SB 116 — Income Tax Rate Modifications

-(2) 4On -or 01-28before 11:37November 1st1, Sub.the commission shall publish the income tax rate for the taxable year beginning on or after the next January 1.

(Green) S.B.

116 (2) On or before November 1, the commission shall publish the income tax rate for the taxable year beginning on or after the next January 1.

59-6-10259-6-102. .

[(1) Except as provided in Subsection (2), each producer shall deduct and withhold from each payment being made to any person in respect to production of minerals in this state, but not including that to - 5 - SB0116 compared with SB0116S01 which the producer is entitled, an amount equal to 5% of the amount which would have otherwise been payable to the person entitled to the payment.] (1) Except as provided in Subsection (2), each producer shall deduct and withhold from each payment being made to any person in respect to production of minerals in this state, but not including the payment to which the producer is entitled, an amount equal to the income tax rate multiplied by the amount payable to the person entitled to the payment.

59-7-10459-7-104. .

-[(2) 5The -tax 1stshall Sub.be 4.5% of a corporation's Utah taxable income.] (3) The minimum tax a corporation shall pay under this chapter is $100.

(Green) S.B.

116 01-28 11:37 [(2) The tax shall be 4.5% of a corporation's Utah taxable income.] (3) The minimum tax a corporation shall pay under this chapter is $100.

59-7-20159-7-201. .

(1) There is imposed upon each corporation, except a corporation that is exempt under Section 59-7-102, a tax upon the corporation's Utah taxable income for the taxable year that is derived from - 6 - SB0116 compared with SB0116S01 sources within this state other than income for any period that the corporation is required to include in the corporation's tax base under Section 59-7-104.

59-7-61059-7-610. .

(2)(a)(2) (a) To claim a tax credit described in Subsection (1), the taxpayer shall receive from the Department of Environmental Quality a written certification, on a form [approved by ]the commission approves, that includes:

-(i) 6a -statement 01-28that 11:37the 1sttaxpayer Sub.is operating a business within the boundaries of a recycling market development zone;

(Green) S.B.

116 (i) a statement that the taxpayer is operating a business within the boundaries of a recycling market development zone;

- 7 - SB0116 compared with SB0116S01 (B) the date that the taxpayer purchased the machinery and equipment;

(b)(i)(b) (i) The Department of Environmental Quality shall provide a taxpayer seeking to claim a tax credit under Subsection (1) with a copy of the written certification.

- 78 - 1stSB0116 Sub.compared with SB0116S01 (4) The commission shall make rules governing what information a taxpayer shall file with the commission to verify the entitlement to and amount of a tax credit.

(Green) S.B.

116 01-28 11:37 (4) The commission shall make rules governing what information a taxpayer shall file with the commission to verify the entitlement to and amount of a tax credit.

59-7-70159-7-701. .

- 89 - 01-28SB0116 11:37compared 1stwith Sub.SB0116S01 Section 9.

(Green) S.B.

116 Section 9.

59-7-80259-7-802. .

59-10-10459-10-104. .

59-10-11659-10-116. .

59-10-20159-10-201. .

(1) Except as provided in Subsection (2), a tax [determined in accordance with the rate prescribed by Subsection 59-10-104(2)(b) ]is imposed for each taxable year on [the state taxable income of ]each resident estate or trust in the amount equal to the income tax -rate 9multiplied -by 1stthe Sub.resident estate's or trust's state taxable income.

(Green)- S.B.10 - SB0116 compared with SB0116S01 (2) The following are not subject to a tax imposed by this part:

116 01-28 11:37 rate multiplied by the resident estate's or trust's state taxable income.

(2) The following are not subject to a tax imposed by this part:

59-10-20559-10-205. .

59-10-100759-10-1007. .

or - 1011 - 01-28SB0116 11:37compared 1stwith Sub.SB0116S01 (B) reduce or reuse postconsumer waste material;

(Green) S.B.

116 (B) reduce or reuse postconsumer waste material;

(2)(a)(2) (a) To claim a tax credit described in Subsection (1), the claimant, estate, or trust shall receive from the Department of Environmental Quality a written certification, on a form [approved by ]the commission approves, that includes:

(b)(i)(b) - 12 - SB0116 compared with SB0116S01 (i) The Department of Environmental Quality shall provide a claimant, estate, or trust seeking to claim a tax credit under Subsection (1) with a copy of the written certification.

-(ii) 11The -claimant, 1stestate, Sub.or trust shall retain a copy of the written certification for the same period of time that a person is required to keep books and records under Section 59-1-1406.

(Green) S.B.

116 01-28 11:37 (ii) The claimant, estate, or trust shall retain a copy of the written certification for the same period of time that a person is required to keep books and records under Section 59-1-1406.

(6) A claimant, estate, or trust may not claim or carry forward a tax credit described in Subsection (1)(a)(1) (a) in a taxable year during which the claimant, estate, or trust claims or carries forward a tax credit under Section 63N-2-213.

59-10-101759-10-1017. .

- 13 - SB0116 compared with SB0116S01 (c) "Higher education costs" means the same as that term is defined in Section -53H-10-201. 12 - 01-28 11:37 1st Sub.

(Green) S.B.

116 53H-10-201.

-(3) 13A -claimant, 1stestate, Sub.or trust, or a person other than the claimant, estate, or trust, may make a qualified investment described in Subsection (2).

(Green)- S.B.14 - SB0116 compared with SB0116S01 (4) A claimant, estate, or trust that is an account owner may not claim a tax credit under this section with respect to any portion of a qualified investment described in Subsection (2) that a claimant, estate, trust, or person described in Subsection (3) deducts on a federal income tax return.

116 01-28 11:37 (3) A claimant, estate, or trust, or a person other than the claimant, estate, or trust, may make a qualified investment described in Subsection (2).

(4) A claimant, estate, or trust that is an account owner may not claim a tax credit under this section with respect to any portion of a qualified investment described in Subsection (2) that a claimant, estate, trust, or person described in Subsection (3) deducts on a federal income tax return.

59-10-102259-10-1022. .

(a)[(i)](a) [(i)] "Capital gain transaction" means a transaction that results in a:

(i)(A)(i) (A) common;

and - 15 - SB0116 compared with SB0116S01 (iii) issued:

-(A) 14by -a 01-28Utah 11:37small 1stbusiness Sub.corporation;

(Green) S.B.

116 (A) by a Utah small business corporation;

(f)(i)(f) (i) "Utah small business corporation" means a corporation that:

(iii) The phrase "the date the loss on such stock was sustained" in Sections 1244(c)(1)(C) and 1244(c)(2),1244(c) (2), Internal Revenue Code, is considered to be "the last day of the taxable year for which the claimant, estate, or trust claims a tax credit under this section." (2) [For taxable years beginning on or after January 1, 2008, a] A claimant, estate, or trust that meets the requirements of Subsection (3) may claim a nonrefundable tax credit equal to the product of:

and - 16 - SB0116 compared with SB0116S01 (b) [prior to] before the purchase of the qualifying stock described in Subsection (3)(a)(i), -the 15claimant, -estate, 1stor Sub.trust did not have an ownership interest in the Utah small business corporation that issued the qualifying stock.

(Green) S.B.

116 01-28 11:37 the claimant, estate, or trust did not have an ownership interest in the Utah small business corporation that issued the qualifying stock.

59-10-102359-10-1023. .

and (B) the dependent is insured under the health benefit plan described in Subsection -(1)(b)(i). 16 - 01-28 11:37 1st Sub.

(Green)- S.B.17 - SB0116 compared with SB0116S01 (c) "Excluded expenses" means an amount a claimant pays for insurance offered under a health benefit plan for a taxable year if:

116 (1)(b)(i).

(c) "Excluded expenses" means an amount a claimant pays for insurance offered under a health benefit plan for a taxable year if:

(d)(i)(d) (i) "Health benefit plan" [is as] means the same as that term is defined in Section 31A-1-301.

and (ii) do not claim a dependent under Section 151, Internal Revenue Code, on the [[husband's husband's and wife's] spouses' federal individual income tax return for the taxable year.

or -(iii) 17a -married 1stindividual Sub.who:

(Green)- S.B.18 - SB0116 compared with SB0116S01 (A) does not file a single federal individual income tax return jointly with that married individual's spouse for the taxable year;

116 01-28 11:37 (iii) a married individual who:

(A) does not file a single federal individual income tax return jointly with that married individual's spouse for the taxable year;

59-10-102859-10-1028. .

- 19 - SB0116 compared with SB0116S01 (b) "Long-term capital gain" [is as] means the same as that term is defined in Section -1222, 18Internal -Revenue 01-28Code. 11:37 1st Sub.

(Green) S.B.

116 1222, Internal Revenue Code.

[(e) {[} "Short-term capital loss" is as defined in Section 1222, Internal Revenue Code.] [(f)] (e) "Short-term capital gain" [is as] means the same as that term is defined in Section 1222, Internal Revenue Code.

(f)(g){(f)} "Short-term capital loss" means the same as that term is defined in Section 1222, Internal Revenue Code.

59-10-103559-10-1035. .

and - 1920 - 1stSB0116 Sub.compared with SB0116S01 (ii) receives a statement from the qualified ABLE program itemizing the contribution.

(Green) S.B.

116 01-28 11:37 (ii) receives a statement from the qualified ABLE program itemizing the contribution.

59-10-103659-10-1036. .

or (b) the death of a member of the reserve components that results from a -service-connected 20cause -while 01-28performing 11:37inactive 1stduty Sub.training.

(Green) S.B.

116 service-connected cause while performing inactive duty training.

- 21 - SB0116 compared with SB0116S01 (a) the amount of survivor benefits that the surviving spouse or dependent child received during the taxable year;

59-10-104259-10-1042. .

(2) Except as provided in Section 59-10-1002.2 and Subsections (3) and (4), each claimant -on 21a -return 1stthat Sub.receives a social security benefit may claim a nonrefundable tax credit against taxes otherwise due under this part equal to the product of:

(Green)- S.B.22 - SB0116 compared with SB0116S01 [(a) the percentage listed in Subsection 59-10-104(2);

116 01-28 11:37 on a return that receives a social security benefit may claim a nonrefundable tax credit against taxes otherwise due under this part equal to the product of:

[(a) the percentage listed in Subsection 59-10-104(2);

59-10-104359-10-1043. .

(a)(i)(a) (i) "Military retirement pay" means retirement pay, including survivor benefits, that relates to service in the armed forces or the reserve components, as described in 10 U.S.C.

(A) [Social[Social{] social} {[} Security] social security income;

(b) "Survivor benefits" means the retired pay portion of the benefits described in 10 -U.S.C. 22 - 01-28 11:37 1st Sub.

(Green) S.B.

116 U.S.C.

- 23 - SB0116 compared with SB0116S01 (2) Except as provided in Section 59-10-1002.2, a claimant who receives military retirement pay may claim a nonrefundable tax credit against taxes equal to the product of:

59-10-1403.259-10-1403.2. .

Pass-through entity payment or withholding of tax on behalf of a pass-throughpass- through entity taxpayer -- Exceptions to payment or withholding requirement -- Procedures and requirements -- Failure to pay or withhold a tax on behalf of a pass-through entity taxpayer.

(1)(a)(1) (a) Except as provided in Subsections (1)(b) and (2), for a taxable year, a pass-through entity shall pay or withhold a tax:

- 2324 - 1stSB0116 Sub.compared with SB0116S01 (A) as defined in Section 7704(b), Internal Revenue Code;

(Green) S.B.

116 01-28 11:37 (A) as defined in Section 7704(b), Internal Revenue Code;

(2)(a)(2) (a) For each taxable year that begins on or after January 1, 2022, but begins on or before December 31, 2025, a pass-through entity that is not a disregarded pass-through entity may elect to pay a tax in an amount equal to the product of:

(c) A pass-through entity that pays a tax described in Subsection (2)(a) shall provide to each final pass-throughpass- through entity taxpayer a statement that states:

(3)(a)(3) - 25 - SB0116 compared with SB0116S01 (a) Subject to Subsection (3)(b), the tax a pass-through entity shall pay or withhold on behalf of a pass-throughpass- through entity taxpayer for a taxable year is an amount:

(i) determined by the commission by rule made in accordance with Title 63G, -Chapter 243, -Utah 01-28Administrative 11:37Rulemaking 1stAct; Sub.

(Green)and S.B.(ii) that the commission estimates will be sufficient to pay the tax liability of the pass-through entity taxpayer under this chapter with respect to the income described in Subsection (1)(a)(i) or (2)(a) (ii) of that pass-through entity for the taxable year.

116 Chapter 3, Utah Administrative Rulemaking Act;

and (ii) that the commission estimates will be sufficient to pay the tax liability of the pass-through entity taxpayer under this chapter with respect to the income described in Subsection (1)(a)(i) or (2)(a)(ii) of that pass-through entity for the taxable year.

or - 26 - SB0116 compared with SB0116S01 (D) a tax credit allowed against a tax imposed under:

or -(II) 25this -chapter. 1st Sub.

(Green) S.B.

116 01-28 11:37 (II) this chapter.

(i) for a pass-through entity except for a pass-through entity that is an S corporation, the pass-through entity does not analyze the items of income, gain, loss, deduction, or credit on the schedule for reporting partners' distributive share items as part of the federal income tax return for the pass-throughpass- through entity;

(4)(a)(4) (a) Except as provided in Subsection (4)(b), a pass-through entity shall remit to the commission the tax the pass-through entity pays or withholds on behalf of a pass-through entity taxpayer under this section:

(5) A pass-through entity shall provide a statement to a pass-through entity taxpayer on behalf of whom the pass-through entity pays or withholds a tax under this section showing the amount of tax the pass-through entity pays or withholds under this section for the taxable year on behalf of the pass-throughpass- through entity taxpayer.

- 27 - SB0116 compared with SB0116S01 (6) Notwithstanding Section 59-1-401 or 59-1-402, the commission may not collect an amount under this section for a taxable year from a pass-through entity and shall waive any penalty and interest on that amount if:

-(a) 26the -pass-through 01-28entity 11:37fails 1stto Sub.pay or withhold the tax on the amount as required by this section on behalf of the pass-through entity taxpayer;

(Green) S.B.

116 (a) the pass-through entity fails to pay or withhold the tax on the amount as required by this section on behalf of the pass-through entity taxpayer;

and (c)(i)(c) (i) the dependent beneficiary complies with the requirements of Subsection (6)(b);

or (ii)(A)(ii) (A) the dependent beneficiary's adjusted gross income for the taxable year does not exceed the basic standard deduction for the dependent beneficiary, as calculated under Section 63, Internal Revenue Code, for that taxable year;

(8) If a pass-through entity would have otherwise qualified for a waiver of a penalty and interest under Subsection (7), except that the trustee of a trust has not applied to the commission as required by - 28 - SB0116 compared with SB0116S01 Subsection (7)(b) or retained the statement of dependent beneficiary income required by Subsection (7)(c)(ii)(B), it is a rebuttable presumption in an audit that the pass-through entity would have otherwise qualified for the waiver of the penalty and interest under Subsection (7).

-59-10-1403.3. 27 - 1st Sub.

(Green) S.B.

116 01-28 11:37 59-10-1403.3 .

(4) A pass-through entity shall claim a refund of qualifying excess withholding under this section within 30 days after the earlier of the day on which:

or - 29 - SB0116 compared with SB0116S01 (b) the pass-through entity's income tax return is due, including any extension of due date authorized in statute.

-[(6) 28(a) -On 01-28or 11:37before 1stNovember Sub.30, 2018, the committee shall review the $250,000 threshold described in Subsection (2) for the purpose of assessing whether the threshold amount should be maintained, increased, or decreased.] [(b) To assist the committee in conducting the review described in Subsection (6)(a), the commission shall provide the committee with:] [(i) the total number of refund requests made under this section;] [(ii) the total costs of any refunds issued under this section;] [(iii) the costs of any audits conducted on refund requests made under this section;

(Green) S.B.

116 [(6)(a) On or before November 30, 2018, the committee shall review the $250,000 threshold described in Subsection (2) for the purpose of assessing whether the threshold amount should be maintained, increased, or decreased.] [(b) To assist the committee in conducting the review described in Subsection (6)(a), the commission shall provide the committee with:] [(i) the total number of refund requests made under this section;] [(ii) the total costs of any refunds issued under this section;] [(iii) the costs of any audits conducted on refund requests made under this section;

63I-1-25963I-1-259. .

(2) Subsection 59-1-101(3)(a), regarding the tax rate for a taxable year beginning on or after January 1, 2027, and {on or } before January 1, 2028, is repealed July 1, 2038.

- 30 - SB0116 compared with SB0116S01 [(2)] (5) Section 59-2-1603, Allocation of money in the Property Tax Valuation Fund -- Use of funds, is repealed July 1, 2030.

[(6)] (9) Section 59-10-1033.1, Tax credit related to alternative fuel heavy duty vehicles, is -repealed 29July -1, 1st2029. Sub.

(Green) S.B.

116 01-28 11:37 repealed July 1, 2029.

Effective date.

1-28-26 11:37 AM - 3031 -