Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 170 First Substitute (2016GS)

Sponsor

Rep. Peterson, J.

Final action

Governor Signed 3/25/2016

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• repeals the medical care savings account tax credit; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

MEDICAL CARE SAVINGS ACCOUNT TAX CREDIT
REPEAL
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Jeremy A. Peterson
Senate Sponsor: 
Deidre M. Henderson
LONG TITLE
General Description:
This bill repeals the medical care savings account tax credit. 
Highlighted Provisions:
This bill:
▸ repeals the medical care savings account tax credit; and
▸ makes technical and conforming changes. 
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
AMENDS:
31A-32a-101
, as last amended by Laws of Utah 2008, Chapter 389
31A-32a-106
, as last amended by Laws of Utah 2008, Chapter 389
59-10-114
, as last amended by Laws of Utah 2010, Chapter 6
59-10-1002.2
, as last amended by Laws of Utah 2011, Chapter 302
REPEALS:
59-10-1021
, as enacted by Laws of Utah 2008, Chapter 389
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
31A-32a-101
 is amended to read:
31A-32a-101.
Title.
[
(1)
] This chapter is known as the "Medical Care Savings Account Act."
[
(2) (a) This chapter applies only to a medical care savings account established for the
purpose of seeking a tax credit under Section 
59-10-1021
.
]
[
(b) This chapter does not apply to a medical care savings account with respect to
which a tax credit is not claimed under Section 
59-10-1021
.
]
Section 2. Section 
31A-32a-106
 is amended to read:
31A-32a-106.
Regulation of account administrators -- Administration of addition
to adjusted gross income and tax credit -- Rulemaking authority.
(1) The department shall regulate account administrators and may adopt rules
necessary to administer this chapter.
(2) The State Tax Commission may adopt rules necessary to monitor and implement
the[
: (a)
] amounts required to be added to adjusted gross income in accordance with Sections
31A-32a-105
 and 
59-10-114
[
; or
]
.
[
(b) amount claimed as a tax credit in accordance with Section 
59-10-1021
.
]
Section 3. Section 
59-10-114
 is amended to read:
59-10-114.
Additions to and subtractions from adjusted gross income of an
individual.
(1) There shall be added to adjusted gross income of a resident or nonresident
individual:
(a) a lump sum distribution that the taxpayer does not include in adjusted gross income
on the taxpayer's federal individual income tax return for the taxable year;
(b) the amount of a child's income calculated under Subsection (4) that:
(i) a parent elects to report on the parent's federal individual income tax return for the
taxable year; and
(ii) the parent does not include in adjusted gross income on the parent's federal
individual income tax return for the taxable year;
(c) (i) a withdrawal from a medical care savings account and any penalty imposed for
the taxable year if:
(A) the resident or nonresident individual does not deduct the amounts on the resident
or nonresident individual's federal individual income tax return under Section 220, Internal
Revenue Code;
(B) the withdrawal is subject to Subsections 
31A-32a-105
(1) and (2); and
(C) the withdrawal is[
:
] 
subtracted on, or used as the basis for claiming a tax credit on,
a return the resident or nonresident individual files under this chapter;
[
(I) subtracted on a return the resident or nonresident individual files under this chapter
for a taxable year beginning on or before December 31, 2007; or
]
[
(II) used as the basis for a resident or nonresident individual to claim a tax credit
under Section 
59-10-1021
;
]
(ii) a disbursement required to be added to adjusted gross income in accordance with
Subsection 
31A-32a-105
(3); or
(iii) an amount required to be added to adjusted gross income in accordance with
Subsection 
31A-32a-105
(5)(c);
(d) the amount withdrawn under Title 53B, Chapter 8a, Utah Educational Savings Plan,
from the account of a resident or nonresident individual who is an account owner as defined in
Section 
53B-8a-102
, for the taxable year for which the amount is withdrawn, if that amount
withdrawn from the account of the resident or nonresident individual who is the account
owner:
(i) is not expended for:
(A) higher education costs as defined in Section 
53B-8a-102
; or
(B) a payment or distribution that qualifies as an exception to the additional tax for
distributions not used for educational expenses provided in Sections 529(c) and 530(d),
Internal Revenue Code; and
(ii) is:
(A) subtracted by the resident or nonresident individual:
(I) who is the account owner; and
(II) on the resident or nonresident individual's return filed under this chapter for a
taxable year beginning on or before December 31, 2007; or
(B) used as the basis for the resident or nonresident individual who is the account
owner to claim a tax credit under Section 
59-10-1017
;
(e) except as provided in Subsection (5), for bonds, notes, and other evidences of
indebtedness acquired on or after January 1, 2003, the interest from bonds, notes, and other
evidences of indebtedness issued by one or more of the following entities:
(i) a state other than this state;
(ii) the District of Columbia;
(iii) a political subdivision of a state other than this state; or
(iv) an agency or instrumentality of an entity described in Subsections (1)(e)(i) through
(iii);
(f) subject to Subsection (2)(c), any distribution received by a resident beneficiary of a
resident trust of income that was taxed at the trust level for federal tax purposes, but was
subtracted from state taxable income of the trust pursuant to Subsection 
59-10-202
(2)(b);
(g) any distribution received by a resident beneficiary of a nonresident trust of
undistributed distributable net income realized by the trust on or after January 1, 2004, if that
undistributed distributable net income was taxed at the trust level for federal tax purposes, but
was not taxed at the trust level by any state, with undistributed distributable net income
considered to be distributed from the most recently accumulated undistributed distributable net
income; and
(h) any adoption expense:
(i) for which a resident or nonresident individual receives reimbursement from another
person; and
(ii) to the extent to which the resident or nonresident individual subtracts that adoption
expense:
(A) on a return filed under this chapter for a taxable year beginning on or before
December 31, 2007; or
(B) from federal taxable income on a federal individual income tax return.
(2) There shall be subtracted from adjusted gross income of a resident or nonresident
individual:
(a) the difference between:
(i) the interest or a dividend on an obligation or security of the United States or an
authority, commission, instrumentality, or possession of the United States, to the extent that
interest or dividend is:
(A) included in adjusted gross income for federal income tax purposes for the taxable
year; and
(B) exempt from state income taxes under the laws of the United States; and
(ii) any interest on indebtedness incurred or continued to purchase or carry the
obligation or security described in Subsection (2)(a)(i);
(b) for taxable years beginning on or after January 1, 2000, if the conditions of
Subsection (3)(a) are met, the amount of income derived by a Ute tribal member:
(i) during a time period that the Ute tribal member resides on homesteaded land
diminished from the Uintah and Ouray Reservation; and
(ii) from a source within the Uintah and Ouray Reservation;
(c) an amount received by a resident or nonresident individual or distribution received
by a resident or nonresident beneficiary of a resident trust:
(i) if that amount or distribution constitutes a refund of taxes imposed by:
(A) a state; or
(B) the District of Columbia; and
(ii) to the extent that amount or distribution is included in adjusted gross income for
that taxable year on the federal individual income tax return of the resident or nonresident
individual or resident or nonresident beneficiary of a resident trust;
(d) the amount of a railroad retirement benefit:
(i) paid:
(A) in accordance with The Railroad Retirement Act of 1974, 45 U.S.C. Sec. 231 et
seq.;
(B) to a resident or nonresident individual; and
(C) for the taxable year; and
(ii) to the extent that railroad retirement benefit is included in adjusted gross income on
that resident or nonresident individual's federal individual income tax return for that taxable
year; and
(e) an amount:
(i) received by an enrolled member of an American Indian tribe; and
(ii) to the extent that the state is not authorized or permitted to impose a tax under this
part on that amount in accordance with:
(A) federal law;
(B) a treaty; or
(C) a final decision issued by a court of competent jurisdiction.
(3) (a) A subtraction for an amount described in Subsection (2)(b) is allowed only if:
(i) the taxpayer is a Ute tribal member; and
(ii) the governor and the Ute tribe execute and maintain an agreement meeting the
requirements of this Subsection (3).
(b) The agreement described in Subsection (3)(a):
(i) may not:
(A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
(B) provide a subtraction under this section greater than or different from the
subtraction described in Subsection (2)(b); or
(C) affect the power of the state to establish rates of taxation; and
(ii) shall:
(A) provide for the implementation of the subtraction described in Subsection (2)(b);
(B) be in writing;
(C) be signed by:
(I) the governor; and
(II) the chair of the Business Committee of the Ute tribe;
(D) be conditioned on obtaining any approval required by federal law; and
(E) state the effective date of the agreement.
(c) (i) The governor shall report to the commission by no later than February 1 of each
year regarding whether or not an agreement meeting the requirements of this Subsection (3) is
in effect.
(ii) If an agreement meeting the requirements of this Subsection (3) is terminated, the
subtraction permitted under Subsection (2)(b) is not allowed for taxable years beginning on or
after the January 1 following the termination of the agreement.
(d) For purposes of Subsection (2)(b) and in accordance with Title 63G, Chapter 3,
Utah Administrative Rulemaking Act, the commission may make rules:
(i) for determining whether income is derived from a source within the Uintah and
Ouray Reservation; and
(ii) that are substantially similar to how adjusted gross income derived from Utah
sources is determined under Section 
59-10-117
.
(4) (a) For purposes of this Subsection (4), "Form 8814" means:
(i) the federal individual income tax Form 8814, Parents' Election To Report Child's
Interest and Dividends; or
(ii) (A) a form designated by the commission in accordance with Subsection
(4)(a)(ii)(B) as being substantially similar to 2000 Form 8814 if for purposes of federal
individual income taxes the information contained on 2000 Form 8814 is reported on a form
other than Form 8814; and
(B) for purposes of Subsection (4)(a)(ii)(A) and in accordance with Title 63G, Chapter
3, Utah Administrative Rulemaking Act, the commission may make rules designating a form as
being substantially similar to 2000 Form 8814 if for purposes of federal individual income
taxes the information contained on 2000 Form 8814 is reported on a form other than Form
8814.
(b) The amount of a child's income added to adjusted gross income under Subsection
(1)(b) is equal to the difference between:
(i) the lesser of:
(A) the base amount specified on Form 8814; and
(B) the sum of the following reported on Form 8814:
(I) the child's taxable interest;
(II) the child's ordinary dividends; and
(III) the child's capital gain distributions; and
(ii) the amount not taxed that is specified on Form 8814.
(5) Notwithstanding Subsection (1)(e), interest from bonds, notes, and other evidences
of indebtedness issued by an entity described in Subsections (1)(e)(i) through (iv) may not be
added to adjusted gross income of a resident or nonresident individual if, as annually
determined by the commission:
(a) for an entity described in Subsection (1)(e)(i) or (ii), the entity and all of the
political subdivisions, agencies, or instrumentalities of the entity do not impose a tax based on
income on any part of the bonds, notes, and other evidences of indebtedness of this state; or
(b) for an entity described in Subsection (1)(e)(iii) or (iv), the following do not impose
a tax based on income on any part of the bonds, notes, and other evidences of indebtedness of
this state:
(i) the entity; or
(ii) (A) the state in which the entity is located; or
(B) the District of Columbia, if the entity is located within the District of Columbia.
Section 4. Section 
59-10-1002.2
 is amended to read:
59-10-1002.2.
Apportionment of tax credits.
(1) A nonresident individual or a part-year resident individual that claims a tax credit
in accordance with Section 
59-10-1017
, 
59-10-1018
, 
59-10-1019
, [
59-10-1021
,
] 
59-10-1022
,
59-10-1023
, 
59-10-1024
, or 
59-10-1028
 may only claim an apportioned amount of the tax
credit equal to:
(a) for a nonresident individual, the product of:
(i) the state income tax percentage for the nonresident individual; and
(ii) the amount of the tax credit that the nonresident individual would have been
allowed to claim but for the apportionment requirements of this section; or
(b) for a part-year resident individual, the product of:
(i) the state income tax percentage for the part-year resident individual; and
(ii) the amount of the tax credit that the part-year resident individual would have been
allowed to claim but for the apportionment requirements of this section.
(2) A nonresident estate or trust that claims a tax credit in accordance with Section
59-10-1017
, 
59-10-1020
, 
59-10-1022
, 
59-10-1024
, or 
59-10-1028
 may only claim an
apportioned amount of the tax credit equal to the product of:
(a) the state income tax percentage for the nonresident estate or trust; and
(b) the amount of the tax credit that the nonresident estate or trust would have been
allowed to claim but for the apportionment requirements of this section.
Section 5. 
Repealer.
This bill repeals:
Section 
59-10-1021
,
Nonrefundable medical care savings account tax credit.
Section 6. 
Effective date.
This bill takes effect for a taxable year beginning on or after January 1, 2017, except
that the amendments to Section 
31A-32a-101
 and Section 
31A-32a-106
 in this bill take effect
on January 1, 2017.