R865.  Tax Commission, Auditing.

R865-6F.  Franchise Tax.

R865‑6F‑35.  S Corporation Determination of Tax Pursuant to Utah Code Ann. Section 59‑7‑703.

(1)  For purposes of Section 59-7-703(2)(b)(i), "items of income or loss from Schedule K of the 1120S federal form" shall be calculated by:

(a) adding back to the line on the Schedule K labeled Income/loss reconciliation" the amount  included on that schedule for:

(i) charitable contributions; and

(ii) total foreign taxes paid or accrued.

(b) If the S corporation was not required to complete the line labeled Income/loss reconciliation" on the Schedule K, a pro forma calculation of the amounts for charitable contributions and foreign taxes paid or accrued, and of the amount that would have been entered on the Income/loss reconciliation" line shall be used for purposes of this rule.

(2) The amount that the S corporation shall withhold for nonresident shareholders shall be computed as follows:

(a) The deduction shall be equal to 15 percent of the Utah income attributable to nonresident shareholders.

(b)  The deduction in Subsection (2)(a) shall be allowed in place of a standard deduction, itemized deductions, personal exemptions, federal tax determined for the same period, or any other deductions.

(3) The tax shall be computed using the maximum Utah individual income tax rate applied to the combined nonresident shareholders' share of the S corporation's income after deduction of the amount allowed under Subsection (2).

(4) An S corporation with nonresident shareholders shall complete Schedule N of form TC‑20S, and shall provide the following information for each nonresident shareholder:

(a) name;

(b) social security number;

(c) percentage of S corporation held; and

(d) amount of Utah tax paid or withheld on behalf of that shareholder.

 

 

 

KEY:  taxation, franchise, historic preservation, trucking industries

59-7-703