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H.B. 117
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INDIVIDUAL INCOME TAX - ESTIMATED
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TAX PAYMENTS AND USE OF REVENUES
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FOR EDUCATION
4
2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Patrice M. Arent
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Keele Johnson
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Lawanna Shurtliff
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Lloyd W. Frandsen
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Gary F. Cox
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Afton B. Bradshaw
12
Brad King
13
Richard M. Siddoway
14
Ralph Becker
15
Sheryl L. Allen
16
Karen W. Morgan
17
David N. Cox
Brent H. Goodfellow
Kory M. Holdaway
James R. Gowans
David L. Gladwell
Trisha S. Beck
Chad E. Bennion
Judy Ann Buffmire
Jordan Tanner
David M. Jones
Wayne A. Harper
Duane E. Bourdeaux
David L. Hogue
Susan J. Koehn
Fred J. Fife
Ron Bigelow
Loretta Baca
David L. Zolman
Perry L. Buckner
Katherine M. Bryson
Neil A. Hansen
Jackie Biskupski
Mary Carlson
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AN ACT RELATING TO THE INDIVIDUAL INCOME TAX ACT; REQUIRING TAXPAYERS
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TO MAKE ESTIMATED TAX PAYMENTS TO THE STATE TAX COMMISSION UNDER
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CERTAIN CIRCUMSTANCES; PROVIDING REQUIREMENTS FOR MAKING ESTIMATED
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TAX PAYMENTS TO THE STATE TAX COMMISSION; PROVIDING PURPOSES FOR
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WHICH REVENUES GENERATED BY THE ESTIMATED TAX PAYMENT ACT MAY BE
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USED; AND MAKING TECHNICAL CHANGES.
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This act affects sections of Utah Code Annotated 1953 as follows:
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AMENDS:
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59-1-401, as last amended by Chapter 205, Laws of Utah 1995
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ENACTS:
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59-10-1001, Utah Code Annotated 1953
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59-10-1002, Utah Code Annotated 1953
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59-10-1003, Utah Code Annotated 1953
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59-10-1004, Utah Code Annotated 1953
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59-10-1005, Utah Code Annotated 1953
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59-10-1006, Utah Code Annotated 1953
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This act enacts uncodified material.
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
59-1-401
is amended to read:
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59-1-401. Penalties.
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(1) (a) The penalty for failure to file a tax return within the time prescribed by law
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including extensions is the greater of $20 or 10% of the unpaid tax due on the return.
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(b) Subsection (1) does not apply to amended returns.
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(2) The penalty for failure to pay tax due shall be the greater of $20 or 10% of the unpaid
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tax for:
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(a) failure to pay any tax, as reported on a timely filed return;
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(b) failure to pay any tax within 90 days of the due date of the return, if there was a late
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filed return subject to the penalty provided under Subsection (1)(a);
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(c) failure to pay any tax within 30 days of the date of mailing any notice of deficiency of
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tax unless a petition for redetermination or a request for agency action is filed within 30 days of
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the date of mailing the notice of deficiency;
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(d) failure to pay any tax within 30 days after the date the commission's order constituting
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final agency action resulting from a timely filed petition for redetermination or request for agency
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action is issued or is considered to have been issued under Subsection
63-46b-13
(3)(b); and
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(e) failure to pay any tax within 30 days after the date of a final judicial decision resulting
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from a timely filed petition for judicial review.
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(3) (a) (i) Beginning January 1, 1995, in the case of any failure to pay or underpayment of
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estimated tax or quarterly installments required by Sections
59-5-107
,
59-5-207
,
59-7-504
, and
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59-9-104
, there shall be added a penalty in an amount determined by applying the interest rate
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provided under Section
59-1-402
plus four percentage points to the amount of the underpayment
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for the period of the underpayment.
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(ii) For taxable years beginning on or after January 1, 2001, if a taxpayer fails to pay or
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underpays an estimated tax payment under Section
59-10-1004
, there shall be added a penalty in
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an amount determined by applying the interest rate provided under Section
59-1-402
plus three
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percentage points to the amount of the underpayment for the period of the underpayment.
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(b) (i) For purposes of Subsection (3)(a), the amount of the underpayment shall be the
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excess of the required installment over the amount, if any, of the installment paid on or before the
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due date for the installment.
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(ii) The period of the underpayment shall run from the due date for the installment to
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whichever of the following dates is the earlier:
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(A) the original due date of the tax return, without extensions, for the taxable year; or
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(B) with respect to any portion of the underpayment, the date on which that portion is paid.
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(iii) For purposes of this Subsection (3), a payment of estimated tax shall be credited
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against unpaid required installments in the order in which the installments are required to be paid.
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(4) (a) In case of an extension of time to file an individual income tax or corporate
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franchise tax return, if the lesser of 90% of the total tax reported on the tax return or 100% of the
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prior year's tax is not paid by the due date of the return, not including extensions, a 2% per month
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penalty shall apply on the unpaid tax during the period of extension.
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(b) If a return is not filed within the extension time period as provided in Section
59-7-505
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or
59-10-516
, penalties as provided in Subsection (1) and Subsection (2)(b) shall be added in lieu
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of the penalty assessed under this subsection as if no extension of time for filing a return had been
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granted.
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(5) (a) Additional penalties for underpayments of tax are as follows:
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(i) If any underpayment of tax is due to negligence, the penalty is 10% of the
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underpayment.
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(ii) If any underpayment of tax is due to intentional disregard of law or rule, the penalty
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is 15% of the underpayment.
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(iii) For intent to evade the tax, the penalty is the greater of $500 per period or 50% of the
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tax due.
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(iv) If the underpayment is due to fraud with intent to evade the tax, the penalty is the
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greater of $500 per period or 100% of the underpayment.
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(b) If the commission determines that a person is liable for a penalty imposed under
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Subsection (5)(a)(ii), (iii), or (iv), the commission shall notify the taxpayer of the proposed penalty.
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(i) The notice of proposed penalty shall:
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(A) set forth the basis of the assessment; and
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(B) be mailed by registered mail, postage prepaid, to the person's last-known address.
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(ii) Upon receipt of the notice of proposed penalty, the person against whom the penalty
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is proposed may:
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(A) pay the amount of the proposed penalty at the place and time stated in the notice; or
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(B) proceed in accordance with the review procedures of Subsection (5)(b)(iii).
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(iii) Any person against whom a penalty has been proposed in accordance with this
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subsection may contest the proposed penalty by filing a petition for an adjudicative proceeding
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with the commission.
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(iv) If the commission determines that a person is liable for a penalty under this subsection,
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the commission shall assess the penalty and give notice and demand for payment. The notice and
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demand for payment shall be mailed by registered mail, postage prepaid, to the person's last-known
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address.
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(6) The penalty for failure to file an information return or a complete supporting schedule
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is $50 for each return or schedule up to a maximum of $1,000.
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(7) If any taxpayer, in furtherance of a frivolous position, has a prima facie intent to delay
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or impede administration of the tax law and files a purported return that fails to contain
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information from which the correctness of reported tax liability can be determined or that clearly
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indicates that the tax liability shown must be substantially incorrect, the penalty is $500.
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(8) For monthly payment of sales and use taxes under Section
59-12-108
, in addition to
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any other penalties for late payment, a vendor may not retain a percentage of sales and use taxes
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collected as otherwise allowable under Section
59-12-108
.
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(9) As provided in Section
76-8-1101
, the following are criminal penalties:
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(a) Any person who is required by this title or any laws the commission administers or
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regulates to register with or obtain a license or permit from the commission, or who operates
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without having registered or secured a license or permit, or who operates when the registration,
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license, or permit is expired or not current, is guilty of a class B misdemeanor, except that,
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notwithstanding Section
76-3-301
, the fine is not less than $500 nor more than $1,000.
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(b) Any person who, with intent to evade any tax or requirement of this title or any lawful
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requirement of the commission, fails to make, render, sign, or verify any return or to supply any
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information within the time required under this title, or who makes, renders, signs, or verifies any
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false or fraudulent return or statement, or who supplies any false or fraudulent information, is
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guilty of a third degree felony, except that, notwithstanding Section
76-3-301
, the fine is not less
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than $1,000 nor more than $5,000.
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(c) Any person who willfully attempts to evade or defeat any tax or the payment thereof
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is, in addition to other penalties provided by law, guilty of a second degree felony, except that,
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notwithstanding Section
76-3-301
, the fine is not less than $1,500 nor more than $25,000.
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(d) The statute of limitations for prosecution for a violation of this section is six years from
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the date the tax should have been remitted.
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(10) Upon making a record of its actions, and upon reasonable cause shown, the
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commission may waive, reduce, or compromise any of the penalties or interest imposed under this
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part.
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Section 2.
Section
59-10-1001
is enacted to read:
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Part 10. Estimated Tax Payment Act
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59-10-1001. Title.
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This part is known as the "Estimated Tax Payment Act."
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Section 3.
Section
59-10-1002
is enacted to read:
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59-10-1002. Definitions.
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As used in this part:
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(1) "Adjusted state tax liability" means the difference between:
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(a) a taxpayer's tax liability under this chapter for the taxable year; and
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(b) any credits the taxpayer may claim under this chapter for the taxable year.
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(2) "Adjusted state tax liability after withholding" means the difference between:
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(a) the taxpayer's adjusted state tax liability; and
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(b) the total amount an employer withholds for the taxable year under Part 4.
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(3) "Calendar year taxpayer" means a taxpayer that:
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(a) meets the requirements of Subsection
59-10-1003
(1); and
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(b) has a taxable year that:
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(i) begins on January 1; and
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(ii) is for a 12-month period.
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(4) "Estimated tax payment threshold" means an amount of adjusted state tax liability after
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withholding that is equal to h [
$1,000
]
$2,000
h for a taxpayer that files a return under this chapter,
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regardless
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of the taxpayer's filing status.
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(5) "Farmer" is as defined in Section 6654, Internal Revenue Code.
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(6) "Fiscal year taxpayer" means a taxpayer that:
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(a) meets the requirements of Subsection
59-10-1003
(1); and
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(b) has a taxable year that:
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(i) begins on a day other than January 1; and
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(ii) is for a 12-month period.
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(7) "Fisherman" is as defined in Section 6654, Internal Revenue Code.
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(8) "Required annual payment" means:
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(a) for a taxpayer other than a farmer or fisherman, an amount equal to the lesser of:
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(i) 90% of the taxpayer's adjusted state tax liability for the taxable year; or
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(ii) 100% of the taxpayer's adjusted state tax liability for the previous taxable year if:
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(A) that taxable year was for a period of 12 months; and
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(B) the taxpayer filed a return under this chapter for that taxable year; or
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(b) for a farmer or fisherman, an amount equal to the lesser of:
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(i) 66-2/3% of the farmer's or fisherman's adjusted state tax liability for the taxable year;
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or
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(ii) 100% of the farmer's or fisherman's adjusted state tax liability for the previous taxable
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year if:
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(A) that taxable year was for a period of 12 months; and
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(B) the taxpayer filed a return under this chapter for that taxable year.
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(9) "Required annual payment after withholding" means the difference between:
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(a) a taxpayer's required annual payment; and
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(b) the total amount an employer withholds for the taxable year under Part 4.
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(10) "Taxpayer's tax liability under this chapter for the taxable year" means the product
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of:
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(a) the taxpayer's state taxable income for the taxable year; and
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(b) the h [
amount of
] h tax h
RATE
h imposed under this chapter for the taxable year on
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the amount
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described in Subsection (10)(a).
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Section 4.
Section
59-10-1003
is enacted to read:
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59-10-1003. Estimated tax payments -- Required annual payment.
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(1) For taxable years beginning on or after January 1, 2001, a taxpayer shall pay to the
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commission as provided in this part one or more estimated tax payments if on the last day of the
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taxpayer's taxable year the taxpayer's adjusted state tax liability after withholding for the taxable
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year will be greater than or equal to the estimated tax payment threshold.
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(2) (a) For taxable years beginning on or after January 1, 2001, a taxpayer described in
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Subsection (1) shall make a required annual payment to the commission.
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(b) The required annual payment under Subsection (2)(a) shall be made by:
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(i) employer withholding as provided in Part 4;
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(ii) the taxpayer making to the commission as provided in this part one or more estimated
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tax payments; or
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(iii) a combination of Subsections (2)(b)(i) and (ii).
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Section 5.
Section
59-10-1004
is enacted to read:
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59-10-1004. Payment schedule for estimated tax payments -- Taxpayers having a
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taxable year beginning on January 1 -- Taxpayers having a taxable year beginning on a date
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other than January 1 -- Taxpayers meeting estimated tax payment threshold on or after
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April 1 -- Change in payments if taxpayer's tax liability changes.
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(1) A taxpayer required to make estimated tax payments to the commission under this part
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shall make the estimated tax payments as provided in this section.
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(2) (a) Except as provided in Subsections (4) through (6), a calendar year taxpayer shall
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make four estimated tax payments:
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(i) as provided in this Subsection (2); and
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(ii) that are each equal to 25% of the required annual payment after withholding.
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(b) A taxpayer shall make the estimated tax payments described in Subsection (2)(a) on
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or before:
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(i) April 15 of the taxable year;
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(ii) June 15 of the taxable year;
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(iii) September 15 of the taxable year; and
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(iv) January 15 of the year after the taxable year.
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(3) (a) Except as provided in Subsections (5) and (6), a fiscal year taxpayer shall make four
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estimated tax payments:
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(i) as provided in this Subsection (3); and
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(ii) that are each equal to 25% of the required annual payment after withholding.
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(b) A taxpayer shall make the estimated tax payments described in Subsection (3)(a) on
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or before the 15th day of the:
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(i) fourth month of the taxable year;
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(ii) sixth month of the taxable year;
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(iii) ninth month of the taxable year; and
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(iv) first month of the year after the taxable year.
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(4) (a) Notwithstanding Subsection (2) and except as provided in Subsections (5) and (6),
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for a taxable year a calendar year taxpayer shall make estimated tax payments as provided in this
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Subsection (4) if:
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(i) on March 31 of the taxable year the taxpayer's adjusted state tax liability after
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withholding for the taxable year will be less than the estimated tax payment threshold on the last
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day of the taxpayer's taxable year; and
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(ii) on or after April 1 of the taxable year the taxpayer's adjusted state tax liability after
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withholding for the taxable year will be greater than or equal to the estimated tax payment
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threshold on the last day of the taxpayer's taxable year.
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(b) If, on or after April 1 but on or before May 31 of the taxable year, a taxpayer's adjusted
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state tax liability after withholding for the taxable year will be greater than or equal to the
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estimated tax payment threshold on the last day of the taxpayer's taxable year, the taxpayer shall
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pay:
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(i) 50% of the required annual payment after withholding on or before June 15 of the
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taxable year;
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(ii) 25% of the required annual payment after withholding on or before September 15 of
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the taxable year; and
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(iii) 25% of the required annual payment after withholding on or before January 15 of the
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year after the taxable year.
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(c) If, on or after June 1 but on or before August 31 of the taxable year, a taxpayer's
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adjusted state tax liability after withholding for the taxable year will be greater than or equal to the
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estimated tax payment threshold on the last day of the taxpayer's taxable year, the taxpayer shall
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pay:
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(i) 75% of the required annual payment after withholding on or before September 15 of
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the taxable year; and
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(ii) 25% of the required annual payment after withholding on or before January 15 of the
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year after the taxable year.
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(d) If, on or after September 1 of the taxable year, a taxpayer's adjusted state tax liability
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after withholding for the taxable year will be greater than or equal to the estimated tax payment
252
threshold on the last day of the taxpayer's taxable year, the taxpayer shall pay 100% of the required
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annual payment after withholding on or before January 15 of the year after the taxable year.
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(5) For purposes of Subsections (2) through (4), if after making an estimated tax payment
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a taxpayer's adjusted state tax liability after withholding changes, the taxpayer shall proportionally
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increase or decrease the taxpayer's remaining estimated tax payments for the taxable year so that
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the balance of the required annual payment after withholding is made in equal installments.
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(6) Notwithstanding Subsections (2) through (4), a farmer or fisherman shall make one
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estimated tax payment for the taxable year:
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(a) on or before the 15th day after the last day of the farmer's or fisherman's taxable year;
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and
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(b) in an amount equal to the total amount of the required annual payment after
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withholding.
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Section 6.
Section
59-10-1005
is enacted to read:
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59-10-1005. Taxpayers having a taxable year of less than 12 months -- Rulemaking
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authority.
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In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
268
commission shall make rules providing for estimated tax payments for a taxpayer having a taxable
269
year of less than 12 months.
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Section 7.
Section
59-10-1006
is enacted to read:
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59-10-1006. Penalties -- Exceptions to penalties.
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(1) Except as provided in Subsections (2) and (3), a taxpayer shall pay a penalty as
273
provided in Section
59-1-401
if the taxpayer fails to pay or underpays an estimated tax payment
274
under Section
59-10-1004
.
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(2) Notwithstanding Subsection (1) and except as provided in Subsection (3), the
276
commission may waive, reduce, or compromise the penalty described in Subsection (1).
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(3) Notwithstanding Subsections (1) and (2), in accordance with Title 63, Chapter 46a,
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Utah Administrative Rulemaking Act, the commission shall make rules providing for the following
279
exceptions to the penalty described in Subsection (1):
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(a) an exception that is consistent with Section 6654(e)(1), Internal Revenue Code;
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(b) an exception that is consistent with Section 6654(e)(2), Internal Revenue Code;
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(c) an exception for a taxpayer's failure to pay the final estimated tax payment for a taxable
283
year that is consistent with Section 6654(h), Internal Revenue Code;
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(d) an exception for a farmer's or fisherman's failure to pay the estimated tax payment
285
required by Subsection
59-10-1004
(6) that is consistent with Section 6654(i), Internal Revenue
286
Code;
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(e) an exception that is consistent with Section 6658(a), Internal Revenue Code; and
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(f) an exception for the first year that a taxpayer is required to file a return under this
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chapter if the individual:
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(i) files the return under this chapter on or before the due date provided for under this
291
chapter for filing the return; and
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(ii) pays in full the amount of tax due for the taxable year.
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Section 8. Expenditure of certain revenues generated by the Required Annual
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Payment and Estimated Tax Payment Act.
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(1) Beginning on January 1, 2001, through June 30, 2001, the revenues collected under
296
Title 59, Chapter 10, Part 10,
Estimated Tax
Payment Act,
shall be
h
[ expended as follows: ]
296a
DEPOSITED INTO THE STATE SCHOOL FUND ESTABLISHED BY UTAH CONSTITUTION ARTICLE X,
296b
SECTION 5.
h
297
h [
(a) 75% of the revenues shall be allocated to the State Board of Education created by Title
298
53A, Chapter 1, Part 1, State Board of Education, to be distributed to school districts as provided
299
in this section for:
300
(i) textbooks;
301
(ii) libraries;
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(iii) science lab supplies;
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(iv) other instructional materials; or
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(v) a combination of Subsections (1)(a)(i) through (iv); and
305
(b) 25% of the revenues shall be allocated to the State Board of Regents created by Title
306
53B, Chapter 1, Governance, Powers, Rights, and Responsibilities, to be distributed to the
307
institutions described in Subsections
53B-1-102
(1)(b) through (k) for:
308
(i) libraries;
309
(ii) science lab supplies;
] h
310
h [
(iii) applied technology education supplies;
311
(iv) other instructional materials; or
312
(v) a combination of Subsections (1)(b)(i) through (iv).
313
(2) (a) For purposes of the allocations described in Subsection (1)(a), the State Board of
314
Education shall distribute the allocations to school districts on the basis of the ratio of a school
315
district's average daily membership to the state total average daily membership.
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(b) For purposes of the allocations described in Subsection (1)(b), the State Board of
317
Regents shall develop criteria for distributing the allocations to the institutions described in
318
Subsections
53B-1-102
(1)(b) through (k)
.] h
Legislative Review Note
as of 2-10-00 10:36 AM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.