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S.B. 31
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COMMERCIAL HISTORIC BUILDING REHABILITATION -
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CORPORATE FRANCHISE AND INCOME TAX AND
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INDIVIDUAL INCOME TAX CREDITS
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Beverly Ann Evans
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AN ACT RELATING TO REVENUE AND TAXATION; PROVIDING DEFINITIONS;
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EXPANDING THE CORPORATE FRANCHISE AND INCOME TAX AND INDIVIDUAL
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INCOME TAX HISTORIC PRESERVATION CREDITS TO INCLUDE CREDITS FOR
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COMMERCIAL CERTIFIED HISTORIC BUILDINGS AND COMMERCIAL QUALIFIED
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HISTORIC BUILDINGS; DELETING THE RESIDENCY REQUIREMENT FOR THE
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INDIVIDUAL INCOME TAX CREDIT; MAKING TECHNICAL CHANGES; AND
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PROVIDING FOR RETROSPECTIVE OPERATION.
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This act affects sections of Utah Code Annotated 1953 as follows:
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AMENDS:
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59-7-609, as enacted by Chapter 42, Laws of Utah 1995
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59-10-108.5, as last amended by Chapter 25, Laws of Utah 1995
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
59-7-609
is amended to read:
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59-7-609. Historic preservation credit.
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(1) As used in this section:
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(a) "Certified historic building" means a building or structure that:
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(i) (A) is listed on the National Register of Historic Places; or
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(B) is listed on the National Register of Historic Places within a three-year period after a
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taxpayer claims a credit under this section; or
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(ii) is located in a National Register Historic District; and
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(iii) the Division of State History has designated as being of significance to the National
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Register Historic District.
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(b) "Commercial certified historic building" means a commercial unit that is a certified
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historic building.
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(c) "Commercial qualified historic building" means a commercial unit that is a qualified
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historic building.
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(d) "Commercial unit" means a building or structure that is primarily used for the purpose
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of conducting business.
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(e) "Qualified historic building" means a building that is determined by the Division of
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State History to meet the age and integrity requirements established by the National Register of
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Historic Places.
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(f) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable to
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the rehabilitation and restoration of the physical elements of a building, including:
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(A) the historic decorative elements of the building;
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(B) the upgrading of the structural, mechanical, electrical, or plumbing systems of the
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building to applicable codes; or
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(C) notwithstanding Subsection (1)(f)(ii)(E), an expenditure described in Subsection
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(1)(f)(ii)(E)(II) or (III) if the outbuilding or secondary structure is a:
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(I) certified historic building; or
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(II) qualified historic building.
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(ii) "Qualified rehabilitation expenditures" does not include:
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(A) an expenditure related to the taxpayer's personal labor;
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(B) an expenditure related to the cost of acquiring the property;
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(C) an expenditure attributable to the enlargement of an existing building;
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(D) if the rehabilitation work is not approved as provided in Subsection (2)(c), an
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expenditure related to rehabilitation work on a:
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(I) certified historic building; or
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(II) qualified historic building;
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(E) except as provided in Subsection (1)(f)(i)(C), an expenditure attributable to:
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(I) landscaping or other site features;
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(II) an outbuilding;
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(III) a secondary structure; or
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(IV) an expenditure similar to those described in Subsections (1)(f)(ii)(E)(I) through (III).
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(g) "Residential" means a building that is:
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(i) primarily used for residential purposes; and
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(ii) (A) occupied by the owner of the building; or
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(B) income producing.
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[(1)] (2) (a) [For tax years beginning January 1, 1993, and thereafter, there is allowed to
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a] A taxpayer subject to taxation under Section
59-7-104
[, as a credit against the tax due,] may
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claim the following nonrefundable credits as provided in this section:
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(i) for taxable years beginning on or after January 1, 1993, an amount equal to 20% of the
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total amount of the taxpayer's qualified rehabilitation expenditures[, costing more than] if the
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taxpayer expends more than $10,000[, incurred] in connection with [any] a residential certified
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historic building[. When qualifying expenditures of more than $10,000 are incurred, the credit
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allowed by this section shall apply to the full amount of expenditures.];
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(ii) except as provided in Subsection (2)(b), for taxable years beginning on or after January
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1, 2000, an amount equal to 20% of the total amount of the taxpayer's qualified rehabilitation
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expenditures if the taxpayer expends more than $10,000 in connection with a:
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(A) commercial certified historic building; or
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(B) commercial qualified historic building; or
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(iii) a combination of the credits described in Subsections (2)(a)(i) and (ii).
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(b) (i) Notwithstanding Subsection (2)(a)(ii), the maximum amount of credit that may be
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claimed or carried forward during a six-year period is $100,000 for all of the qualified
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rehabilitation expenditures incurred in connection with:
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(A) each commercial certified historic building; or
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(B) each commercial qualified historic building.
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(ii) A six-year period described in Subsection (2)(b)(i):
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(A) begins on the first day of the first taxable year for which a taxpayer may claim a credit
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under Subsection (2)(a)(ii); and
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(B) ends six years after the date described in Subsection (2)(b)(ii)(A).
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[(b)] (c) All rehabilitation work to which [the] a credit under this section may be applied
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shall be approved by the State Historic Preservation Office prior to completion of the rehabilitation
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project as meeting the Secretary of the Interior's Standards for Rehabilitation so that the [office
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can] State Historic Preservation Office may provide corrective comments to the taxpayer in order
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to preserve the historical qualities of the building.
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[(c) Any] (d) If the amount of a tax credit [remaining] a taxpayer claims under this section
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exceeds the taxpayer's tax liability for a taxable year, the taxpayer may [be carried] carry forward
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[to each of the] the amount of the credit that exceeds the liability for a period that does not exceed
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five [taxable] years following the day on which the taxpayer incurred the qualified rehabilitation
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expenditures.
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[(d) The] (e) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
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Act, the commission, in consultation with the Division of State History, shall promulgate rules to
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implement this section.
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[(2) As used in this section:]
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[(a) "Certified historic building" means a building that is listed on the National Register
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of Historic Places within three years of taking the credit under this section or that is located in a
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National Register Historic District and the building has been designated by the Division of State
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History as being of significance to the district.]
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[(b) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable to
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the rehabilitation and restoration of the physical elements of the building, including the historic
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decorative elements, and the upgrading of the structural, mechanical, electrical, and plumbing
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systems to applicable codes.]
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[(ii) "Qualified rehabilitation expenditures" does not include expenditures related to:]
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[(A) the taxpayer's personal labor;]
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[(B) cost of acquisition of the property;]
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[(C) any expenditure attributable to the enlargement of an existing building;]
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[(D) rehabilitation of a certified historic building without the approval required in
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Subsection (1)(b); or]
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[(E) any expenditure attributable to landscaping and other site features, outbuildings,
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garages, and related features.]
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[(c) "Residential" means a building used for residential use, either owner occupied or
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income producing.]
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Section 2.
Section
59-10-108.5
is amended to read:
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59-10-108.5. Historic preservation credit.
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(1) As used in this section:
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(a) "Certified historic building" means a building or structure that:
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(i) (A) is listed on the National Register of Historic Places; or
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(B) is listed on the National Register of Historic Places within a three-year period after a
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taxpayer claims a credit under this section; or
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(ii) is located in a National Register Historic District; and
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(iii) the Division of State History has designated as being of significance to the National
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Register Historic District.
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(b) "Commercial certified historic building" means a commercial unit that is a certified
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historic building.
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(c) "Commercial qualified historic building" means a commercial unit that is a qualified
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historic building.
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(d) "Commercial unit" means a building or structure that is primarily used for the purpose
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of conducting business.
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(e) "Qualified historic building" means a building that is determined by the Division of
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State History to meet the age and integrity requirements established by the National Register of
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Historic Places.
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(f) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable to
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the rehabilitation and restoration of the physical elements of a building, including:
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(A) the historic decorative elements of the building;
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(B) the upgrading of the structural, mechanical, electrical, or plumbing systems of the
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building to applicable codes; or
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(C) notwithstanding Subsection (1)(f)(ii)(E), an expenditure described in Subsection
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(1)(f)(ii)(E)(II) or (III) if the outbuilding or secondary structure is a:
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(I) certified historic building; or
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(II) qualified historic building.
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(ii) "Qualified rehabilitation expenditures" does not include:
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(A) an expenditure related to the taxpayer's personal labor;
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(B) an expenditure related to the cost of acquiring the property;
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(C) an expenditure attributable to the enlargement of an existing building;
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(D) if the rehabilitation work is not approved as provided in Subsection (2)(c), an
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expenditure related to rehabilitation work on a:
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(I) certified historic building; or
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(II) qualified historic building; or
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(E) except as provided in Subsection (1)(f)(i)(C), an expenditure attributable to:
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(I) landscaping or other site features;
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(II) an outbuilding;
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(III) a secondary structure; or
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(IV) an expenditure similar to those described in Subsections (1)(f)(ii)(E)(I) through (III).
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(g) "Residential" means a building that is:
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(i) primarily used for residential purposes; and
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(ii) (A) occupied by the owner of the building; or
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(B) income producing.
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[(1)] (2) (a) [For tax years beginning January 1, 1993, and thereafter, there is allowed to
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resident individuals, as a credit against the income tax due] A taxpayer may claim the following
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nonrefundable credits as provided in this section:
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(i) for taxable years beginning on or after January 1, 1993, an amount equal to 20% of the
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total amount of the taxpayer's qualified rehabilitation expenditures[, costing more than] if a
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taxpayer expends more than $10,000[, incurred] in connection with [any] a residential certified
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historic building[. When qualifying expenditures of more than $10,000 are incurred, the credit
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allowed by this section shall apply to the full amount of expenditures.];
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(ii) except as provided in Subsection (2)(b), for taxable years beginning on or after January
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1, 2000, an amount equal to 20% of the total amount of the taxpayer's qualified rehabilitation
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expenditures if the taxpayer expends more than $10,000 in connection with a:
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(A) commercial certified historic building; or
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(B) commercial qualified historic building; or
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(iii) a combination of the credits described in Subsections (2)(a)(i) and (ii).
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(b) (i) Notwithstanding Subsection (2)(a)(ii), the maximum amount of credit that may be
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claimed or carried forward during a six-year period is $100,000 for all of the qualified
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rehabilitation expenditures incurred in connection with:
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(A) each commercial certified historic building; or
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(B) each commercial qualified historic building.
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(ii) A six-year period described in Subsection (2)(b)(i):
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(A) begins on the first day of the first taxable year for which a taxpayer may claim a credit
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under Subsection (2)(a)(ii); and
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(B) ends six years after the date described in Subsection (2)(b)(ii)(A).
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[(b)] (c) All rehabilitation work to which [the] a credit under this section may be applied
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shall be approved by the State Historic Preservation Office prior to completion of the
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rehabilitation project as meeting the Secretary of the Interior's Standards for Rehabilitation so that
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the [office can] State Historic Preservation Office may provide corrective comments to the
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taxpayer in order to preserve the historical qualities of the building.
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[(c) Any] (d) If the amount of a tax credit [remaining] a taxpayer claims under this section
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exceeds the taxpayer's tax liability for a taxable year, the taxpayer may [be carried] carry forward
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[to each of the] the amount of the credit that exceeds the liability for a period that does not exceed
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five [taxable] years following the day on which the taxpayer incurred the qualified rehabilitation
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expenditures.
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[(d) The] (e) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
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Act, the commission, in consultation with the Division of State History, shall promulgate rules to
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implement this section.
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[(2) As used in this section:]
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[(a) "Certified historic building" means a building that is listed on the National Register
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of Historic Places within three years of taking the credit under this section or that is located in a
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National Register Historic District and the building has been designated by the Division of State
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History as being of significance to the district.]
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[(b) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable to
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the rehabilitation and restoration of the physical elements of the building, including the historic
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decorative elements, and the upgrading of the structural, mechanical, electrical, and plumbing
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systems to applicable codes.]
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[(ii) "Qualified rehabilitation expenditures" does not include expenditures related to:]
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[(A) the taxpayer's personal labor;]
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[(B) cost of acquisition of the property;]
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[(C) any expenditure attributable to the enlargement of an existing building;]
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[(D) rehabilitation of a certified historic building without the approval required in
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Subsection (1)(b); or]
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[(E) any expenditure attributable to landscaping and other site features, outbuildings,
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garages, and related features.]
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[(c) "Residential" means a building used for residential use, either owner occupied or
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income producing.]
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Section 3. Retrospective operation.
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This act has retrospective operation for taxable years beginning on or after January 1, 2000.
Legislative Review Note
as of 1-11-00 3:51 PM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.