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S.B. 178
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INCOME TAX AMENDMENTS
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Howard C. Nielson
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AN ACT RELATING TO THE INDIVIDUAL INCOME TAX ACT; REPEALING OBSOLETE
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LANGUAGE; MODIFYING DEFINITIONS; CHANGING THE BASIS FOR CALCULATING
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INDIVIDUAL INCOME TAXES FROM FEDERAL TAXABLE INCOME TO FEDERAL
8
ADJUSTED GROSS INCOME; REQUIRING TAXPAYERS TO ELECT TO SUBTRACT
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FROM ADJUSTED GROSS INCOME EITHER THE FEDERAL STANDARD DEDUCTION
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OR FEDERAL ITEMIZED DEDUCTIONS; MAKING TECHNICAL CHANGES; AND
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PROVIDING AN EFFECTIVE DATE.
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This act affects sections of Utah Code Annotated 1953 as follows:
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AMENDS:
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59-10-103, as last amended by Chapter 88, Laws of Utah 1999
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59-10-104, as last amended by Chapter 333, Laws of Utah 1996
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59-10-111, as last amended by Chapter 96, Laws of Utah 1987
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59-10-112, as last amended by Chapter 345, Laws of Utah 1995
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59-10-114, as last amended by Chapters 60, 131, 240 and 282, Laws of Utah 1999
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59-10-116, as renumbered and amended by Chapter 2, Laws of Utah 1987
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59-10-117, as last amended by Chapters 311 and 345, 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
59-10-103
is amended to read:
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59-10-103. Definitions.
24
(1) As used in this chapter:
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(a) "Adult with a disability" means an individual who:
26
(i) is 18 years of age or older;
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(ii) is eligible for services under Title 62A, Chapter 5, Services to People with Disabilities;
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and
29
(iii) is not enrolled in:
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(A) an education program for students with disabilities that is authorized under Section
31
53A-15-301
; or
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(B) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind.
33
(b) "Corporation" includes associations, joint stock companies, and insurance companies.
34
(c) "Dependent child with a disability" means an individual 21 years of age or younger
35
who:
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(i) (A) is diagnosed by a school district representative under rules adopted by the State
37
Board of Education as having a disability classified as:
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(I) autism;
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(II) deafness;
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(III) preschool developmental delay;
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(IV) dual sensory impairment;
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(V) hearing impairment;
43
(VI) intellectual disability;
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(VII) multidisability;
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(VIII) orthopedic impairment;
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(IX) other health impairment;
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(X) traumatic brain injury; or
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(XI) visual impairment;
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(B) is not receiving residential services from:
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(I) the Division of Services for People with Disabilities created under Section
62A-5-102
;
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or
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(II) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind; and
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(C) is enrolled in:
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(I) an education program for students with disabilities that is authorized under Section
55
53A-15-301
; or
56
(II) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind; or
57
(ii) is identified under guidelines of the Department of Health as qualified for:
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(A) Early Intervention; or
59
(B) Infant Development Services.
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(d) "Employer," "employee," and "wages" are defined as provided in Section
59-10-401
.
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(e) "Fiduciary" means a guardian, trustee, executor, administrator, receiver, conservator,
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or any person acting in any fiduciary capacity for any individual.
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(f) "Individual" means a natural person and includes aliens and minors.
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(g) "Nonresident individual" means an individual who is not a resident of this state.
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(h) "Nonresident trust" or "nonresident estate" means a trust or estate which is not a
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resident estate or trust.
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(i) (i) "Partnership" includes a syndicate, group, pool, joint venture, or other
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unincorporated organization, through or by means of which any business, financial operation, or
69
venture is carried on, and which is not, within the meaning of this chapter, a trust or estate or a
70
corporation.
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(ii) "Partnership" does not include any organization not included under the definition of
72
"partnership" contained in Section 761, Internal Revenue Code.
73
(iii) "Partner" includes a member in such a syndicate, group, pool, joint venture, or
74
organization.
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(j) "Resident individual" means:
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(i) an individual who is domiciled in this state for any period of time during the taxable
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year, but only for the duration of such period; or
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(ii) an individual who is not domiciled in this state but maintains a permanent place of
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abode in this state and spends in the aggregate 183 or more days of the taxable year in this state.
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For purposes of this Subsection (1)(j)(ii), a fraction of a calendar day shall be counted as a whole
81
day.
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(k) (i) "Resident estate" or "resident trust" means:
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(A) an estate of a decedent who at his death was domiciled in this state;
84
(B) a trust, or a portion of a trust, consisting of property transferred by will of a decedent
85
who at his death was domiciled in this state; or
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(C) a trust administered in this state.
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(ii) For purposes of this chapter, a trust shall be considered to be administered in this state
88
if:
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(A) the place of business where the fiduciary transacts a major portion of its administration
90
of the trust is in this state; or
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(B) the usual place of business of the fiduciary is in this state.
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(iii) Where there are two or more fiduciaries, the residency status of the trust shall be
93
determined by the situs of the corporate or professional fiduciary with primary responsibility for
94
the administration of the trust as defined in the trust instrument.
95
(iv) The commission may, by rule, provide additional guidelines to determine the
96
residency status of a trust.
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[(l) "Taxable income" and "state taxable income" are defined as provided in Sections
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59-10-111
,
59-10-112
,
59-10-116
,
59-10-201.1
, and
59-10-204
.]
99
[(m)] (l) "Taxpayer" means any individual, estate, or trust or beneficiary of an estate or
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trust, whose income is subject in whole or part to the tax imposed by this chapter.
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(2) Any term used in this chapter has the same meaning as when used in comparable
102
context in the laws of the United States relating to federal income taxes unless a different meaning
103
is clearly required. Any reference to the Internal Revenue Code or to the laws of the United States
104
shall mean the Internal Revenue Code or other provisions of the laws of the United States relating
105
to federal income taxes which are in effect for the taxable year. Any reference to a specific section
106
of the Internal Revenue Code or other provision of the laws of the United States relating to federal
107
income taxes shall include any corresponding or comparable provisions of the Internal Revenue
108
Code as hereafter amended, redesignated, or reenacted.
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Section 2.
Section
59-10-104
is amended to read:
110
59-10-104. Tax basis -- Rates.
111
[(1) For taxable years beginning on or after January 1, 1996, but beginning before January
112
1, 1997, a tax is imposed on the state taxable income, as defined in Section
59-10-112
, of every
113
resident individual as follows:]
114
[(a) For an individual, other than a husband and wife or head of household required to use
115
the tax table under Subsection (1)(b), the tax under this section is imposed in accordance with the
116
following table:]
117
[If the state taxable income is:] [The tax is:]
118
[Less than or equal to $750] [2.55% of the state taxable income]
119
[Greater than $750 but less than or equal] [$19, plus 3.5% of state taxable income]
120
[to $1,500] [greater than $750]
121
[Greater than $1,500 but less than or equal] [$45, plus 4.4% of state taxable income]
122
[to $2,250] [greater than $1,500]
123
[Greater than $2,250 but less than or equal] [$78, plus 5.35% of state taxable income]
124
[to $3,000] [greater than $2,250]
125
[Greater than $3,000 but less than or equal] [$119, plus 6% of state taxable income]
126
[to $3,750] [greater than $3,000]
127
[Greater than $3,750] [$164, plus 7% of state taxable income]
128
[greater than $3,750]
129
[(b) For a husband and wife filing a single return jointly, or a head of household as defined
130
in Section 2(b), Internal Revenue Code, filing a single return, the tax under this section is imposed
131
in accordance with the following table:]
132
[If the state taxable income is:] [The tax is:]
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[Less than or equal to $1,500] [2.55% of the state taxable income]
134
[Greater than $1,500 but less than or equal] [$38, plus 3.5% of state taxable income]
135
[to $3,000] [greater than $1,500]
136
[Greater than $3,000 but less than or equal] [$91, plus 4.4% of state taxable income]
137
[to $4,500] [greater than $3,000]
138
[Greater than $4,500 but less than or equal] [$157, plus 5.35% of state taxable income]
139
[to $6,000] [greater than $4,500]
140
[Greater than $6,000 but less than or equal] [$237, plus 6% of state taxable income]
141
[to $7,500] [greater than $6,000]
142
[Greater than $7,500] [$327, plus 7% of state taxable income]
143
[greater than $7,500]
144
[(2)] For taxable years beginning on or after January 1, 1997, a tax is imposed on the state
145
taxable income, as defined in Section
59-10-112
, of every resident individual as [follows:]
146
provided in Subsections (1) and (2).
147
[(a)] (1) For an individual, other than a husband and wife or head of household required
148
to use the tax table under Subsection (2)[(b)], the tax under this section is imposed in accordance
149
with the following table:
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If the state taxable income is: The tax is:
151
Less than or equal to $750 2.3% of the state taxable income
152
Greater than $750 but less than or equal $17, plus 3.3% of state taxable income
153
to $1,500 greater than $750
154
Greater than $1,500 but less than or equal $42, plus 4.2% of state taxable income
155
to $2,250 greater than $1,500
156
Greater than $2,250 but less than or equal $74, plus 5.2% of state taxable income
157
to $3,000 greater than $2,250
158
Greater than $3,000 but less than or equal $113, plus 6% of state taxable income
159
to $3,750 greater than $3,000
160
Greater than $3,750 $158, plus 7% of state taxable income
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greater than $3,750
162
[(b)] (2) For a husband and wife filing a single return jointly, or a head of household as
163
defined in Section 2(b), Internal Revenue Code, filing a single return, the tax under this section is
164
imposed in accordance with the following table:
165
If the state taxable income is: The tax is:
166
Less than or equal to $1,500 2.3% of the state taxable income
167
Greater than $1,500 but less than or equal $35, plus 3.3% of state taxable income
168
to $3,000 greater than $1,500
169
Greater than $3,000 but less than or equal $84, plus 4.2% of state taxable income
170
to $4,500 greater than $3,000
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Greater than $4,500 but less than or equal $147, plus 5.2% of state taxable income
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to $6,000 greater than $4,500
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Greater than $6,000 but less than or equal $225, plus 6% of state taxable income
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to $7,500 greater than $6,000
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Greater than $7,500 $315, plus 7% of state taxable income
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greater than $7,500
177
Section 3.
Section
59-10-111
is amended to read:
178
59-10-111. Federal taxable income defined.
179
["Federal] For purposes of this chapter, "federal taxable income" means taxable income as
180
[currently] defined in Section 63, Internal Revenue Code [of 1986].
181
Section 4.
Section
59-10-112
is amended to read:
182
59-10-112. State taxable income of resident individual.
183
["State] (1) Except as otherwise provided in this chapter, for purposes of this chapter,
184
"state taxable income" in the case of a resident individual means [his] the individual's federal
185
[taxable] adjusted gross income [(]as defined by Section [
59-10-111
)] 62, Internal Revenue Code,
186
with the modifications, subtractions, and adjustments provided in Section
59-10-114
.
187
(2) The state taxable income of a resident individual who is the beneficiary of an estate or
188
trust shall be modified by the adjustments provided in Section
59-10-209
.
189
Section 5.
Section
59-10-114
is amended to read:
190
59-10-114. Additions to and subtractions from federal taxable income of an
191
individual.
192
(1) [There] A resident or nonresident individual shall [be added] add the following
193
amounts to the individual's federal [taxable] adjusted gross income [of a resident or nonresident
194
individual]:
195
(a) (i) except as provided in Subsection (1)(a)(ii), if an individual subtracts from the
196
individual's federal adjusted gross income the amount described in Subsection (2)(m)(ii), the
197
individual shall add to the individual's federal adjusted gross income the amount of any income
198
tax imposed by [this or any predecessor Utah individual income tax law and the amount of any
199
income tax imposed by]:
200
(A) this chapter; or
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(B) the laws of:
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(I) another state[,];
203
(II) the District of Columbia[,]; or
204
(III) a possession of the United States[, to the extent deducted from federal adjusted gross
205
income, as defined by Section 62, Internal Revenue Code, in determining federal taxable income];
206
and
207
(ii) notwithstanding Subsection (1)(a)(i), an individual shall add the amount described in
208
Subsection (1)(a)(i) to the individual's federal adjusted gross income only to the extent that the
209
individual deducts the amount described in Subsection (1)(a)(i):
210
(A) on the individual's federal individual income tax return for the taxable year; and
211
(B) in determining federal taxable income;
212
(b) a lump sum distribution allowable as a deduction under Section [402(e)(3)] 402(d)(3),
213
Internal Revenue Code, to the extent deductible under Section 62(a)(8), Internal Revenue Code,
214
in determining federal adjusted gross income;
215
[(c) 25% of the personal exemptions, as defined and calculated in the Internal Revenue
216
Code;]
217
[(d)] (c) a withdrawal from a medical care savings account and any penalty imposed in the
218
taxable year if:
219
(i) the [taxpayer] individual did not deduct or include the amounts on [his] the individual's
220
federal individual income tax return pursuant to Section 220, Internal Revenue Code; and
221
(ii) the withdrawal is subject to Subsections
31A-32a-105
(1) and (2); and
222
[(e)] (d) the amount refunded to a participant under Title 53B, Chapter 8a, Higher
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Education Savings Incentive Program, in the year in which the amount is refunded.
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(2) [There] A resident or nonresident individual shall [be subtracted] subtract the following
225
amounts from the individual's federal [taxable] adjusted gross income [of a resident or nonresident
226
individual]:
227
(a) (i) [the] to the extent the interest or dividends are includable in gross income for federal
228
income tax purposes but exempt from state income taxes under the laws of the United States,
229
interest or dividends on obligations or securities of:
230
(A) the United States [and] or its possessions; or [of any]
231
(B) an authority, commission, or instrumentality of the United States[, to the extent
232
includable in gross income for federal income tax purposes but exempt from state income taxes
233
under the laws of the United States, but]; and
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(ii) the amount subtracted under [this] Subsection (2)(a)(i) shall be reduced by any:
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(A) interest on indebtedness incurred or continued to purchase or carry the obligations or
236
securities described in [this] Subsection[,] (2)(a)(i); and [by any]
237
(B) expenses incurred in the production of interest or dividend income described in [this]
238
Subsection (2)(a)(i) to the extent that [such] the expenses, including amortizable bond premiums,
239
are deductible in determining federal taxable income;
240
(b) 1/2 of the net amount of any income tax paid or payable to the United States after
241
subtracting all allowable credits, as reported on the United States individual income tax return of
242
the [taxpayer] individual for the same taxable year;
243
(c) the amount of adoption expenses which, for purposes of this Subsection (2)(c), means
244
any actual medical and hospital expenses of the mother of the adopted child which are incident to
245
the child's birth and any welfare agency, child placement service, legal, and other fees or costs
246
relating to the adoption;
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(d) subject to Subsection (3), amounts received by [taxpayers] an individual under age 65
248
as retirement income which, for purposes of this section, means pensions and annuities, paid from
249
an annuity contract:
250
(i) purchased by:
251
(A) an employer under a plan which meets the requirements of Section 404 (a)(2), Internal
252
Revenue Code[,]; or [purchased by]
253
(B) an employee under a plan which meets the requirements of Section 408, Internal
254
Revenue Code[,]; or
255
(ii) paid to an employee or the employee's surviving spouse by:
256
(A) the United States[,];
257
(B) a state[, or];
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(C) a political subdivision [thereof,] of a state; or
259
(D) the District of Columbia[, to the employee involved or the surviving spouse];
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(e) subject to Subsection (3), for each [taxpayer] individual age 65 or over before the close
261
of the taxable year, a $7,500 personal retirement exemption;
262
(f) 75% of the amount of the personal exemption, as [defined and] calculated in [the]
263
Section 151, Internal Revenue Code, for each dependent child with a disability and adult with a
264
disability who is claimed as a dependent on [a taxpayer's] an individual's return;
265
(g) any amount included in federal taxable income that was received pursuant to any
266
federal law enacted in 1988 to provide reparation payments, as damages for human suffering, to
267
United States citizens and resident aliens of Japanese ancestry who were interned during World
268
War II;
269
(h) subject to [the limitations of] Subsection [(3)(e)] (4), amounts [a taxpayer] an
270
individual pays during the taxable year for health care insurance, as defined in Title 31A, Chapter
271
1, General Provisions:
272
(i) for:
273
(A) the [taxpayer] individual;
274
(B) the [taxpayer's] individual's spouse; and
275
(C) the [taxpayer's] individual's dependents; and
276
(ii) to the extent the [taxpayer] individual does not deduct the amounts under Section 125,
277
162, or 213, Internal Revenue Code, in determining federal taxable income for the taxable year;
278
(i) [except as otherwise provided in this subsection] subject to Subsection (5), the amount
279
of:
280
(i) a contribution made [in the tax year] on behalf of [the taxpayer] an individual to a
281
medical care savings account; and
282
(ii) interest earned on a contribution to a medical care savings account established pursuant
283
to Title 31A, Chapter [32] 32a, Medical Care Savings Account Act[, to the extent the contribution
284
is accepted by the account administrator as provided in the Medical Care Savings Account Act,
285
and if the taxpayer did not deduct or include amounts on his federal tax return pursuant to Section
286
220, Internal Revenue Code. A contribution deductible under this subsection may not exceed
287
either of the following:];
288
[(i) the maximum contribution allowed under the Medical Care Savings Account Act for
289
the tax year multiplied by two for taxpayers who file a joint return, if neither spouse is covered by
290
health care insurance as defined in Section
31A-1-301
or self-funded plan that covers the other
291
spouse, and each spouse has a medical care savings account; or]
292
[(ii) the maximum contribution allowed under the Medical Care Savings Account Act for
293
the tax year for taxpayers:]
294
[(A) who do not file a joint return; or]
295
[(B) who file a joint return, but do not qualify under Subsection (2)(i)(i); and]
296
(j) the amount included in federal taxable income that was derived from money paid by
297
the [taxpayer] individual to the program fund under Title 53B, Chapter 8a, Higher Education
298
Savings Incentive Program, not to exceed amounts determined under Subsection
53B-8a-106
(1)(d)
299
and investment income earned on participation agreements under Subsection
53B-8a-106
(1) when
300
used for higher education costs of the beneficiary; [and]
301
(k) for [tax] taxable years beginning on or after January 1, 2000, any amounts paid for
302
premiums [on] for long-term care insurance [policies] as defined in Section
31A-22-1402
to the
303
extent the amounts paid for long-term care insurance were not deducted under Section 213,
304
Internal Revenue Code, in determining federal taxable income[.];
305
(l) 75% of the amount of personal exemptions the individual is allowed for the taxable year
306
under Section 151, Internal Revenue Code, for:
307
(i) the individual;
308
(ii) the individual's spouse; and
309
(iii) the individual's dependents; and
310
(m) regardless of whether an individual claims the federal standard deduction or itemizes
311
deductions on the individual's federal individual income tax return for the taxable year, the
312
individual shall elect to subtract from the individual's federal adjusted gross income for the taxable
313
year either:
314
(i) the amount of the federal standard deduction the individual is allowed for the taxable
315
year; or
316
(ii) the amount of the federal itemized deduction the individual is allowed for the taxable
317
year.
318
(3) (a) For purposes of Subsection (2)(d), the amount of retirement income subtracted for
319
[taxpayers] an individual under 65 shall be the lesser of the amount included in federal taxable
320
income, or $4,800, except that:
321
(i) for married [taxpayers] individuals filing joint returns, for each $1 of adjusted gross
322
income earned over $32,000, the amount of the retirement income exemption that may be
323
subtracted shall be reduced by 50 cents;
324
(ii) for married [taxpayers] individuals filing separate returns, for each $1 of adjusted gross
325
income earned over $16,000, the amount of the retirement income exemption that may be
326
subtracted shall be reduced by 50 cents; and
327
(iii) for [individual taxpayers] an individual filing as a single taxpayer, for each $1 of
328
adjusted gross income earned over $25,000, the amount of the retirement income exemption that
329
may be subtracted shall be reduced by 50 cents.
330
(b) For purposes of Subsection (2)(e), the amount of the personal retirement exemption
331
shall be further reduced according to the following schedule:
332
(i) for married [taxpayers] individuals filing joint returns, for each $1 of adjusted gross
333
income earned over $32,000, the amount of the personal retirement exemption shall be reduced
334
by 50 cents;
335
(ii) for married [taxpayers] individuals filing separate returns, for each $1 of adjusted gross
336
income earned over $16,000, the amount of the personal retirement exemption shall be reduced
337
by 50 cents; and
338
(iii) for [individual taxpayers] an individual filing as a single taxpayer, for each $1 of
339
adjusted gross income earned over $25,000, the amount of the personal retirement exemption shall
340
be reduced by 50 cents.
341
(c) For purposes of Subsections (3)(a) and (b), adjusted gross income shall be calculated
342
by adding to federal adjusted gross income any interest income not otherwise included in federal
343
adjusted gross income.
344
(d) (i) For purposes of determining ownership of items of retirement income common law
345
doctrine will be applied in all cases even though some items may have originated from service or
346
investments in a community property state.
347
(ii) Amounts received by the spouse of a living retiree because of the retiree's having been
348
employed in a community property state are not deductible as retirement income of such spouse.
349
[(e)] (4) For purposes of Subsection (2)(h), a subtraction for an amount paid for health care
350
insurance as defined in Title 31A, Chapter 1, General Provisions, is not allowed:
351
[(i)] (a) for an amount that is reimbursed or funded in whole or in part by:
352
(i) the [federal government,] United States;
353
(ii) the state[,]; or
354
(iii) an agency or instrumentality of:
355
(A) the [federal government] United States; or
356
(B) the state; and
357
[(ii)] (b) for [a taxpayer] an individual who is eligible to participate in a health plan
358
maintained and funded in whole or in part by the [taxpayer's] individual's employer or the
359
[taxpayer's] individual's spouse's employer.
360
(5) (a) An individual may subtract from the individual's federal taxable income a
361
contribution or interest earned on a contribution under Subsection (2)(i):
362
(i) to the extent the contribution is accepted by the account administrator as provided in
363
Title 31A, Chapter 32a, Medical Care Savings Account Act; and
364
(ii) if the individual did not deduct or include the amounts of the contribution or interest
365
earned on the contribution on the individual's federal individual income tax return pursuant to
366
Section 220, Internal Revenue Code.
367
(b) A contribution subtracted from federal taxable income under Subsection (2)(i) may not
368
exceed:
369
(i) for an individual described in Subsection (5)(c), the product of:
370
(A) the maximum contribution allowed under Title 31A, Chapter 32a, Medical Care
371
Savings Account Act, for the taxable year; and
372
(B) two; or
373
(ii) for an individual described in Subsection (5)(d), the maximum contribution allowed
374
under Title 31A, Chapter 32a, Medical Care Savings Account Act, for the taxable year.
375
(c) A contribution subtracted from federal taxable income under Subsection (2)(i) may not
376
exceed the amount described in Subsection (5)(b)(i) for an individual filing a joint return if:
377
(i) neither spouse filing the joint return is covered by:
378
(A) health care insurance as defined in Section
31A-1-301
; or
379
(B) a self-funded plan that covers the other spouse; and
380
(ii) each spouse filing the joint return has a medical care savings account.
381
(d) A contribution subtracted from federal taxable income under Subsection (2)(i) may not
382
exceed the amount described in Subsection (5)(b)(ii) for an individual who:
383
(i) does not file a joint return; or
384
(ii) files a joint return, but does not meet the requirements of Subsection (5)(c).
385
Section 6.
Section
59-10-116
is amended to read:
386
59-10-116. Tax on nonresident individual's state taxable income.
387
A tax is [hereby] imposed on the state taxable income, as defined in [Sections
59-10-111
388
and] Section
59-10-112
, of every nonresident individual in accordance with the schedules in
389
Section
59-10-104
, [but] except that the individual's Utah tax shall be only the portion of the
390
resident tax [so calculated as] that the individual's federal adjusted gross income received from
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Utah sources [(]determined under Section
59-10-117
[)] for taxable year bears to the individual's
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total federal adjusted gross income for the same taxable year.
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Section 7.
Section
59-10-117
is amended to read:
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59-10-117. Federal adjusted gross income derived from Utah sources.
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(1) For the purpose of Section
59-10-116
, federal adjusted gross income derived from Utah
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sources [shall include] includes those items includable in federal ["]adjusted gross income[" (], as
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defined [by] in Section 62 [of the], Internal Revenue Code[)], attributable to or resulting from:
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(a) the ownership in this state of any interest in real or tangible personal property
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[(]including real property or property rights from which "gross income from mining" as defined
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by Section 613(c) [of the], Internal Revenue Code, is derived[)]; or
401
(b) the carrying on of a business, trade, profession, or occupation in this state.
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(2) For the purposes of Subsection (1):
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(a) Income from intangible personal property, including annuities, dividends, interest, and
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gains from the disposition of intangible personal property shall constitute income derived from
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Utah sources only to the extent that such income is from property employed in a trade, business,
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profession, or occupation carried on in this state.
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(b) Deductions with respect to capital losses, net long-term capital gains, and net operating
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losses shall be based solely on income, gain, loss, and deduction connected with Utah sources,
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under rules prescribed by the commission, but otherwise shall be determined in the same manner
410
as the corresponding federal deductions.
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(c) Salaries, wages, commissions, and compensation for personal services rendered outside
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this state shall not be considered to be derived from Utah sources.
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(d) A nonresident shareholder's distributive share of ordinary income, gain, loss, and
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deduction derived from or connected with Utah sources shall be determined under Section
415
59-10-118
.
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(e) A nonresident, other than a dealer holding property primarily for sale to customers in
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the ordinary course of [his] the dealer's trade or business, shall not be considered to carry on a
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trade, business, profession, or occupation in this state solely by reason of the purchase or sale of
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property for [his] the nonresident's own account.
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(f) If a trade, business, profession, or occupation is carried on partly within and partly
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without this state, items of income, gain, loss, and deductions derived from or connected with Utah
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sources shall be determined in accordance with the provisions of Section
59-10-118
.
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(g) A nonresident partner's distributive share of partnership income, gain, loss, and
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deduction derived from or connected with Utah sources shall be determined under Section
425
59-10-303
.
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(h) The share of a nonresident estate or trust and nonresident beneficiaries of any estate
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or trust in income, gain, loss, and deduction derived from or connected with Utah sources shall be
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determined under Section
59-10-207
.
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(i) Any dividend, interest, or distributive share of income, gain, or loss from a real estate
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investment trust, as defined in Section [
59-7-116.5
] 856, Internal Revenue Code, distributed or
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allocated to a nonresident investor in the trust, including any shareholder, beneficiary, or owner
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of a beneficial interest in the trust, shall:
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(A) be income from intangible personal property under Subsection (2)(a)[,]; and [shall]
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(B) constitute income derived from Utah sources only to the extent the nonresident
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investor is employing its beneficial interest in the trust in a trade, business, profession, or
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occupation carried on by the investor in this state.
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Section 8. Effective date.
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This act takes effect for taxable years beginning on or after January 1, 2001.
Legislative Review Note
as of 2-10-00 1:32 PM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.