1     
TAX CHANGES

2     
2019 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Travis M. Seegmiller

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill modifies the Corporate Franchise and Income Taxes code and the Individual
10     Income Tax Act by amending provisions relating to certain income tax rates and tax
11     credit calculations.
12     Highlighted Provisions:
13          This bill:
14          ▸     amends the corporate franchise and income tax rate and the individual income tax
15     rate;
16          ▸     amends the calculation of certain tax credits to match the applicable income tax
17     rate; and
18          ▸     makes technical and conforming changes.
19     Money Appropriated in this Bill:
20          None
21     Other Special Clauses:
22          This bill provides retrospective operation.
23     Utah Code Sections Affected:
24     AMENDS:
25          59-7-104, as last amended by Laws of Utah 2018, Chapter 456
26          59-7-201, as last amended by Laws of Utah 2018, Chapter 456
27          59-7-610, as last amended by Laws of Utah 2015, Chapter 283

28          59-7-620, as last amended by Laws of Utah 2017, Chapter 222
29          59-10-104, as last amended by Laws of Utah 2018, Chapter 456
30          59-10-1007, as last amended by Laws of Utah 2015, Chapter 283
31          59-10-1017, as last amended by Laws of Utah 2017, Chapter 389
32          59-10-1017.1, as enacted by Laws of Utah 2017, Chapter 389
33          59-10-1022, as enacted by Laws of Utah 2008, Chapter 389
34          59-10-1023, as enacted by Laws of Utah 2008, Chapter 389
35          59-10-1028, as last amended by Laws of Utah 2012, Chapter 399
36          59-10-1035, as last amended by Laws of Utah 2017, Chapter 222
37          59-10-1036, as enacted by Laws of Utah 2016, Chapter 55
38     

39     Be it enacted by the Legislature of the state of Utah:
40          Section 1. Section 59-7-104 is amended to read:
41          59-7-104. Tax -- Minimum tax.
42          (1) Each domestic and foreign corporation, except a corporation that is exempt under
43     Section 59-7-102, shall pay an annual tax to the state based on the corporation's Utah taxable
44     income for the taxable year for the privilege of exercising the corporation's corporate franchise
45     or for the privilege of doing business in the state.
46          (2) The tax shall be [4.95%] 4.75% of a corporation's Utah taxable income.
47          (3) The minimum tax a corporation shall pay under this chapter is $100.
48          Section 2. Section 59-7-201 is amended to read:
49          59-7-201. Tax -- Minimum tax.
50          (1) There is imposed upon each corporation, except a corporation that is exempt under
51     Section 59-7-102, a tax upon the corporation's Utah taxable income for the taxable year that is
52     derived from sources within this state other than income for any period that the corporation is
53     required to include in the corporation's tax base under Section 59-7-104.
54          (2) The tax imposed by Subsection (1) shall be [4.95%] 4.75% of a corporation's Utah
55     taxable income.
56          (3) In no case shall the tax be less than $100.
57          Section 3. Section 59-7-610 is amended to read:
58          59-7-610. Recycling market development zones tax credit.

59          (1) For taxable years beginning on or after January 1, 1996, a business operating in a
60     recycling market development zone as defined in Section 63N-2-402 may claim a tax credit as
61     provided in this section.
62          (a) (i) There shall be allowed a nonrefundable tax credit of [5%] 4.75% of the purchase
63     price paid for machinery and equipment used directly in:
64          (A) commercial composting; or
65          (B) manufacturing facilities or plant units that:
66          (I) manufacture, process, compound, or produce recycled items of tangible personal
67     property for sale; or
68          (II) reduce or reuse postconsumer waste material.
69          (ii) The Governor's Office of Economic Development shall certify that the machinery
70     and equipment described in Subsection (1)(a)(i) are integral to the composting or recycling
71     process:
72          (A) on a form provided by the commission; and
73          (B) before a taxpayer is allowed a tax credit under this section.
74          (iii) The Governor's Office of Economic Development shall provide a taxpayer seeking
75     to claim a tax credit under this section with a copy of the form described in Subsection
76     (1)(a)(ii).
77          (iv) The taxpayer described in Subsection (1)(a)(iii) shall retain a copy of the form
78     received under Subsection (1)(a)(iii).
79          (b) There shall be allowed a nonrefundable tax credit equal to 20% of net expenditures
80     up to $10,000 to third parties for rent, wages, supplies, tools, test inventory, and utilities made
81     by the taxpayer for establishing and operating recycling or composting technology in Utah,
82     with an annual maximum tax credit of $2,000.
83          (2) The total nonrefundable tax credit allowed under this section may not exceed 40%
84     of the Utah income tax liability of the taxpayer prior to any tax credits in the taxable year of
85     purchase prior to claiming the tax credit authorized by this section.
86          (3) (a) Any tax credit not used for the taxable year in which the purchase price on
87     composting or recycling machinery and equipment was paid may be carried over for credit
88     against the business' income taxes in the three succeeding taxable years until the total tax credit
89     amount is used.

90          (b) Tax credits not claimed by a business on the business' state income tax return
91     within three years are forfeited.
92          (4) The commission shall make rules governing what information shall be filed with
93     the commission to verify the entitlement to and amount of a tax credit.
94          (5) (a) Notwithstanding Subsection (1)(a), for taxable years beginning on or after
95     January 1, 2001, a taxpayer may not claim or carry forward a tax credit described in Subsection
96     (1)(a) in a taxable year during which the taxpayer claims or carries forward a tax credit under
97     Section 63N-2-213.
98          (b) For a taxable year other than a taxable year during which the taxpayer may not
99     claim or carry forward a tax credit in accordance with Subsection (5)(a), a taxpayer may claim
100     or carry forward a tax credit described in Subsection (1)(a):
101          (i) if the taxpayer may claim or carry forward the tax credit in accordance with
102     Subsections (1) and (2); and
103          (ii) subject to Subsections (3) and (4).
104          (6) Notwithstanding Subsection (1)(b), for taxable years beginning on or after January
105     1, 2001, a taxpayer may not claim a tax credit described in Subsection (1)(b) in a taxable year
106     during which the taxpayer claims or carries forward a tax credit under Section 63N-2-213.
107          (7) A taxpayer may not claim or carry forward a tax credit available under this section
108     for a taxable year during which the taxpayer has claimed the targeted business income tax
109     credit available under Section 63N-2-305.
110          Section 4. Section 59-7-620 is amended to read:
111          59-7-620. Nonrefundable tax credit for contribution to state Achieving a Better
112     Life Experience Program account.
113          (1) As used in this section:
114          (a) "Account" means an account in a qualified ABLE program where the designated
115     beneficiary of the account is a resident of this state.
116          (b) "Contributor" means a corporation that:
117          (i) makes a contribution to an account; and
118          (ii) receives a statement from the qualified ABLE program itemizing the contribution.
119          (c) "Designated beneficiary" means the same as that term is defined in 26 U.S.C. Sec.
120     529A.

121          (d) "Qualified ABLE program" means the same as that term is defined in Section
122     35A-12-102.
123          (2) A contributor to an account may claim a nonrefundable tax credit as provided in
124     this section.
125          (3) Subject to the other provisions of this section, the tax credit is equal to the product
126     of:
127          (a) [5%] 4.75%; and
128          (b) the total amount of contributions:
129          (i) the contributor makes for the taxable year; and
130          (ii) for which the contributor receives a statement from the qualified ABLE program
131     itemizing the contributions.
132          (4) A contributor may not claim a tax credit under this section:
133          (a) for an amount of excess contribution to an account that is returned to the
134     contributor; or
135          (b) with respect to an amount the contributor deducts on a federal income tax return.
136          (5) A tax credit under this section may not be carried forward or carried back.
137          Section 5. Section 59-10-104 is amended to read:
138          59-10-104. Tax basis -- Tax rate -- Exemption.
139          (1) A tax is imposed on the state taxable income of a resident individual as provided in
140     this section.
141          (2) For purposes of Subsection (1), for a taxable year, the tax is an amount equal to the
142     product of:
143          (a) the resident individual's state taxable income for that taxable year; and
144          (b) [4.95%] 4.75%.
145          (3) This section does not apply to a resident individual exempt from taxation under
146     Section 59-10-104.1.
147          Section 6. Section 59-10-1007 is amended to read:
148          59-10-1007. Recycling market development zones tax credit.
149          (1) For taxable years beginning on or after January 1, 1996, a claimant, estate, or trust
150     in a recycling market development zone as defined in Section 63N-2-402 may claim a
151     nonrefundable tax credit as provided in this section.

152          (a) (i) There shall be allowed a tax credit of [5%] 4.75% of the purchase price paid for
153     machinery and equipment used directly in:
154          (A) commercial composting; or
155          (B) manufacturing facilities or plant units that:
156          (I) manufacture, process, compound, or produce recycled items of tangible personal
157     property for sale; or
158          (II) reduce or reuse postconsumer waste material.
159          (ii) The Governor's Office of Economic Development shall certify that the machinery
160     and equipment described in Subsection (1)(a)(i) are integral to the composting or recycling
161     process:
162          (A) on a form provided by the commission; and
163          (B) before a claimant, estate, or trust is allowed a tax credit under this section.
164          (iii) The Governor's Office of Economic Development shall provide a claimant, estate,
165     or trust seeking to claim a tax credit under this section with a copy of the form described in
166     Subsection (1)(a)(ii).
167          (iv) The claimant, estate, or trust described in Subsection (1)(a)(iii) shall retain a copy
168     of the form received under Subsection (1)(a)(iii).
169          (b) There shall be allowed a tax credit equal to 20% of net expenditures up to $10,000
170     to third parties for rent, wages, supplies, tools, test inventory, and utilities made by the
171     claimant, estate, or trust for establishing and operating recycling or composting technology in
172     Utah, with an annual maximum tax credit of $2,000.
173          (2) The total tax credit allowed under this section may not exceed 40% of the Utah
174     income tax liability of the claimant, estate, or trust prior to any tax credits in the taxable year of
175     purchase prior to claiming the tax credit authorized by this section.
176          (3) (a) Any tax credit not used for the taxable year in which the purchase price on
177     composting or recycling machinery and equipment was paid may be carried forward against the
178     claimant's, estate's, or trusts's tax liability under this chapter in the three succeeding taxable
179     years until the total tax credit amount is used.
180          (b) Tax credits not claimed by a claimant, estate, or trust on the claimant's, estate's, or
181     trust's tax return under this chapter within three years are forfeited.
182          (4) The commission shall make rules governing what information shall be filed with

183     the commission to verify the entitlement to and amount of a tax credit.
184          (5) (a) Notwithstanding Subsection (1)(a), for taxable years beginning on or after
185     January 1, 2001, a claimant, estate, or trust may not claim or carry forward a tax credit
186     described in Subsection (1)(a) in a taxable year during which the claimant, estate, or trust
187     claims or carries forward a tax credit under Section 63N-2-213.
188          (b) For a taxable year other than a taxable year during which the claimant, estate, or
189     trust may not claim or carry forward a tax credit in accordance with Subsection (5)(a), a
190     claimant, estate, or trust may claim or carry forward a tax credit described in Subsection (1)(a):
191          (i) if the claimant, estate, or trust may claim or carry forward the tax credit in
192     accordance with Subsections (1) and (2); and
193          (ii) subject to Subsections (3) and (4).
194          (6) Notwithstanding Subsection (1)(b), for taxable years beginning on or after January
195     1, 2001, a claimant, estate, or trust may not claim a tax credit described in Subsection (1)(b) in
196     a taxable year during which the claimant, estate, or trust claims or carries forward a tax credit
197     under Section 63N-2-213.
198          (7) A claimant, estate, or trust may not claim or carry forward a tax credit available
199     under this section for a taxable year during which the claimant, estate, or trust has claimed the
200     targeted business income tax credit available under Section 63N-2-305.
201          Section 7. Section 59-10-1017 is amended to read:
202          59-10-1017. Utah Educational Savings Plan tax credit.
203          (1) As used in this section:
204          (a) "Account owner" means the same as that term is defined in Section 53B-8a-102.
205          (b) "Grantor trust" means the same as that term is defined in Section 53B-8a-102.5.
206          (c) "Higher education costs" means the same as that term is defined in Section
207     53B-8a-102.5.
208          (d) "Maximum amount of a qualified investment for the taxable year" means, for a
209     taxable year, the product of [5%] 4.75% and:
210          (i) subject to Subsection (1)(d)(iii), for a claimant, estate, or trust that is an account
211     owner, if that claimant, estate, or trust is other than husband and wife account owners who file
212     a single return jointly, the maximum amount of a qualified investment:
213          (A) listed in Subsection 53B-8a-106(1)(e)(ii); and

214          (B) increased or kept for that taxable year in accordance with Subsections
215     53B-8a-106(1)(f) and (g);
216          (ii) subject to Subsection (1)(d)(iii), for claimants who are husband and wife account
217     owners who file a single return jointly, the maximum amount of a qualified investment:
218          (A) listed in Subsection 53B-8a-106(1)(e)(iii); and
219          (B) increased or kept for that taxable year in accordance with Subsections
220     53B-8a-106(1)(f) and (g); or
221          (iii) for a grantor trust:
222          (A) if the owner of the grantor trust has a single filing status or head of household
223     filing status as defined in Section 59-10-1018, the amount described in Subsection (1)(d)(i); or
224          (B) if the owner of the grantor trust has a joint filing status as defined in Section
225     59-10-1018, the amount described in Subsection (1)(d)(ii).
226          (e) "Owner of the grantor trust" means the same as that term is defined in Section
227     53B-8a-102.5.
228          (f) "Qualified investment" means the same as that term is defined in Section
229     53B-8a-102.5.
230          (2) Except as provided in Section 59-10-1002.2 and subject to the other provisions of
231     this section, a claimant, estate, or trust that is an account owner may claim a nonrefundable tax
232     credit equal to the product of:
233          (a) the amount of a qualified investment made:
234          (i) during the taxable year; and
235          (ii) into an account owned by the claimant, estate, or trust; and
236          (b) [5%] 4.75%.
237          (3) A claimant, estate, or trust, or a person other than the claimant, estate, or trust, may
238     make a qualified investment described in Subsection (2).
239          (4) A claimant, estate, or trust that is an account owner may not claim a tax credit
240     under this section with respect to any portion of a qualified investment described in Subsection
241     (2) that a claimant, estate, trust, or person described in Subsection (3) deducts on a federal
242     income tax return.
243          (5) A tax credit under this section may not exceed the maximum amount of a qualified
244     investment for the taxable year.

245          (6) A claimant, estate, or trust that is an account owner may not carry forward or carry
246     back the tax credit under this section.
247          (7) A claimant, estate, or trust may claim a tax credit under this section in addition to
248     the tax credit described in Section 59-10-1017.1.
249          Section 8. Section 59-10-1017.1 is amended to read:
250          59-10-1017.1. Student Prosperity Savings Program tax credit.
251          (1) As used in this section, "qualified donation" means an amount donated, in
252     accordance with Section 53B-8a-203, to the Student Prosperity Savings Program created in
253     Section 53B-8a-202.
254          (2) A claimant, estate, or trust may claim a nonrefundable tax credit for a qualified
255     donation.
256          (3) The tax credit equals the product of:
257          (a) the qualified donation; and
258          (b) [5%] 4.75%.
259          (4) A claimant, estate, or trust may not claim a tax credit under this section with
260     respect to any portion of a qualified donation that a claimant, estate, or trust deducts on a
261     federal income tax return.
262          (5) A claimant, estate, or trust may not carry forward or carry back the portion of the
263     tax credit allowed by this section that exceeds the claimant's, estate's, or trust's tax liability for
264     the taxable year in which the claimant, estate, or trust claims the tax credit.
265          (6) A claimant, estate, or trust may claim a tax credit under this section in addition to
266     the tax credit described in Section 59-10-1017.
267          Section 9. Section 59-10-1022 is amended to read:
268          59-10-1022. Nonrefundable tax credit for capital gain transactions.
269          (1) As used in this section:
270          (a) (i) "Capital gain transaction" means a transaction that results in a:
271          (A) short-term capital gain; or
272          (B) long-term capital gain.
273          (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
274     commission may by rule define the term "transaction."
275          (b) "Commercial domicile" means the principal place from which the trade or business

276     of a Utah small business corporation is directed or managed.
277          (c) "Long-term capital gain" is as defined in Section 1222, Internal Revenue Code.
278          (d) "Qualifying stock" means stock that is:
279          (i) (A) common; or
280          (B) preferred;
281          (ii) as defined by the commission by rule made in accordance with Title 63G, Chapter
282     3, Utah Administrative Rulemaking Act, originally issued to:
283          (A) a claimant, estate, or trust; or
284          (B) a partnership if the claimant, estate, or trust that claims a tax credit under this
285     section:
286          (I) was a partner on the day on which the stock was issued; and
287          (II) remains a partner until the last day of the taxable year for which the claimant,
288     estate, or trust claims a tax credit under this section; and
289          (iii) issued:
290          (A) by a Utah small business corporation;
291          (B) on or after January 1, 2008; and
292          (C) for:
293          (I) money; or
294          (II) other property, except for stock or securities.
295          (e) "Short-term capital gain" is as defined in Section 1222, Internal Revenue Code.
296          (f) (i) "Utah small business corporation" means a corporation that:
297          (A) except as provided in Subsection (1)(f)(ii), is a small business corporation as
298     defined in Section 1244(c)(3), Internal Revenue Code;
299          (B) except as provided in Subsection (1)(f)(iii), meets the requirements of Section
300     1244(c)(1)(C), Internal Revenue Code; and
301          (C) has its commercial domicile in this state.
302          (ii) The dollar amount listed in Section 1244(c)(3)(A) is considered to be $2,500,000.
303          (iii) The phrase "the date the loss on such stock was sustained" in Sections
304     1244(c)(1)(C) and 1244(c)(2), Internal Revenue Code, is considered to be "the last day of the
305     taxable year for which the claimant, estate, or trust claims a tax credit under this section."
306          (2) For taxable years beginning on or after January 1, 2008, a claimant, estate, or trust

307     that meets the requirements of Subsection (3) may claim a nonrefundable tax credit equal to the
308     product of:
309          (a) the total amount of the claimant's, estate's, or trust's short-term capital gain or
310     long-term capital gain on a capital gain transaction that occurs on or after January 1, 2008; and
311          (b) [5%] 4.75%.
312          (3) For purposes of Subsection (2), a claimant, estate, or trust may claim the
313     nonrefundable tax credit allowed by Subsection (2) if:
314          (a) 70% or more of the gross proceeds of the capital gain transaction are expended:
315          (i) to purchase qualifying stock in a Utah small business corporation; and
316          (ii) within a 12-month period after the day on which the capital gain transaction occurs;
317     and
318          (b) prior to the purchase of the qualifying stock described in Subsection (3)(a)(i), the
319     claimant, estate, or trust did not have an ownership interest in the Utah small business
320     corporation that issued the qualifying stock.
321          (4) A claimant, estate, or trust may not carry forward or carry back a tax credit under
322     this section.
323          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
324     commission may make rules:
325          (a) defining the term "gross proceeds"; and
326          (b) prescribing the circumstances under which a claimant, estate, or trust has an
327     ownership interest in a Utah small business corporation.
328          Section 10. Section 59-10-1023 is amended to read:
329          59-10-1023. Nonrefundable tax credit for amounts paid under a health benefit
330     plan.
331          (1) As used in this section:
332          (a) "Claimant with dependents" means a claimant:
333          (i) regardless of the claimant's filing status for purposes of filing a federal individual
334     income tax return for the taxable year; and
335          (ii) who claims one or more dependents under Section 151, Internal Revenue Code, as
336     allowed on the claimant's federal individual income tax return for the taxable year.
337          (b) "Eligible insured individual" means:

338          (i) the claimant who is insured under a health benefit plan;
339          (ii) the spouse of the claimant described in Subsection (1)(b)(i) if:
340          (A) the claimant files a single return jointly under this chapter with the claimant's
341     spouse for the taxable year; and
342          (B) the spouse is insured under the health benefit plan described in Subsection
343     (1)(b)(i); or
344          (iii) a dependent of the claimant described in Subsection (1)(b)(i) if:
345          (A) the claimant claims the dependent under Section 151, Internal Revenue Code, as
346     allowed on the claimant's federal individual income tax return for the taxable year; and
347          (B) the dependent is insured under the health benefit plan described in Subsection
348     (1)(b)(i).
349          (c) "Excluded expenses" means an amount a claimant pays for insurance offered under
350     a health benefit plan for a taxable year if:
351          (i) the claimant claims a tax credit for that amount under Section 35, Internal Revenue
352     Code:
353          (A) on the claimant's federal individual income tax return for the taxable year; and
354          (B) with respect to an eligible insured individual;
355          (ii) the claimant deducts that amount under Section 162 or 213, Internal Revenue
356     Code:
357          (A) on the claimant's federal individual income tax return for the taxable year; and
358          (B) with respect to an eligible insured individual; or
359          (iii) the claimant excludes that amount from gross income under Section 106 or 125,
360     Internal Revenue Code, with respect to an eligible insured individual.
361          (d) (i) "Health benefit plan" is as defined in Section 31A-1-301.
362          (ii) "Health benefit plan" does not include equivalent self-insurance as defined by the
363     Insurance Department by rule made in accordance with Title 63G, Chapter 3, Utah
364     Administrative Rulemaking Act.
365          (e) "Joint claimant with no dependents" means a husband and wife who:
366          (i) file a single return jointly under this chapter for the taxable year; and
367          (ii) do not claim a dependent under Section 151, Internal Revenue Code, on the
368     husband's and wife's federal individual income tax return for the taxable year.

369          (f) "Single claimant with no dependents" means:
370          (i) a single individual who:
371          (A) files a single federal individual income tax return for the taxable year; and
372          (B) does not claim a dependent under Section 151, Internal Revenue Code, on the
373     single individual's federal individual income tax return for the taxable year;
374          (ii) a head of household:
375          (A) as defined in Section 2(b), Internal Revenue Code, who files a single federal
376     individual income tax return for the taxable year; and
377          (B) who does not claim a dependent under Section 151, Internal Revenue Code, on the
378     head of household's federal individual income tax return for the taxable year; or
379          (iii) a married individual who:
380          (A) does not file a single federal individual income tax return jointly with that married
381     individual's spouse for the taxable year; and
382          (B) does not claim a dependent under Section 151, Internal Revenue Code, on that
383     married individual's federal individual income tax return for the taxable year.
384          (2) Subject to Subsection (3), and except as provided in Subsection (4), for taxable
385     years beginning on or after January 1, 2009, a claimant may claim a nonrefundable tax credit
386     equal to the product of:
387          (a) the difference between:
388          (i) the total amount the claimant pays during the taxable year for:
389          (A) insurance offered under a health benefit plan; and
390          (B) an eligible insured individual; and
391          (ii) excluded expenses; and
392          (b) [5%] 4.75%.
393          (3) The maximum amount of a tax credit described in Subsection (2) a claimant may
394     claim on a return for a taxable year is:
395          (a) for a single claimant with no dependents, $300;
396          (b) for a joint claimant with no dependents, $600; or
397          (c) for a claimant with dependents, $900.
398          (4) A claimant may not claim a tax credit under this section if the claimant is eligible to
399     participate in insurance offered under a health benefit plan maintained and funded in whole or

400     in part by:
401          (a) the claimant's employer; or
402          (b) another person's employer.
403          (5) A claimant may not carry forward or carry back a tax credit under this section.
404          Section 11. Section 59-10-1028 is amended to read:
405          59-10-1028. Nonrefundable tax credit for capital gain transactions on the
406     exchange of one form of legal tender for another form of legal tender.
407          (1) As used in this section:
408          (a) "Capital gain transaction" means a transaction that results in a:
409          (i) short-term capital gain; or
410          (ii) long-term capital gain.
411          (b) "Long-term capital gain" is as defined in Section 1222, Internal Revenue Code.
412          (c) "Long-term capital loss" is as defined in Section 1222, Internal Revenue Code.
413          (d) "Net capital gain" means the amount by which the sum of long-term capital gains
414     and short-term capital gains on a claimant's, estate's, or trust's transactions from exchanges
415     made for a taxable year of one form of legal tender for another form of legal tender exceeds the
416     sum of long-term capital losses and short-term capital losses on those transactions for that
417     taxable year.
418          (e) "Short-term capital loss" is as defined in Section 1222, Internal Revenue Code.
419          (f) "Short-term capital gain" is as defined in Section 1222, Internal Revenue Code.
420          (2) Except as provided in Section 59-10-1002.2, for taxable years beginning on or after
421     January 1, 2012, a claimant, estate, or trust may claim a nonrefundable tax credit equal to the
422     product of:
423          (a) to the extent a net capital gain is included in taxable income, the amount of the
424     claimant's, estate's, or trust's net capital gain on capital gain transactions from exchanges made
425     on or after January 1, 2012, for a taxable year, of one form of legal tender for another form of
426     legal tender; and
427          (b) [5%] 4.75%.
428          (3) A claimant, estate, or trust may not carry forward or carry back a tax credit under
429     this section.
430          (4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the

431     commission may make rules to implement this section.
432          Section 12. Section 59-10-1035 is amended to read:
433          59-10-1035. Nonrefundable tax credit for contribution to state Achieving a Better
434     Life Experience Program account.
435          (1) As used in this section:
436          (a) "Account" means an account in a qualified ABLE program where the designated
437     beneficiary of the account is a resident of this state.
438          (b) "Contributor" means a claimant, estate, or trust that:
439          (i) makes a contribution to an account; and
440          (ii) receives a statement from the qualified ABLE program itemizing the contribution.
441          (c) "Designated beneficiary" means the same as that term is defined in 26 U.S.C. Sec.
442     529A.
443          (d) "Qualified ABLE program" means the same as that term is defined in Section
444     35A-12-102.
445          (2) A contributor to an account may claim a nonrefundable tax credit as provided in
446     this section.
447          (3) Subject to the other provisions of this section, the tax credit is equal to the product
448     of:
449          (a) [5%] 4.75%; and
450          (b) the total amount of contributions:
451          (i) the contributor makes for the taxable year; and
452          (ii) for which the contributor receives a statement from the qualified ABLE program
453     itemizing the contributions.
454          (4) A contributor may not claim a tax credit under this section:
455          (a) for an amount of excess contribution to an account that is returned to the
456     contributor; or
457          (b) with respect to an amount the contributor deducts on a federal income tax return.
458          (5) A tax credit under this section may not be carried forward or carried back.
459          Section 13. Section 59-10-1036 is amended to read:
460          59-10-1036. Nonrefundable tax credit for military survivor benefits.
461          (1) As used in this section:

462          (a) "Dependent child" means the same as that term is defined in 10 U.S.C. Sec. 1447.
463          (b) "Reserve components" means the same as that term is described in 10 U.S.C. Sec.
464     10101.
465          (c) "Surviving spouse" means the same as that term is defined in 10 U.S.C. Sec. 1447.
466          (d) "Survivor benefits" means the amount paid by the federal government in
467     accordance with 10 U.S.C. Secs. 1447 through 1455.
468          (2) A surviving spouse or dependent child may claim a nonrefundable tax credit for
469     survivor benefits if the benefits are paid due to:
470          (a) the death of a member of the armed forces or reserve components while on active
471     duty; or
472          (b) the death of a member of the reserve components that results from a
473     service-connected cause while performing inactive duty training.
474          (3) The tax credit described in Subsection (2) is equal to the product of:
475          (a) the amount of survivor benefits that the surviving spouse or dependent child
476     received during the taxable year; and
477          (b) [5%] 4.75%.
478          (4) The tax credit described in Subsection (2):
479          (a) may not be carried forward or carried back; and
480          (b) applies to a taxable year beginning on or after January 1, 2017.
481          Section 14. Retrospective operation.
482          This bill has retrospective operation for a taxable year beginning on or after January 1,
483     2019.