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7 LONG TITLE
8 General Description:
9 This bill modifies provisions relating to tax refunds.
10 Highlighted Provisions:
11 This bill:
12 ▸ limits the total amount of interest that may accrue each year on a tax overpayment,
13 with certain exceptions; and
14 ▸ makes technical and conforming changes.
15 Money Appropriated in this Bill:
16 None
17 Other Special Clauses:
18 This bill provides a special effective date.
19 Utah Code Sections Affected:
20 AMENDS:
21 59-1-402, as last amended by Laws of Utah 2020, Chapter 294
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23 Be it enacted by the Legislature of the state of Utah:
24 Section 1. Section 59-1-402 is amended to read:
25 59-1-402. Definitions -- Interest.
26 (1) As used in this section:
27 (a) "Final judicial decision" means a final ruling by a court of this state or the United
28 States for which the time for any further review or proceeding has expired.
29 (b) "Retroactive application of a judicial decision" means the application of a final
30 judicial decision that:
31 (i) invalidates a state or federal taxation statute; and
32 (ii) requires the state to provide a refund for an overpayment that was made:
33 (A) prior to the final judicial decision; or
34 (B) during the 180-day period after the final judicial decision.
35 (c) (i) Except as provided in Subsection (1)(c)(ii), "tax, fee, or charge" means:
36 (A) a tax, fee, or charge the commission administers under:
37 (I) this title;
38 (II) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
39 (III) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
40 (IV) Section 19-6-410.5;
41 (V) Section 19-6-714;
42 (VI) Section 19-6-805;
43 (VII) Section 34A-2-202;
44 (VIII) Section 40-6-14; or
45 (IX) Title 69, Chapter 2, Part 4, Prepaid Wireless Telecommunications Service
46 Charges; or
47 (B) another amount that by statute is subject to interest imposed under this section.
48 (ii) "Tax, fee, or charge" does not include a tax, fee, or charge imposed under:
49 (A) Title 41, Chapter 1a, Motor Vehicle Act, except for Section 41-1a-301;
50 (B) Title 41, Chapter 3, Motor Vehicle Business Regulation Act;
51 (C) Chapter 2, Property Tax Act, except for Section 59-2-1309;
52 (D) Chapter 3, Tax Equivalent Property Act;
53 (E) Chapter 4, Privilege Tax; or
54 (F) Chapter 13, Part 5, Interstate Agreements.
55 (2) Except as otherwise provided for by law, the interest rate for a calendar year for a
56 tax, fee, or charge administered by the commission shall be calculated based on the federal
57 short-term rate determined by the Secretary of the Treasury under Section 6621, Internal
58 Revenue Code, in effect for the preceding fourth calendar quarter.
59 (3) The interest rate calculation shall be as follows:
60 (a) except as provided in Subsection (7), in the case of an overpayment or refund,
61 simple interest shall be calculated at the rate of two percentage points above the federal
62 short-term rate; or
63 (b) in the case of an underpayment, deficiency, or delinquency, simple interest shall be
64 calculated at the rate of two percentage points above the federal short-term rate.
65 (4) Notwithstanding Subsection (2) or (3), the interest rate applicable to certain
66 installment sales for purposes of a tax under Chapter 7, Corporate Franchise and Income Taxes,
67 shall be determined in accordance with Section 453A, Internal Revenue Code, as provided in
68 Section 59-7-112.
69 (5) (a) Except as provided in Subsection (5)(c), interest may not be allowed on an
70 overpayment of a tax, fee, or charge if the overpayment of the tax, fee, or charge is refunded
71 within:
72 (i) 45 days after the last date prescribed for filing the return with respect to a tax under
73 Chapter 7, Corporate Franchise and Income Taxes, or Chapter 10, Individual Income Tax Act,
74 if the return is filed electronically; or
75 (ii) 90 days after the last date prescribed for filing the return:
76 (A) with respect to a tax, fee, or charge, except for a tax under Chapter 7, Corporate
77 Franchise and Income Taxes, or Chapter 10, Individual Income Tax Act; or
78 (B) if the return is not filed electronically.
79 (b) Except as provided in Subsection (5)(c), if the return is filed after the last date
80 prescribed for filing the return, interest may not be allowed on the overpayment if the
81 overpayment is refunded within:
82 (i) 45 days after the date the return is filed:
83 (A) with respect to a tax under Chapter 7, Corporate Franchise and Income Taxes, or
84 Chapter 10, Individual Income Tax Act; and
85 (B) if the return is filed electronically; or
86 (ii) 90 days after the date the return is filed:
87 (A) with respect to a tax, fee, or charge, except for a tax under Chapter 7, Corporate
88 Franchise and Income Taxes, or Chapter 10, Individual Income Tax Act; or
89 (B) if the return is not filed electronically.
90 (c) (i) [
91 an overpayment [
92 [
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96 filing the original return; and
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101 (ii) For an amended return filed electronically with respect to a tax under Chapter 7,
102 Corporate Franchise and Income Taxes, or Chapter 10, Individual Income Tax Act, [
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104 a refund of the overpayment within a 45-day period after the date the commission receives the
105 amended return, for a time period:
106 [
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108 completes processing the refund of the overpayment[
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112 respect to any tax, fee, or charge not described in Subsection (5)(c)(ii), interest on an
113 overpayment is allowed if the commission does not process a refund of the overpayment within
114 a 90-day period after the date the commission receives the amended return, for a time period:
115 [
116 [
117 completes processing the refund of the overpayment.
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121 (d) (i) This Subsection (5)(d) applies to interest on an overpayment under Subsection
122 (5)(c)(i) in which:
123 (A) the amount of interest accruing on the overpayment on or after January 1, 2025,
124 exceeds $200 in any calendar year during the time period described in Subsection (5)(c)(i); and
125 (B) the amount of the overpayment exceeds 30% of the taxpayer's total tax liability as
126 originally reported for the tax, fee, or charge to which the overpayment applies during the time
127 period described in Subsection (5)(c)(i).
128 (ii) This Subsection (5)(d) does not apply to:
129 (A) an overpayment provided to a federally-recognized tribe; or
130 (B) an overpayment resulting from commission error.
131 (iii) The annual interest rate imposed on an overpayment described in Subsection
132 (5)(d)(i) shall be calculated at the rate of two percentage points below the federal short-term
133 rate.
134 (iv) Notwithstanding Subsection (5)(d)(iii), for an overpayment described in
135 Subsection (5)(d)(i):
136 (A) the interest rate imposed on the overpayment shall be a rate of no less than 0% and
137 no more than 3%; and
138 (B) the amount of interest accruing in a calendar year for an overpayment may not be
139 less than $200, unless the amount of interest that would have accrued during the calendar year
140 is less than $200 when calculated using the interest rate described in Subsection (3).
141 (6) Interest on any underpayment, deficiency, or delinquency of a tax, fee, or charge
142 shall be computed from the time the original return is due, excluding any filing or payment
143 extensions, to the date the payment is received.
144 (7) Interest on a refund relating to a tax, fee, or charge may not be paid on any
145 overpayment that arises from a statute that is determined to be invalid under state or federal
146 law or declared unconstitutional under the constitution of the United States or Utah if the basis
147 for the refund is the retroactive application of a judicial decision upholding the claim of
148 unconstitutionality or the invalidation of a statute.
149 Section 2. Effective date.
150 This bill takes effect on January 1, 2025.