1     
TAX REFORM REVISIONS

2     
2018 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Tim Quinn

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill modifies the calculation of the taxpayer tax credit.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     modifies the calculation of the taxpayer tax credit; and
14          ▸     makes technical changes.
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          59-10-1018, as last amended by Laws of Utah 2012, Chapter 295
22     

23     Be it enacted by the Legislature of the state of Utah:
24          Section 1. Section 59-10-1018 is amended to read:
25          59-10-1018. Definitions -- Nonrefundable taxpayer tax credits.
26          (1) As used in this section:
27          (a) "Dependent" means the same as that term is defined in Section 152, Internal
28     Revenue Code, except that Section 152(d)(1)(B), Internal Revenue Code, shall be read as
29     "whose gross income for the calendar year in which such taxable year begins is less than the
30     exemption amount (as defined in Section 151(d)(1)-(4))."
31          [(a)] (b) "Dependent adult with a disability" means an individual who:
32          [(i) a claimant claims as a dependent under Section 151, Internal Revenue Code, on the
33     claimant's federal individual income tax return for the taxable year;]
34          (i) is a claimant's dependent;
35          (ii) is not the claimant or the claimant's spouse; and
36          (iii) is:
37          (A) 18 years of age or older;
38          (B) eligible for services under Title 62A, Chapter 5, Services for People with
39     Disabilities; and
40          (C) not enrolled in an education program for students with disabilities that is
41     authorized under Section 53A-15-301.
42          [(b)] (c) "Dependent child with a disability" means an individual 21 years of age or
43     younger who:
44          [(i) a claimant claims as a dependent under Section 151, Internal Revenue Code, on the
45     claimant's federal individual income tax return for the taxable year;]
46          (i) is a claimant's dependent;
47          (ii) is not the claimant or the claimant's spouse; and
48          (iii) is:
49          (A) an eligible student with a disability; or
50          (B) identified under guidelines of the Department of Health as qualified for Early
51     Intervention or Infant Development Services.
52          [(c)] (d) "Eligible student with a disability" means an individual who is:
53          (i) diagnosed by a school district representative under rules the State Board of
54     Education adopts in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
55     Act, as having a disability classified as autism, deafness, preschool developmental delay, dual
56     sensory impairment, hearing impairment, intellectual disability, multidisability, orthopedic
57     impairment, other health impairment, traumatic brain injury, or visual impairment;
58          (ii) not receiving residential services from the Division of Services for People with
59     Disabilities created under Section 62A-5-102 or a school established under Title 53A, Chapter
60     25b, Utah Schools for the Deaf and the Blind; and
61          (iii) (A) enrolled in an education program for students with disabilities that is
62     authorized under Section 53A-15-301; or
63          (B) a recipient of a scholarship awarded under Title 53A, Chapter 1a, Part 7, Carson
64     Smith Scholarships for Students with Special Needs Act.
65          (e) (i) "Federal itemized deduction" means the amount that the claimant deducts as
66     allowed as an itemized deduction on the claimant's federal income tax return for the taxable
67     year.
68          (ii) "Federal itemized deduction" does not include any amount of qualified business
69     income that the claimant subtracts as allowed by Section 199A, Internal Revenue Code, on the
70     claimant's federal income tax return for the taxable year.
71          [(d)] (f) "Head of household filing status" means a head of household, as defined in
72     Section 2(b), Internal Revenue Code, who files a single federal individual income tax return for
73     the taxable year.
74          [(e)] (g) "Joint filing status" means:
75          (i) [a husband and wife] spouses who file a single return jointly under this chapter for a
76     taxable year; or
77          (ii) a surviving spouse, as defined in Section 2(a), Internal Revenue Code, who files a
78     single federal individual income tax return for the taxable year.
79          [(f)] (h) "Single filing status" means:
80          (i) a single individual who files a single federal individual income tax return for the
81     taxable year; or
82          (ii) a married individual who:
83          (A) does not file a single federal individual income tax return jointly with that married
84     individual's spouse for the taxable year; and
85          (B) files a single federal individual income tax return for the taxable year.
86          (i) "State or local property tax" means the amount of property tax that the claimant
87     pays:
88          (i) to a state or local government for the taxable year; and
89          (ii) regardless of whether the claimant is allowed an itemized deduction on the
90     claimant's federal individual income tax return for the taxable year for the full amount of state
91     or local property tax paid.
92          (j) "Utah itemized deduction" means the product of:
93          (i) the amount calculated by:
94          (A) subtracting the state or local tax that the claimant deducts on the federal return
95     from the claimant's federal itemized deduction; and
96          (B) adding to the claimant's federal itemized deduction the amount of state or local
97     property tax; and
98          (ii) 1.06.
99          (k) "Utah personal exemption" means, subject to Subsection (6), $3,113 per individual
100     for each of the following individuals:
101          (i) the claimant;
102          (ii) the claimant's spouse, if the claimant has a joint filing status;
103          (iii) any individual who is the claimant's dependent, even if the individual is also an
104     individual described in Subsection (1)(k)(iv) or (v);
105          (iv) any individual who is the claimant's dependent and who is a dependent adult with a
106     disability; and
107          (v) any individual who is the claimant's dependent and who is a dependent child with a
108     disability.
109          (l) "Utah standard deduction" means the sum of:
110          (i) 54.1% of the amount of the basic standard deduction, as defined in Section 63,
111     Internal Revenue Code, that the claimant deducts as allowed as a basic standard deduction on
112     the claimant's federal income tax return for that taxable year; and
113          (ii) 100% of the amount of the additional standard deduction, as defined in Section 63,
114     Internal Revenue Code, that the claimant deducts as allowed as an additional standard
115     deduction on the claimant's federal income tax return for that taxable year.
116          (2) Except as provided in Section 59-10-1002.2, and subject to Subsections (3) through
117     (5), a claimant may claim a nonrefundable tax credit against taxes otherwise due under this part
118     equal to the sum of:
119          (a) (i) for a claimant that deducts the standard deduction on the claimant's federal
120     individual income tax return for the taxable year, 6% of the [amount the claimant deducts as
121     allowed as the standard deduction on the claimant's federal individual income tax return for
122     that taxable year] claimant's Utah standard deduction; or
123          (ii) for a claimant that itemizes deductions on the claimant's federal individual income
124     tax return for the taxable year, [the product of:] 6% of the claimant's Utah itemized deduction;
125     and
126          [(A) the difference between:]
127          [(I) the amount the claimant deducts as allowed as an itemized deduction on the
128     claimant's federal individual income tax return for that taxable year; and]
129          [(II) any amount of state or local income taxes the claimant deducts as allowed as an
130     itemized deduction on the claimant's federal individual income tax return for that taxable year;
131     and]
132          [(B) 6%; and]
133          [(b) the product of:]
134          [(i) 75% of the total amount the claimant deducts as allowed as a personal exemption
135     deduction on the claimant's federal individual income tax return for that taxable year, plus an
136     additional 75% of the 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 with
138     respect to each dependent adult with a disability or dependent child with a disability; and]
139          [(ii) 6%.]
140          (b) 6% of the claimant's Utah personal exemption.
141          (3) A claimant may not carry forward or carry back a tax credit under this section.
142          (4) The tax credit allowed by Subsection (2) shall be reduced by $.013 for each dollar
143     by which a claimant's state taxable income exceeds:
144          (a) for a claimant who has a single filing status, $12,000;
145          (b) for a claimant who has a head of household filing status, $18,000; or
146          (c) for a claimant who has a joint filing status, $24,000.
147          (5) (a) For [taxable years] a taxable year beginning on or after January 1, 2009, the
148     commission shall increase or decrease annually the following dollar amounts by a percentage
149     equal to the percentage difference between the consumer price index for the preceding calendar
150     year and the consumer price index for calendar year 2007:
151          (i) the dollar amount listed in Subsection (4)(a); and
152          (ii) the dollar amount listed in Subsection (4)(b).
153          (b) After the commission increases or decreases the dollar amounts listed in Subsection
154     (5)(a), the commission shall round those dollar amounts listed in Subsection (5)(a) to the
155     nearest whole dollar.
156          (c) After the commission rounds the dollar amounts as required by Subsection (5)(b),
157     the commission shall increase or decrease the dollar amount listed in Subsection (4)(c) so that
158     the dollar amount listed in Subsection (4)(c) is equal to the product of:
159          (i) the dollar amount listed in Subsection (4)(a); and
160          (ii) two.
161          (d) For purposes of Subsection (5)(a), the commission shall calculate the consumer
162     price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
163          (6) (a) For a taxable year beginning on or after January 1, 2019, the commission shall
164     increase annually the Utah personal exemption amount listed in Subsection (1)(k) by a
165     percentage equal to the percentage by which the consumer price index for the preceding
166     calendar year exceeds the consumer price index for calendar year 2017.
167          (b) After the commission increases the Utah personal exemption amount as described
168     in Subsection (6)(a), the commission shall round the Utah personal exemption amount to the
169     nearest whole dollar.
170          (c) For purposes of Subsection (6)(a), the commission shall calculate the consumer
171     price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
172          (7) A claimant may not claim a Utah personal exemption unless the claimant provides
173     the social security number for each individual the claimant claims as an exemption.
174          Section 2. Retrospective operation.
175          This bill has retrospective operation for a taxable year beginning on or after January 1,
176     2018.




Legislative Review Note
Office of Legislative Research and General Counsel