Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 46 (2021GS)

Sponsor

Rep. Eliason, S.

Final action

Governor Signed 3/22/2021

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• repeals the corporate income tax deduction for a donation to the Student Prosperity Savings Program;
• repeals the individual income tax credit for a donation to the Student Prosperity Savings Program;
• eliminates a record retention requirement; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

STUDENT PROSPERITY SAVINGS PROGRAM AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Steve Eliason
Senate Sponsor: 
Jani Iwamoto
LONG TITLE
General Description:
This bill repeals income tax incentives related to the Student Prosperity Savings
Program.
Highlighted Provisions:
This bill:
▸ repeals the corporate income tax deduction for a donation to the Student Prosperity
Savings Program;
▸ repeals the individual income tax credit for a donation to the Student Prosperity
Savings Program;
▸ eliminates a record retention requirement; 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:
53B-8a-203
, as enacted by Laws of Utah 2017, Chapter 389
59-7-106
, as last amended by Laws of Utah 2020, Sixth Special Session, Chapter 15
59-10-1017
, as last amended by Laws of Utah 2017, Chapter 389
63I-2-259
, as last amended by Laws of Utah 2020, Fifth Special Session, Chapter 12
REPEALS:
59-10-1017.1
, as enacted by Laws of Utah 2017, Chapter 389
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
53B-8a-203
 is amended to read:
53B-8a-203.
Donations to the program.
(1) (a) A person may make a donation to the program by:
(i) sending the donation to the plan; and
(ii) including with the donation, direction that the donation benefit the program.
(b) A person making a donation shall include the person's name and mailing address
with the donation.
(2) (a) The plan shall mail a receipt to the person that makes the donation.
(b) The receipt described in Subsection (2)(a) shall state:
(i) the name of the person that made the donation;
(ii) the amount of the donation; and
(iii) the date on which the person makes the donation.
(c) The date on which the person makes a donation to the program is the date on which
the plan receives the donation, unless the plan receives the donation on a Saturday, a Sunday,
or a holiday, in which case the date on which the person makes the donation shall be the first
business day after the day on which the plan receives the donation.
[
(d) A person that receives a receipt described in Subsection (2)(a) shall retain the
receipt for the same time period a person is required to keep books and records under Section
59-1-1406
.
]
Section 2. Section 
59-7-106
 is amended to read:
59-7-106.
Subtractions from unadjusted income.
(1) In computing adjusted income, the following amounts shall be subtracted from
unadjusted income:
(a) the foreign dividend gross-up included in gross income for federal income tax
purposes under Section 78, Internal Revenue Code;
(b) subject to Subsection (2), the net capital loss, as defined for federal purposes, if the
taxpayer elects to deduct the net capital loss on the return filed under this chapter for the
taxable year for which the net capital loss is incurred;
(c) the decrease in salary expense deduction for federal income tax purposes due to
claiming the federal work opportunity credit under Section 51, Internal Revenue Code;
(d) the decrease in qualified research and basic research expense deduction for federal
income tax purposes due to claiming the federal credit for increasing research activities under
Section 41, Internal Revenue Code;
(e) the decrease in qualified clinical testing expense deduction for federal income tax
purposes due to claiming the federal credit for clinical testing expenses for certain drugs for
rare diseases or conditions under Section 45C, Internal Revenue Code;
(f) any decrease in any expense deduction for federal income tax purposes due to
claiming any other federal credit;
(g) the safe harbor lease adjustment required under Subsections 
59-7-111
(1)(b) and
(2)(b);
(h) any income on the federal corporation income tax return that has been previously
taxed by Utah;
(i) an amount included in federal taxable income that is due to a refund of a tax,
including a franchise tax, an income tax, a corporate stock and business tax, or an occupation
tax:
(i) if that tax is imposed for the privilege of:
(A) doing business; or
(B) exercising a corporate franchise;
(ii) if that tax is paid by the corporation to:
(A) Utah;
(B) another state of the United States;
(C) a foreign country;
(D) a United States possession; or
(E) the Commonwealth of Puerto Rico; and
(iii) to the extent that tax was added to unadjusted income under Section 
59-7-105
;
(j) a charitable contribution, to the extent the charitable contribution is allowed as a
subtraction under Section 
59-7-109
;
(k) subject to Subsection (3), 50% of a dividend considered to be received or received
from a subsidiary that:
(i) is a member of the unitary group;
(ii) is organized or incorporated outside of the United States; and
(iii) is not included in a combined report under Section 
59-7-402
 or 
59-7-403
;
(l) subject to Subsection (4) and Section 
59-7-401
, 50% of the adjusted income of a
foreign operating company;
(m) the amount of gain or loss that is included in unadjusted income but not recognized
for federal purposes on stock sold or exchanged by a member of a selling consolidated group as
defined in Section 338, Internal Revenue Code, if an election has been made in accordance
with Section 338(h)(10), Internal Revenue Code;
(n) the amount of gain or loss that is included in unadjusted income but not recognized
for federal purposes on stock sold, exchanged, or distributed by a corporation in accordance
with Section 336(e), Internal Revenue Code, if an election under Section 336(e), Internal
Revenue Code, has been made for federal purposes;
(o) subject to Subsection (5), an adjustment to the following due to a difference
between basis for federal purposes and basis as computed under Section 
59-7-107
:
(i) an amortization expense;
(ii) a depreciation expense;
(iii) a gain;
(iv) a loss; or
(v) an item similar to Subsections (1)(o)(i) through (iv);
(p) an interest expense that is not deducted on a federal corporation income tax return
under Section 265(b) or 291(e), Internal Revenue Code;
(q) 100% of dividends received from a subsidiary that is an insurance company if that
subsidiary that is an insurance company is:
(i) exempt from this chapter under Subsection 
59-7-102
(1)(c); and
(ii) under common ownership;
(r) subject to Subsection 
59-7-105
(10), for a corporation that is an account owner as
defined in Section 
53B-8a-102
, the amount of a qualified investment as defined in Section
53B-8a-102.5
:
(i) that the corporation or a person other than the corporation makes into an account
owned by the corporation during the taxable year;
(ii) to the extent that neither the corporation nor the person other than the corporation
described in Subsection (1)(r)(i) deducts the qualified investment on a federal income tax
return; and
(iii) to the extent the qualified investment does not exceed the maximum amount of the
qualified investment that may be subtracted from unadjusted income for a taxable year in
accordance with Subsection 
53B-8a-106
(1);
[
(s) for a corporation that makes a donation, as that term is defined in Section
53B-8a-201
, to the Student Prosperity Savings Program created in Section 
53B-8a-202
, the
amount of the donation to the extent that the corporation did not deduct the donation on a
federal income tax return;
]
[
(t)
] 
(s)
 for purposes of income included in a combined report under Part 4, Combined
Reporting, the entire amount of the dividends a member of a unitary group receives or is
considered to receive from a captive real estate investment trust;
[
(u)
] 
(t)
 the increase in income for federal income tax purposes due to claiming a:
(i) qualified tax credit bond credit under Section 54A, Internal Revenue Code; or
(ii) qualified zone academy bond under Section 1397E, Internal Revenue Code;
[
(v)
] 
(u)
 for a taxable year beginning on or after January 1, 2019, but beginning on or
before December 31, 2019, only:
(i) the amount of any FDIC premium paid or incurred by the taxpayer that is
disallowed as a deduction for federal income tax purposes under Section 162(r), Internal
Revenue Code, on the taxpayer's 2018 federal income tax return; plus
(ii) the amount of any FDIC premium paid or incurred by the taxpayer that is
disallowed as a deduction for federal income tax purposes under Section 162(r), Internal
Revenue Code, for the taxable year;
[
(w)
] 
(v)
 for a taxable year beginning on or after January 1, 2020, the amount of any
FDIC premium paid or incurred by the taxpayer that is disallowed as a deduction for federal
income tax purposes under Section 162(r), Internal Revenue Code, for the taxable year; and
[
(x)
] 
(w)
 for a taxable year beginning on or after January 1, 2020, but beginning on or
before December 31, 2020, the amount of:
(i) a paycheck protection loan similar to a loan forgiven in accordance with 15 U.S.C.
Sec. 636(a)(36) that is:
(A) authorized by the federal government;
(B) provided in response to COVID-19;
(C) forgiven if the borrower meets the expenditure requirements; and
(D) subject to federal income tax, to the extent that a deduction for the expenditures
paid with the loan is disallowed; and
(ii) any grant funds or forgiven loans that:
(A) the taxpayer receives from the state, a county within the state, or a municipality
within the state in response to COVID-19;
(B) are funded using federal revenue received by the state, the county, or the
municipality to respond to COVID-19; and
(C) are included in unadjusted income.
(2) For purposes of Subsection (1)(b):
(a) the subtraction shall be made by claiming the subtraction on a return filed:
(i) under this chapter for the taxable year for which the net capital loss is incurred; and
(ii) by the due date of the return, including extensions; and
(b) a net capital loss for a taxable year shall be:
(i) subtracted for the taxable year for which the net capital loss is incurred; or
(ii) carried forward as provided in Sections 1212(a)(1)(B) and (C), Internal Revenue
Code.
(3) (a) For purposes of calculating the subtraction provided for in Subsection (1)(k), a
taxpayer shall first subtract from a dividend considered to be received or received an expense
directly attributable to that dividend.
(b) For purposes of Subsection (3)(a), the amount of an interest expense that is
considered to be directly attributable to a dividend is calculated by multiplying the interest
expense by a fraction:
(i) the numerator of which is the taxpayer's average investment in the dividend paying
subsidiaries; and
(ii) the denominator of which is the taxpayer's average total investment in assets.
(c) (i) For purposes of calculating the subtraction allowed by Subsection (1)(k), in
determining income apportionable to this state, a portion of the factors of a foreign subsidiary
that has dividends that are partially subtracted under Subsection (1)(k) shall be included in the
combined report factors as provided in this Subsection (3)(c).
(ii) For purposes of Subsection (3)(c)(i), the portion of the factors of a foreign
subsidiary that has dividends that are partially subtracted under Subsection (1)(k) that shall be
included in the combined report factors is calculated by multiplying each factor of the foreign
subsidiary by a fraction:
(A) not to exceed 100%; and
(B) (I) the numerator of which is the amount of the dividend paid by the foreign
subsidiary that is included in adjusted income; and
(II) the denominator of which is the current year earnings and profits of the foreign
subsidiary as determined under the Internal Revenue Code.
(4) (a) For purposes of Subsection (1)(l), a taxpayer may not make a subtraction under
Subsection (1)(l):
(i) if the taxpayer elects to file a worldwide combined report as provided in Section
59-7-403
; or
(ii) for the following:
(A) income generated from intangible property; or
(B) a capital gain, dividend, interest, rent, royalty, or other similar item that is
generated from an asset held for investment and not from a regular business trading activity.
(b) In calculating the subtraction provided for in Subsection (1)(l), a foreign operating
company:
(i) may not subtract an amount provided for in Subsection (1)(k) or (l); and
(ii) prior to determining the subtraction under Subsection (1)(l), shall eliminate a
transaction that occurs between members of a unitary group.
(c) For purposes of the subtraction provided for in Subsection (1)(l), in determining
income apportionable to this state, the factors for a foreign operating company shall be
included in the combined report factors in the same percentages as the foreign operating
company's adjusted income is included in the combined adjusted income.
(d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may by rule define what constitutes:
(i) income generated from intangible property; or
(ii) a capital gain, dividend, interest, rent, royalty, or other similar item that is
generated from an asset held for investment and not from a regular business trading activity.
(5) (a) For purposes of the subtraction provided for in Subsection (1)(o), the amount of
a reduction in basis shall be allowed as an expense for the taxable year in which a federal tax
credit is claimed if:
(i) there is a reduction in federal basis for a federal tax credit; and
(ii) there is no corresponding tax credit allowed in this state.
(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may by rule define what constitutes an item similar to Subsections (1)(o)(i)
through (iv).
Section 3. Section 
59-10-1017
 is amended to read:
59-10-1017.
Utah Educational Savings Plan tax credit.
(1) As used in this section:
(a) "Account owner" means the same as that term is defined in Section 
53B-8a-102
.
(b) "Grantor trust" means the same as that term is defined in Section 
53B-8a-102.5
.
(c) "Higher education costs" means the same as that term is defined in Section
53B-8a-102.5
.
(d) "Maximum amount of a qualified investment for the taxable year" means, for a
taxable year, the product of 5% and:
(i) subject to Subsection (1)(d)(iii), for a claimant, estate, or trust that is an account
owner, if that claimant, estate, or trust is other than husband and wife account owners who file
a single return jointly, the maximum amount of a qualified investment:
(A) listed in Subsection 
53B-8a-106
(1)(e)(ii); and
(B) increased or kept for that taxable year in accordance with Subsections
53B-8a-106
(1)(f) and (g);
(ii) subject to Subsection (1)(d)(iii), for claimants who are husband and wife account
owners who file a single return jointly, the maximum amount of a qualified investment:
(A) listed in Subsection 
53B-8a-106
(1)(e)(iii); and
(B) increased or kept for that taxable year in accordance with Subsections
53B-8a-106
(1)(f) and (g); or
(iii) for a grantor trust:
(A) if the owner of the grantor trust has a single filing status or head of household
filing status as defined in Section 
59-10-1018
, the amount described in Subsection (1)(d)(i); or
(B) if the owner of the grantor trust has a joint filing status as defined in Section
59-10-1018
, the amount described in Subsection (1)(d)(ii).
(e) "Owner of the grantor trust" means the same as that term is defined in Section
53B-8a-102.5
.
(f) "Qualified investment" means the same as that term is defined in Section
53B-8a-102.5
.
(2) Except as provided in Section 
59-10-1002.2
 and subject to the other provisions of
this section, a claimant, estate, or trust that is an account owner may claim a nonrefundable tax
credit equal to the product of:
(a) the amount of a qualified investment made:
(i) during the taxable year; and
(ii) into an account owned by the claimant, estate, or trust; and
(b) 5%.
(3) A claimant, estate, or trust, or a person other than the claimant, estate, or trust, may
make a qualified investment described in Subsection (2).
(4) A claimant, estate, or trust that is an account owner may not claim a tax credit
under this section with respect to any portion of a qualified investment described in Subsection
(2) that a claimant, estate, trust, or person described in Subsection (3) deducts on a federal
income tax return.
(5) A tax credit under this section may not exceed the maximum amount of a qualified
investment for the taxable year.
(6) A claimant, estate, or trust that is an account owner may not carry forward or carry
back the tax credit under this section.
[
(7) A claimant, estate, or trust may claim a tax credit under this section in addition to
the tax credit described in Section 
59-10-1017.1
.
]
Section 4. Section 
63I-2-259
 is amended to read:
63I-2-259.
Repeal dates -- Title 59.
(1) In Section 
59-2-926
, the language that states "applicable" and "or 
53F-2-301.5
" is
repealed July 1, 2023.
(2) Subsection 
59-7-106
(1)[
(x)
]
(w)
 is repealed December 31, 2021.
(3) Section 
59-7-620
 is repealed December 31, 2021. 
(4) Subsection 
59-10-114
(2)(j) is repealed December 31, 2021.
Section 5. 
Repealer.
This bill repeals:
Section 
59-10-1017.1
,
Student Prosperity Savings Program tax credit.
Section 6. 
Retrospective operation.
(1) Except as provided in Subsection (2), this bill has retrospective operation for a
taxable year beginning on or after January 1, 2021.
(2) The changes to Section 
63I-2-259
 have retrospective operation to January 1, 2021.