1     
INCOME TAX RATE REDUCTION AMENDMENTS

2     
2020 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Lincoln Fillmore

5     
House Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions related to income tax.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     provides for a reduction of the income tax rate when the growth rate of income tax
14     revenue exceeds the growth rate of the gross domestic product for Utah;
15          ▸     provides a formula and process for calculating a reduction of the income tax rate;
16          ▸     requires the State Tax Commission to annually publish the income tax rate; and
17          ▸     makes technical and conforming changes.
18     Money Appropriated in this Bill:
19          None
20     Other Special Clauses:
21          None
22     Utah Code Sections Affected:
23     AMENDS:
24          59-1-101, as last amended by Laws of Utah 2009, Chapter 212
25          59-7-104, as last amended by Laws of Utah 2019, Chapter 418
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 2019, Chapter 247
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          59-10-116, as last amended by Laws of Utah 2008, Chapters 382 and 389
31          59-10-201, as last amended by Laws of Utah 2010, Chapter 6
32          59-10-205, as last amended by Laws of Utah 2008, Chapter 389
33          59-10-1007, as last amended by Laws of Utah 2019, Chapter 247
34          59-10-1017, as last amended by Laws of Utah 2017, Chapter 389
35          59-10-1017.1, as enacted by Laws of Utah 2017, Chapter 389
36          59-10-1022, as enacted by Laws of Utah 2008, Chapter 389
37          59-10-1023, as enacted by Laws of Utah 2008, Chapter 389
38          59-10-1028, as last amended by Laws of Utah 2012, Chapter 399
39          59-10-1035, as last amended by Laws of Utah 2017, Chapter 222
40          59-10-1036, as enacted by Laws of Utah 2016, Chapter 55
41          59-10-1403.3, as enacted by Laws of Utah 2017, Chapter 270
42     ENACTS:
43          59-1-1801, Utah Code Annotated 1953
44          59-1-1802, Utah Code Annotated 1953
45     

46     Be it enacted by the Legislature of the state of Utah:
47          Section 1. Section 59-1-101 is amended to read:
48          59-1-101. Definitions.
49          As used in this title:
50          (1) "Commission" and "tax commission" mean the State Tax Commission.
51          (2) "Deficiency" is as defined in Section 59-1-1402.
52          (3) "Income tax rate" means:
53          (a) for a taxable year beginning before January 1, 2021, 4.95%; or
54          (b) for a taxable year beginning on or after January 1, 2021, the current rate calculated
55     and published in accordance with Part 18, Income Tax Rate.
56          Section 2. Section 59-1-1801 is enacted to read:
57     
Part 18. Income Tax Rate

58          59-1-1801. Definitions.
59          As used in this section:
60          (1) "Consensus entities" means:
61          (a) the Legislative Fiscal Analyst;
62          (b) the commission; and
63          (c) the Governor's Office of Management and Budget.
64          (2) "Income tax revenue growth rate" means the greater of:
65          (a) the amount by which income tax revenue increased in the preceding fiscal year
66     compared to the second preceding fiscal year, expressed as a percentage; and
67          (b) zero.
68          (3) "Gross domestic product for Utah" means the Gross Domestic Product by State for
69     Utah in current dollars published by the Bureau of Economic Analysis, United States
70     Department of Commerce.
71          (4) "Growth rate differential" means the difference between:
72          (a) the income tax revenue growth rate; and
73          (b) the percent change in gross domestic product for Utah.
74          (5) "Percent change in gross domestic product for Utah" means the greater of:
75          (a) the percent change in the gross domestic product for Utah in the preceding fiscal
76     year compared to the second preceding fiscal year; and
77          (b) zero.
78          (6) "Targeted growth rate" means:
79          (a) if the growth rate differential is greater than zero, the income tax revenue growth
80     rate minus one half of the growth rate differential; or
81          (b) if the growth rate differential is less than or equal to zero, the income tax revenue
82     growth rate.
83          Section 3. Section 59-1-1802 is enacted to read:
84          59-1-1802. Calculation of income tax rate.
85          (1) (a) Beginning in 2020, after June 30, the consensus entities shall calculate the
86     income tax revenue growth rate and the percent change in gross domestic product for Utah.
87          (b) If, based on the calculations done in accordance with Subsection (1)(a), the income
88     tax revenue growth rate exceeds the percent change in gross domestic product for Utah, the
89     income tax rate for a taxable year beginning on or after January 1 of the upcoming calendar
90     year decreases to a rate, rounded to the nearest hundredth, that would have generated an income
91     tax revenue growth rate equal to the targeted growth rate.
92          (2) No later than November 1 before a taxable year beginning on or after January 1, the
93     commission shall publish the income tax rate for the taxable year.
94          Section 4. Section 59-7-104 is amended to read:
95          59-7-104. Tax -- Minimum tax.
96          (1) Each domestic and foreign corporation, except a corporation that is exempt under
97     Section 59-7-102, shall pay an annual tax to the state based on the corporation's Utah taxable
98     income for the taxable year for the privilege of exercising the corporation's corporate franchise,
99     as defined in Section 59-7-101, or for the privilege of doing business, as defined in Section
100     59-7-101, in the state.
101          (2) The tax [shall be 4.95% of a] imposed by Subsection (1) is an amount equal to the
102     product of:
103          (a) corporation's Utah taxable income[.]; and
104          (b) the income tax rate.
105          (3) The minimum tax a corporation shall pay under this chapter is $100.
106          Section 5. Section 59-7-201 is amended to read:
107          59-7-201. Tax -- Minimum tax.
108          (1) There is imposed upon each corporation, except a corporation that is exempt under
109     Section 59-7-102, a tax upon the corporation's Utah taxable income for the taxable year that is
110     derived from sources within this state other than income for any period that the corporation is
111     required to include in the corporation's tax base under Section 59-7-104.
112          (2) The tax imposed by Subsection (1) [shall be 4.95% of a] is an amount equal to the
113     product of:
114          (a) corporation's Utah taxable income[.]; and
115          (b) the income tax rate.
116          (3) In no case shall the tax be less than $100.
117          Section 6. Section 59-7-610 is amended to read:
118          59-7-610. Recycling market development zones tax credits.
119          (1) Subject to other provisions of this section, a taxpayer that is a business operating in
120     a recycling market development zone as defined in Section 63N-2-402 may claim the following
121     nonrefundable tax credits:
122          (a) a tax credit [of 5% of] equal to the product of the income tax rate and the purchase
123     price paid for machinery and equipment used directly in:
124          (i) commercial composting; or
125          (ii) manufacturing facilities or plant units that:
126          (A) manufacture, process, compound, or produce recycled items of tangible personal
127     property for sale; or
128          (B) reduce or reuse postconsumer waste material; and
129          (b) a tax credit equal to the lesser of:
130          (i) 20% of net expenditures to third parties for rent, wages, supplies, tools, test
131     inventory, and utilities made by the taxpayer for establishing and operating recycling or
132     composting technology in Utah; and
133          (ii) $2,000.
134          (2) (a) To claim a tax credit described in Subsection (1), the taxpayer shall receive
135     from the Governor's Office of Economic Development a written certification, on a form
136     approved by the commission, that includes:
137          (i) a statement that the taxpayer is operating a business within the boundaries of a
138     recycling market development zone;
139          (ii) for claims of the tax credit described in Subsection (1)(a):
140          (A) the type of the machinery and equipment that the taxpayer purchased;
141          (B) the date that the taxpayer purchased the machinery and equipment;
142          (C) the purchase price for the machinery and equipment;
143          (D) the total purchase price for all machinery and equipment for which the taxpayer is
144     claiming a tax credit;
145          (E) a statement that the machinery and equipment are integral to the composting or
146     recycling process; and
147          (F) the amount of the taxpayer's tax credit; and
148          (iii) for claims of the tax credit described in Subsection (1)(b):
149          (A) the type of net expenditure that the taxpayer made to a third party;
150          (B) the date that the taxpayer made the payment to a third party;
151          (C) the amount that the taxpayer paid to each third party;
152          (D) the total amount that the taxpayer paid to all third parties;
153          (E) a statement that the net expenditures support the establishment and operation of
154     recycling or composting technology in Utah; and
155          (F) the amount of the taxpayer's tax credit.
156          (b) (i) The Governor's Office of Economic Development shall provide a taxpayer
157     seeking to claim a tax credit under Subsection (1) with a copy of the written certification.
158          (ii) The taxpayer shall retain a copy of the written certification for the same period of
159     time that a person is required to keep books and records under Section 59-1-1406.
160          (c) The Governor's Office of Economic Development shall submit to the commission
161     an electronic list that includes:
162          (i) the name and identifying information of each taxpayer to which the office issues a
163     written certification; and
164          (ii) for each taxpayer, the amount of each tax credit listed on the written certification.
165          (3) A taxpayer may not claim a tax credit under Subsection (1)(a), Subsection (1)(b), or
166     both that exceeds 40% of the taxpayer's state income tax liability as the tax liability is
167     calculated:
168          (a) for the taxable year in which the taxpayer made the purchases or payments;
169          (b) before any other tax credits the taxpayer may claim for the taxable year; and
170          (c) before the taxpayer claiming a tax credit authorized by this section.
171          (4) The commission shall make rules governing what information a taxpayer shall file
172     with the commission to verify the entitlement to and amount of a tax credit.
173          (5) Except as provided in Subsections (6) through (8), a taxpayer may carry forward, to
174     the next three taxable years, the amount of the tax credit that exceeds the taxpayer's income tax
175     liability for the taxable year.
176          (6) A taxpayer may not claim or carry forward a tax credit described in Subsection
177     (1)(a) in a taxable year during which the taxpayer claims or carries forward a tax credit under
178     Section 63N-2-213.
179          (7) A taxpayer may not claim or carry forward a tax credit described in Subsection
180     (1)(b) in a taxable year during which the taxpayer claims or carries forward a tax credit under
181     Section 63N-2-213.
182          (8) A taxpayer may not claim or carry forward a tax credit under this section for a
183     taxable year during which the taxpayer claims the targeted business income tax credit under
184     Section 59-7-624.
185          Section 7. Section 59-7-620 is amended to read:
186          59-7-620. Nonrefundable tax credit for contribution to state Achieving a Better
187     Life Experience Program account.
188          (1) As used in this section:
189          (a) "Account" means an account in a qualified ABLE program where the designated
190     beneficiary of the account is a resident of this state.
191          (b) "Contributor" means a corporation that:
192          (i) makes a contribution to an account; and
193          (ii) receives a statement from the qualified ABLE program itemizing the contribution.
194          (c) "Designated beneficiary" means the same as that term is defined in 26 U.S.C. Sec.
195     529A.
196          (d) "Qualified ABLE program" means the same as that term is defined in Section
197     35A-12-102.
198          (2) A contributor to an account may claim a nonrefundable tax credit as provided in
199     this section.
200          (3) Subject to the other provisions of this section, the tax credit is equal to the product
201     of:
202          (a) [5%] the income tax rate; and
203          (b) the total amount of contributions:
204          (i) the contributor makes for the taxable year; and
205          (ii) for which the contributor receives a statement from the qualified ABLE program
206     itemizing the contributions.
207          (4) A contributor may not claim a tax credit under this section:
208          (a) for an amount of excess contribution to an account that is returned to the
209     contributor; or
210          (b) with respect to an amount the contributor deducts on a federal income tax return.
211          (5) A tax credit under this section may not be carried forward or carried back.
212          Section 8. Section 59-10-104 is amended to read:
213          59-10-104. Tax basis -- Tax rate -- Exemption.
214          (1) A tax is imposed on the state taxable income of a resident individual as provided in
215     this section.
216          (2) For purposes of Subsection (1), for a taxable year, the tax is an amount equal to the
217     product of:
218          (a) the resident individual's state taxable income for that taxable year; and
219          (b) [4.95%] the income tax rate.
220          (3) This section does not apply to a resident individual exempt from taxation under
221     Section 59-10-104.1.
222          Section 9. Section 59-10-116 is amended to read:
223          59-10-116. Tax on nonresident individual -- Calculation -- Exemption.
224          (1) Except as provided in Subsection (2), a tax is imposed on a nonresident individual
225     in an amount equal to the product of [the]:
226          (a) the nonresident individual's state taxable income; and
227          (b) [percentage listed in Subsection 59-10-104(2)] the income tax rate.
228          (2) This section does not apply to a nonresident individual exempt from taxation under
229     Section 59-10-104.1.
230          Section 10. Section 59-10-201 is amended to read:
231          59-10-201. Taxation of resident trusts and estates.
232          (1) Except as provided in Subsection (2), a tax [determined in accordance with the rate
233     prescribed by Subsection 59-10-104(2)(b)] is imposed for each taxable year on [the state
234     taxable income of] each resident estate or trust[.] in an amount equal to the product of:
235          (a) the resident estate's or trust's state taxable income; and
236          (b) the income tax rate.
237          (2) The following are not subject to a tax imposed by this part:
238          (a) a resident estate or trust that is not required to file a federal income tax return for
239     estates and trusts for the taxable year; or
240          (b) a resident trust taxed as a corporation.
241          (3) A resident estate or trust shall be allowed the credit provided in Section
242     59-10-1003, relating to an income tax imposed by another state, except that the limitation shall
243     be computed by reference to the taxable income of the estate or trust.
244          (4) The property of the Utah Educational Savings Plan established in Title 53B,
245     Chapter 8a, Utah Educational Savings Plan, and its income from operations and investments
246     are exempt from all taxation by the state under this chapter.
247          Section 11. Section 59-10-205 is amended to read:
248          59-10-205. Tax on nonresident estate or trust.
249          (1) Except as provided in Subsection (2), a tax is imposed on a nonresident estate or
250     trust in an amount equal to the product of:
251          (a) the nonresident estate's or trust's state taxable income as determined under Section
252     59-10-204; and
253          (b) the [percentage listed in Subsection 59-10-104(2)] income tax rate.
254          (2) The following are not subject to a tax imposed by this part:
255          (a) a nonresident estate or trust that is not required to file a federal income tax return
256     for estates and trusts for the taxable year; or
257          (b) a nonresident trust taxed as a corporation.
258          Section 12. Section 59-10-1007 is amended to read:
259          59-10-1007. Recycling market development zones tax credits.
260          (1) Subject to other provisions of this section, a claimant, estate, or trust in a recycling
261     market development zone as defined in Section 63N-2-402 may claim the following
262     nonrefundable tax credits:
263          (a) a tax credit [of 5% of] equal to the product of the income tax rate and the purchase
264     price paid for machinery and equipment used directly in:
265          (i) commercial composting; or
266          (ii) manufacturing facilities or plant units that:
267          (A) manufacture, process, compound, or produce recycled items of tangible personal
268     property for sale; or
269          (B) reduce or reuse postconsumer waste material; and
270          (b) a tax credit equal to the lesser of:
271          (i) 20% of net expenditures to third parties for rent, wages, supplies, tools, test
272     inventory, and utilities made by the claimant, estate, or trust for establishing and operating
273     recycling or composting technology in Utah; and
274          (ii) $2,000.
275          (2) (a) To claim a tax credit described in Subsection (1), the claimant, estate, or trust
276     shall receive from the Governor's Office of Economic Development a written certification, on a
277     form approved by the commission, that includes:
278          (i) a statement that the claimant, estate, or trust is operating within the boundaries of a
279     recycling market development zone;
280          (ii) for claims of the tax credit described in Subsection (1)(a):
281          (A) the type of the machinery and equipment that the claimant, estate, or trust
282     purchased;
283          (B) the date that the claimant, estate, or trust purchased the machinery and equipment;
284          (C) the purchase price for the machinery and equipment;
285          (D) the total purchase price for all machinery and equipment for which the claimant,
286     estate, or trust is claiming a tax credit;
287          (E) the amount of the claimant's, estate's, or trust's tax credit; and
288          (F) a statement that the machinery and equipment are integral to the composting or
289     recycling process; and
290          (iii) for claims of the tax credit described in Subsection (1)(b):
291          (A) the type of net expenditure that the claimant, estate, or trust made to a third party;
292          (B) the date that the claimant, estate, or trust made the payment to a third party;
293          (C) the amount that the claimant, estate, or trust paid to each third party;
294          (D) the total amount that the claimant, estate, or trust paid to all third parties;
295          (E) a statement that the net expenditures support the establishment and operation of
296     recycling or composting technology in Utah; and
297          (F) the amount of the claimant's, estate's, or trust's tax credit.
298          (b) (i) The Governor's Office of Economic Development shall provide a claimant,
299     estate, or trust seeking to claim a tax credit under Subsection (1) with a copy of the written
300     certification.
301          (ii) The claimant, estate, or trust shall retain a copy of the written certification for the
302     same period of time that a person is required to keep books and records under Section
303     59-1-1406.
304          (c) The Governor's Office of Economic Development shall submit to the commission
305     an electronic list that includes:
306          (i) the name and identifying information of each claimant, estate, or trust to which the
307     office issues a written certification; and
308          (ii) for each claimant, estate, or trust, the amount of each tax credit listed on the written
309     certification.
310          (3) A claimant, estate, or trust may not claim a tax credit under Subsection (1)(a),
311     Subsection (1)(b), or both that exceeds 40% of the claimant's, estate's, or trust's state income
312     tax liability as the tax liability is calculated:
313          (a) for the taxable year in which the claimant, estate, or trust made the purchases or
314     payments;
315          (b) before any other tax credits the claimant, estate, or trust may claim for the taxable
316     year; and
317          (c) before the claimant, estate, or trust claiming a tax credit authorized by this section.
318          (4) The commission shall make rules governing what information a claimant, estate, or
319     trust shall file with the commission to verify the entitlement to and amount of a tax credit.
320          (5) Except as provided in Subsections (6) through (8), a claimant, estate, or trust may
321     carry forward, to the next three taxable years, the amount of the tax credit that exceeds the
322     taxpayer's income tax liability for the taxable year.
323          (6) A claimant, estate, or trust may not claim or carry forward a tax credit described in
324     Subsection (1)(a) in a taxable year during which the claimant, estate, or trust claims or carries
325     forward a tax credit under Section 63N-2-213.
326          (7) A claimant, estate, or trust may not claim a tax credit described in Subsection (1)(b)
327     in a taxable year during which the claimant, estate, or trust claims or carries forward a tax
328     credit under Section 63N-2-213.
329          (8) A claimant, estate, or trust may not claim or carry forward a tax credit available
330     under this section for a taxable year during which the claimant, estate, or trust claims the
331     targeted business income tax credit under Section 59-10-1112.
332          Section 13. Section 59-10-1017 is amended to read:
333          59-10-1017. Utah Educational Savings Plan tax credit.
334          (1) As used in this section:
335          (a) "Account owner" means the same as that term is defined in Section 53B-8a-102.
336          (b) "Grantor trust" means the same as that term is defined in Section 53B-8a-102.5.
337          (c) "Higher education costs" means the same as that term is defined in Section
338     53B-8a-102.5.
339          (d) "Maximum amount of a qualified investment for the taxable year" means, for a
340     taxable year, the product of [5%] the income tax rate and:
341          (i) subject to Subsection (1)(d)(iii), for a claimant, estate, or trust that is an account
342     owner, if that claimant, estate, or trust is other than husband and wife account owners who file
343     a single return jointly, the maximum amount of a qualified investment:
344          (A) listed in Subsection 53B-8a-106(1)(e)(ii); and
345          (B) increased or kept for that taxable year in accordance with Subsections
346     53B-8a-106(1)(f) and (g);
347          (ii) subject to Subsection (1)(d)(iii), for claimants who are husband and wife account
348     owners who file a single return jointly, the maximum amount of a qualified investment:
349          (A) listed in Subsection 53B-8a-106(1)(e)(iii); and
350          (B) increased or kept for that taxable year in accordance with Subsections
351     53B-8a-106(1)(f) and (g); or
352          (iii) for a grantor trust:
353          (A) if the owner of the grantor trust has a single filing status or head of household
354     filing status as defined in Section 59-10-1018, the amount described in Subsection (1)(d)(i); or
355          (B) if the owner of the grantor trust has a joint filing status as defined in Section
356     59-10-1018, the amount described in Subsection (1)(d)(ii).
357          (e) "Owner of the grantor trust" means the same as that term is defined in Section
358     53B-8a-102.5.
359          (f) "Qualified investment" means the same as that term is defined in Section
360     53B-8a-102.5.
361          (2) Except as provided in Section 59-10-1002.2 and subject to the other provisions of
362     this section, a claimant, estate, or trust that is an account owner may claim a nonrefundable tax
363     credit equal to the product of:
364          (a) the amount of a qualified investment made:
365          (i) during the taxable year; and
366          (ii) into an account owned by the claimant, estate, or trust; and
367          (b) [5%] the income tax rate.
368          (3) A claimant, estate, or trust, or a person other than the claimant, estate, or trust, may
369     make a qualified investment described in Subsection (2).
370          (4) A claimant, estate, or trust that is an account owner may not claim a tax credit
371     under this section with respect to any portion of a qualified investment described in Subsection
372     (2) that a claimant, estate, trust, or person described in Subsection (3) deducts on a federal
373     income tax return.
374          (5) A tax credit under this section may not exceed the maximum amount of a qualified
375     investment for the taxable year.
376          (6) A claimant, estate, or trust that is an account owner may not carry forward or carry
377     back the tax credit under this section.
378          (7) A claimant, estate, or trust may claim a tax credit under this section in addition to
379     the tax credit described in Section 59-10-1017.1.
380          Section 14. Section 59-10-1017.1 is amended to read:
381          59-10-1017.1. Student Prosperity Savings Program tax credit.
382          (1) As used in this section, "qualified donation" means an amount donated, in
383     accordance with Section 53B-8a-203, to the Student Prosperity Savings Program created in
384     Section 53B-8a-202.
385          (2) A claimant, estate, or trust may claim a nonrefundable tax credit for a qualified
386     donation.
387          (3) The tax credit equals the product of:
388          (a) the qualified donation; and
389          (b) [5%] the income tax rate.
390          (4) A claimant, estate, or trust may not claim a tax credit under this section with
391     respect to any portion of a qualified donation that a claimant, estate, or trust deducts on a
392     federal income tax return.
393          (5) A claimant, estate, or trust may not carry forward or carry back the portion of the
394     tax credit allowed by this section that exceeds the claimant's, estate's, or trust's tax liability for
395     the taxable year in which the claimant, estate, or trust claims the tax credit.
396          (6) A claimant, estate, or trust may claim a tax credit under this section in addition to
397     the tax credit described in Section 59-10-1017.
398          Section 15. Section 59-10-1022 is amended to read:
399          59-10-1022. Nonrefundable tax credit for capital gain transactions.
400          (1) As used in this section:
401          (a) (i) "Capital gain transaction" means a transaction that results in a:
402          (A) short-term capital gain; or
403          (B) long-term capital gain.
404          (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
405     commission may by rule define the term "transaction."
406          (b) "Commercial domicile" means the principal place from which the trade or business
407     of a Utah small business corporation is directed or managed.
408          (c) "Long-term capital gain" is as defined in Section 1222, Internal Revenue Code.
409          (d) "Qualifying stock" means stock that is:
410          (i) (A) common; or
411          (B) preferred;
412          (ii) as defined by the commission by rule made in accordance with Title 63G, Chapter
413     3, Utah Administrative Rulemaking Act, originally issued to:
414          (A) a claimant, estate, or trust; or
415          (B) a partnership if the claimant, estate, or trust that claims a tax credit under this
416     section:
417          (I) was a partner on the day on which the stock was issued; and
418          (II) remains a partner until the last day of the taxable year for which the claimant,
419     estate, or trust claims a tax credit under this section; and
420          (iii) issued:
421          (A) by a Utah small business corporation;
422          (B) on or after January 1, 2008; and
423          (C) for:
424          (I) money; or
425          (II) other property, except for stock or securities.
426          (e) "Short-term capital gain" is as defined in Section 1222, Internal Revenue Code.
427          (f) (i) "Utah small business corporation" means a corporation that:
428          (A) except as provided in Subsection (1)(f)(ii), is a small business corporation as
429     defined in Section 1244(c)(3), Internal Revenue Code;
430          (B) except as provided in Subsection (1)(f)(iii), meets the requirements of Section
431     1244(c)(1)(C), Internal Revenue Code; and
432          (C) has its commercial domicile in this state.
433          (ii) The dollar amount listed in Section 1244(c)(3)(A) is considered to be $2,500,000.
434          (iii) The phrase "the date the loss on such stock was sustained" in Sections
435     1244(c)(1)(C) and 1244(c)(2), Internal Revenue Code, is considered to be "the last day of the
436     taxable year for which the claimant, estate, or trust claims a tax credit under this section."
437          (2) For taxable years beginning on or after January 1, 2008, a claimant, estate, or trust
438     that meets the requirements of Subsection (3) may claim a nonrefundable tax credit equal to the
439     product of:
440          (a) the total amount of the claimant's, estate's, or trust's short-term capital gain or
441     long-term capital gain on a capital gain transaction that occurs on or after January 1, 2008; and
442          (b) [5%] the income tax rate.
443          (3) For purposes of Subsection (2), a claimant, estate, or trust may claim the
444     nonrefundable tax credit allowed by Subsection (2) if:
445          (a) 70% or more of the gross proceeds of the capital gain transaction are expended:
446          (i) to purchase qualifying stock in a Utah small business corporation; and
447          (ii) within a 12-month period after the day on which the capital gain transaction occurs;
448     and
449          (b) prior to the purchase of the qualifying stock described in Subsection (3)(a)(i), the
450     claimant, estate, or trust did not have an ownership interest in the Utah small business
451     corporation that issued the qualifying stock.
452          (4) A claimant, estate, or trust may not carry forward or carry back a tax credit under
453     this section.
454          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
455     commission may make rules:
456          (a) defining the term "gross proceeds"; and
457          (b) prescribing the circumstances under which a claimant, estate, or trust has an
458     ownership interest in a Utah small business corporation.
459          Section 16. Section 59-10-1023 is amended to read:
460          59-10-1023. Nonrefundable tax credit for amounts paid under a health benefit
461     plan.
462          (1) As used in this section:
463          (a) "Claimant with dependents" means a claimant:
464          (i) regardless of the claimant's filing status for purposes of filing a federal individual
465     income tax return for the taxable year; and
466          (ii) who claims one or more dependents under Section 151, Internal Revenue Code, as
467     allowed on the claimant's federal individual income tax return for the taxable year.
468          (b) "Eligible insured individual" means:
469          (i) the claimant who is insured under a health benefit plan;
470          (ii) the spouse of the claimant described in Subsection (1)(b)(i) if:
471          (A) the claimant files a single return jointly under this chapter with the claimant's
472     spouse for the taxable year; and
473          (B) the spouse is insured under the health benefit plan described in Subsection
474     (1)(b)(i); or
475          (iii) a dependent of the claimant described in Subsection (1)(b)(i) if:
476          (A) the claimant claims the dependent under Section 151, Internal Revenue Code, as
477     allowed on the claimant's federal individual income tax return for the taxable year; and
478          (B) the dependent is insured under the health benefit plan described in Subsection
479     (1)(b)(i).
480          (c) "Excluded expenses" means an amount a claimant pays for insurance offered under
481     a health benefit plan for a taxable year if:
482          (i) the claimant claims a tax credit for that amount under Section 35, Internal Revenue
483     Code:
484          (A) on the claimant's federal individual income tax return for the taxable year; and
485          (B) with respect to an eligible insured individual;
486          (ii) the claimant deducts that amount under Section 162 or 213, Internal Revenue
487     Code:
488          (A) on the claimant's federal individual income tax return for the taxable year; and
489          (B) with respect to an eligible insured individual; or
490          (iii) the claimant excludes that amount from gross income under Section 106 or 125,
491     Internal Revenue Code, with respect to an eligible insured individual.
492          (d) (i) "Health benefit plan" is as defined in Section 31A-1-301.
493          (ii) "Health benefit plan" does not include equivalent self-insurance as defined by the
494     Insurance Department by rule made in accordance with Title 63G, Chapter 3, Utah
495     Administrative Rulemaking Act.
496          (e) "Joint claimant with no dependents" means a husband and wife who:
497          (i) file a single return jointly under this chapter for the taxable year; and
498          (ii) do not claim a dependent under Section 151, Internal Revenue Code, on the
499     husband's and wife's federal individual income tax return for the taxable year.
500          (f) "Single claimant with no dependents" means:
501          (i) a single individual who:
502          (A) files a single federal individual income tax return for the taxable year; and
503          (B) does not claim a dependent under Section 151, Internal Revenue Code, on the
504     single individual's federal individual income tax return for the taxable year;
505          (ii) a head of household:
506          (A) as defined in Section 2(b), Internal Revenue Code, who files a single federal
507     individual income tax return for the taxable year; and
508          (B) who does not claim a dependent under Section 151, Internal Revenue Code, on the
509     head of household's federal individual income tax return for the taxable year; or
510          (iii) a married individual who:
511          (A) does not file a single federal individual income tax return jointly with that married
512     individual's spouse for the taxable year; and
513          (B) does not claim a dependent under Section 151, Internal Revenue Code, on that
514     married individual's federal individual income tax return for the taxable year.
515          (2) Subject to Subsection (3), and except as provided in Subsection (4), for taxable
516     years beginning on or after January 1, 2009, a claimant may claim a nonrefundable tax credit
517     equal to the product of:
518          (a) the difference between:
519          (i) the total amount the claimant pays during the taxable year for:
520          (A) insurance offered under a health benefit plan; and
521          (B) an eligible insured individual; and
522          (ii) excluded expenses; and
523          (b) [5%] the income tax rate.
524          (3) The maximum amount of a tax credit described in Subsection (2) a claimant may
525     claim on a return for a taxable year is:
526          (a) for a single claimant with no dependents, $300;
527          (b) for a joint claimant with no dependents, $600; or
528          (c) for a claimant with dependents, $900.
529          (4) A claimant may not claim a tax credit under this section if the claimant is eligible to
530     participate in insurance offered under a health benefit plan maintained and funded in whole or
531     in part by:
532          (a) the claimant's employer; or
533          (b) another person's employer.
534          (5) A claimant may not carry forward or carry back a tax credit under this section.
535          Section 17. Section 59-10-1028 is amended to read:
536          59-10-1028. Nonrefundable tax credit for capital gain transactions on the
537     exchange of one form of legal tender for another form of legal tender.
538          (1) As used in this section:
539          (a) "Capital gain transaction" means a transaction that results in a:
540          (i) short-term capital gain; or
541          (ii) long-term capital gain.
542          (b) "Long-term capital gain" is as defined in Section 1222, Internal Revenue Code.
543          (c) "Long-term capital loss" is as defined in Section 1222, Internal Revenue Code.
544          (d) "Net capital gain" means the amount by which the sum of long-term capital gains
545     and short-term capital gains on a claimant's, estate's, or trust's transactions from exchanges
546     made for a taxable year of one form of legal tender for another form of legal tender exceeds the
547     sum of long-term capital losses and short-term capital losses on those transactions for that
548     taxable year.
549          (e) "Short-term capital loss" is as defined in Section 1222, Internal Revenue Code.
550          (f) "Short-term capital gain" is as defined in Section 1222, Internal Revenue Code.
551          (2) Except as provided in Section 59-10-1002.2, for taxable years beginning on or after
552     January 1, 2012, a claimant, estate, or trust may claim a nonrefundable tax credit equal to the
553     product of:
554          (a) to the extent a net capital gain is included in taxable income, the amount of the
555     claimant's, estate's, or trust's net capital gain on capital gain transactions from exchanges made
556     on or after January 1, 2012, for a taxable year, of one form of legal tender for another form of
557     legal tender; and
558          (b) [5%] the income tax rate.
559          (3) A claimant, estate, or trust may not carry forward or carry back a tax credit under
560     this section.
561          (4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
562     commission may make rules to implement this section.
563          Section 18. Section 59-10-1035 is amended to read:
564          59-10-1035. Nonrefundable tax credit for contribution to state Achieving a Better
565     Life Experience Program account.
566          (1) As used in this section:
567          (a) "Account" means an account in a qualified ABLE program where the designated
568     beneficiary of the account is a resident of this state.
569          (b) "Contributor" means a claimant, estate, or trust that:
570          (i) makes a contribution to an account; and
571          (ii) receives a statement from the qualified ABLE program itemizing the contribution.
572          (c) "Designated beneficiary" means the same as that term is defined in 26 U.S.C. Sec.
573     529A.
574          (d) "Qualified ABLE program" means the same as that term is defined in Section
575     35A-12-102.
576          (2) A contributor to an account may claim a nonrefundable tax credit as provided in
577     this section.
578          (3) Subject to the other provisions of this section, the tax credit is equal to the product
579     of:
580          (a) [5%] the income tax rate; and
581          (b) the total amount of contributions:
582          (i) the contributor makes for the taxable year; and
583          (ii) for which the contributor receives a statement from the qualified ABLE program
584     itemizing the contributions.
585          (4) A contributor may not claim a tax credit under this section:
586          (a) for an amount of excess contribution to an account that is returned to the
587     contributor; or
588          (b) with respect to an amount the contributor deducts on a federal income tax return.
589          (5) A tax credit under this section may not be carried forward or carried back.
590          Section 19. Section 59-10-1036 is amended to read:
591          59-10-1036. Nonrefundable tax credit for military survivor benefits.
592          (1) As used in this section:
593          (a) "Dependent child" means the same as that term is defined in 10 U.S.C. Sec. 1447.
594          (b) "Reserve components" means the same as that term is described in 10 U.S.C. Sec.
595     10101.
596          (c) "Surviving spouse" means the same as that term is defined in 10 U.S.C. Sec. 1447.
597          (d) "Survivor benefits" means the amount paid by the federal government in
598     accordance with 10 U.S.C. Secs. 1447 through 1455.
599          (2) A surviving spouse or dependent child may claim a nonrefundable tax credit for
600     survivor benefits if the benefits are paid due to:
601          (a) the death of a member of the armed forces or reserve components while on active
602     duty; or
603          (b) the death of a member of the reserve components that results from a
604     service-connected cause while performing inactive duty training.
605          (3) The tax credit described in Subsection (2) is equal to the product of:
606          (a) the amount of survivor benefits that the surviving spouse or dependent child
607     received during the taxable year; and
608          (b) [5%] the income tax rate.
609          (4) The tax credit described in Subsection (2):
610          (a) may not be carried forward or carried back; and
611          (b) applies to a taxable year beginning on or after January 1, 2017.
612          Section 20. Section 59-10-1403.3 is amended to read:
613          59-10-1403.3. Refund of amounts paid or withheld for a pass-through entity.
614          (1) As used in this section:
615          (a) "Committee" means the Revenue and Taxation Interim Committee.
616          (b) "Qualifying excess withholding" means an amount that:
617          (i) is paid or withheld:
618          (A) by a pass-through entity that has a different taxable year than the pass-through
619     entity that requests a refund under this section; and
620          (B) on behalf of the pass-through entity that requests the refund, if the pass-through
621     entity that requests the refund also is a pass-through entity taxpayer; and
622          (ii) is equal to the difference between:
623          (A) the amount paid or withheld for the taxable year on behalf of the pass-through
624     entity that requests the refund; and
625          (B) the product of [5%] the income tax rate and the income, described in Subsection
626     59-10-1403.2(1)(a)(i), of the pass-through entity that requests the refund.
627          (2) For a taxable year ending on or after July 1, 2017, a pass-through entity may claim
628     a refund of qualifying excess withholding, if the amount of the qualifying excess withholding is
629     equal to or greater than $250,000.
630          (3) A pass-through entity that requests a refund of qualifying excess withholding under
631     this section shall:
632          (a) apply to the commission for a refund on or, subject to Subsection (4), after the day
633     on which the pass-through entity files the pass-through entity's income tax return; and
634          (b) provide any information that the commission may require to determine that the
635     pass-through entity is eligible to receive the refund.
636          (4) A pass-through entity shall claim a refund of qualifying excess withholding under
637     this section within 30 days after the earlier of the day on which:
638          (a) the pass-through entity files an income tax return; or
639          (b) the pass-through entity's income tax return is due, including any extension of due
640     date authorized in statute.
641          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
642     commission may make rules establishing the information that a pass-through entity shall
643     provide to the commission to obtain a refund of qualifying excess withholding under this
644     section.
645          (6) (a) On or before November 30, 2018, the committee shall review the $250,000
646     threshold described in Subsection (2) for the purpose of assessing whether the threshold
647     amount should be maintained, increased, or decreased.
648          (b) To assist the committee in conducting the review described in Subsection (6)(a),
649     the commission shall provide the committee with:
650          (i) the total number of refund requests made under this section;
651          (ii) the total costs of any refunds issued under this section;
652          (iii) the costs of any audits conducted on refund requests made under this section; and
653          (iv) an estimation of:
654          (A) the number of refund requests the commission expects to receive if the Legislature
655     increases the threshold;
656          (B) the number of refund requests the commission expects to receive if the Legislature
657     decreases the threshold; and
658          (C) the costs of any audits the commission would conduct if the Legislature increases
659     or decreases the threshold.