Utah State Tax Commission
S Corporation Franchise or Income Tax Return and Instructions
Form TC-20S
Need Forms? Call (801) 297-6700 or 1-800-662-4335, ext. 6700 Print from the Internet at http://www.tax.ex.state.ut.us/CurrentPackX/Business.html Need more information? You can find additional tax information and forms on the Tax Commission's web page at http://www.tax.ex.state.ut.us
References: UCA Utah Code Annotated IRC Internal Revenue Code
2000
210 N 1950 W SLC UT 84134 (801) 297-2200 1-800-662-4335 http://www.tax.ex.state.ut.us
Table of Contents
General Instructions and Information .......................................................................................... 1 Instructions for Return ................................................................................................................ 3 Instructions for Schedule A Utah Taxable Income and Tax Due ............................................... 5 Instructions for Schedule E - Prepayments of Any Type ............................................................. 6 Instructions for Schedule H Nonbusiness Income Schedule ................................................... 7 Instructions for Schedule J Apportionment Schedule .............................................................. 8 Instructions for Schedule N Nonresident Tax Remittance Information ................................... 10
Whats New?
· Tax Credit For Increasing Research Activities: A nonrefundable credit is allowed for expenses incurred for increasing qualified research activities in Utah. To see if you qualify, see page 13. · Tax Credit For Machinery And Equipment Used To Conduct Research: A nonrefundable credit is allowed for machinery, equipment or both used primarily for conducting qualified research or basic research in Utah. To see if you qualify, see page 13. · Foreign taxes that were deducted on federal form 1120S, Schedule K, line 15(f) must be added back in calculating net income on Utah Schedule A. See Schedule A instructions for line 3. · The Department of Commerce is re-issuing identification numbers for incorporation or qualification in the state of Utah. Each new number issued will consist of 6 or 7 digits followed by a 4-digit suffix. Enter the new identification number on all return forms where requested. If you have not yet received notification of your new identification number, enter your original 6-digit charter number. · Use tax, in the amount of $400 or less, may be claimed on Line 7 of the return. If use tax exceeds $400, the purchaser is required to obtain a sales and use tax license. See instructions on Page 4.
File TC-20 if Corporation filed federal 1120 File TC-20S if S Corporation filed federal 1120S
If you need an accommodation under the Americans with Disabilities Act, contact the Tax Commission at (801) 297-3811 or Telecommunications Device for the Deaf (TDD) (801) 297-3819. Please allow three working days for a response.
General Instructions and Information
Corporation Identification Numbers
The Utah State Tax Commission will use the Employer Identification Number (EIN) as the corporation's taxpayer identification with the state. The Utah Department of Commerce issues a registration number upon incorporation or qualification in Utah. Enter the Utah Incorporation/Qualification number in the field provided. Make sure you provide your EIN and Utah Incorporation/Qualification Number for proper identification of the corporate tax return or any correspondence.
or rented, and that do not maintain an inventory or have employees located at a place of business in Utah. For example: A foreign corporation with goods maintained in Utah in a public warehouse, or a trucking company operated in or through Utah by a foreign corporation not qualified for the privilege of doing business in Utah, is subject to the income rather than franchise tax. Corporate income tax filers use form TC-20. A $100 minimum tax applies to the corporate income tax.
Taxable Year
The taxable year for Utah Corporation franchise or income tax purposes must match the taxable year used for federal income tax purposes. When the taxable year changes for federal purposes, the taxable year must be adjusted accordingly for Utah corporation franchise or income tax purposes. Refer to "Filing Return Where Period Changed," below. If the taxable year is not a calendar year, enter the beginning and ending dates of the taxable year at the top of form TC-20 where indicated.
Rounding Off to Whole-Dollar Amounts
All entries must be reported in whole-dollar amounts.
Liability for Filing and Paying Returns
Tax Forms
The Tax Commission supplies returns for filing of corporate taxes to corporations properly registered with the state. If an original return is received by the corporation, call (801) 297-6700 to request forms. NOTE: Please review "Supporting Federal Information," later in these general instructions to identify what federal information is required with the Utah filing. Franchise Tax Every C corporation incorporated in Utah (domestic), qualified in Utah (foreign), or doing business in Utah, whether qualified or not, must file a corporate franchise tax return. C corporation returns are filed on form TC-20. There is a minimum tax (privilege tax) of $100 on every corporation that files form TC20 regardless of whether the corporation exercises its right to do business. S Corporation Every S corporation (as defined in IRC Section 1361(a)) that has filed a proper and timely election under IRC Section 1362(a) must file form TC-20S so long as the federal election remains in effect. The minimum tax does not apply to S corporations. S corporation franchise or income tax return, schedules, and general instructions are printed separately from this booklet. Income Tax The only corporations required to file under the income tax provisions are those that derive income from Utah sources, but that are not qualified to do business in Utah and have no regular and established place of business in this state, either owned
Filing Return Where Period Changed
When changes are made to the taxable year, as indicated in "Taxable Year," above, a short period return is required. The short period return must cover the period of less than 12 months between the prior taxable year-end and the new taxable year-end. The tax rates as provided in UCA §59-7104 and §59-7-201 apply to short period returns.
Due Date
Returns must be filed on or before the 15th day of the fourth month following the close of the taxable year.
Filing Extension
Corporations are automatically allowed an extension of up to six months to file a return without filing an extension form. This is an extension of time to file the return - NOT an extension of time to pay taxes. To avoid penalty and interest, the prepayment requirements must be met on or before the original return due date and all returns must be filed within the six-month extension period.
Penalties
The penalty for failure to file a tax due return by the due date is the greater of $20 or 10 percent of the unpaid tax. In addition, if a tax balance remains unpaid 90 days after the due date, a second penalty, the greater of $20 or 10 percent of the tax balance, will be added for failure to pay timely. The penalty for failure to pay tax due as reported on a timely filed return, or within 30 days of a notice of deficiency, is the greater of $20 or 10 percent of the tax due.
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The penalty for underpayment of the extension prepayment is 2 percent per month of the unpaid tax during the extension period. If the return is not filed by the extension due date, failure to file and failure to pay penalties will apply, as if the extension had not been granted. Penalty for failure to file an information return or complete supporting schedule is $50 for each return or schedule to a maximum of $1,000. The penalty for each underpayment of required estimated tax or required quarterly installments is determined by applying the state interest rate(s) in effect for the period of the underpayment, plus four percentage points to the amount of the underpayment for the period of the underpayment. For a list of additional penalties, that may be imposed please refer to UCA §59-1-401.
Suspension for Failure to Pay Tax Due
Utah law provides for suspension of the corporation's right to do business in Utah if the corporation fails to pay taxes due before 5 p.m. on the last day of the eleventh month after the due date.
Interest
The calendar year interest rate applicable for all taxes and fees administered by the Tax Commission is two percentage points above the federal short-term rate in effect for the preceding fourth calendar quarter. The Internal Revenue Service publishes this rate in September of each year. The interest rate for most taxes and fees administered by the Tax Commission for the 2001 calendar year is 8 percent.
Supporting Federal Information
Form 1120-S, as filed with the IRS, should be attached when filing the Utah S Corporation Franchise or Income Tax return (Form TC-20S). In addition, federal Schedule K-1 forms must be filed for each shareholder.
First Time Filers
A copy of the IRS letter of authorization, "Notice of Acceptance as an S Corporation," must be attached to the S Corporation Franchise or Income Tax Return, TC-20S, when filing for the first time.
Corporation Changes
Corporation changes (e.g., name change, merger, or ceasing to do business in Utah) must be reported to both: Division of Corporations Department of Commerce 160 E 300 S Salt Lake City, UT 84145 and Tax Commission Master File Maintenance 210 N 1950 W Salt Lake City, UT 84134.
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Instructions for Return
Corporation Name and Address Area
Enter the corporate name, address, and telephone number. Check the box provided if there has been a change to this information since last year's filing.
EIN and Utah Charter Number
Enter the Employer Identification Number (EIN) and Utah Incorporation/Qualification Number issued by the Department of Commerce in the appropriate fields.
must be filed within three years following the date the original return was filed. A return filed before the due date is considered filed on the due date. To amend a previously filed 2000 state tax return: 1. Check the amended box located at the top of the return; and 2. Indicate the reason for amending, by writing the number in the box provided on the return.
Reasons for Amending
1. You filed an amended return with the Internal Revenue Service (you must attach a copy of your amended federal return). 2. You made an error on your state return (attach an explanation of the adjustments made). 3. Federal audit adjustments which resulted in changes in federal taxable income were issued and became final (attach a copy of the IRS adjustment). 4. Other (please attach explanation to return). Complete the return entering the figures as corrected. Enter other amounts shown on your original return. If you received a refund on your original return, enter the total previous refunds on TC-20S, Schedule A, line 14c. If you paid with the original return or made subsequent payments of the tax prior to filing the amended return, enter the total previous payments on TC-20S Schedule A, line 15d. Remember: Except for the amounts you amend, the amounts you place on the return must match the amounts on your original return. Line 1(a) Number of Resident and Nonresident Shares Indicate number of resident and nonresident shares. Line 1(b) Percentage of Resident and Nonresident Shares Indicate percentage of resident and nonresident shares. Line 2 Corporations Conducting Business in Utah Check box, if applicable. Line 3 S Corporation Election Check box, if applicable. Line 4 Refund From Schedule A, line 18. Line 5 Tax Due From Schedule A, line 19. Line 6 Total Penalties and Interest Enter any applicable penalty and interest amounts on the appropriate lines. Enter the total amount in the box. For help calculating penalties and interest, contact the Tax Commission at (801) 297-7790 or 1-800-662-4335.
Filing Period
If the return is being filed for a period other than the calendar year ending Dec. 31, 2000 enter the beginning and ending filing dates.
Qualified Subchapter S Subsidiary
An S corporation that owns one or more qualified subchapter S subsidiaries, as defined in IRC Section 1361(b)3(B), must: · Include each subsidiary's assets, liabilities and items of income, loss and deductions as assets, liabilities and items of income, loss and deductions of the S corporation parent for Utah corporation franchise tax purposes. The qualified subchapter S subsidiary shall not be treated as a separate corporation. · Take into account the activities of the qualified subchapter S subsidiaries in determining whether the S corporation parent is doing business in Utah. For purpose of this determination, all of the subsidiary's activities will be attributed to the parent. · File TC-20S, Schedule M identifying the qualified subchapter S subsidiaries that are incorporated, qualified, or doing business in Utah.
Amended Returns for 2000
An amended state return for 2000 should be filed promptly If you discover: 1. An error on your state or federal return after it has been filed; or 2. Your federal return is audited or adjusted by the IRS and the IRS audit or adjustment affects your state return. You must report such changes or corrected net income within 90 days of the IRS's final determination. If you need to amend a return for a tax year other than 2000, please use the tax form and instructions for the year you are amending. To qualify for a refund or credit, an amended return
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Line 7 Utah Use Tax Utah corporations that purchased items or services outside Utah for use or consumption in Utah and did not pay sales or use tax on those items at the time of purchase, or that paid sales or use tax at a lower rate than the required use tax rate must pay use tax on the purchase price at the rate applicable in the city or county in which the item or service was consumed. Use tax of $400 or less may be paid on this line; use tax exceeding $400 must be filed and paid on a sales and use tax return. Use tax applies to the following purchases: · Goods purchased in another state and transported to Utah for use or consumption. · Goods purchased from a catalog and shipped into Utah for use or consumption. · Goods purchased over the Internet and shipped into Utah for use or consumption. Credit is allowed for sales taxes paid in another state or for Utah use tax collected by the vendor. No credit is given for taxes paid in foreign countries.
Complete the worksheet below to determine use tax. Use the city tax rate from the list fat the top of the next column. If your city is not listed, use the county rate.
Use Tax Rate Chart (Effective Dec. 31, 2000)
.0600 .0700 .0600 .0625 .0600 .0625 .0600 .0625 .0600 .0625 .0600 .0625 .0575 .0750 .0700 .0800 .0600 .0775 .0600 .0775 .0600 .0625 .0675 .0775 .0575 .0600 .0600 .0600 .0635 .0735 .0600 .0650 Beaver County Beaver Box Elder County Brigham, Perry, Willard Cache County Logan Carbon County Price Daggett County Davis County Duchesne County Roosevelt Emery County Green River Garfield County Boulder, Panguitch, Tropic Grand County Moab, East Green River Iron County Brian Head Juab County Nephi Kane County Kanab Millard County Morgan County Piute County Rich County Salt Lake County Alta San Juan County Monticello .0600 .0625 .0600 .0625 .0600 .0725 .0575 .0600 Sanpete County Ephraim, Gunnison Sevier County Richfield, Salina Summit County Park City Tooele County Erda, Grantsville, Lakepoint, Lincoln, Tooele City, Stansbury Park Uintah County Vernal Utah County Alpine, American Fork, Lehi, Lindon, Mapleton, Orem, Payson, Pleasant Grove, Provo, Provo Canyon, Salem, Highland, Spanish Fork, Springville, Cedar Hills Wasatch County Heber Washington Cnty Hurricane, Ivins, La Verkin, St. George, Santa Clara, Washington City Springdale Wayne County Weber County
.0650 .0675 .0600 .0625
.0600 .0625 .0600 .0625
.0750 .0600 .0625
WORKSHEET FOR COMPUTING UTAH USE TAX (Retain this worksheet for your records.)
1. Total amount of purchases subject to use tax ... $___________ 2. Use tax rate (decimal) .......................................... $___________ 3. Use tax (multiply line 1 by line 2) ......................... $___________ 4. Credit for sales tax paid ....................................... $___________ 5. Amount of Use tax due (line 3 less line 4) Enter ZERO if less than zero .............................. $___________
Line 8 Total Refund Subtract lines 6 and 7 from line 4. Line 9 Total Remitted Add lines 5, 6 and 7. Show total amount due on line 9. Make check or money order payable to the Utah State Tax Commission. Do not mail cash. The Tax Commission assumes no liability for loss of cash placed in the mail.
Signature and Date Lines
Signature and date lines are required for declaration of the return's accuracy. Refunds will not be granted on returns without signatures and dates.
Supplemental Information to be Supplied by all Corporations
All corporations must complete this section, located on the back of the return.
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Instructions for Schedule A Utah Taxable Income and Tax Due
Line 1 Income/Loss Enter the amount of income or loss (R865-6F-35) as taken from federal form 1120S, Schedule K, line 23. Line 2 Charitable Contributions Addition Add charitable contributions that were deducted on federal form 1120S, Schedule K, line 7. Line 3 Foreign Taxes Add foreign taxes that were deducted on federal form 1120S, Schedule K, Line 15(f). Line 4 Net Income 4a Total Income before Nonbusiness Income. Add Lines 1, 2 and 3. 4b Nonresident Income Schedule A, line 4a multiplied by the percentage of nonresident shares on line 1b of S Corporation Franchise or Income Tax return, form TC-20S. Line 5 Nonbusiness Income Allocation Add line 5a and line 5b. 5a Nonbusiness Income Allocated to Utah Schedule H, line 13 multiplied by the percent of nonresident shareholders on line 1b of S Corporation Franchise Tax return, form TC-20S. 5b Nonbusiness Income Allocated Outside Utah Schedule H, line 26 multiplied by the percent of nonresident shareholders on line 1b of S Corporation Franchise or Income Tax return, form TC-20S. Line 6 Net Income Subject to Apportionment Subtract line 5 from line 4b. Line 7 Apportionment Fraction 100 percent or bring forward fraction from Schedule J, line 7. Line 8 Net Income Apportioned to Utah Multiply line 6 by line 7. Line 9 Nonbusiness Income Allocated to Utah Enter amount reported on line 5a above. Line 10 Utah Taxable Income/Loss Add line 8 and line 9. Nonresident shareholders should transfer their pro rata share of taxable income before deduction amount to their Utah Individual Income Tax Return, TC-40, line 23, column A. For tax years beginning on or after 1/1/94, losses are passed through to the individual shareholders and are not available for carryforward or carryback.
Line 11 Deduction Amount Applies To Income Greater Than Zero Multiply line 10 by (.15). If line 10 is a loss, no deduction amount is allowed. Line 12 Net Taxable Income Subtract line 11 from line 10. Line 13 Tax Rate The tax rate is .07. Line 14 Calculation of Tax Add lines 14a through 14c. 14a Calculation of Tax Multiply line 12 by line 13. 14b Built-in and Other Gains Tax In accordance with the provisions of UCA §59-7701, gains or income subject to the federal corporation tax are also subject to the Utah S Corporation Franchise or Income Tax. The most common transactions that occur under federal provisions, include: built-in gains, capital gains, federal recapture amounts of prior year's investment credits, LIFO recapture amounts, and any other similar type transaction. These gains or income should be apportioned (see Schedule J) and multiplied by the current tax rate of 5 percent. Attach a schedule to form TC-20S that provides the necessary details of gains or income being reported. 14c Amended Returns Only (Previous refunds) This line is used only for amended returns. When filing an amended return, enter the amount of all refunds, credits, or offsets of corporation franchise or income tax received for the tax year being amended. You should exclude refund interest from this amount. This amount is then added into the tax amount on line 14. Line 15 Refundable Credits and Previous Payments Add lines 15a through 15d. 15a Mineral Production Withholding Credit (R865-14W-1) A refundable credit is allowed for Utah tax withheld from the corporation's mineral production payments as indicated on form TC-675R or federal schedule K-1(s). Form TC-675R or K-1 must be attached when credit is claimed. 15b Credit for Agricultural Off-Highway Gasoline and Undyed Diesel Tax (UCA §59-13-202) Attach federal form 1040 Schedule F. There is no state form for this credit. Make sure you keep all personal records, forms, and worksheets to support this credit.
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This is 24.5 cents per gallon credit only for: · Motor fuel and undyed diesel fuel purchased in Utah; and · Used to operate stationary farm machinery used solely for commercial nonhighway agricultural use; and · That was taxed at the time of purchase. Activities that DO NOT qualify for this credit include, but are not limited to, the following: · Golf courses · Hobbies · Horse racing · Boat operations · Highway seeding · Vehicles registered for highway use · Farming for personal use Multiply your total gallons eligible for the credit by .245 and enter the gallon and credit amount on line 15b of your state return. 15c Total Prepayments A refundable credit is allowed for advance payments made as quarterly prepayments and extension payments (form TC-559). Also, include any overpayment from the prior year applied to this year, and include withholding prepayments made applicable to the filing period and specify amount paid. (See Schedule E.) 15d Amended Returns Only (Previous Payments) This line should only be used for amended returns. When filing an amended return, enter the amount of tax paid with the original return and/or subsequent payments of the tax prior to filing this amended return. Line 16 Overpayment If line 15 is larger than line 14, subtract line 14 from line 15. Line 17 Overpayment To Be Applied To Next Taxable Year As a convenience to refund filers, all or part of a refund may be applied as an advance payment for the next tax year. Enter amount to be applied (must be less than or equal to refund). Line 18 Refund Subtract line 17 from line 16 and enter amount on form TC-20S, line 4. Line 19 Total Tax If line 14 is larger than line 15, subtract line 15 from line 14. Enter amount on form TC-20S, line 5.
Instructions for Schedule E Prepayments of any Type
Line 1 Enter the total amount of all refunds applied from the prior year. Line 2 List the date, check number and amount of extension prepayment. Line 3 List the date, check number and amount of all prepayments made for the filing period. Enter the total amount on line 3. Attach additional sheet, if necessary. Line 4 Add lines 1, 2, and 3. Enter the total on this line and on Schedule A, line 15c.
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Instructions for Schedule H Nonbusiness Income Schedule
Determine nonbusiness income allocated to Utah and outside Utah by completing this schedule. All income that arises from the conduct of the trade or business operations of a corporation is business income. Nonbusiness income means all income other than business income and will be narrowly construed. Intangible income must be properly classified and based upon factual evidence. The burden of proof is on the corporation to justify the manner in which the income is claimed on the return. Interest income is business income where the intangible with respect to which the interest was received arises out of or was created in the regular course of the taxpayer's trade or business operations. (Tax Commission Rule R865-6F-8(A)(3)(c)) Dividends are business income where the stock, with respect to which the dividends are received, arises out of or was acquired in the regular course of the taxpayer's trade or business operations. Because of the regularity with which most corporate taxpayers engage in investment activities, income arising from the ownership, sale or other disposition of investments is presumptively business income. (Tax Commission Rule R865-6F8(A)(3)(d)) Gain or loss from the sale, exchange, or other disposition of real or tangible or intangible personal property constitutes business income if the property while owned by the taxpayer was used in the taxpayer's trade or business. (Tax Commission Rule R865-6F-8(A)(3)(b)) Rental income from real and tangible property is business income if the property with respect to which the rental income was received is used in the taxpayer's trade or business or . . . includable in the property factor. (Tax Commission Rule R865-6F-8(A)(3)(a)) If the corporation is claiming only Utah nonbusiness income, lines 1a through 13 must be completed. If the corporation is claiming only non-Utah nonbusiness income, lines 14a through 26 must be completed. If the corporation is claiming both Utah and non-Utah nonbusiness income, lines 1a through 26 must be completed. Use additional pages if necessary to provide complete information including a description of the business purpose for making the investment, the transactions creating the non-business income, and the use of revenues generated by the non-business investment.
Utah Nonbusiness Income
Lines 1(a)-(d) Utah Nonbusiness Income Complete each column with the information required and show the gross nonbusiness income from each class of income being specifically allocated. Use additional pages, if necessary, to provide complete information about additional sources of nonbusiness income. Line 2 Total Utah Nonbusiness Income Add lines 1(a) through 1(d). Lines 3a-3d Direct Related Expenses Describe and enter amounts of direct expenses on the same letter line as the corresponding nonbusiness income is listed on lines 1a-1d. Direct related expenses include wages, interest, depreciation, etc. (UCA §59-7-101(19)). Line 4 Total Direct Related Expenses Enter the sum of direct related expenses by adding lines 3(a) through 3(d). Line 5 Utah Nonbusiness Income Net of Direct Related Expenses Subtract line 4 from line 2. Line 6 Beginning of Year Assets Enter the beginning of year value of assets used to produce Utah nonbusiness income in column A. Enter the beginning of year value of the corporation's total assets in column B. Total assets, including Utah assets, should be included in column B. Line 7 End of Year Assets Enter the end of year value of assets used to produce Utah nonbusiness income in column A. Enter the end of year value of the corporation's total assets in column B. Total assets, including Utah assets, should be included in column B. Line 8 Sum of Beginning and End of Year Assets Values Add lines 6 and 7 for each respective column. Line 9 Average Asset Values Line 8 divided by 2 for each column. Line 10 Average Assets Used to Produce Utah Nonbusiness Income Line 9, column A divided by line 9, column B. Line 11 Interest Expense Enter the total amount of interest deducted in computing Utah taxable income. Line 12 Indirect Related Expenses for Utah Nonbusiness Income Multiply line 10 by line 11. Line 13 Total Utah Nonbusiness Income Net of Expenses Subtract line 12 from line 5. Enter amount here and on Schedule A, line 5a.
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Non-Utah Nonbusiness Income
Lines 14a-14d Non-Utah Nonbusiness Income Complete each column with the information required and show the gross nonbusiness income from each class of income being specifically allocated. Use additional pages, if necessary, to provide complete information about additional sources of nonbusiness income. Line 15 Total Non-Utah Nonbusiness Income Add lines 14a through 14d. Lines 16a-16d Direct Related Expenses Describe and enter amounts of direct expenses on the same letter line as the corresponding nonbusiness income is listed on lines 14a-14d. Direct related expenses include wages, interest, depreciation, etc. (UCA §59-7-101(19)). Line 17 Total Direct Related Expenses Enter the sum of direct related expenses by adding lines 16a through 16d. Line 18 Non-Utah Nonbusiness Income Net of Direct Related Expenses Subtract line 17 from line 15. Line 19 Beginning of Year Assets Enter the beginning of year value of total assets used to produce non-Utah nonbusiness income in column A. Enter the beginning of year value of the corporation's total assets in column B. Total assets, including Utah assets, should be included in column B. Line 20 End of Year Assets Enter the end of year value of total assets used to produce non-Utah nonbusiness income in column A. Enter the end of year value of the corporation's total assets in column B. Total assets, including Utah assets, should be included in column B. Line 21 Sum of Beginning and End of Year Assets Values Add lines 19 and 20 for each respective column. Line 22 Average Asset Values Line 21 divided by 2 for each column. Line 23 Average Assets Used to Produce Non-Utah Nonbusiness Income Line 22, column A divided by line 22, column B. Line 24 Interest Expense Enter the total amount of interest deducted in computing Utah taxable income. Line 25 Indirect Related Expenses for NonUtah Nonbusiness Income Multiply line 23 by line 24. Line 26 Total Non-Utah Nonbusiness Income Net of Expenses Subtract line 25 from line 18. Enter amount here and on Schedule A, line 5b.
Instructions for Schedule J Apportionment Schedule
Determine apportionment fraction by completing this schedule. The factors express a percent for tangible property in Utah, for wages and salaries in Utah, and for sales in Utah. These factors are to be added together and divided by the number of factors present (typically 3) to arrive at the Utah apportionment fraction calculated to six decimals. This fraction is to be applied to the net income (or loss) to arrive at the amount of income (or loss) apportioned to Utah. In cases where one or more of the factors is omitted due to peculiar aspects of the business operations, the corporation should divide by the number of factors present. The Utah property, payroll and sales, of each qualified subchapter S subsidiary shall be added, respectively, to the Utah property, payroll and sales of the S corporation parent to determine the numerators of the property, payroll and sales factors; and all of the property, payroll and sales of each qualified S corporation subsidiary shall be added, respectively, to all of the property, payroll and sales of the S corporation parent, to determine the denominators of the property payroll and sales factor. Income or loss from partnership or joint venture interests shall be included in income and apportioned to Utah through application of the threefactor formula consisting of property, payroll and sales. For apportionment purposes, the portion of partnership or joint venture property, payroll, and sales to be included in the corporation's property, payroll, and sales factors shall be computed on the basis of the corporation's ownership interest in the partnership or joint venture. Briefly describe the nature and location(s) of your Utah business activities in the space provided at the top of this schedule. Lines 1(a)-1(e) Tangible Property Show the average cost value during the taxable year of real and tangible personal property used in the business within the state (including leased property) in column A and overall (including Utah) in column B. Property owned by the corporation is valued at its original cost. Property rented by the corporation is valued at eight times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the corporation less the annual rental rate received by the corporation from subrentals. The average value of property shall be determined by averaging the cost values at the beginning and
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ending of the tax period. However, monthly values may be used or required if monthly averaging more clearly reflects the average value of the corporation's property. A supporting schedule should be attached whenever monthly averaging is used. Line 2 Total Tangible Property Enter totals of lines 1(a)-1(e) in the respective columns. Line 2(a) Property Fraction Determine property fraction: column A, line 2 divided by column B, line 2. Line 3 Wages, Salaries, Commissions, and Other Includable Compensation Wages, salaries, commissions, and other includable compensation paid to employees for personal services must be included in the Utah factor to the extent that the services, for which the compensation was paid, were rendered in Utah. Compensation is paid in the state if 1. The individual's service is performed entirely within the state; 2. The individual's service is performed both within and outside the state, but the service performed outside the state is incidental to the individual's service within the state; or 3. Some of the service is performed in the state and a. The base of operations or, if there is no base of operation, the place from where the service is directed or controlled within the state, or b. The base of operations or the place where the service is directed or controlled is not in any state where some part of the service is performed, but the individual's residence is in this state. Amounts reportable for employment security purposes may ordinarily be used to determine the wage factor. Line 3(a) Wages Fraction Column A, line 3 divided by column B, line 3. Overall wages, including Utah, are listed in column B. Lines 4(a)-4(e) Gross Receipts from Business The sales factor is the percentage the sales or charges for services within the state for the taxable year bear to the overall sales for the taxable year. Gross receipts from the performance of services are in this state to the extent the services are performed in this state. Sales of tangible personal property are in this state if the property is delivered or shipped to a purchaser within this state regardless of the F.O.B. point or other conditions of the sale, or if the
property is shipped from an office, store, warehouse, factory, or other place of storage in this state and: (1) the purchaser is the United States government, or (2) the corporation is not taxable in the state of the purchaser. Nexus: The jurisdictional link that must be present before a state may tax a corporation upon its activities within a state's borders. Note: Exception to the above method for securities brokerage businesses can be found in UCA §59-7319(3). Line 5 Total Sales and Service Enter totals of lines 4(a)-4(e) in their respective columns. Line 5(a) Sales Fraction Determine sales fraction: column A, line 5 divided by column B, line 5. Overall sales, including Utah, are listed in column B. Line 6 Total Fraction Enter total of lines 2(a), 3(a), and 5(a). Line 7 Apportionment Fraction Calculate the apportionment fraction to six decimals: Line 6 divided by the number of factors used (typically 3 - property, wages, and sales). If one or more of the factors are not present (i.e., there is a zero represented on lines 2, 3, or 5 in column B), divide by the number of factors present. Enter apportionment fraction here and on Schedule A, line 7.
Specialized Apportionment Rules
Specialized apportionment rules apply for: · Trucking Companies (R865-6F-19) · Railroads (R865-6F-29) · Publishing Companies (R865-6F-31) · Financial Institutions (R865-6F-32) · Telecommunication (R865-6F-33)
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Instructions for Schedule N Nonresident Tax Remittance Information
Every S corporation is subject to payment of the corporation franchise tax on Utah's apportioned share of any income subject to federal corporation income tax. Utah's apportioned share of taxable income is taxed at the same rate (5 percent) applied to C corporations. In addition, tax must be paid at the S corporation level on the percentage of taxable income attributable to the nonresident shareholders of the S corporation. The nonresident's share of taxable income is based on the ratio of stock held by nonresidents to total outstanding stock on the last day of the corporate filing period. The tax rate imposed on the nonresident shareholders is the same as the rate imposed on nonresident partners that file a Utah nonresident composite partnership return. Nonresident S corporation shareholders may generally consider the tax imposed as either a payment or a withholding. Nonresident shareholders having no other Utah source income may choose whether or not to file a Utah nonresident individual income tax return. However, nonresident shareholders with income or loss from other Utah sources must file a nonresident individual income tax return. A nonresident shareholder who is eligible for tax credits under Utah law may claim those credits by filing a Utah nonresident individual income tax return. If a nonresident individual income tax return is filed, a credit may be claimed for the nonresident shareholder's share of the S corporation tax as shown on form TC-20S, Schedule N. Note to Tax Preparers: It is recommended that the amount of Utah tax paid on behalf of each shareholder be included on the federal schedule K-1. Part 1 Utah Individual Income Tax S corporations having nonresident shareholders must complete Part I of Schedule N showing the amount of Utah tax paid on behalf of each nonresident shareholder. Part 2 Nonrefundable Tax Credits S corporations that have earned nonrefundable credits are required to complete Part II of Schedule N showing each shareholder's portion of each nonrefundable credit, the total for each credit and the total amount of nonrefundable credits that each shareholder (whether resident or nonresident) has earned. A summary of current nonrefundable tax credits available for pass-through to shareholders is pro-
vided to facilitate an understanding of the requirements for each credit. Codes for Nonrefundable Credits 02 Qualified Sheltered Workshop Cash Contribution Credit 03 Renewable Energy Systems Tax Credit 04 Clean Fuel Alternative Tax Credit 05 Clean Fuel Vehicle Tax Credit 06 Historic Preservation Tax Credit 07 Enterprise Zone Credit 08 Low Income Housing Tax Credit 09 Credit for Employers who Hire Persons with Disabilities 10 Recycling Market Development Zone Tax Credit 12 Credit for Increasing Research Activities 13 Credit for Machinery and Equipment Used to Conduct Research (02) Qualified Sheltered Workshop Cash Contribution Credit (UCA §59-10-108) There is no form for this credit. Make sure you keep any documentation to support this credit. Cash contributions made within the tax year to a qualified nonprofit rehabilitation sheltered workshop facility for the handicapped operating in Utah are eligible for a credit against Utah income taxes. Check with the workshop to make sure they have a current Day Training Provider License or Day Support Provider Certificate issued by the Department of Human Services. The credit is equal to 50 percent of the total of cash contributions, not to exceed $200 for each Utah Individual Income Tax Return. If the contribution was deducted when calculating federal taxable income (federal form 1120S, Schedule K, line 7), that amount must be added to unadjusted income (Utah Schedule A, line 2) before the credit may be claimed on this line. For more information, contact: Division of Services for Person's with Disabilities Contract Administrator 120 N 200 W #411 Salt Lake City, UT 84103 Telephone: (801) 538-4200 (03) Renewable Energy Systems Tax Credit (UCA §59-10-602 & §59-10-603) Attach form TC-40E, "Renewable Energy Systems Tax Credit" with the Office of Energy and Resource Planning stamp, verifying the credit has been approved. To qualify for the energy tax credit, you must have installed or upgraded a renewable energy system (such as solar or wind generated power systems) during the tax period. Energy saving devices, such as insulation, siding thermal windows, and high
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efficiency furnaces, that do not contain a renewable component, do not qualify. To determine if your system or system components and installation qualify for the tax credit you must submit a written application, complete with signatures and photocopies of receipts, to the Utah Office of Energy and Resource Planning (OERP). Application forms can be obtained from: Utah Office of Energy and Resource Planning 1594 W North Temple, Suite 3610 Box 146480 Salt Lake City, UT 84114-6480 Telephone: (801) 538-5428. If your system meets the eligibility requirements, you will receive form TC-40E, with information on your eligible system and installation costs and the OERP stamp of approval. (04) Clean Fuel Alternative Tax Credit (UCA §59-10-128) Complete and attach form TC-40F, "Clean Fuel Alternative Tax Credit" with the Utah Energy Office seal, verifying the credit has been approved. To qualify you must have purchased and installed EPA certified pellet burning stoves, high mass wood stoves, solid fuel burning devices, and natural gas or propane free standing fireplaces or inserts. The credit is limited to $50 or 10 percent of the total of the purchase cost and installation costs, whichever is less. To obtain form TC-40F, certification, and for additional information, contact: Department of Environmental Quality Division of Air Quality 150 N 1950 W Salt Lake City, UT 84114-4820 Telephone: (801) 536-4000 (05) Clean Fuel Vehicle Tax Credit (UCA §59-10-127) Complete and attach form TC-40V, "Clean Fuel Vehicle Tax Credit," with the Division of Air Quality approval stamp, verifying the credit has been approved. The following credits are available: · 20 percent, to a maximum of $500 per vehicle for purchases of new vehicles that are fueled by propane, natural gas, or electricity and are registered in Utah for the first time; · 20 percent, to a maximum of $400 of the cost of equipment for conversion of a Utah registered vehicle to be fueled by propane, natural gas, or electricity; or · 20 percent, to a maximum of $500 of the cost of equipment for conversion of a special fuel mobile equipment engine to be fueled by propane, natural gas, or electricity.
To obtain form TC-40V, approval, or for additional information, contact: Department of Environmental Quality Division of Air Quality 150 N 1950 W Salt Lake City, UT 84114-4820 Telephone: (801) 536-4000 (06) Historic Preservation Tax Credit (UCA §59-10-108.5) Complete and attach form TC-40H, "Historic Preservation Tax Credit" with the State Historic Preservation Office certification, verifying the credit has been approved. This is a credit for costs incurred in connection with qualified rehabilitation of any residential certified historic building. If qualified rehabilitation expenditures exceed $10,000, a credit of 20 percent of the total expenditures is allowed. Unused credits may be carried forward five years as a credit against Utah tax due. To obtain form TC-40H, certification, and for additional information, contact: State Historic Preservation Office 300 Rio Grande Salt Lake City, UT 84101 Telephone: (801) 533-3563. (07) Enterprise Zone Credit (UCA §9-2-413) There is no form for this credit. Retain documentation to support this credit. For businesses to qualify for the enterprise zone tax credit, at least 51 percent of the employees employed by the business located in the enterprise zone, must reside in the county in which the enterprise zone is located. · Businesses engaged in retail trade or public utilities are not eligible for the enterprise zone tax credit. · Construction jobs are not eligible for the tax credits in paragraphs 1 through 4 below. The following state tax credits are applicable to qualifying businesses in an enterprise zone. 1. A credit of $750 for each new full-time position filled for not less than six months during a tax year. 2. An additional $500 tax credit if the new position pays at least 125 percent of the county average monthly nonagricultural payroll wage for the respective industry as determined by the Department of Workforce Services. If this information is not available, the job must pay at least 125 percent of the total average monthly nonagricultural payroll wage in the respective county where the enterprise is located.
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3. An additional credit of $750 may be claimed if the new position is in a business that adds value to agricultural commodities through manufacturing or processing. 4. An additional $200 credit may be claimed for two consecutive years for each new employee who is insured under an employer-sponsored health insurance program, if the employer pays at least 50 percent of the premium cost for two consecutive years. 5. A 50 percent credit, not to exceed $100,000, for cash contributions made to a private nonprofit corporation that is exempt from federal income tax under IRC Section 501(c)(3), whose primary purpose is community and economic development and is accredited by the Utah Rural Development Council Board of Directors. 6. A 25 percent credit of the first $200,000 spent on rehabilitating a building, vacant for two years, in the enterprise zone. 7. An annual investment tax credit of 10 percent of the first $250,000 investment and 5 percent of the next $1,000,000 qualifying investment in plant, equipment, or other depreciable property. A business claiming a credit under paragraphs 1 through 4 may claim a credit for 30 full-time employee positions or less in each of its taxable years. A business may claim an additional credit for a full-time employee position under paragraphs 1 through 4 above if: a. The business creates a new full-time employee position; b. The total number of full-time employee positions is greater than the number of full-time employee positions previously claimed by the business under paragraph 1 through 4; and c. The total number of credits claimed for its current taxable year, including the new full-time employee positions being claimed as a credit, is less than or equal to 30. If the tax credit exceeds the tax liability, the credit amount exceeding the liability may be carried forward for a period that does not exceed the next three taxable years. Indian tribes may apply for enterprise zone designation within an Indian reservation. If enterprise zone credits are being taken based on your ownership in a partnership, you must allocate the above-calculated credits based on your respective percentage of ownership. For additional information, contact: Dept.of Community and Economic Development 324 S State Street Suite 500 Salt Lake City, UT 84111 Telephone: (801) 538-8782
(08) Low Income Housing Tax Credit (UCA §59-10-129) Complete and attach forms TC-40TCAC, "Utah Low-Income Housing Tax Credit Allocation Certification," and TC-40LI, "Summary of Utah LowIncome Housing Tax Credit," to your return. If you are carrying this credit forward or backward, you must also attach form TC-40LIC, "Utah Low-Income Housing Tax Credit Carryback and/or Carryforward," to your return. This credit is an amount determined by the Utah Housing Finance Agency, for any housing sponsor that has received an allocation of the federal lowincome housing tax credit and any applicant for an allocation of the federal low-income housing tax credit. Unused credits may be carried back three years or carried forward five years. To obtain forms, certification and for additional information, contact: Utah Housing Finance Agency 554 S 300 E Salt Lake City, UT 84111 Telephone: (801) 521-6950 (09) Credit For Employers Who Hire Persons With Disabilities (UCA §59-10-109) Complete and attach form TC-40HD, "Tax Credit for Employers Who Hire Persons with Disabilities," showing certification. The credit is for employers hiring an individual with a disability who: 1. Worked in Utah for at least 6 months in a taxable year for that employer; and 2. Is paid at least minimum wages by that employer. Individual with a disability means an individual who: 1. Has been receiving services from a certified day-training program for persons with disabilities, which is certified by the Department of Human Services, for at least six consecutive months prior to working for the employer claiming the tax credit; or 2. Is eligible for services from the Division of Services for People with Disabilities at the time the individual begins working for the employer claiming the tax credit. To obtain form TC-40HD, certification or for additional information, contact: Utah Department of Human Services Division of Services for People with Disabilities 120 N 200 W Rm 411 Salt Lake City, UT 84103 Telephone: (801) 538-4200
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(10) Recycling Market Development Zone Tax Credit (UCA §59-10-108.7) Attach the completed form TC-40R, "Recycling Market Development Zone Tax Credit" with the Department of Community and Economic Development certification, verifying the credit has been approved. A credit is available to businesses operating in a recycling market development zone as defined in UCA §9-2-1602. To obtain form TC-40R, certification, or for additional information, contact: Dept. of Community and Economic Development 324 S State Street, Suite 500 Salt Lake City, UT 84111 Telephone: (801) 538-8804 (12) Credit for Increasing Research Activities (UCA §59-10-131) The credit is for expenses incurred for increasing qualified research activities in Utah. A qualifying taxpayer may claim the credit in the taxable year immediately following the taxable year for which the taxpayer qualifies for the credit. A qualifying taxpayer may take the following nonrefundable research credits for activities in Utah: 1. A research credit of 6% of the taxpayer's qualified research expenses for the current taxable year that exceed the base amount; and 2. A credit for payments to qualified organizations for basic research, as provided in IRC Section 41(e), of 6% for the current taxable year that exceed the base amount.
For detailed information regarding this credit, including definition of terms and procedures for claiming the credit, refer to UCA §59-10-131. (13) Credit for Machinery and Equipment Used to Conduct Research (UCA §59-10-132) The credit is for machinery, equipment, or both used primarily for conducting qualified research or basic research in Utah for a time period of not less than 12 consecutive months. A qualifying taxpayer may claim the credit in the taxable year immediately following the taxable year for which the taxpayer qualifies for the credit.
A qualifying taxpayer may take the following nonrefundable credits: 1. A credit of 6 percent of the purchase price of certain machinery and equipment primarily used to conduct qualified research in Utah; and 2. A credit of 6 percent of the purchase price of certain machinery and equipment donated to a qualified organization and used primarily to conduct basic research in Utah. For detailed information regarding this credit, including definition of terms and procedures for claiming the credit, refer to UCA §59-10-132.
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Utah State Tax Commission 210 N 1950 W Salt Lake City Utah 84134
PRESORTED STANDARD U. S. POSTAGE PAID UTAH STATE TAX COMM.
Utah State Tax Commission
S Corporation Franchise or Income Tax Return and Instructions
Form TC-20S
Need Forms? Call (801) 297-6700 or 1-800-662-4335, ext. 6700 Print from the Internet at http://www.tax.ex.state.ut.us/CurrentPackX/Business.html Need more information? You can find additional tax information and forms on the Tax Commission's web page at http://www.tax.ex.state.ut.us
References: UCA Utah Code Annotated IRC Internal Revenue Code
2000
210 N 1950 W SLC UT 84134 (801) 297-2200 1-800-662-4335 http://www.tax.ex.state.ut.us
Table of Contents
General Instructions and Information .......................................................................................... 1 Instructions for Return ................................................................................................................ 3 Instructions for Schedule A Utah Taxable Income and Tax Due ............................................... 5 Instructions for Schedule E - Prepayments of Any Type ............................................................. 6 Instructions for Schedule H Nonbusiness Income Schedule ................................................... 7 Instructions for Schedule J Apportionment Schedule .............................................................. 8 Instructions for Schedule N Nonresident Tax Remittance Information ................................... 10
Whats New?
· Tax Credit For Increasing Research Activities: A nonrefundable credit is allowed for expenses incurred for increasing qualified research activities in Utah. To see if you qualify, see page 13. · Tax Credit For Machinery And Equipment Used To Conduct Research: A nonrefundable credit is allowed for machinery, equipment or both used primarily for conducting qualified research or basic research in Utah. To see if you qualify, see page 13. · Foreign taxes that were deducted on federal form 1120S, Schedule K, line 15(f) must be added back in calculating net income on Utah Schedule A. See Schedule A instructions for line 3. · The Department of Commerce is re-issuing identification numbers for incorporation or qualification in the state of Utah. Each new number issued will consist of 6 or 7 digits followed by a 4-digit suffix. Enter the new identification number on all return forms where requested. If you have not yet received notification of your new identification number, enter your original 6-digit charter number. · Use tax, in the amount of $400 or less, may be claimed on Line 7 of the return. If use tax exceeds $400, the purchaser is required to obtain a sales and use tax license. See instructions on Page 4.
File TC-20 if Corporation filed federal 1120 File TC-20S if S Corporation filed federal 1120S
If you need an accommodation under the Americans with Disabilities Act, contact the Tax Commission at (801) 297-3811 or Telecommunications Device for the Deaf (TDD) (801) 297-3819. Please allow three working days for a response.
General Instructions and Information
Corporation Identification Numbers
The Utah State Tax Commission will use the Employer Identification Number (EIN) as the corporation's taxpayer identification with the state. The Utah Department of Commerce issues a registration number upon incorporation or qualification in Utah. Enter the Utah Incorporation/Qualification number in the field provided. Make sure you provide your EIN and Utah Incorporation/Qualification Number for proper identification of the corporate tax return or any correspondence.
or rented, and that do not maintain an inventory or have employees located at a place of business in Utah. For example: A foreign corporation with goods maintained in Utah in a public warehouse, or a trucking company operated in or through Utah by a foreign corporation not qualified for the privilege of doing business in Utah, is subject to the income rather than franchise tax. Corporate income tax filers use form TC-20. A $100 minimum tax applies to the corporate income tax.
Taxable Year
The taxable year for Utah Corporation franchise or income tax purposes must match the taxable year used for federal income tax purposes. When the taxable year changes for federal purposes, the taxable year must be adjusted accordingly for Utah corporation franchise or income tax purposes. Refer to "Filing Return Where Period Changed," below. If the taxable year is not a calendar year, enter the beginning and ending dates of the taxable year at the top of form TC-20 where indicated.
Rounding Off to Whole-Dollar Amounts
All entries must be reported in whole-dollar amounts.
Liability for Filing and Paying Returns
Tax Forms
The Tax Commission supplies returns for filing of corporate taxes to corporations properly registered with the state. If an original return is received by the corporation, call (801) 297-6700 to request forms. NOTE: Please review "Supporting Federal Information," later in these general instructions to identify what federal information is required with the Utah filing. Franchise Tax Every C corporation incorporated in Utah (domestic), qualified in Utah (foreign), or doing business in Utah, whether qualified or not, must file a corporate franchise tax return. C corporation returns are filed on form TC-20. There is a minimum tax (privilege tax) of $100 on every corporation that files form TC20 regardless of whether the corporation exercises its right to do business. S Corporation Every S corporation (as defined in IRC Section 1361(a)) that has filed a proper and timely election under IRC Section 1362(a) must file form TC-20S so long as the federal election remains in effect. The minimum tax does not apply to S corporations. S corporation franchise or income tax return, schedules, and general instructions are printed separately from this booklet. Income Tax The only corporations required to file under the income tax provisions are those that derive income from Utah sources, but that are not qualified to do business in Utah and have no regular and established place of business in this state, either owned
Filing Return Where Period Changed
When changes are made to the taxable year, as indicated in "Taxable Year," above, a short period return is required. The short period return must cover the period of less than 12 months between the prior taxable year-end and the new taxable year-end. The tax rates as provided in UCA §59-7104 and §59-7-201 apply to short period returns.
Due Date
Returns must be filed on or before the 15th day of the fourth month following the close of the taxable year.
Filing Extension
Corporations are automatically allowed an extension of up to six months to file a return without filing an extension form. This is an extension of time to file the return - NOT an extension of time to pay taxes. To avoid penalty and interest, the prepayment requirements must be met on or before the original return due date and all returns must be filed within the six-month extension period.
Penalties
The penalty for failure to file a tax due return by the due date is the greater of $20 or 10 percent of the unpaid tax. In addition, if a tax balance remains unpaid 90 days after the due date, a second penalty, the greater of $20 or 10 percent of the tax balance, will be added for failure to pay timely. The penalty for failure to pay tax due as reported on a timely filed return, or within 30 days of a notice of deficiency, is the greater of $20 or 10 percent of the tax due.
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The penalty for underpayment of the extension prepayment is 2 percent per month of the unpaid tax during the extension period. If the return is not filed by the extension due date, failure to file and failure to pay penalties will apply, as if the extension had not been granted. Penalty for failure to file an information return or complete supporting schedule is $50 for each return or schedule to a maximum of $1,000. The penalty for each underpayment of required estimated tax or required quarterly installments is determined by applying the state interest rate(s) in effect for the period of the underpayment, plus four percentage points to the amount of the underpayment for the period of the underpayment. For a list of additional penalties, that may be imposed please refer to UCA §59-1-401.
Suspension for Failure to Pay Tax Due
Utah law provides for suspension of the corporation's right to do business in Utah if the corporation fails to pay taxes due before 5 p.m. on the last day of the eleventh month after the due date.
Interest
The calendar year interest rate applicable for all taxes and fees administered by the Tax Commission is two percentage points above the federal short-term rate in effect for the preceding fourth calendar quarter. The Internal Revenue Service publishes this rate in September of each year. The interest rate for most taxes and fees administered by the Tax Commission for the 2001 calendar year is 8 percent.
Supporting Federal Information
Form 1120-S, as filed with the IRS, should be attached when filing the Utah S Corporation Franchise or Income Tax return (Form TC-20S). In addition, federal Schedule K-1 forms must be filed for each shareholder.
First Time Filers
A copy of the IRS letter of authorization, "Notice of Acceptance as an S Corporation," must be attached to the S Corporation Franchise or Income Tax Return, TC-20S, when filing for the first time.
Corporation Changes
Corporation changes (e.g., name change, merger, or ceasing to do business in Utah) must be reported to both: Division of Corporations Department of Commerce 160 E 300 S Salt Lake City, UT 84145 and Tax Commission Master File Maintenance 210 N 1950 W Salt Lake City, UT 84134.
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Instructions for Return
Corporation Name and Address Area
Enter the corporate name, address, and telephone number. Check the box provided if there has been a change to this information since last year's filing.
EIN and Utah Charter Number
Enter the Employer Identification Number (EIN) and Utah Incorporation/Qualification Number issued by the Department of Commerce in the appropriate fields.
must be filed within three years following the date the original return was filed. A return filed before the due date is considered filed on the due date. To amend a previously filed 2000 state tax return: 1. Check the amended box located at the top of the return; and 2. Indicate the reason for amending, by writing the number in the box provided on the return.
Reasons for Amending
1. You filed an amended return with the Internal Revenue Service (you must attach a copy of your amended federal return). 2. You made an error on your state return (attach an explanation of the adjustments made). 3. Federal audit adjustments which resulted in changes in federal taxable income were issued and became final (attach a copy of the IRS adjustment). 4. Other (please attach explanation to return). Complete the return entering the figures as corrected. Enter other amounts shown on your original return. If you received a refund on your original return, enter the total previous refunds on TC-20S, Schedule A, line 14c. If you paid with the original return or made subsequent payments of the tax prior to filing the amended return, enter the total previous payments on TC-20S Schedule A, line 15d. Remember: Except for the amounts you amend, the amounts you place on the return must match the amounts on your original return. Line 1(a) Number of Resident and Nonresident Shares Indicate number of resident and nonresident shares. Line 1(b) Percentage of Resident and Nonresident Shares Indicate percentage of resident and nonresident shares. Line 2 Corporations Conducting Business in Utah Check box, if applicable. Line 3 S Corporation Election Check box, if applicable. Line 4 Refund From Schedule A, line 18. Line 5 Tax Due From Schedule A, line 19. Line 6 Total Penalties and Interest Enter any applicable penalty and interest amounts on the appropriate lines. Enter the total amount in the box. For help calculating penalties and interest, contact the Tax Commission at (801) 297-7790 or 1-800-662-4335.
Filing Period
If the return is being filed for a period other than the calendar year ending Dec. 31, 2000 enter the beginning and ending filing dates.
Qualified Subchapter S Subsidiary
An S corporation that owns one or more qualified subchapter S subsidiaries, as defined in IRC Section 1361(b)3(B), must: · Include each subsidiary's assets, liabilities and items of income, loss and deductions as assets, liabilities and items of income, loss and deductions of the S corporation parent for Utah corporation franchise tax purposes. The qualified subchapter S subsidiary shall not be treated as a separate corporation. · Take into account the activities of the qualified subchapter S subsidiaries in determining whether the S corporation parent is doing business in Utah. For purpose of this determination, all of the subsidiary's activities will be attributed to the parent. · File TC-20S, Schedule M identifying the qualified subchapter S subsidiaries that are incorporated, qualified, or doing business in Utah.
Amended Returns for 2000
An amended state return for 2000 should be filed promptly If you discover: 1. An error on your state or federal return after it has been filed; or 2. Your federal return is audited or adjusted by the IRS and the IRS audit or adjustment affects your state return. You must report such changes or corrected net income within 90 days of the IRS's final determination. If you need to amend a return for a tax year other than 2000, please use the tax form and instructions for the year you are amending. To qualify for a refund or credit, an amended return
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Line 7 Utah Use Tax Utah corporations that purchased items or services outside Utah for use or consumption in Utah and did not pay sales or use tax on those items at the time of purchase, or that paid sales or use tax at a lower rate than the required use tax rate must pay use tax on the purchase price at the rate applicable in the city or county in which the item or service was consumed. Use tax of $400 or less may be paid on this line; use tax exceeding $400 must be filed and paid on a sales and use tax return. Use tax applies to the following purchases: · Goods purchased in another state and transported to Utah for use or consumption. · Goods purchased from a catalog and shipped into Utah for use or consumption. · Goods purchased over the Internet and shipped into Utah for use or consumption. Credit is allowed for sales taxes paid in another state or for Utah use tax collected by the vendor. No credit is given for taxes paid in foreign countries.
Complete the worksheet below to determine use tax. Use the city tax rate from the list fat the top of the next column. If your city is not listed, use the county rate.
Use Tax Rate Chart (Effective Dec. 31, 2000)
.0600 .0700 .0600 .0625 .0600 .0625 .0600 .0625 .0600 .0625 .0600 .0625 .0575 .0750 .0700 .0800 .0600 .0775 .0600 .0775 .0600 .0625 .0675 .0775 .0575 .0600 .0600 .0600 .0635 .0735 .0600 .0650 Beaver County Beaver Box Elder County Brigham, Perry, Willard Cache County Logan Carbon County Price Daggett County Davis County Duchesne County Roosevelt Emery County Green River Garfield County Boulder, Panguitch, Tropic Grand County Moab, East Green River Iron County Brian Head Juab County Nephi Kane County Kanab Millard County Morgan County Piute County Rich County Salt Lake County Alta San Juan County Monticello .0600 .0625 .0600 .0625 .0600 .0725 .0575 .0600 Sanpete County Ephraim, Gunnison Sevier County Richfield, Salina Summit County Park City Tooele County Erda, Grantsville, Lakepoint, Lincoln, Tooele City, Stansbury Park Uintah County Vernal Utah County Alpine, American Fork, Lehi, Lindon, Mapleton, Orem, Payson, Pleasant Grove, Provo, Provo Canyon, Salem, Highland, Spanish Fork, Springville, Cedar Hills Wasatch County Heber Washington Cnty Hurricane, Ivins, La Verkin, St. George, Santa Clara, Washington City Springdale Wayne County Weber County
.0650 .0675 .0600 .0625
.0600 .0625 .0600 .0625
.0750 .0600 .0625
WORKSHEET FOR COMPUTING UTAH USE TAX (Retain this worksheet for your records.)
1. Total amount of purchases subject to use tax ... $___________ 2. Use tax rate (decimal) .......................................... $___________ 3. Use tax (multiply line 1 by line 2) ......................... $___________ 4. Credit for sales tax paid ....................................... $___________ 5. Amount of Use tax due (line 3 less line 4) Enter ZERO if less than zero .............................. $___________
Line 8 Total Refund Subtract lines 6 and 7 from line 4. Line 9 Total Remitted Add lines 5, 6 and 7. Show total amount due on line 9. Make check or money order payable to the Utah State Tax Commission. Do not mail cash. The Tax Commission assumes no liability for loss of cash placed in the mail.
Signature and Date Lines
Signature and date lines are required for declaration of the return's accuracy. Refunds will not be granted on returns without signatures and dates.
Supplemental Information to be Supplied by all Corporations
All corporations must complete this section, located on the back of the return.
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Instructions for Schedule A Utah Taxable Income and Tax Due
Line 1 Income/Loss Enter the amount of income or loss (R865-6F-35) as taken from federal form 1120S, Schedule K, line 23. Line 2 Charitable Contributions Addition Add charitable contributions that were deducted on federal form 1120S, Schedule K, line 7. Line 3 Foreign Taxes Add foreign taxes that were deducted on federal form 1120S, Schedule K, Line 15(f). Line 4 Net Income 4a Total Income before Nonbusiness Income. Add Lines 1, 2 and 3. 4b Nonresident Income Schedule A, line 4a multiplied by the percentage of nonresident shares on line 1b of S Corporation Franchise or Income Tax return, form TC-20S. Line 5 Nonbusiness Income Allocation Add line 5a and line 5b. 5a Nonbusiness Income Allocated to Utah Schedule H, line 13 multiplied by the percent of nonresident shareholders on line 1b of S Corporation Franchise Tax return, form TC-20S. 5b Nonbusiness Income Allocated Outside Utah Schedule H, line 26 multiplied by the percent of nonresident shareholders on line 1b of S Corporation Franchise or Income Tax return, form TC-20S. Line 6 Net Income Subject to Apportionment Subtract line 5 from line 4b. Line 7 Apportionment Fraction 100 percent or bring forward fraction from Schedule J, line 7. Line 8 Net Income Apportioned to Utah Multiply line 6 by line 7. Line 9 Nonbusiness Income Allocated to Utah Enter amount reported on line 5a above. Line 10 Utah Taxable Income/Loss Add line 8 and line 9. Nonresident shareholders should transfer their pro rata share of taxable income before deduction amount to their Utah Individual Income Tax Return, TC-40, line 23, column A. For tax years beginning on or after 1/1/94, losses are passed through to the individual shareholders and are not available for carryforward or carryback.
Line 11 Deduction Amount Applies To Income Greater Than Zero Multiply line 10 by (.15). If line 10 is a loss, no deduction amount is allowed. Line 12 Net Taxable Income Subtract line 11 from line 10. Line 13 Tax Rate The tax rate is .07. Line 14 Calculation of Tax Add lines 14a through 14c. 14a Calculation of Tax Multiply line 12 by line 13. 14b Built-in and Other Gains Tax In accordance with the provisions of UCA §59-7701, gains or income subject to the federal corporation tax are also subject to the Utah S Corporation Franchise or Income Tax. The most common transactions that occur under federal provisions, include: built-in gains, capital gains, federal recapture amounts of prior year's investment credits, LIFO recapture amounts, and any other similar type transaction. These gains or income should be apportioned (see Schedule J) and multiplied by the current tax rate of 5 percent. Attach a schedule to form TC-20S that provides the necessary details of gains or income being reported. 14c Amended Returns Only (Previous refunds) This line is used only for amended returns. When filing an amended return, enter the amount of all refunds, credits, or offsets of corporation franchise or income tax received for the tax year being amended. You should exclude refund interest from this amount. This amount is then added into the tax amount on line 14. Line 15 Refundable Credits and Previous Payments Add lines 15a through 15d. 15a Mineral Production Withholding Credit (R865-14W-1) A refundable credit is allowed for Utah tax withheld from the corporation's mineral production payments as indicated on form TC-675R or federal schedule K-1(s). Form TC-675R or K-1 must be attached when credit is claimed. 15b Credit for Agricultural Off-Highway Gasoline and Undyed Diesel Tax (UCA §59-13-202) Attach federal form 1040 Schedule F. There is no state form for this credit. Make sure you keep all personal records, forms, and worksheets to support this credit.
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This is 24.5 cents per gallon credit only for: · Motor fuel and undyed diesel fuel purchased in Utah; and · Used to operate stationary farm machinery used solely for commercial nonhighway agricultural use; and · That was taxed at the time of purchase. Activities that DO NOT qualify for this credit include, but are not limited to, the following: · Golf courses · Hobbies · Horse racing · Boat operations · Highway seeding · Vehicles registered for highway use · Farming for personal use Multiply your total gallons eligible for the credit by .245 and enter the gallon and credit amount on line 15b of your state return. 15c Total Prepayments A refundable credit is allowed for advance payments made as quarterly prepayments and extension payments (form TC-559). Also, include any overpayment from the prior year applied to this year, and include withholding prepayments made applicable to the filing period and specify amount paid. (See Schedule E.) 15d Amended Returns Only (Previous Payments) This line should only be used for amended returns. When filing an amended return, enter the amount of tax paid with the original return and/or subsequent payments of the tax prior to filing this amended return. Line 16 Overpayment If line 15 is larger than line 14, subtract line 14 from line 15. Line 17 Overpayment To Be Applied To Next Taxable Year As a convenience to refund filers, all or part of a refund may be applied as an advance payment for the next tax year. Enter amount to be applied (must be less than or equal to refund). Line 18 Refund Subtract line 17 from line 16 and enter amount on form TC-20S, line 4. Line 19 Total Tax If line 14 is larger than line 15, subtract line 15 from line 14. Enter amount on form TC-20S, line 5.
Instructions for Schedule E Prepayments of any Type
Line 1 Enter the total amount of all refunds applied from the prior year. Line 2 List the date, check number and amount of extension prepayment. Line 3 List the date, check number and amount of all prepayments made for the filing period. Enter the total amount on line 3. Attach additional sheet, if necessary. Line 4 Add lines 1, 2, and 3. Enter the total on this line and on Schedule A, line 15c.
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Instructions for Schedule H Nonbusiness Income Schedule
Determine nonbusiness income allocated to Utah and outside Utah by completing this schedule. All income that arises from the conduct of the trade or business operations of a corporation is business income. Nonbusiness income means all income other than business income and will be narrowly construed. Intangible income must be properly classified and based upon factual evidence. The burden of proof is on the corporation to justify the manner in which the income is claimed on the return. Interest income is business income where the intangible with respect to which the interest was received arises out of or was created in the regular course of the taxpayer's trade or business operations. (Tax Commission Rule R865-6F-8(A)(3)(c)) Dividends are business income where the stock, with respect to which the dividends are received, arises out of or was acquired in the regular course of the taxpayer's trade or business operations. Because of the regularity with which most corporate taxpayers engage in investment activities, income arising from the ownership, sale or other disposition of investments is presumptively business income. (Tax Commission Rule R865-6F8(A)(3)(d)) Gain or loss from the sale, exchange, or other disposition of real or tangible or intangible personal property constitutes business income if the property while owned by the taxpayer was used in the taxpayer's trade or business. (Tax Commission Rule R865-6F-8(A)(3)(b)) Rental income from real and tangible property is business income if the property with respect to which the rental income was received is used in the taxpayer's trade or business or . . . includable in the property factor. (Tax Commission Rule R865-6F-8(A)(3)(a)) If the corporation is claiming only Utah nonbusiness income, lines 1a through 13 must be completed. If the corporation is claiming only non-Utah nonbusiness income, lines 14a through 26 must be completed. If the corporation is claiming both Utah and non-Utah nonbusiness income, lines 1a through 26 must be completed. Use additional pages if necessary to provide complete information including a description of the business purpose for making the investment, the transactions creating the non-business income, and the use of revenues generated by the non-business investment.
Utah Nonbusiness Income
Lines 1(a)-(d) Utah Nonbusiness Income Complete each column with the information required and show the gross nonbusiness income from each class of income being specifically allocated. Use additional pages, if necessary, to provide complete information about additional sources of nonbusiness income. Line 2 Total Utah Nonbusiness Income Add lines 1(a) through 1(d). Lines 3a-3d Direct Related Expenses Describe and enter amounts of direct expenses on the same letter line as the corresponding nonbusiness income is listed on lines 1a-1d. Direct related expenses include wages, interest, depreciation, etc. (UCA §59-7-101(19)). Line 4 Total Direct Related Expenses Enter the sum of direct related expenses by adding lines 3(a) through 3(d). Line 5 Utah Nonbusiness Income Net of Direct Related Expenses Subtract line 4 from line 2. Line 6 Beginning of Year Assets Enter the beginning of year value of assets used to produce Utah nonbusiness income in column A. Enter the beginning of year value of the corporation's total assets in column B. Total assets, including Utah assets, should be included in column B. Line 7 End of Year Assets Enter the end of year value of assets used to produce Utah nonbusiness income in column A. Enter the end of year value of the corporation's total assets in column B. Total assets, including Utah assets, should be included in column B. Line 8 Sum of Beginning and End of Year Assets Values Add lines 6 and 7 for each respective column. Line 9 Average Asset Values Line 8 divided by 2 for each column. Line 10 Average Assets Used to Produce Utah Nonbusiness Income Line 9, column A divided by line 9, column B. Line 11 Interest Expense Enter the total amount of interest deducted in computing Utah taxable income. Line 12 Indirect Related Expenses for Utah Nonbusiness Income Multiply line 10 by line 11. Line 13 Total Utah Nonbusiness Income Net of Expenses Subtract line 12 from line 5. Enter amount here and on Schedule A, line 5a.
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Non-Utah Nonbusiness Income
Lines 14a-14d Non-Utah Nonbusiness Income Complete each column with the information required and show the gross nonbusiness income from each class of income being specifically allocated. Use additional pages, if necessary, to provide complete information about additional sources of nonbusiness income. Line 15 Total Non-Utah Nonbusiness Income Add lines 14a through 14d. Lines 16a-16d Direct Related Expenses Describe and enter amounts of direct expenses on the same letter line as the corresponding nonbusiness income is listed on lines 14a-14d. Direct related expenses include wages, interest, depreciation, etc. (UCA §59-7-101(19)). Line 17 Total Direct Related Expenses Enter the sum of direct related expenses by adding lines 16a through 16d. Line 18 Non-Utah Nonbusiness Income Net of Direct Related Expenses Subtract line 17 from line 15. Line 19 Beginning of Year Assets Enter the beginning of year value of total assets used to produce non-Utah nonbusiness income in column A. Enter the beginning of year value of the corporation's total assets in column B. Total assets, including Utah assets, should be included in column B. Line 20 End of Year Assets Enter the end of year value of total assets used to produce non-Utah nonbusiness income in column A. Enter the end of year value of the corporation's total assets in column B. Total assets, including Utah assets, should be included in column B. Line 21 Sum of Beginning and End of Year Assets Values Add lines 19 and 20 for each respective column. Line 22 Average Asset Values Line 21 divided by 2 for each column. Line 23 Average Assets Used to Produce Non-Utah Nonbusiness Income Line 22, column A divided by line 22, column B. Line 24 Interest Expense Enter the total amount of interest deducted in computing Utah taxable income. Line 25 Indirect Related Expenses for NonUtah Nonbusiness Income Multiply line 23 by line 24. Line 26 Total Non-Utah Nonbusiness Income Net of Expenses Subtract line 25 from line 18. Enter amount here and on Schedule A, line 5b.
Instructions for Schedule J Apportionment Schedule
Determine apportionment fraction by completing this schedule. The factors express a percent for tangible property in Utah, for wages and salaries in Utah, and for sales in Utah. These factors are to be added together and divided by the number of factors present (typically 3) to arrive at the Utah apportionment fraction calculated to six decimals. This fraction is to be applied to the net income (or loss) to arrive at the amount of income (or loss) apportioned to Utah. In cases where one or more of the factors is omitted due to peculiar aspects of the business operations, the corporation should divide by the number of factors present. The Utah property, payroll and sales, of each qualified subchapter S subsidiary shall be added, respectively, to the Utah property, payroll and sales of the S corporation parent to determine the numerators of the property, payroll and sales factors; and all of the property, payroll and sales of each qualified S corporation subsidiary shall be added, respectively, to all of the property, payroll and sales of the S corporation parent, to determine the denominators of the property payroll and sales factor. Income or loss from partnership or joint venture interests shall be included in income and apportioned to Utah through application of the threefactor formula consisting of property, payroll and sales. For apportionment purposes, the portion of partnership or joint venture property, payroll, and sales to be included in the corporation's property, payroll, and sales factors shall be computed on the basis of the corporation's ownership interest in the partnership or joint venture. Briefly describe the nature and location(s) of your Utah business activities in the space provided at the top of this schedule. Lines 1(a)-1(e) Tangible Property Show the average cost value during the taxable year of real and tangible personal property used in the business within the state (including leased property) in column A and overall (including Utah) in column B. Property owned by the corporation is valued at its original cost. Property rented by the corporation is valued at eight times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the corporation less the annual rental rate received by the corporation from subrentals. The average value of property shall be determined by averaging the cost values at the beginning and
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ending of the tax period. However, monthly values may be used or required if monthly averaging more clearly reflects the average value of the corporation's property. A supporting schedule should be attached whenever monthly averaging is used. Line 2 Total Tangible Property Enter totals of lines 1(a)-1(e) in the respective columns. Line 2(a) Property Fraction Determine property fraction: column A, line 2 divided by column B, line 2. Line 3 Wages, Salaries, Commissions, and Other Includable Compensation Wages, salaries, commissions, and other includable compensation paid to employees for personal services must be included in the Utah factor to the extent that the services, for which the compensation was paid, were rendered in Utah. Compensation is paid in the state if 1. The individual's service is performed entirely within the state; 2. The individual's service is performed both within and outside the state, but the service performed outside the state is incidental to the individual's service within the state; or 3. Some of the service is performed in the state and a. The base of operations or, if there is no base of operation, the place from where the service is directed or controlled within the state, or b. The base of operations or the place where the service is directed or controlled is not in any state where some part of the service is performed, but the individual's residence is in this state. Amounts reportable for employment security purposes may ordinarily be used to determine the wage factor. Line 3(a) Wages Fraction Column A, line 3 divided by column B, line 3. Overall wages, including Utah, are listed in column B. Lines 4(a)-4(e) Gross Receipts from Business The sales factor is the percentage the sales or charges for services within the state for the taxable year bear to the overall sales for the taxable year. Gross receipts from the performance of services are in this state to the extent the services are performed in this state. Sales of tangible personal property are in this state if the property is delivered or shipped to a purchaser within this state regardless of the F.O.B. point or other conditions of the sale, or if the
property is shipped from an office, store, warehouse, factory, or other place of storage in this state and: (1) the purchaser is the United States government, or (2) the corporation is not taxable in the state of the purchaser. Nexus: The jurisdictional link that must be present before a state may tax a corporation upon its activities within a state's borders. Note: Exception to the above method for securities brokerage businesses can be found in UCA §59-7319(3). Line 5 Total Sales and Service Enter totals of lines 4(a)-4(e) in their respective columns. Line 5(a) Sales Fraction Determine sales fraction: column A, line 5 divided by column B, line 5. Overall sales, including Utah, are listed in column B. Line 6 Total Fraction Enter total of lines 2(a), 3(a), and 5(a). Line 7 Apportionment Fraction Calculate the apportionment fraction to six decimals: Line 6 divided by the number of factors used (typically 3 - property, wages, and sales). If one or more of the factors are not present (i.e., there is a zero represented on lines 2, 3, or 5 in column B), divide by the number of factors present. Enter apportionment fraction here and on Schedule A, line 7.
Specialized Apportionment Rules
Specialized apportionment rules apply for: · Trucking Companies (R865-6F-19) · Railroads (R865-6F-29) · Publishing Companies (R865-6F-31) · Financial Institutions (R865-6F-32) · Telecommunication (R865-6F-33)
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Instructions for Schedule N Nonresident Tax Remittance Information
Every S corporation is subject to payment of the corporation franchise tax on Utah's apportioned share of any income subject to federal corporation income tax. Utah's apportioned share of taxable income is taxed at the same rate (5 percent) applied to C corporations. In addition, tax must be paid at the S corporation level on the percentage of taxable income attributable to the nonresident shareholders of the S corporation. The nonresident's share of taxable income is based on the ratio of stock held by nonresidents to total outstanding stock on the last day of the corporate filing period. The tax rate imposed on the nonresident shareholders is the same as the rate imposed on nonresident partners that file a Utah nonresident composite partnership return. Nonresident S corporation shareholders may generally consider the tax imposed as either a payment or a withholding. Nonresident shareholders having no other Utah source income may choose whether or not to file a Utah nonresident individual income tax return. However, nonresident shareholders with income or loss from other Utah sources must file a nonresident individual income tax return. A nonresident shareholder who is eligible for tax credits under Utah law may claim those credits by filing a Utah nonresident individual income tax return. If a nonresident individual income tax return is filed, a credit may be claimed for the nonresident shareholder's share of the S corporation tax as shown on form TC-20S, Schedule N. Note to Tax Preparers: It is recommended that the amount of Utah tax paid on behalf of each shareholder be included on the federal schedule K-1. Part 1 Utah Individual Income Tax S corporations having nonresident shareholders must complete Part I of Schedule N showing the amount of Utah tax paid on behalf of each nonresident shareholder. Part 2 Nonrefundable Tax Credits S corporations that have earned nonrefundable credits are required to complete Part II of Schedule N showing each shareholder's portion of each nonrefundable credit, the total for each credit and the total amount of nonrefundable credits that each shareholder (whether resident or nonresident) has earned. A summary of current nonrefundable tax credits available for pass-through to shareholders is pro-
vided to facilitate an understanding of the requirements for each credit. Codes for Nonrefundable Credits 02 Qualified Sheltered Workshop Cash Contribution Credit 03 Renewable Energy Systems Tax Credit 04 Clean Fuel Alternative Tax Credit 05 Clean Fuel Vehicle Tax Credit 06 Historic Preservation Tax Credit 07 Enterprise Zone Credit 08 Low Income Housing Tax Credit 09 Credit for Employers who Hire Persons with Disabilities 10 Recycling Market Development Zone Tax Credit 12 Credit for Increasing Research Activities 13 Credit for Machinery and Equipment Used to Conduct Research (02) Qualified Sheltered Workshop Cash Contribution Credit (UCA §59-10-108) There is no form for this credit. Make sure you keep any documentation to support this credit. Cash contributions made within the tax year to a qualified nonprofit rehabilitation sheltered workshop facility for the handicapped operating in Utah are eligible for a credit against Utah income taxes. Check with the workshop to make sure they have a current Day Training Provider License or Day Support Provider Certificate issued by the Department of Human Services. The credit is equal to 50 percent of the total of cash contributions, not to exceed $200 for each Utah Individual Income Tax Return. If the contribution was deducted when calculating federal taxable income (federal form 1120S, Schedule K, line 7), that amount must be added to unadjusted income (Utah Schedule A, line 2) before the credit may be claimed on this line. For more information, contact: Division of Services for Person's with Disabilities Contract Administrator 120 N 200 W #411 Salt Lake City, UT 84103 Telephone: (801) 538-4200 (03) Renewable Energy Systems Tax Credit (UCA §59-10-602 & §59-10-603) Attach form TC-40E, "Renewable Energy Systems Tax Credit" with the Office of Energy and Resource Planning stamp, verifying the credit has been approved. To qualify for the energy tax credit, you must have installed or upgraded a renewable energy system (such as solar or wind generated power systems) during the tax period. Energy saving devices, such as insulation, siding thermal windows, and high
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efficiency furnaces, that do not contain a renewable component, do not qualify. To determine if your system or system components and installation qualify for the tax credit you must submit a written application, complete with signatures and photocopies of receipts, to the Utah Office of Energy and Resource Planning (OERP). Application forms can be obtained from: Utah Office of Energy and Resource Planning 1594 W North Temple, Suite 3610 Box 146480 Salt Lake City, UT 84114-6480 Telephone: (801) 538-5428. If your system meets the eligibility requirements, you will receive form TC-40E, with information on your eligible system and installation costs and the OERP stamp of approval. (04) Clean Fuel Alternative Tax Credit (UCA §59-10-128) Complete and attach form TC-40F, "Clean Fuel Alternative Tax Credit" with the Utah Energy Office seal, verifying the credit has been approved. To qualify you must have purchased and installed EPA certified pellet burning stoves, high mass wood stoves, solid fuel burning devices, and natural gas or propane free standing fireplaces or inserts. The credit is limited to $50 or 10 percent of the total of the purchase cost and installation costs, whichever is less. To obtain form TC-40F, certification, and for additional information, contact: Department of Environmental Quality Division of Air Quality 150 N 1950 W Salt Lake City, UT 84114-4820 Telephone: (801) 536-4000 (05) Clean Fuel Vehicle Tax Credit (UCA §59-10-127) Complete and attach form TC-40V, "Clean Fuel Vehicle Tax Credit," with the Division of Air Quality approval stamp, verifying the credit has been approved. The following credits are available: · 20 percent, to a maximum of $500 per vehicle for purchases of new vehicles that are fueled by propane, natural gas, or electricity and are registered in Utah for the first time; · 20 percent, to a maximum of $400 of the cost of equipment for conversion of a Utah registered vehicle to be fueled by propane, natural gas, or electricity; or · 20 percent, to a maximum of $500 of the cost of equipment for conversion of a special fuel mobile equipment engine to be fueled by propane, natural gas, or electricity.
To obtain form TC-40V, approval, or for additional information, contact: Department of Environmental Quality Division of Air Quality 150 N 1950 W Salt Lake City, UT 84114-4820 Telephone: (801) 536-4000 (06) Historic Preservation Tax Credit (UCA §59-10-108.5) Complete and attach form TC-40H, "Historic Preservation Tax Credit" with the State Historic Preservation Office certification, verifying the credit has been approved. This is a credit for costs incurred in connection with qualified rehabilitation of any residential certified historic building. If qualified rehabilitation expenditures exceed $10,000, a credit of 20 percent of the total expenditures is allowed. Unused credits may be carried forward five years as a credit against Utah tax due. To obtain form TC-40H, certification, and for additional information, contact: State Historic Preservation Office 300 Rio Grande Salt Lake City, UT 84101 Telephone: (801) 533-3563. (07) Enterprise Zone Credit (UCA §9-2-413) There is no form for this credit. Retain documentation to support this credit. For businesses to qualify for the enterprise zone tax credit, at least 51 percent of the employees employed by the business located in the enterprise zone, must reside in the county in which the enterprise zone is located. · Businesses engaged in retail trade or public utilities are not eligible for the enterprise zone tax credit. · Construction jobs are not eligible for the tax credits in paragraphs 1 through 4 below. The following state tax credits are applicable to qualifying businesses in an enterprise zone. 1. A credit of $750 for each new full-time position filled for not less than six months during a tax year. 2. An additional $500 tax credit if the new position pays at least 125 percent of the county average monthly nonagricultural payroll wage for the respective industry as determined by the Department of Workforce Services. If this information is not available, the job must pay at least 125 percent of the total average monthly nonagricultural payroll wage in the respective county where the enterprise is located.
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3. An additional credit of $750 may be claimed if the new position is in a business that adds value to agricultural commodities through manufacturing or processing. 4. An additional $200 credit may be claimed for two consecutive years for each new employee who is insured under an employer-sponsored health insurance program, if the employer pays at least 50 percent of the premium cost for two consecutive years. 5. A 50 percent credit, not to exceed $100,000, for cash contributions made to a private nonprofit corporation that is exempt from federal income tax under IRC Section 501(c)(3), whose primary purpose is community and economic development and is accredited by the Utah Rural Development Council Board of Directors. 6. A 25 percent credit of the first $200,000 spent on rehabilitating a building, vacant for two years, in the enterprise zone. 7. An annual investment tax credit of 10 percent of the first $250,000 investment and 5 percent of the next $1,000,000 qualifying investment in plant, equipment, or other depreciable property. A business claiming a credit under paragraphs 1 through 4 may claim a credit for 30 full-time employee positions or less in each of its taxable years. A business may claim an additional credit for a full-time employee position under paragraphs 1 through 4 above if: a. The business creates a new full-time employee position; b. The total number of full-time employee positions is greater than the number of full-time employee positions previously claimed by the business under paragraph 1 through 4; and c. The total number of credits claimed for its current taxable year, including the new full-time employee positions being claimed as a credit, is less than or equal to 30. If the tax credit exceeds the tax liability, the credit amount exceeding the liability may be carried forward for a period that does not exceed the next three taxable years. Indian tribes may apply for enterprise zone designation within an Indian reservation. If enterprise zone credits are being taken based on your ownership in a partnership, you must allocate the above-calculated credits based on your respective percentage of ownership. For additional information, contact: Dept.of Community and Economic Development 324 S State Street Suite 500 Salt Lake City, UT 84111 Telephone: (801) 538-8782
(08) Low Income Housing Tax Credit (UCA §59-10-129) Complete and attach forms TC-40TCAC, "Utah Low-Income Housing Tax Credit Allocation Certification," and TC-40LI, "Summary of Utah LowIncome Housing Tax Credit," to your return. If you are carrying this credit forward or backward, you must also attach form TC-40LIC, "Utah Low-Income Housing Tax Credit Carryback and/or Carryforward," to your return. This credit is an amount determined by the Utah Housing Finance Agency, for any housing sponsor that has received an allocation of the federal lowincome housing tax credit and any applicant for an allocation of the federal low-income housing tax credit. Unused credits may be carried back three years or carried forward five years. To obtain forms, certification and for additional information, contact: Utah Housing Finance Agency 554 S 300 E Salt Lake City, UT 84111 Telephone: (801) 521-6950 (09) Credit For Employers Who Hire Persons With Disabilities (UCA §59-10-109) Complete and attach form TC-40HD, "Tax Credit for Employers Who Hire Persons with Disabilities," showing certification. The credit is for employers hiring an individual with a disability who: 1. Worked in Utah for at least 6 months in a taxable year for that employer; and 2. Is paid at least minimum wages by that employer. Individual with a disability means an individual who: 1. Has been receiving services from a certified day-training program for persons with disabilities, which is certified by the Department of Human Services, for at least six consecutive months prior to working for the employer claiming the tax credit; or 2. Is eligible for services from the Division of Services for People with Disabilities at the time the individual begins working for the employer claiming the tax credit. To obtain form TC-40HD, certification or for additional information, contact: Utah Department of Human Services Division of Services for People with Disabilities 120 N 200 W Rm 411 Salt Lake City, UT 84103 Telephone: (801) 538-4200
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(10) Recycling Market Development Zone Tax Credit (UCA §59-10-108.7) Attach the completed form TC-40R, "Recycling Market Development Zone Tax Credit" with the Department of Community and Economic Development certification, verifying the credit has been approved. A credit is available to businesses operating in a recycling market development zone as defined in UCA §9-2-1602. To obtain form TC-40R, certification, or for additional information, contact: Dept. of Community and Economic Development 324 S State Street, Suite 500 Salt Lake City, UT 84111 Telephone: (801) 538-8804 (12) Credit for Increasing Research Activities (UCA §59-10-131) The credit is for expenses incurred for increasing qualified research activities in Utah. A qualifying taxpayer may claim the credit in the taxable year immediately following the taxable year for which the taxpayer qualifies for the credit. A qualifying taxpayer may take the following nonrefundable research credits for activities in Utah: 1. A research credit of 6% of the taxpayer's qualified research expenses for the current taxable year that exceed the base amount; and 2. A credit for payments to qualified organizations for basic research, as provided in IRC Section 41(e), of 6% for the current taxable year that exceed the base amount.
For detailed information regarding this credit, including definition of terms and procedures for claiming the credit, refer to UCA §59-10-131. (13) Credit for Machinery and Equipment Used to Conduct Research (UCA §59-10-132) The credit is for machinery, equipment, or both used primarily for conducting qualified research or basic research in Utah for a time period of not less than 12 consecutive months. A qualifying taxpayer may claim the credit in the taxable year immediately following the taxable year for which the taxpayer qualifies for the credit.
A qualifying taxpayer may take the following nonrefundable credits: 1. A credit of 6 percent of the purchase price of certain machinery and equipment primarily used to conduct qualified research in Utah; and 2. A credit of 6 percent of the purchase price of certain machinery and equipment donated to a qualified organization and used primarily to conduct basic research in Utah. For detailed information regarding this credit, including definition of terms and procedures for claiming the credit, refer to UCA §59-10-132.
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Utah State Tax Commission 210 N 1950 W Salt Lake City Utah 84134
PRESORTED STANDARD U. S. POSTAGE PAID UTAH STATE TAX COMM.
Free 2000 TC-20S Instructions - Utah
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