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7 LONG TITLE
8 General Description:
9 This bill modifies income tax provisions.
10 Highlighted Provisions:
11 This bill:
12 ▸ modifies the due date for an installment payment of the tax on deferred foreign
13 income;
14 ▸ modifies the payment of the corporate estimated income tax due dates;
15 ▸ modifies the corporate and individual return filing dates, extension dates and
16 periods, and the return and extension requirements;
17 ▸ provides for when interest accrues on a late payment;
18 ▸ adds and modifies definitions;
19 ▸ creates a subtraction from adjusted gross income for certain distributions from a
20 qualified retirement plan; and
21 ▸ provides the circumstances under which the State Tax Commission shall extend the
22 time to pay an income tax for the 2019 taxable year.
23 Money Appropriated in this Bill:
24 None
25 Other Special Clauses:
26 This bill provides a special effective date.
27 This bill provides retrospective operation.
28 Utah Code Sections Affected:
29 ENACTS:
30 59-7-118.1, Utah Code Annotated 1953
31 59-7-504.1, Utah Code Annotated 1953
32 59-7-505.1, Utah Code Annotated 1953
33 59-7-507.1, Utah Code Annotated 1953
34 59-10-103.2, Utah Code Annotated 1953
35 59-10-114.1, Utah Code Annotated 1953
36 59-10-514.2, Utah Code Annotated 1953
37 59-10-516.1, Utah Code Annotated 1953
38 59-10-522.1, Utah Code Annotated 1953
39 59-10-1403.4, Utah Code Annotated 1953
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41 Be it enacted by the Legislature of the state of Utah:
42 Section 1. Section 59-7-118.1 is enacted to read:
43 59-7-118.1. Modification of installment due date for deferred foreign income tax.
44 (1) The Legislature intends that:
45 (a) Subsection (2) replace Subsection 59-7-118(3)(b); and
46 (b) the remaining subsections of Section 59-7-118 apply as written.
47 (2) A corporation shall make:
48 (a) the first installment of a tax described in Section 59-7-118 on or before the due date
49 of the tax return filed under this chapter for the first taxable year in which the corporation
50 reports deferred foreign income described in Section 965, Internal Revenue Code; and
51 (b) a subsequent installment of a tax described in Section 59-7-118 on or before the
52 due date of the tax return filed under this chapter in each of the following seven years.
53 (3) This section supersedes any conflicting provisions of Utah law.
54 Section 2. Section 59-7-504.1 is enacted to read:
55 59-7-504.1. Modification of estimated payment due date.
56 (1) The Legislature intends that:
57 (a) Subsection (2) replace Subsection 59-7-504(1);
58 (b) Subsection (3) replace Subsection 59-7-504(2); and
59 (c) the remaining subsections of Section 59-7-504 apply as written.
60 (2) Except as provided in Subsection (3), a corporation subject to taxation under this
61 chapter that has a tax liability of $3,000 or more in either the current taxable year or the
62 previous taxable year shall make a payment of an estimated tax on or before the day on which
63 the corporation is required to make a payment of an estimated tax for the same time period to
64 the federal government.
65 (3) The provisions of Section 6655, Internal Revenue Code, shall govern the payment
66 described in Subsection (2), except that:
67 (a) for the first year that a corporation is required to file a return in Utah, the
68 corporation is not subject to Subsection (2) if the corporation makes a payment on or before the
69 due date of the return, without extensions, equal to or greater than the minimum tax required
70 under Section 59-7-104 or 59-7-201;
71 (b) the applicable percentage of the required annual payment, as defined in Section
72 6655, Internal Revenue Code, for annualized income installments, adjusted seasonal
73 installments, and those estimated tax payments based on the current year tax liability shall be:
| 74 | Installment | Percentage | |
| 75 | 1st | 22.5 | |
| 76 | 2nd | 45.0 | |
| 77 | 3rd | 67.5 | |
| 78 | 4th | 90.0 |
80 section and Section 59-7-504;
81 (d) if a taxpayer elects a different annualization period than the one used for federal
82 purposes, the taxpayer shall make an election with the commission at the same time as
83 provided under Section 6655, Internal Revenue Code; and
84 (e) the due date shall be superseded by the due date for federal estimated payments if
85 modified by other federal action.
86 (4) This section supersedes any conflicting provisions of Utah law.
87 Section 3. Section 59-7-505.1 is enacted to read:
88 59-7-505.1. Modification of return due date and extension period.
89 (1) The Legislature intends that:
90 (a) Subsection (2) replace Subsection 59-7-505(2);
91 (b) Subsection (3) replace Subsection 59-7-505(3); and
92 (c) the remaining subsections of Section 59-7-505 apply as written.
93 (2) (a) A corporation shall make a return on or before the later of:
94 (i) the 15th day of the fourth month following the close of the taxable year; or
95 (ii) the day on which a corporation required to make a return under this chapter is
96 required to file a federal income tax return.
97 (b) Interest accrues from the day on which a return is due under this Subsection (2).
98 (3) (a) The commission shall allow a taxpayer an extension of the time for filing a
99 return.
100 (b) Except as provided in Subsection (3)(c), the extension described in Subsection
101 (3)(a) may be for up to six months.
102 (c) For a taxable year beginning on or after January 1, 2019, but beginning on or before
103 December 31, 2019, a taxpayer may receive an extension described in Subsection (3)(a) for the
104 time period that ends on the last day of the extension to file the taxpayer's federal income tax
105 return.
106 (4) This section supersedes any conflicting provisions of Utah law.
107 Section 4. Section 59-7-507.1 is enacted to read:
108 59-7-507.1. Modification of time for payment of tax.
109 (1) The Legislature intends that:
110 (a) Subsection (2) replace Subsection 59-7-507(1)(a);
111 (b) (i) Subsection (3)(a) replace Subsection 59-7-507(1)(b); and
112 (ii) Subsection (3)(b) replace Subsection 59-7-507(1)(c);
113 (c) Subsection (4) replace Subsection 59-7-507(2)(a) for a taxable year beginning on or
114 after January 1, 2019, but beginning on or before December 31, 2019; and
115 (d) the remaining subsections of Section 59-7-507 apply as written.
116 (2) If an estimated payment is not made as provided in Section 59-7-504.1, the amount
117 of the tax imposed by this chapter shall be paid no later than the due date of the return
118 described in Subsection 59-7-505.1(2).
119 (3) (a) If a taxpayer needs an extension of time to file a return, as provided in Section
120 59-7-505.1 or 59-7-803, a taxpayer shall pay, no later than the due date of the return described
121 in Subsection 59-7-505.1(2), an amount equal to the lesser of:
122 (i) the greater of:
123 (A) 90% of the total tax reported on the return for the current taxable year; or
124 (B) 100% of the minimum tax described in Section 59-7-104; or
125 (ii) 100% of the total tax liability for the taxable year immediately preceding the
126 current taxable year.
127 (b) If payment is not made as provided in Subsection (3)(a), the commission shall add
128 an extension penalty as provided in Section 59-1-401, until the tax is paid during the period of
129 extension.
130 (4) A taxpayer shall receive an extension of the time for the payment of the amount
131 determined as the tax of the taxpayer, or any part of that amount, for the time period that ends
132 on the last day of the extension to pay the taxpayer's federal income tax.
133 (5) This section supersedes any conflicting provisions of Utah law.
134 Section 5. Section 59-10-103.2 is enacted to read:
135 59-10-103.2. Additional chapter definitions.
136 (1) The Legislature intends:
137 (a) that the definitions in Subsections (2) and (3) supplement the definitions in Section
138 59-10-103;
139 (b) the definition in Subsection (4) replace the definition of "taxpayer" in Section
140 59-10-103; and
141 (c) the remaining subsections of Section 59-10-103 apply as written.
142 (2) "Pass-through entity" means the same as that term is defined in Section
143 59-10-1402.
144 (3) "Pass-through entity taxpayer" means the same as that term is defined in Section
145 59-10-1402.
146 (4) "Taxpayer" means any of the following that has income subject in whole or in part
147 to the tax imposed by this chapter:
148 (a) an individual;
149 (b) an estate, a trust, or a beneficiary of an estate or a trust that is not a pass-through
150 entity or a pass-through entity taxpayer;
151 (c) a pass-through entity; or
152 (d) a pass-through entity taxpayer.
153 (5) This section supersedes any conflicting provisions of Utah law.
154 Section 6. Section 59-10-114.1 is enacted to read:
155 59-10-114.1. Additional subtraction from income.
156 (1) The Legislature intends that the subtraction described in Subsection (2) be in
157 addition to the subtractions described in Section 59-10-114.
158 (2) There shall be subtracted from adjusted gross income of a resident or nonresident
159 individual an amount of a distribution from a qualified retirement plan under Section 401(a),
160 Internal Revenue Code, if:
161 (a) the amount of the distribution is included in adjusted gross income on the resident
162 or nonresident individual's federal individual income tax return for the taxable year; and
163 (b) for the taxable year when the amount of the distribution was contributed to the
164 qualified retirement plan, the amount of the distribution:
165 (i) was not included in adjusted gross income on the resident or nonresident
166 individual's federal individual income tax return for the taxable year; and
167 (ii) was taxed by another state of the United States, the District of Columbia, or a
168 possession of the United States.
169 (3) This section supersedes any conflicting provisions of Utah law.
170 Section 7. Section 59-10-514.2 is enacted to read:
171 59-10-514.2. Modification of return due date.
172 (1) The Legislature intends that:
173 (a) Subsection (2) replace Subsection 59-10-514(1); and
174 (b) the remaining subsections of Section 59-10-514 apply as written.
175 (2) (a) Subject to Subsection 59-10-514(3) and Section 59-10-518:
176 (i) an individual income tax return filed for a tax imposed in accordance with Part 1,
177 Determination and Reporting of Tax Liability and Information, shall be filed with the
178 commission on or before the day on which a federal individual income tax return is due;
179 (ii) a fiduciary income tax return filed for a tax imposed in accordance with Part 2,
180 Trusts and Estates, shall be filed with the commission on or before the day on which a federal
181 return for estates and trusts is due; and
182 (iii) a return filed in accordance with Section 59-10-507 shall be filed with the
183 commission on or before the later of:
184 (A) the 15th day of the fourth month following the last day of the taxpayer's taxable
185 year; or
186 (B) the day on which the taxpayer is required to file a federal income tax return.
187 (b) Interest accrues from the day on which a return is due under this Subsection (2).
188 (3) This section supersedes any conflicting provisions of Utah law.
189 Section 8. Section 59-10-516.1 is enacted to read:
190 59-10-516.1. Modification of extension dates.
191 (1) The Legislature intends that:
192 (a) Subsection (2) replace Subsection 59-10-516(1);
193 (b) Subsections (3) and (4) replace Subsection 59-10-516(2); and
194 (c) the remaining subsections of Section 59-10-516 apply as written.
195 (2) (a) The commission shall allow a taxpayer an extension of the time for filing a
196 return.
197 (b) Except as provided in Subsection (2)(c):
198 (i) for a return filed by a taxpayer other than a partnership, the extension described in
199 Subsection (2)(a) may be for up to six months; and
200 (ii) for a return filed by a taxpayer that is a partnership, the extension described in
201 Subsection (2)(a) may be for up to five months.
202 (c) For a taxable year beginning on or after January 1, 2019, but beginning on or before
203 December 31, 2019, a taxpayer may receive an extension described in Subsection (2)(a) for the
204 time period that ends on the last day of the extension to file the taxpayer's federal income tax
205 return.
206 (3) Except as provided in Subsection (4), the commission may not impose a penalty
207 under Section 59-1-401 on:
208 (a) a pass-through entity during the extension period described under Subsection (2) if
209 the pass-through entity, on or before the return due date, pays or withholds the tax on behalf of
210 a pass-through entity taxpayer; or
211 (b) a taxpayer other than a taxpayer described in Subsection (3)(a) during the extension
212 period described in Subsection (2) if the taxpayer pays, on or before the return due date
213 described in Section 59-10-514.2, an amount equal to the lesser of:
214 (i) 90% of the total tax reported on the return for the current taxable year; or
215 (ii) 100% of the total tax liability for the taxable year immediately preceding the
216 current taxable year.
217 (4) If a taxpayer fails to meet the requirements of Subsection (3), the commission may
218 apply to the total balance due a penalty as provided in Section 59-1-401.
219 (5) This section supersedes any conflicting provisions of Utah law.
220 Section 9. Section 59-10-522.1 is enacted to read:
221 59-10-522.1. Limitation on commission authority to extend the time for payment
222 of tax.
223 (1) The Legislature intends that Subsection (2) replace Subsection 59-10-522(1) for a
224 taxable year beginning on or after January 1, 2019, but beginning on or before December 31,
225 2019.
226 (2) A taxpayer shall receive an extension of the time for the payment of the amount
227 determined as the tax of the taxpayer, or any part of that amount, for the time period that ends
228 on the last day of the extension to pay the taxpayer's federal income tax.
229 (3) This section supersedes any conflicting provisions of Utah law.
230 Section 10. Section 59-10-1403.4 is enacted to read:
231 59-10-1403.4. Modification of return filing requirements for pass-through entity.
232 (1) The Legislature intends that:
233 (a) Subsection (2) replace Subsection 59-10-1403(3); and
234 (b) the remaining subsections of Section 59-10-1403 apply as written.
235 (2) A pass-through entity is subject to the return filing requirements of Sections
236 59-10-507, 59-10-514, 59-10-514.2, 59-10-516, and 59-10-516.1.
237 (3) This section supersedes any conflicting provisions of Utah law.
238 Section 11. Effective date.
239 If approved by two-thirds of all the members elected to each house, this bill takes effect
240 upon approval by the governor, or the day following the constitutional time limit of Utah
241 Constitution, Article VII, Section 8, without the governor's signature, or in the case of a veto,
242 the date of veto override.
243 Section 12. Retrospective operation.
244 (1) Except as provided in Subsections (2) and (3), this bill has retrospective operation
245 for a taxable year beginning on or after January 1, 2019.
246 (2) The changes to Section 59-10-114.1 have retrospective operation for a taxable year
247 beginning on or after January 1, 2020.
248 (3) The changes to Section 59-7-118.1 have retrospective operation for:
249 (a) the last taxable year of a taxpayer beginning on or before December 31, 2017; and
250 (b) a taxable year beginning on or after January 1, 2018.