| (1) |
Terms Used In Utah Code 59-10-1405- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Corporation: includes :
| (ii) | a joint stock company; and |
| (iii) | an insurance company. See Utah Code 59-10-103- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Nonresident pass-through entity taxpayer: means a pass-through entity taxpayer that is a:
| (a) | nonresident individual; or |
| (b) | nonresident business entity. See Utah Code 59-10-1402- Pass-through entity: means a business entity that is:
| (a) | the following if classified as a partnership for federal income tax purposes:| (i) | a general partnership; |
| (ii) | a limited liability company; |
| (iii) | a limited liability partnership; or |
| (iv) | a limited partnership; |
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| (c) | an estate or trust with respect to which the estate's or trust's income, gain, loss, deduction, or credit is divided among and passed through to one or more pass-through entity taxpayers; or |
| (d) | a business entity similar to Subsections (11)(a) through (c):| (i) | with respect to which the business entity's income, gain, loss, deduction, or credit is divided among and passed through to one or more pass-through entity taxpayers; and |
| (ii) | as defined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act. See Utah Code 59-10-1402- Pass-through entity taxpayer: means a resident or nonresident individual, a resident or nonresident business entity, or a resident or nonresident estate or trust:
| (a) | that is:| (i) | for a general partnership, a partner; |
| (ii) | for a limited liability company, a member; |
| (iii) | for a limited liability partnership, a partner; |
| (iv) | for a limited partnership, a partner; |
| (v) | for an S corporation, a shareholder; |
| (vi) | for an estate or trust described in Subsection(11)(c), a beneficiary; or |
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| (b) | to which the income, gain, loss, deduction, or credit of a pass-through entity is passed through. See Utah Code 59-10-1402- State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
- Taxpayer: means any of the following that has income subject in whole or part to the tax imposed by this chapter:
| (ii) | an estate, a trust, or a beneficiary of an estate or a trust that is not a pass-through entity or a pass-through entity taxpayer; |
| (iii) | a pass-through entity; or |
| (iv) | a pass-through entity taxpayer. See Utah Code 59-10-103 |
| (a) |
Except as provided in Subsection (3), in determining the taxable income of a nonresident pass-through entity taxpayer, an addition, subtraction, or adjustment that relates to an item of income, gain, loss, deduction, or credit of a pass-through entity shall be made in accordance with this Subsection (1). |
| (b) |
For a nonresident pass-through entity taxpayer of a pass-through entity except for a pass-through entity that is an S corporation, the nonresident pass-through entity taxpayer‘s share of an addition, subtraction, or adjustment that relates to an item of income, gain, loss, deduction, or credit is:
| (i) |
if the item of income, gain, loss, deduction, or credit is required to be taken into account separately for federal income tax purposes, the nonresident pass-through entity taxpayer’s distributive share of the item of income, gain, loss, deduction, or credit:
| (A) |
for federal income tax purposes; |
| (B) |
determined under Section 704 et seq., Internal Revenue Code; and |
| (C) |
derived from or connected with Utah sources; or |
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| (ii) |
if the item of income, gain, loss, deduction, or credit is not required to be taken into account separately for federal income tax purposes, determined in accordance with the nonresident pass-through entity taxpayer’s distributive share of income, gain, loss, deduction, or credit:
| (A) |
relating to the pass-through entity generally; |
| (B) |
for federal income tax purposes; |
| (C) |
under Section 704 et seq., Internal Revenue Code; and |
| (D) |
derived from or connected with Utah sources. |
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| (c) |
For a nonresident pass-through entity taxpayer of a pass-through entity that is an S corporation, the nonresident pass-through entity taxpayer’s share of an addition, subtraction, or adjustment that relates to an item of income, gain, loss, deduction, or credit is:
| (i) |
if the item of income, gain, loss, deduction, or credit is required to be taken into account separately for federal income tax purposes, the nonresident pass-through entity taxpayer’s pro rata share of the item of income, gain, loss, deduction, or credit:
| (A) |
for federal income tax purposes; |
| (B) |
determined under Section 1366 et seq., Internal Revenue Code; and |
| (C) |
derived from or connected with Utah sources; or |
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| (ii) |
if the item of income, gain, loss, deduction, or credit is not required to be taken into account separately for federal income tax purposes, determined in accordance with the nonresident pass-through entity taxpayer’s pro rata share of the item of income, gain, loss, deduction, or credit:
| (A) |
relating to the pass-through entity generally; |
| (B) |
for federal income tax purposes; |
| (C) |
under Section 1366 et seq., Internal Revenue Code; and |
| (D) |
derived from or connected with Utah sources. |
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| (2) |
In determining the source of a nonresident pass-through entity taxpayer’s income, the following provisions in a pass-through entity agreement may not be considered:
| (a) |
a provision that allocates to the nonresident pass-through entity taxpayer, as income, gain, or credit from a source outside this state, a greater proportion of the nonresident pass-through entity taxpayer’s share of income, gain, or credit of the pass-through entity than the ratio of income, gain, or credit of the pass-through entity from sources outside this state to income, gain, or credit of the pass-through entity from all sources; or |
| (b) |
a provision that allocates to the nonresident pass-through entity taxpayer a greater proportion of an item of loss or deduction of the pass-through entity derived from or connected with Utah sources than the taxpayer’s share of loss or deduction generally:
| (i) |
relating to the pass-through entity; and |
| (ii) |
for federal income tax purposes. |
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| (3) |
The commission may by rule, made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, authorize the use of a calculation other than the calculation provided in Subsection (1), for determining a nonresident pass-through entity taxpayer’s share of an addition, subtraction, or adjustment that relates to an item of income, gain, loss, deduction, or credit of a pass-through entity derived from or connected with Utah sources if:
| (a) |
the nonresident pass-through entity taxpayer applies to the commission; and |
| (b) |
the commission finds that the use of the calculation is appropriate and equitable. |
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Amended by Chapter 312, 2009 General Session
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