar.
157          (c) After the commission rounds the dollar amounts as required by Subsection (5)(b),
158     the commission shall increase or decrease the dollar amount listed in Subsection (4)(c) so that
159     the dollar amount listed in Subsection (4)(c) is equal to the product of:
160          (i) the dollar amount listed in Subsection (4)(a); and
161          (ii) two.
162          (d) For purposes of Subsection (5)(a), the commission shall calculate the consumer
163     price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
164          Section 5. Retrospective operation.
165           This bill has retrospective operation for a taxable year beginning on or after January 1,
166     2018.




Legislative Review Note
Office of Legislative Research and General Counsel