Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 219 (2025GS)

Sponsor

Sen. McKell, Michael K.

Final action

Governor Signed 3/25/2025

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• defines terms;
• grants rulemaking authority to the State Tax Commission to establish the sales to include in the sales factor fraction for financial institutions; and
• provides that sales from Utah investment and trading activities of financial institutions are not sourced to Utah.

Every vote on this bill

Bill text

4
59-7-317
0
Financial Institution Tax Amendments
2025 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Michael K. McKell
House Sponsor: Val L. Peterson
LONG TITLE
General Description:
This bill modifies the formula for apportioning business income of financial institutions.
Highlighted Provisions:
This bill:
defines terms;
grants rulemaking authority to the State Tax Commission to establish the sales to include 
in the sales factor fraction for financial institutions; and
provides that sales from Utah investment and trading activities of financial institutions are 
not sourced to Utah.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
AMENDS:
59-7-317
, as last amended by Laws of Utah 2008, Chapter 283
Be it enacted by the Legislature of the state of Utah:
Section 1, Section 
59-7-317
 is amended to read:
59-7-317
. Sales factor for apportionment of business income -- Transportation 
revenue of an airline -- Sales of a financial institution.
(1)
As used in this section:
(a)
(i)
"Finance lease" means a lease transaction that is the functional equivalent of an 
extension of credit and that transfers substantially all of the benefits and risks 
incident to the ownership of property.
(ii)
"Finance lease" includes a direct financing lease or leverage lease that meets the 
criteria of Financial Accounting Standards Board Statement No. 13, Accounting 
for Leases, or any other lease that is accounted for as a financing lease by a lessor 
under generally accepted accounting principles.
(b)
"Financial institution" means:
(i)
a corporation or other business entity registered under state law as a bank holding 
company, under the Federal Bank Holding Act of 1956, as amended, or registered 
as a savings and loan holding company under the Federal National Housing Act, 
as amended;
(ii)
a national bank organized and existing as a national bank association in 
accordance with the National Bank Act, 12 U.S.C. Secs. 21 et seq.;
(iii)
a savings association or federal savings bank as defined in 12 U.S.C. Secs. 
1813(b)(1) and (2);
(iv)
a bank, industrial loan corporation, or thrift institution incorporated or organized 
under the laws of any state;
(v)
a corporation organized under the provisions of 12 U.S.C. Secs. 611 through 631;
(vi)
an agency or a branch of a foreign bank as defined in 12 U.S.C. Sec. 3101;
(vii)
a production credit association organized under the Federal Farm Credit Act of 
1933, if all of the production credit association's stock held by the Federal 
Production Credit Corporation has been retired;
(viii)
a corporation, other than an insurance company taxable under Chapter 9, 
Taxation of Admitted Insurers, for which voting stock is more than 50% owned, 
directly or indirectly, by any person described in Subsections (1)(b)(i) through 
(1)(b)(vii);
(ix)
a corporation or other business entity that derives from finance leases more than 
50% of the corporation's or the business entity's total gross income for financial 
accounting purposes:
(A)
using the average of the gross income in the current tax year and immediately 
preceding two tax years; and
(B)
disregarding gross income from incidental or occasional transactions; or
(x)
another person, other than an insurance company, a credit union exempt from the 
corporation franchise tax under Section 
59-7-102
, a real estate broker, or a 
securities dealer, that derives more than 50% of the person's gross income, 
excluding non-recurring, extraordinary items, from activities that a person 
described in Subsections (1)(b)(ii) through (vii) and (1)(b)(ix) is authorized to 
transact unless the commission excludes the person upon receipt of proof, by clear 
and convincing evidence, that the income-producing activity of the person is not 
in substantial competition with the persons described in Subsections (1)(b)(ii) 
through (vii) and (1)(b)(ix).
(c)
(i)
"Sales from investment activities and assets and trading activities and assets" 
means receipts from interest, dividends, a net gain, but not less than zero, or other 
income from an investment security, a trading account asset, federal funds, a 
security purchased and sold under an agreement to resell or repurchase, an option, 
a future contract, a forward contract, equities, a foreign currency transaction, or a 
notional principal contract, such as swaps.
(ii)
"Sales from investment activities and assets and trading activities and assets" 
includes:
(A)
the amount by which interest from federal funds sold and securities purchased 
under resale agreements exceeds interest expense on federal funds purchased 
and securities sold under repurchase agreements; and
(B)
the amount by which interest, dividends, gains, and other income from foreign 
currency transactions and trading assets and activities, including assets and 
activities in the matched book and arbitrage book, exceed amounts paid in lieu 
of interest, amounts paid in lieu of dividends, and losses from trading assets 
and activities.
(iii)
"Sales from investment activities and assets and trading activities and assets" 
does not include:
(A)
receipts from the lease of real property;
(B)
receipts from the lease of tangible personal property;
(C)
interest from a loan secured by real property;
(D)
interest from a loan not secured by real property;
(E)
a net gain from the sale of a loan;
(F)
receipts from a credit card receivable;
(G)
a net gain from the sale of a credit card receivable;
(H)
a credit card issuer's reimbursement fees;
(I)
receipts from a merchant discount;
(J)
a loan servicing fee;
(K)
receipts from a service; or
(L)
other receipts not addressed in Subsection (1)(c)(i) or Subsections (1)(c)(iii)(A) 
through (K).
(2)
Except as provided in 
Subsection 
(2)
Subsections (3) and (4)
, the sales factor is a 
fraction, the numerator of which is the total sales of the taxpayer in this state during the 
tax period, and the denominator of which is the total sales of the taxpayer everywhere 
during the tax period.
(2)
(3)
The total sales of an airline in this state during the tax period attributable to 
transportation 
revenues
revenue
 in this state during the tax period for purposes of the 
numerator of the fraction described in Subsection 
(1)
 shall be calculated by determining 
the product of:
(a)
the total transportation 
revenues
revenue
 during the tax period of the airline; and
(b)
a fraction, the numerator of which is the Utah revenue ton miles and the denominator 
of which is the airline revenue ton miles.
(4)
(a)
Except as provided in Subsection (4)(b), the commission shall make rules, in 
accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, that 
establish the sales to be included in the sales factor fraction of a financial institution.
(b)
In calculating the sales factor of a financial institution:
(i)
the numerator may not include sales from investment activities and assets and 
trading activities and assets; and
(ii)
the denominator shall include sales from investment activities and assets and 
trading activities and assets.
Section 2. 
Effective Date.
This bill takes effect for a taxable year beginning on or after January 1, 2026.
3-6-25 5:09 PM