1     
TAX REFORM PROVISIONS

2     
2018 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Howard A. Stephenson

5     
House Sponsor: Steve Eliason

6     

7     LONG TITLE
8     General Description:
9           This bill amends provisions related to federal tax reform .
10     Highlighted Provisions:
11          This bill:
12          ▸      prohibits an individual from receiving the homeowner's or renter's credit if the
13     individual is a dependent with respect to whom another individual claims certain tax
14     credits;
15          ▸     provides that a corporation may pay taxes on deferred foreign income in
16     installments under certain circumstances;
17          ▸     addresses when an individual is considered to have domicile in this state for
18     purposes of income tax; 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          59-2-1208, as last amended by Laws of Utah 2016, Chapter 375
27          59-2-1209, as last amended by Laws of Utah 2016, Chapter 375
28          59-10-136, as enacted by Laws of Utah 2011, Chapter 410
29     ENACTS:

30          59-7-118, Utah Code Annotated 1953
31     

32     Be it enacted by the Legislature of the state of Utah:
33          Section 1. Section 59-2-1208 is amended to read:
34          59-2-1208. Amount of homeowner's credit -- Cost-of-living adjustment --
35     Limitation -- General Fund as source of credit.
36          (1) (a) Subject to Subsection (2), for a calendar year beginning on or after January 1,
37     2007, a claimant may claim a homeowner's credit that does not exceed the following amounts:
38      If household income isHomeowner's credit
39      $0 -- $9,159$798
40      $9,160 -- $12,214$696
41      $12,215 -- $15,266$597
42      $15,267 -- $18,319$447
43      $18,320 -- $21,374$348
44      $21,375 -- $24,246$199
45      $24,247 -- $26,941$98
46          (b) (i) For a calendar year beginning on or after January 1, 2008, the commission shall
47     increase or decrease the household income eligibility amounts and the credits under Subsection
48     (1)(a) by a percentage equal to the percentage difference between the consumer price index for
49     the preceding calendar year and the consumer price index for calendar year 2006.
50          (ii) For purposes of Subsection (1)(b)(i), the commission shall calculate the consumer
51     price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
52          [(2) An individual who is claimed as a personal exemption on another individual's
53     individual income tax return during any portion of a calendar year for which the individual
54     seeks to claim a homeowner's credit under this section may not receive the homeowner's
55     credit.]
56          (2) An individual may not receive the homeowner's credit under this section if:

57          (a) the individual is claimed as a personal exemption on another individual's federal
58     income tax return during any portion of a calendar year for which the individual seeks to claim
59     the homeowner's credit under this section; or
60          (b) the individual is a dependent with respect to whom another individual claims a tax
61     credit under Section 24(h)(4), Internal Revenue Code, during any portion of a calendar year for
62     which the individual seeks to claim the homeowner's credit under this section.
63          (3) A payment for a homeowner's credit allowed by this section, and provided for in
64     Section 59-2-1204, shall be paid from the General Fund.
65          Section 2. Section 59-2-1209 is amended to read:
66          59-2-1209. Amount of renter's credit -- Cost-of-living adjustment -- Renter's
67     credit may be claimed only for rent that does not constitute a rental assistance payment --
68     Limitation -- General Fund as source of credit -- Maximum credit.
69          (1) (a) Subject to Subsections (2) and (3), for a calendar year beginning on or after
70     January 1, 2007, a claimant may claim a renter's credit for the previous calendar year that does
71     not exceed the following amounts:
72      If household income isPercentage of rent                                    allowed as a credit
73      $0 -- $9,1599.5%
74      $9,160 -- $12,2148.5%
75      $12,215 -- $15,2667.0%
76      $15,267 -- $18,3195.5%
77      $18,320 -- $21,3744.0%
78      $21,375 -- $24,2463.0%
79      $24,247 -- $26,9412.5%
80          (b) (i) For a calendar year beginning on or after January 1, 2008, the commission shall
81     increase or decrease the household income eligibility amounts under Subsection (1)(a) by a
82     percentage equal to the percentage difference between the consumer price index for the
83     preceding calendar year and the consumer price index for calendar year 2006.

84          (ii) For purposes of Subsection (1)(b)(i), the commission shall calculate the consumer
85     price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
86          (2) A claimant may claim a renter's credit under this part only for rent that does not
87     constitute a rental assistance payment.
88          [(3) An individual who is claimed as a personal exemption on another individual's
89     individual income tax return during any portion of a calendar year for which the individual
90     seeks to claim a renter's credit under this section may not receive a renter's credit.]
91          (3) An individual may not receive the renter's credit under this section if the individual
92     is:
93          (a) claimed as a personal exemption on another individual's federal income tax return
94     during any portion of a calendar year for which the individual seeks to claim the renter's credit
95     under this section; or
96          (b) a dependent with respect to whom another individual claims a tax credit under
97     Section 24(h)(4), Internal Revenue Code, during any portion of a calendar year for which the
98     individual seeks to claim the renter's credit under this section.
99          (4) A payment for a renter's credit allowed by this section, and provided for in Section
100     59-2-1204, shall be paid from the General Fund.
101          (5) For calendar years beginning on or after January 1, 2007, a credit under this section
102     may not exceed the maximum amount allowed as a homeowner's credit for each income
103     bracket under Subsection 59-2-1208(1)(a).
104          Section 3. Section 59-7-118 is enacted to read:
105          59-7-118. Section 965, Internal Revenue Code -- Installment payments.
106          (1) Subject to the other provisions of this section, a corporation may pay in
107     installments the tax owed under this chapter on deferred foreign income described in Section
108     965, Internal Revenue Code.
109          (2) Subsection (1) applies:
110          (a) to a corporation that:
111          (i) is authorized to make an election under Section 965(h), Internal Revenue Code; and

112          (ii) apportions deferred foreign income described in Section 965, Internal Revenue
113     Code, to this state; and
114          (b) for a tax year in which a corporation makes an election under Section 965(h),
115     Internal Revenue Code, for purposes of the corporation's federal income tax.
116          (3) The same provisions that apply to an election made under Section 965(h), Internal
117     Revenue Code, for federal purposes apply to an installment payment made under this section.
118          Section 4. Section 59-10-136 is amended to read:
119          59-10-136. Domicile -- Temporary absence from state.
120          (1) (a) An individual is considered to have domicile in this state if:
121          (i) except as provided in Subsection (1)(b), a dependent with respect to whom the
122     individual or the individual's spouse claims a personal exemption or a tax credit under Section
123     24, Internal Revenue Code, on the individual's or individual's spouse's federal individual
124     income tax return is enrolled in a public kindergarten, public elementary school, or public
125     secondary school in this state; or
126          (ii) the individual or the individual's spouse is a resident student in accordance with
127     Section 53B-8-102 who is enrolled in an institution of higher education described in Section
128     53B-2-101 in this state.
129          (b) The determination of whether an individual is considered to have domicile in this
130     state may not be determined in accordance with Subsection (1)(a)(i) if the individual:
131          (i) is the noncustodial parent of a dependent:
132          (A) with respect to whom the individual claims a personal exemption or a tax credit
133     under Section 24, Internal Revenue Code, on the individual's federal individual income tax
134     return; and
135          (B) who is enrolled in a public kindergarten, public elementary school, or public
136     secondary school in this state; and
137          (ii) is divorced from the custodial parent of the dependent described in Subsection
138     (1)(b)(i).
139          (2) There is a rebuttable presumption that an individual is considered to have domicile

140     in this state if:
141          (a) the individual or the individual's spouse claims a residential exemption in
142     accordance with Chapter 2, Property Tax Act, for that individual's or individual's spouse's
143     primary residence;
144          (b) the individual or the individual's spouse is registered to vote in this state in
145     accordance with Title 20A, Chapter 2, Voter Registration; or
146          (c) the individual or the individual's spouse asserts residency in this state for purposes
147     of filing an individual income tax return under this chapter, including asserting that the
148     individual or the individual's spouse is a part-year resident of this state for the portion of the
149     taxable year for which the individual or the individual's spouse is a resident of this state.
150          (3) (a) Subject to Subsection (3)(b), if the requirements of Subsection (1) or (2) are not
151     met for an individual to be considered to have domicile in this state, the individual is
152     considered to have domicile in this state if:
153          (i) the individual or the individual's spouse has a permanent home in this state to which
154     the individual or the individual's spouse intends to return after being absent; and
155          (ii) the individual or the individual's spouse has voluntarily fixed the individual's or the
156     individual's spouse's habitation in this state, not for a special or temporary purpose, but with the
157     intent of making a permanent home.
158          (b) The determination of whether an individual is considered to have domicile in this
159     state under Subsection (3)(a) shall be based on the preponderance of the evidence, taking into
160     consideration the totality of the following facts and circumstances:
161          (i) whether the individual or the individual's spouse has a driver license in this state;
162          (ii) whether a dependent with respect to whom the individual or the individual's spouse
163     claims a personal exemption or a tax credit under Section 24, Internal Revenue Code, on the
164     individual's or individual's spouse's federal individual income tax return is a resident student in
165     accordance with Section 53B-8-102 who is enrolled in an institution of higher education
166     described in Section 53B-2-101 in this state;
167          (iii) the nature and quality of the living accommodations that the individual or the

168     individual's spouse has in this state as compared to another state;
169          (iv) the presence in this state of a spouse or dependent with respect to whom the
170     individual or the individual's spouse claims a personal exemption or a tax credit under Section
171     24, Internal Revenue Code, on the individual's or individual's spouse's federal individual
172     income tax return;
173          (v) the physical location in which earned income as defined in Section 32(c)(2),
174     Internal Revenue Code, is earned by the individual or the individual's spouse;
175          (vi) the state of registration of a vehicle as defined in Section 59-12-102 owned or
176     leased by the individual or the individual's spouse;
177          (vii) whether the individual or the individual's spouse is a member of a church, a club,
178     or another similar organization in this state;
179          (viii) whether the individual or the individual's spouse lists an address in this state on
180     mail, a telephone listing, a listing in an official government publication, other correspondence,
181     or another similar item;
182          (ix) whether the individual or the individual's spouse lists an address in this state on a
183     state or federal tax return;
184          (x) whether the individual or the individual's spouse asserts residency in this state on a
185     document, other than an individual income tax return filed under this chapter, filed with or
186     provided to a court or other governmental entity;
187          (xi) the failure of an individual or the individual's spouse to obtain a permit or license
188     normally required of a resident of the state for which the individual or the individual's spouse
189     asserts to have domicile; or
190          (xii) whether the individual is an individual described in Subsection (1)(b).
191          (4) (a) Notwithstanding Subsections (1) through (3) and subject to the other provisions
192     of this Subsection (4), an individual is not considered to have domicile in this state if the
193     individual meets the following qualifications:
194          (i) except as provided in Subsection (4)(a)(ii)(A), the individual and the individual's
195     spouse are absent from the state for at least 761 consecutive days; and

196          (ii) during the time period described in Subsection (4)(a)(i), neither the individual nor
197     the individual's spouse:
198          (A) return to this state for more than 30 days in a calendar year;
199          (B) claim a personal exemption or a tax credit under Section 24, Internal Revenue
200     Code, on the individual's or individual's spouse's federal individual income tax return with
201     respect to a dependent who is enrolled in a public kindergarten, public elementary school, or
202     public secondary school in this state, unless the individual is an individual described in
203     Subsection (1)(b);
204          (C) are resident students in accordance with Section 53B-8-102 who are enrolled in an
205     institution of higher education described in Section 53B-2-101 in this state;
206          (D) claim a residential exemption in accordance with Chapter 2, Property Tax Act, for
207     that individual's or individual's spouse's primary residence; or
208          (E) assert that this state is the individual's or the individual's spouse's tax home for
209     federal individual income tax purposes.
210          (b) Notwithstanding Subsection (4)(a), an individual that meets the qualifications of
211     Subsection (4)(a) to not be considered to have domicile in this state may elect to be considered
212     to have domicile in this state by filing an individual income tax return in this state as a resident
213     individual.
214          (c) For purposes of Subsection (4)(a), an absence from the state:
215          (i) begins on the later of the date:
216          (A) the individual leaves this state; or
217          (B) the individual's spouse leaves this state; and
218          (ii) ends on the date the individual or the individual's spouse returns to this state if the
219     individual or the individual's spouse remains in this state for more than 30 days in a calendar
220     year.
221          (d) An individual shall file an individual income tax return or amended individual
222     income tax return under this chapter and pay any applicable interest imposed under Section
223     59-1-402 if:

224          (i) the individual did not file an individual income tax return or amended individual
225     income tax return under this chapter based on the individual's belief that the individual has met
226     the qualifications of Subsection (4)(a) to not be considered to have domicile in this state; and
227          (ii) the individual or the individual's spouse fails to meet a qualification of Subsection
228     (4)(a) to not be considered to have domicile in this state.
229          (e) (i) Except as provided in Subsection (4)(e)(ii), an individual that files an individual
230     income tax return or amended individual income tax return under Subsection (4)(d) shall pay
231     any applicable penalty imposed under Section 59-1-401.
232          (ii) The commission shall waive the penalties under Subsections 59-1-401(2), (3), and
233     (5) if an individual who is required by Subsection (4)(d) to file an individual income tax return
234     or amended individual income tax return under this chapter:
235          (A) files the individual income tax return or amended individual income tax return
236     within 105 days after the individual fails to meet a qualification of Subsection (4)(a) to not be
237     considered to have domicile in this state; and
238          (B) within the 105-day period described in Subsection (4)(e)(ii)(A), pays in full the tax
239     due on the return, any interest imposed under Section 59-1-402, and any applicable penalty
240     imposed under Section 59-1-401, except for a penalty under Subsection 59-1-401(2), (3), or
241     (5).
242          (5) (a) If an individual is considered to have domicile in this state in accordance with
243     this section, the individual's spouse is considered to have domicile in this state.
244          (b) For purposes of this section, an individual is not considered to have a spouse if:
245          (i) the individual is legally separated or divorced from the spouse; or
246          (ii) the individual and the individual's spouse claim married filing separately filing
247     status for purposes of filing a federal individual income tax return for the taxable year.
248          (c) Except as provided in Subsection (5)(b)(ii), for purposes of this section, an
249     individual's filing status on a federal individual income tax return or a return filed under this
250     chapter may not be considered in determining whether an individual has a spouse.
251          (6) For purposes of this section, whether or not an individual or the individual's spouse

252     claims a property tax residential exemption under Chapter 2, Property Tax Act, for the
253     residential property that is the primary residence of a tenant of the individual or the individual's
254     spouse may not be considered in determining domicile in this state.
255          Section 5. Retrospective operation.
256          (1) Except as provided in Subsection (2), this bill has retrospective operation beginning
257     on January 1, 2018.
258          (2) The amendments to Sections 59-7-118 and 59-10-136 have retrospective operation
259     for a taxable year beginning on or after January 1, 2018.