2004 Legislation and Tax Law Changes – Corporate Taxes

HB 27 Tax Commission Report - Federal Tax Law Changes

Utah Code §59-1-213

Effective Date May 3, 2004

Requires the Tax Commission to annually report to the Revenue and Taxation Interim Committee on changes to the Internal Revenue Code and the potential impacts of those changes on state revenues.

HB 168 Individual Income Tax and Corporate Franchise and Income Tax Task Force

Enacts Uncodified Material

Effective Date May 3, 2004

This bill provides for a task force, including one member representing the Tax Commission, to study Utah's individual income and corporate franchise and income tax, including the following components:

1. Additions to income;
2. Subtractions from income;
3. Exemptions;
4. Tax credits;
5. Tax rates;
6. Individual income tax brackets; or
7. Other issues relating to these taxes as determined by the task force.

The task force is required to make recommendations on:

1. Whether the taxes should be replaced with a flat or consumption based tax;
2. Whether the individual income tax brackets should be increased for inflation;
3. Whether either tax should be decoupled from the federal tax; and

Whether there should be a state earned income tax credit.

HB 191 Corporate Franchise and Income Tax Amendments

Utah Code §§59-7-101, 59-7-402, 59-7-106.5

Effective Date January 1, 2004

This bill amends the definition of “nonresident shareholder” to repeal language providing that any organization exempt under Section 501, Internal Revenue Code, is a nonresident shareholder, and repeals references to foreign sales corporations that have been repealed under federal law.

SB 144 Corporations Sole Amendments

Utah Code §§16-7-5, 16-7-8, 16-7-9, 16-7-12, 16-7-14, 16-7-15, 16-7-16

Effective Date May 3, 2004

A "corporation sole" is a distinct and separate entity from other types of corporations. In the past, Commerce charged a $22 filing fee for a corporation sole to file its articles of incorporation. A corporation sole is not required to file renewals on an annul basis and has no expiration date.

Effective May 3, 2004, this bill prohibits the formation of a new corporation sole. This bill also requires a corporation sole that is amending or restating its articles of incorporation, to provide a name, title, and street address of an incorporator as well as maintaining an official representative.