Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 106 (2025GS)

Sponsor

Rep. Christofferson, Kay J.

Final action

Governor Signed 3/26/2025

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• amends the corporate franchise and income tax rates;
• amends the individual income tax rate;
• enacts nonrefundable corporate and individual income tax credits for employer-provided child care;
• allows a taxpayer to claim the nonrefundable child tax credit for child dependents under one year old and up to five years old; and
• makes conforming changes.

Every vote on this bill

Bill text

14
59-7-104
59-7-201
59-7-627
59-10-104
59-10-1002.2
59-10-1047
59-10-1048
0
Income Tax Revisions
2025 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Kay J. Christofferson
Senate Sponsor: Daniel McCay
LONG TITLE
General Description:
This bill amends income tax provisions.
Highlighted Provisions:
This bill:
amends the corporate franchise and income tax rates; 
amends the individual income tax rate; 
enacts nonrefundable corporate and individual income tax credits for employer-provided 
child care; 
allows a taxpayer to claim the nonrefundable child tax credit for child dependents under 
one year old and up to five years old; and
makes conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides retrospective operation.
Utah Code Sections Affected:
AMENDS:
59-7-104
, as last amended by Laws of Utah 2024, Chapter 255
59-7-201
, as last amended by Laws of Utah 2024, Chapter 255
59-10-104
, as last amended by Laws of Utah 2024, Chapter 255
59-10-1002.2
, as last amended by Laws of Utah 2023, Chapters 460, 462
59-10-1047
, as last amended by Laws of Utah 2024, Chapter 235
ENACTS:
59-7-627
, Utah Code Annotated 1953
59-10-1048
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1, Section 
59-7-104
 is amended to read:
59-7-104
. Tax -- Minimum tax.
(1)
Each domestic and foreign corporation, except a corporation that is exempt under 
Section 
59-7-102
, shall pay an annual tax to the state based on the corporation's Utah 
taxable income for the taxable year for the privilege of exercising the corporation's 
corporate franchise or for the privilege of doing business in the state.
(2)
The tax shall be 
4.55
4.5
% of a corporation's Utah taxable income.
(3)
The minimum tax a corporation shall pay under this chapter is $100.
Section 2, Section 
59-7-201
 is amended to read:
59-7-201
. Tax -- Minimum tax.
(1)
There is imposed upon each corporation, except a corporation that is exempt under 
Section 
59-7-102
, a tax upon the corporation's Utah taxable income for the taxable year 
that is derived from sources within this state other than income for any period that the 
corporation is required to include in the corporation's tax base under Section 
59-7-104
.
(2)
The tax imposed by Subsection (1) shall be 
4.55
4.5
% of a corporation's Utah taxable 
income.
(3)
In no case shall the tax be less than $100.
Section 3, Section 
59-7-627
 is enacted to read:
59-7-627
. Nonrefundable tax credits for employer-provided child care.
(1)
As used in this section:
(a)
(i)
"Qualified child care expenditure" means an amount paid or incurred for the 
operating costs of a qualified child care facility of the employer, whether the 
employer operates the qualified child care facility or contracts with a third party 
provider to provide child care services at the qualified child care facility.
(ii)
"Qualified child care expenditure" includes costs related to training employees 
and providing increased compensation to employees with higher levels of child 
care training.
(b)
"Qualified child care facility" means center based child care as that term is defined in 
Section 
26B-2-401
 that is located in the state.
(c)
"Qualified construction expenditure" means an amount paid or incurred to acquire, 
construct, rehabilitate, or expand property:
(i)
for a qualified child care facility of the employer; and
(ii)
with respect to which the employer is allowed a deduction for depreciation, or 
amortization in lieu of depreciation.
(d)
"Qualifying taxpayer" means a taxpayer that:
(i)
is an employer; and
(ii)
qualifies for and claims the federal employer-provided child care tax credit 
described in Section 45F, Internal Revenue Code, for the current taxable year.
(e)
"Recapture event" means an employer fails to operate a qualified child care facility 
for which the employer claims a tax credit under this section as a child care facility 
for at least five consecutive taxable years after the taxable year on which the 
employer first claims a tax credit under this section.
(f)
"Third party provider" means:
(i)
a new child care provider; or
(ii)
an existing child care provider that can perform the contract without reducing the 
provider's existing child care services.
(2)
(a)
A qualifying taxpayer may claim a nonrefundable tax credit equal to 20% of the 
qualified construction expenditures the qualifying taxpayer incurred during the 
taxable year.
(b)
A qualifying taxpayer may carry forward, to the next five taxable years, the amount 
of the qualifying taxpayer's tax credit described in this Subsection 
(2)
 that exceeds 
the qualifying taxpayer's income tax liability for the taxable year.
(3)
(a)
(i)
Subject to Subsection 
(3)(a)(ii)
, a qualifying taxpayer may claim a 
nonrefundable tax credit equal to 10% of the qualified child care expenditures the 
qualifying taxpayer incurred during the taxable year.
(ii)
A qualifying taxpayer may claim a tax credit under this Subsection 
(3)
 for 
qualified child care expenditures only if the qualifying taxpayer claims a tax credit 
under Subsection 
(2)
 for the current taxable year or a previous taxable year.
(b)
A qualifying taxpayer may not carry forward or carry back the tax credit described in 
this Subsection (3) that exceeds the qualifying taxpayer's income tax liability for the 
taxable year.
(4)
(a)
(i)
If a recapture event happens within two taxable years after the first taxable 
year in which the qualifying taxpayer claims a tax credit under this section, a 
qualifying taxpayer shall repay 100% of the tax credit a qualifying taxpayer 
receives under this section for any taxable year.
(ii)
If a recapture event happens more than two taxable years but fewer than three 
taxable years after the first taxable year in which the qualifying taxpayer claims a 
tax credit under this section, a qualifying taxpayer shall repay 75% of the tax 
credit a qualifying taxpayer receives under this section for any taxable year.
(iii)
If a recapture event happens more than three taxable years but fewer than four 
taxable years after the first taxable year in which the qualifying taxpayer claims a 
tax credit under this section, a qualifying taxpayer shall repay 50% of the tax 
credit a qualifying taxpayer receives under this section for any taxable year.
(iv)
If a recapture event happens more than four taxable years but fewer than five 
taxable years after the first taxable year in which the qualifying taxpayer claims a 
tax credit under this section, a qualifying taxpayer shall repay 25% of the tax 
credit a qualifying taxpayer receives under this section for any taxable year.
(b)
A qualifying taxpayer shall make a payment for a recapture event for the taxable year 
in which the recapture event occurs.
Section 4, Section 
59-10-104
 is amended to read:
59-10-104
. Tax basis -- Tax rate -- Exemption.
(1)
A tax is imposed on the state taxable income of a resident individual as provided in this 
section.
(2)
For purposes of Subsection (1), for a taxable year, the tax is an amount equal to the 
product of:
(a)
the resident individual's state taxable income for that taxable year; and
(b)
4.55
4.5
%.
(3)
This section does not apply to a resident individual exempt from taxation under Section 
59-10-104.1
.
Section 5, 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
, 
59-10-1022
, 
59-10-1023
, 
59-10-1024
, 
59-10-1028
, 
59-10-1042
, 
59-10-1043
, 
59-10-1044
, 
59-10-1046
, 
or 
59-10-1047
, or 
59-10-1048
 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
, or 
59-10-1048
 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 6, Section 
59-10-1047
 is amended to read:
59-10-1047
. Nonrefundable child tax credit.
(1)
As used in this section:
(a)
"Joint filing status" means the same as that term is defined in Section 
59-10-1018
.
(b)
"Head of household filing status" means the same as that term is defined in Section 
59-10-1018
.
(c)
"Married filing separately status" means a married individual who:
(i)
does not file a single federal individual income tax return jointly with that married 
individual's spouse for the taxable year; and
(ii)
files a single federal individual income tax return for the taxable year.
(d)
"Modified adjusted gross income" means the sum of the following for a claimant or, 
if the claimant's federal individual income tax return is allowed a joint filing status, 
the claimant and the claimant's spouse:
(i)
adjusted gross income for the taxable year for which a tax credit is claimed under 
this section;
(ii)
any interest income that is not included in adjusted gross income for the taxable 
year described in Subsection (1)(d)(i); and
(iii)
any addition to adjusted gross income required by Section 
59-10-114
 for the 
taxable year described in Subsection (1)(d)(i).
(e)
"Qualifying child" means an individual:
(i)
with respect to whom the claimant is allowed to claim a tax credit under Section 
24, Internal Revenue Code, on the claimant's federal individual income tax return 
for the taxable year; and
(ii)
who is 
at least one year old and younger than five
under six
 years old on the last 
day of the claimant's taxable year.
(f)
"Single filing status" means a single individual who files a single federal individual 
income tax return for the taxable year.
(2)
Subject to 
Subsection
Section
59-10-1002.2
, a claimant may claim a nonrefundable tax 
credit of $1,000 for each qualifying child.
(3)
A claimant may not carry forward or carry back the amount of the tax credit that 
exceeds the claimant's tax liability.
(4)
The tax credit allowed by Subsection (2) claimed on a return filed under this part shall 
be reduced by $.10 for each dollar by which modified adjusted gross income for 
purposes of the return exceeds:
(a)
for a federal individual income tax return that is allowed a married filing separately 
status, $27,000;
(b)
for a federal individual income tax return that is allowed a single filing status or head 
of household filing status, $43,000; and
(c)
for a federal individual income tax return that is allowed a joint filing status, $54,000.
Section 7, Section 
59-10-1048
 is enacted to read:
59-10-1048
. Nonrefundable tax credits for employer-provider child care.
(1)
As used in this section:
(a)
"Qualified child care expenditure" means the same as that term is defined in Section 
59-7-627
.
(b)
"Qualified child care facility" means the same as that term is defined in Section 
59-7-627
.
(c)
"Qualified construction expenditure" means the same as that term is defined in 
Section 
59-7-627
.
(d)
"Qualifying claimant" means a claimant, estate, or trust that:
(i)
is an employer; and
(ii)
qualifies for and claims the federal employer-provided child care tax credit 
described in Section 45F, Internal Revenue Code, for the current taxable year.
(e)
"Recapture event" means the same as that term is defined in Section 
59-7-627
.
(f)
"Third party provider" means the same as that term is defined in Section 
59-7-627
.
(2)
(a)
A qualifying claimant may claim a nonrefundable tax credit equal to 20% of the 
qualified construction expenditures the qualifying claimant incurred during the 
taxable year.
(b)
A qualifying claimant may carry forward, to the next five taxable years, the amount 
of the qualifying claimant's tax credit described in this Subsection (2) that exceeds 
the qualifying claimant's income tax liability for the taxable year.
(3)
(a)
(i)
Subject to Subsection 
(3)(a)(ii)
, a qualifying claimant may claim a 
nonrefundable tax credit equal to 10% of the qualified child care expenditures the 
qualifying claimant incurred during the taxable year.
(ii)
A qualifying claimant may claim a tax credit under this Subsection (3) for 
qualified child care expenditures only if the qualifying claimant claims a tax credit 
under Subsection (2) for the current taxable year or a previous taxable year.
(b)
A qualifying claimant may not carry forward or carry back the tax credit described in 
this Subsection (3) that exceeds the qualifying claimant's income tax liability for the 
taxable year.
(4)
(a)
(i)
If a recapture event happens within two taxable years after the first taxable 
year in which the qualifying claimant claims a tax credit under this section, a 
qualifying claimant shall repay 100% of the tax credit a qualifying claimant 
receives under this section for any taxable year.
(ii)
If a recapture event happens more than two taxable years but fewer than three 
taxable years after the first taxable year in which the qualifying claimant claims a 
tax credit under this section, a qualifying claimant shall repay 75% of the tax 
credit a qualifying claimant receives under this section for any taxable year.
(iii)
If a recapture event happens more than three taxable years but fewer than four 
taxable years after the first taxable year in which the qualifying claimant claims a 
tax credit under this section, a qualifying claimant shall repay 50% of the tax 
credit a qualifying claimant receives under this section for any taxable year.
(iv)
If a recapture event happens more than four taxable years but fewer than five 
taxable years after the first taxable year in which the qualifying claimant claims a 
tax credit under this section, a qualifying claimant shall repay 25% of the tax 
credit a qualifying claimant receives under this section for any taxable year.
(b)
A qualifying claimant shall make a payment for a recapture event for the taxable year 
in which the recapture event occurs.
Section 8. 
Effective Date.
This bill takes effect on 
May 7, 2025
.
Section 9. 
Retrospective operation.
This bill has retrospective operation for a taxable year beginning on or after 
January 1, 
2025
.
3-7-25 9:58 PM