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        February 20, 2004

Mr. Speaker:

    The Revenue and Taxation Committee reports a favorable recommendation on H.B. 345, EARNED INCOME TAX CREDIT, by Representative J. Biskupski, with the following amendments:

1.    Page 2, Line 28 :    

             28          59-10-136.

  Definitions --       State earned income tax credit.


2.    Page 2, Lines 29 through 34 :    

             29          (1) As used in this section:
             30          (a) "federal adjusted gross income" is as defined in Section 62, Internal Revenue Code;
             31
[[  
     and   ]]
             32          (b) "federal earned income tax credit" means the amount of the federal earned income
             33      tax credit an individual is allowed for the taxable year in accordance with Section 32, Internal
             34      Revenue Code
[[   .   ]]        ; and      

  (c) notwithstanding Section 59-10-103, "nonresident individual" means an individual who:

(i) is not a resident of this state; and
(ii) has federal adjusted gross income derived from Utah sources as calculated under Section 59-10-117.  


3.    Page 2, Lines 35 through 37 :    

             35          (2)
[[   For   ]]        Subject to Subsection (4), for       taxable years beginning on or after January 1, 2005, a resident or nonresident

             36      individual may claim as provided in this section a refundable earned income tax credit as
             37      follows:

4.    Page 3, Lines 69 through 80 :    

             69      price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
      (4) The tax credit for a nonresident individual is limited to an amount equal to

the product of:


    (a) the tax credit calculated under Subsection (2); and
    (b) a percentage calculated by dividing the nonresident individual's federal adjusted gross income derived from Utah sources for the taxable year, as calculated under Section 59-10-117, by the nonresident individual's total federal adjusted gross income for that same taxable year.  

             70          
[[   (4)   ]]        (5)       A resident or nonresident individual may not claim a tax credit under this section if

             71      the resident or nonresident individual's federal adjusted gross income is greater than the
             72      greatest amount of federal adjusted gross income for which a tax credit is allowed under
             73      Subsection (2)(c).
             74          
[[   (5)   ]]        (6)       A resident or nonresident individual may not carry forward or carry back the tax

             75      credit provided for under this section.
             76          
[[   (6)   ]]        (7)       In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the

             77      commission may make rules providing procedures for issuing a refund to a resident or
             78      nonresident individual for the tax credit provided for under this section if the tax credit exceeds
             79      the resident or nonresident individual's tax liability under this chapter for the taxable year for
             80      which the resident or nonresident individual claims the tax credit.

    Respectfully,

    Wayne A. Harper
    Committee Chair

Voting: 12-0-2
3 HB0345.HC1.wpd 2/20/04 10:04 am bhowe/BRH RLR/BRH

Bill Number
Action Class
Action Code

*HB0345*
*H*
*HCRAMD*

 HB0345
H
HCRAMD