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7 LONG TITLE
8 General Description:
9 This bill modifies the income tax rates.
10 Highlighted Provisions:
11 This bill:
12 ▸ decreases the corporate franchise and income tax rates and the individual income
13 tax rates for the 2021 and 2022 tax years; and
14 ▸ makes the tax rate decrease permanent if revenue in the General Fund and
15 Education Fund exceeds a certain amount at the close of fiscal year 2021-22.
16 Money Appropriated in this Bill:
17 None
18 Other Special Clauses:
19 This bill provides retrospective operation.
20 Utah Code Sections Affected:
21 AMENDS:
22 59-7-104, as last amended by Laws of Utah 2020, Chapter 354
23 59-7-201, as last amended by Laws of Utah 2018, Chapter 456
24 59-10-104, as last amended by Laws of Utah 2018, Chapter 456
25 ENACTS:
26 63A-3-112, Utah Code Annotated 1953
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28 Be it enacted by the Legislature of the state of Utah:
29 Section 1. Section 59-7-104 is amended to read:
30 59-7-104. Tax -- Minimum tax.
31 (1) Each domestic and foreign corporation, except a corporation that is exempt under
32 Section 59-7-102, shall pay an annual tax to the state based on the corporation's Utah taxable
33 income for the taxable year for the privilege of exercising the corporation's corporate franchise
34 or for the privilege of doing business in the state.
35 (2) (a) The tax shall be [
36 amount calculated by multiplying a corporation's Utah taxable income by:
37 (i) for a taxable year beginning on or after January 1, 2021, and beginning on or before
38 December 31, 2022, 4.75%; and
39 (ii) for a taxable year beginning on or after January 1, 2023:
40 (A) if the Division of Finance makes the determination described in Subsection
41 63A-3-112(1)(a), 4.75%; or
42 (B) if the Division of Finance makes the determination described in Subsection
43 63A-3-112(1)(b), 4.95%.
44 (b) Upon receiving the notification described in Section 63A-3-112, the commission
45 shall:
46 (i) post, in a conspicuous location on the commission's website, the income tax rate
47 under this section for a taxable year beginning on or after January 1, 2023; and
48 (ii) notify the Revenue and Taxation Interim Committee electronically of the income
49 tax rate under this section for a taxable year beginning on or after January 1, 2023.
50 (3) The minimum tax a corporation shall pay under this chapter is $100.
51 Section 2. Section 59-7-201 is amended to read:
52 59-7-201. Tax -- Minimum tax.
53 (1) There is imposed upon each corporation, except a corporation that is exempt under
54 Section 59-7-102, a tax upon the corporation's Utah taxable income for the taxable year that is
55 derived from sources within this state other than income for any period that the corporation is
56 required to include in the corporation's tax base under Section 59-7-104.
57 (2) (a) The tax imposed by Subsection (1) shall be [
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59 income by:
60 (i) for a taxable year beginning on or after January 1, 2021, and beginning on or before
61 December 31, 2022, 4.75%; and
62 (ii) for a taxable year beginning on or after January 1, 2023:
63 (A) if the Division of Finance makes the determination described in Subsection
64 63A-3-112(1)(a), 4.75%; or
65 (B) if the Division of Finance makes the determination described in Subsection
66 63A-3-112(1)(b), 4.95%.
67 (b) Upon receiving the notification described in Section 63A-3-112, the commission
68 shall:
69 (i) post, in a conspicuous location on the commission's website, the income tax rate
70 under this section for a taxable year beginning on or after January 1, 2023; and
71 (ii) notify the Revenue and Taxation Interim Committee electronically of the income
72 tax rate under this section for a taxable year beginning on or after January 1, 2023.
73 (3) In no case shall the tax be less than $100.
74 Section 3. Section 59-10-104 is amended to read:
75 59-10-104. Tax basis -- Tax rate -- Exemption.
76 (1) A tax is imposed on the state taxable income of a resident individual as provided in
77 this section.
78 (2) For purposes of Subsection (1), for a taxable year, the tax is an amount equal to the
79 product of:
80 (a) the resident individual's state taxable income for that taxable year; and
81 [
82 (b) (i) for a taxable year beginning on or after January 1, 2021, and beginning on or
83 before December 31, 2022, 4.75%; and
84 (ii) for a taxable year beginning on or after January 1, 2023:
85 (A) if the Division of Finance makes the determination described in Subsection
86 63A-3-112(1)(a), 4.75%; or
87 (B) if the Division of Finance makes the determination described in Subsection
88 63A-3-112(1)(b), 4.95%.
89 (3) Upon receiving the notification described in Section 63A-3-112, the commission
90 shall:
91 (a) post, in a conspicuous location on the commission's website, the income tax rate
92 under this section and Section 59-10-201 for a taxable year beginning on or after January 1,
93 2023; and
94 (b) notify the Revenue and Taxation Interim Committee electronically of the income
95 tax rate under this section and Section 59-10-201 for a taxable year beginning on or after
96 January 1, 2023.
97 [
98 under Section 59-10-104.1.
99 Section 4. Section 63A-3-112 is enacted to read:
100 63A-3-112. Certification of revenue -- Notice to State Tax Commission.
101 (1) On or before October 31, 2022, the Division of Finance shall determine whether the
102 certified revenue in the General Fund and the Education Fund combined at the close of fiscal
103 year 2021-22:
104 (a) is $8,765,000,000 or more; or
105 (b) is less than $8,765,000,000.
106 (2) On or before November 1, 2022, the Division of Finance shall notify the State Tax
107 Commission of the division's determination under Subsection (1).
108 Section 5. Retrospective operation.
109 This bill has retrospective operation for a taxable year beginning on or after January 1,
110 2021.