Utah Corporate Franchise Tax Data

The data in this publication give a fairly complete picture of the corporate franchise tax for tax years 1998 and 1999. Corporate income taxes are not only complicated by their logic, but also by their timing. In 1999, a taxpayer may make an estimated payment on his 1999 taxes. In 2000, he will file a return and at that time may make an additional payment or receive a refund. If he has a loss he may even get a refund on a previous year's tax, using the loss carry back provision. In 2001, he may amend his return and change the data on his 1999 return filed in 2000, and make an additional payment or receive a refund.

In 2002, he may be audited, and his original return (1999) will change again. In addition to further payments for the 1999 tax year he may be required to pay interest and penalties in 2001. In sum, the revenue for a given tax year can span a number of fiscal years, and the return itself can be dynamic, changing depending on when it is examined. The data reported in this report represent a snapshot of how the data stood in early 2001.

The detailed data in this report includes only data from C corporations, but the financial data in the historical section also includes other types of income in the corporate system, mainly S corporations.

A TECHNICAL DATA DESCRIPTION

For the majority of this report, the data is "Utah apportioned data," meaning that it has been multiplied by a factor that determines the Utah portion of a national figure for tax purposes. (More on apportionment will be found later.)

Since Utah has a minimum tax payment of  $100 per taxable unit, some taxpayers pay a tax independent of their incomes. For this reason, we have divided the data into those that are minimum taxpayers and those that really are income based payers.

We have reported some data by income class. The income used is "Utah taxable income. ^" For those who pay the minimum tax, we only have two divisions: those with no income (zero or less), and those with positive income. Those with positive income will generally have income less than $2,000. Multiple corporations that file together, however, can be minimum taxpayers, even with income over $2,000. For reasons of disclosure we have not reported their income in a more detailed way. (Examining the data tables will make this clearer.)

We have also reported the data according to a very broad sector breakdown. In this presentation, the income classes are larger for disclosure reasons. The "no income”, "positive income," and “detailed income” classes have the same meaning as above.

In the data on apportionment, the income category is before apportionment, and the factors are weighted averages for class members, weighted  by  income  before apportionment.

Corporate return data is very confused, with many taxpayer errors and recording errors. Sometimes taxpayers will not fill out the state return, but will attach their own schedules. This year Berhanie Abebe, a research assistant in the Economic and Statistical Unit performed a major task in editing the data to examine large anomalies.