Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 46 (2017GS)

Sponsor

Rep. Eliason, S.

Final action

Governor Signed 3/24/2017

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• addresses state taxable income for pass-through entities; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

PASS-THROUGH ENTITY TAX AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Steve Eliason
Senate Sponsor: 
Curtis S. Bramble
LONG TITLE
Committee Note:
The Revenue and Taxation Interim Committee recommended this bill.
General Description:
This bill amends individual income tax provisions related to pass-through entities.
Highlighted Provisions:
This bill:
▸ addresses state taxable income for pass-through entities; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides retrospective operation.
Utah Code Sections Affected:
AMENDS:
59-10-117
, as last amended by Laws of Utah 2011, Chapter 53
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
59-10-117
 is amended to read:
59-10-117.
State taxable income derived from Utah sources.
(1) For purposes of Section 
59-10-116
, state taxable income derived from Utah sources
includes [
those items includable in
] state taxable income attributable to or resulting from:
(a) the ownership in this state of any interest in real or tangible personal property,
including real property or property rights from which gross income from mining as [
defined
]
described
 by Section 613(c), Internal Revenue Code, is derived;
(b) the carrying on of a business, trade, profession, or occupation in this state;
(c) an addition to adjusted gross income required by Subsection 
59-10-114
(1)(c), (d),
or (h) to the extent 
that
 the addition was previously subtracted from state taxable income;
(d) a subtraction from adjusted gross income required by Subsection 
59-10-114
(2)(c)
for a refund described in Subsection 
59-10-114
(2)(c) to the extent 
that
 the refund subtracted is
related to a tax imposed by this state; or
(e) an adjustment to adjusted gross income required by Section 
59-10-115
 to the extent
the adjustment is related to an item described in Subsections (1)(a) through (d).
(2) For [
the
] purposes of Subsection (1):
(a) income from intangible personal property, including annuities, dividends, interest,
and gains from the disposition of intangible personal property
,
 shall constitute income derived
from Utah sources only to the extent that the income is from property employed in a trade,
business, profession, or occupation carried on in this state;
(b) a deduction with respect to a capital loss, net long-term capital gain, or net
operating loss shall be
:
(i)
 based solely on income, gain, loss, and deduction connected with Utah sources,
under rules prescribed by the commission in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act[
, but
]
; and
(ii)
 otherwise [
shall be
] determined in the same manner as the corresponding federal
deductions;
(c) a salary, wage, commission, or compensation for personal services rendered outside
this state may not be considered to be derived from Utah sources;
(d) a [
nonresident shareholder's distributive
] share of [
ordinary
] income, gain, loss,
[
and
] deduction
, or credit of a nonresident pass-through entity taxpayer, as defined in Section
59-10-1402
,
 derived from or connected with Utah sources shall be determined [
under
] 
in
accordance with
 Section 
59-10-118
;
(e) a nonresident, other than a dealer holding property primarily for sale to customers
in the ordinary course of the dealer's trade or business, may not be considered to carry on a
trade, business, profession, or occupation in this state solely by reason of the purchase or sale
of property for the nonresident's own account;
(f) if a trade, business, profession, or occupation is carried on partly within and partly
without this state, an item of income, gain, loss, or a deduction derived from or connected with
Utah sources shall be determined in accordance with Section 
59-10-118
;
[
(g) a nonresident partner's distributive share of partnership income, gain, loss,
deduction, or credit derived from or connected with Utah sources shall be determined under
Part 14, Pass-Through Entities and Pass-Through Entity Taxpayers Act;
]
[
(h)
] 
(g)
 the share of a nonresident estate or trust or a nonresident beneficiary of any
estate or trust in income, gain, loss, or deduction derived from or connected with Utah sources
shall be determined under Section 
59-10-207
; and
[
(i)
] 
(h)
 any dividend, interest, or distributive share of income, gain, or loss from a real
estate investment trust, as defined in Section 
59-7-101
, distributed or allocated to a nonresident
investor in the trust, including any shareholder, beneficiary, or owner of a beneficial interest in
the trust, shall
:
(i)
 be income from intangible personal property under Subsection (2)(a)[
,
]
;
 and [
shall
]
(ii)
 constitute income derived from Utah sources only to the extent the nonresident
investor is employing its beneficial interest in the trust in a trade, business, profession, or
occupation carried on by the investor in this state.
Section 2. 
Retrospective operation.
This bill has retrospective operation for a taxable year beginning on or after January 1,
2017.
Legislative Review Note
Office of Legislative Research and General Counsel