DAR File No. 31463

Tax Commission, Auditing

R865-9I-13

Nonresident's Share of Partnership or Limited Liability Company Income Pursuant to Utah Code Ann. Sections 59-10-116, 59-10-117, 59-10-118, and 59-10-303

NOTICE OF PROPOSED RULE

DAR File No.: 31463
Filed: 05/20/2008, 01:19
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The proposed amendment is required due to statutory changes made by H.B. 359 (2008). (DAR NOTE: H.B. 359 (2008) is found at Chapter 389, Laws of Utah 2008, and was effective 05/05/2008.)

Summary of the rule or change:

The proposed amendment repeals the 15% deduction allowed on the partnership composite return since most deductions were repealed by H.B. 359 (2008).

State statutory or constitutional authorization for this rule:

Sections 59-10-116, 59-10-117, 59-10-118, and 59-10-1405

Anticipated cost or savings to:

the state budget:

None--Any revenue impacts were taken into account is H.B. 359 (2008).

local governments:

None--Any revenue impacts were taken into account is H.B. 359 (2008).

small businesses and persons other than businesses:

None--Any revenue impacts were taken into account is H.B. 359 (2008).

Compliance costs for affected persons:

None--Individual income tax will now be calculated in a different manner because of the changes in H.B. 359 (2008).

Comments by the department head on the fiscal impact the rule may have on businesses:

There are no anticipated impacts. D'Arcy Dixon, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Tax Commission
Auditing
210 N 1950 W
SALT LAKE CITY UT 84134

Direct questions regarding this rule to:

Cheryl Lee at the above address, by phone at 801-297-3900, by FAX at 801-297-3919, or by Internet E-mail at clee@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

07/15/2008

This rule may become effective on:

10/13/2008

Authorized by:

D'Arcy Dixon, Commissioner

R865. Tax Commission, Auditing.

R865-9I. Income Tax.

R865-9I-13. Nonresident's Share of Partnership or Limited Liability Company Income Pursuant to Utah Code Ann. Sections 59-10-116, 59-10-117, 59-10-118, and [59-10-303]59-10-1405.

[A.](1) Nonresident partners and nonresident members shall keep adequate records to substantiate their determination or to permit a determination by the [Tax Commission]commission of the part of their adjusted gross income that was derived from or connected with sources in this state.

[B.](2) Partnerships and limited liability companies may file form TC-65, Utah Partnership/Limited Liability Company Return of Income, as a composite return on behalf of nonresident partners or nonresident members that meet all of the following conditions:

[1.](a) Nonresident partners or nonresident members included on the return may not have other income from Utah sources. Resident partners and resident members may not be included on the composite return.

[2.](b) A schedule shall be included with the return listing all nonresident partners or nonresident members included in the composite filing. The schedule shall list all of the following information for each nonresident partner or nonresident member:

[a)](i) name;

[b)](ii) address;

[c)](iii) social security number;

[d)](iv) percentage of partnership or limited liability company income;

[e)](v) Utah income attributable to that partner or member.

[3.](c) Nonresident partners or nonresident members that are entitled to mineral production tax withholding credits, agricultural off-highway gas tax credits, or other Utah credits, may not be included in a composite filing, but must file form TC-40NR, Nonresident or Part-year Resident Form Individual Income Tax Return.

[ C. The tax due on the composite return shall be computed as follows:

1. A deduction equal to 15 percent of the Utah taxable income attributable to nonresident partners or nonresident members included in the composite filing shall be allowed in place of a standard deduction, itemized deductions, personal exemptions, federal tax determined for the same period, or any other deductions.

] [2.](3) The tax shall be computed using the [maximum ]tax rate [applied to Utah taxable income attributable to Utah sources]imposed in accordance with Section 59-10-104.

[D.](4) The partnership's or limited liability company's federal identification number shall be used on the form TC-65 in place of a social security number.

 

KEY: historic preservation, income tax, tax returns, enterprise zones

Date of Enactment or Last Substantive Amendment: [March 14], 2008

Notice of Continuation: March 20, 2007

Authorizing, and Implemented or Interpreted Law: 59-10-108 through 59-10-122; 59-10-1405