You must prepare Articles of Incorporation and file the document with the Department of Commerce, Division of Corporations and Commercial Code. The Department of Commerce has information on their website dealing with Articles of Incorporation, at http://corporations.utah.gov/.
An S corporation is the incorporation of an ordinary business formed and operated under a state's general corporation law, but the corporation has applied to and been approved by the Internal Revenue Service to be taxed as an S corporation. An S corporation is generally treated like a partnership for federal income tax purposes. It files an "information" tax return to report its income and expenses, and is not separately taxed as a C corporation.
Income and expenses of an S corporation "flow through" to the shareholders in proportion to their share holdings, and profits are taxed to the shareholders at their individual tax rates. If an S corporation has shareholders that are not Utah resident individuals then the income attributable to those shareholders is subject to a withholding tax.
You must apply to the Internal Revenue Service (IRS) on federal form 2553, Election by a Small Business Corporation. When you receive your approval for the S election from the IRS, please send a copy to the Tax Commission.
The corporate franchise tax is a tax on the privilege or right to do business in Utah, and is based on net income. Every corporation must file a return and pay the tax each calendar or fiscal year, regardless of whether or not a profit was made or business was conducted. The tax rate is computed at 5% of net income with a $100 minimum tax, whichever is greater.
Generally, yes. Any corporation that is incorporated or qualified under the laws of Utah, or conducts business in Utah is required to file and pay the minimum tax. There are two exceptions:
Yes. The tax is imposed for the right to do business in Utah. A return must be filed and at least the minimum tax paid, whether you exercise your right to do business or not.
Every corporation having a Utah tax liability of $3,000 or more in the current year, or which had a tax liability of $3,000 or more in the previous year, must make quarterly estimated tax prepayments. The prepayments are due in four equal payments on the 15th day of the 4th, 6th, 9th, and 12th month of the corporation's taxable year. The quarterly prepayment amounts are based on 90% of the current year's tax or 100% of the prior year's tax.
A corporation is not subject to the prepayment requirements for the first year that the corporation is required to file a return in Utah, if the corporation makes a payment on or before the due date (without extension) equal to or greater than the minimum $100. tax.
All calendar year corporation prepayments are due April 15, June 15, September 15, and December 15. Fiscal year corporation due dates vary according to the beginning month of the tax year.
Submit form TC-20L, Utah Application for Refund from a Corporation Loss Carryback, to claim any refund resulting from a Utah net loss carryback. Do not submit an amended return for the purpose of claiming a loss carryback refund.
A C corporation filing form TC-20 may be entitled to carry back a current-year loss against income of the previous three years. The loss carryback is subject to a $1,000,000 limitation. To claim a refund from a Utah net operating loss carryback, the corporation must file form TC-20L, Utah Application for a Refund from a Corporation Loss Carryback.
Note: If there is a Utah net loss on line 12 of form TC-20, the corporation must carry the loss back (subject to a $1,000,000 limitation), unless the corporation elected to forego the federal net operating loss carryback for federal purposes. The federal election applies to the Utah net operating loss unless on line 12 of form TC-20 for the loss year the corporation elects to forego the Utah net loss carryback. S corporations may not carry losses back or forward as such losses are passed thru to the shareholders.
No. S corporations must use Form TC-20S. Regular or C corporations must use Form TC-20.
From a functional view, there is no difference. The rate for both is 5% of taxable income or $100, whichever is greater, and they use the same form. Any corporation, whether incorporated (domestic) or qualified (foreign or doing business in Utah), is required to file a franchise tax return. Foreign corporations must file franchise tax returns if they have a regular and established place of business or inventory, or own, rent, or lease property. Corporations subject to the income tax are corporations that derive income from Utah sources, but are not qualified or have a place of business in Utah. An example would be a trucking company that runs through Utah but has no fixed place of business in Utah.
The fact that a corporation ceases to do business, sells or distributes its assets, does not relieve it of the liability for filing Utah corporate franchise tax returns and paying the taxes due. A Utah corporation must be legally dissolved or suspended through the Department of Commerce before it is relieved of this responsibility. A non-Utah corporation must receive a tax clearance certificate from the Tax Commission and withdraw from Utah through the Department of Commerce before it is relieved of this responsibility. Contact the Tax Commission to receive a customized tax clearance application for your corporation. Forms for dissolving or withdrawing the corporation are available from the Department of Commerce.
The State Tax Commission is required to send delinquent notices until the corporation is either voluntarily or involuntarily dissolved or withdrawn. Also, if it is your desire to maintain this corporate shell for a future purpose, or to reserve this corporate name for future use, you must keep filing the returns and pay the taxes due, otherwise suspension of the corporate authority will occur.
For Annual Report requirements and dissolution requirements, contact the Department of Commerce at 801-530-4849.
Send a letter requesting the change, be specific about the year end date desired. Include your corporation's Utah entity number, federal employer identification number (EIN), and the exact name of your corporation in your request.
Change the officer information with the Utah Department of Commerce. Send form TC-69C to the Tax Commission with a copy of the officer information record obtained from the Utah Department of Commerce showing the new officers.
If you change your business structure (E.G. from partnership to corporation) with the Department of Commerce the IRS may require you to have a new Federal Employer Identification Number (FEIN) for the business . Utah tax accounts are permanently linked to a specific FEIN. If the IRS requires a change of FEIN you must close any of your previous Utah tax accounts using form TC-69C and request new tax accounts for the new FEIN using form TC-69. If the IRS allows you to retain the previous FEIN file form TC-69C showing you have changed entity types and attach a letter from the IRS showing they are allowing you to retain the prior FEIN after the conversion.
Corporations are automatically allowed an extension of up to six months to file a return without filing an extension form. This is an extension of time to file the return - NOT an extension of time to pay the taxes. To avoid penalty and interest, the prepayment requirements must be met on or before the original return due date and all returns must be filed within the six-month extension period.
Non profit organizations are taxable unless an exemption has been issued by the Utah State Tax Commission. Form TC-161, Utah Registration for Exemption from Corporate Franchise or Income Tax, must be submitted along with the appropriate documentation. The documentation required for each class of exempt organization is listed as follows:
First, contact the Department of Commerce, Division of Corporations and Commercial Code, to ensure your corporation can be reinstated. The Department of Commerce has time limitations on reinstatement. If reinstatement is a viable option, the Department of Commerce may require a Letter of Good Standing from the Tax Commission. Click here for information on how to obtain a Letter of Good Standing.
You have the right to request a waiver of the penalties and/or interest, but the request must be in written form. Include your account number, the tax period, supportive documentation (if any), and state your reason why you believe the penalty and/or interest is unjust. Address your letter to:
Utah State Tax Commission
Collections Division, Waiver Section
210 North 1950 West
Salt Lake City, UT 84134
This is not a state tax administered by the Tax Commission. The tax is levied by the municipality (city or county) against the utility company for their right to do business in that municipality. The State Public Service Commission requires that this tax be separately stated on the billing.
The form you filed was probably the Annual Report of Officers and Directors, filed with the Department of Commerce. The notice you received is referring to is the corporation franchise tax return (Form TC-20) due to the Tax Commission.