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Home » 2011 Issues » Vol. 2011, No. 17 (09/01/2011) » No. 35144 (Amendment): Section R865-6F-14. Extent to Which Federal Income Tax Provisions Are Followed for Corporation Franchise Tax Purposes Pursuant to Utah Code Ann. Sections 59-7-106, 59-7-108, 59-7-501, and 59-7-502

  No. 35144 (Amendment): Section R865-6F-14. Extent to Which Federal Income Tax Provisions Are Followed for Corporation Franchise Tax Purposes Pursuant to Utah Code Ann. Sections 59-7-106, 59-7-108, 59-7-501, and 59-7-502  

  • (Amendment)

    DAR File No.: 35144
    Filed: 08/11/2011 02:10:30 PM

    RULE ANALYSIS

    Purpose of the rule or reason for the change:

    The proposed amendment deletes outdated and unnecessary language and adds language to match current practice.

    Summary of the rule or change:

    The proposed amendment deletes references to rules that are no longer effective, deletes outdated language, adds new items that require different treatment under the state and federal statutes, and makes technical changes.

    State statutory or constitutional authorization for this rule:

    Anticipated cost or savings to:

    the state budget:

    None--The amendments all reflect current practice.

    local governments:

    None--The amendments all reflect current practice.

    small businesses:

    None--The amendments all reflect current practice.

    persons other than small businesses, businesses, or local governmental entities:

    None--The amendments all reflect current practice.

    Compliance costs for affected persons:

    None--The amendments all reflect current practice.

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

    This amendment will create no fiscal impact as it does not change current practice.

    Michael Cragun, Commissioner

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

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

    Direct questions regarding this rule to:

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

    10/03/2011

    This rule may become effective on:

    10/10/2011

    Authorized by:

    Michael Cragun, Tax Commissioner

    RULE TEXT

    R865. Tax Commission, Auditing.

    R865-6F. Franchise Tax.

    R865-6F-14. Extent to Which Federal Income Tax Provisions Are Followed for Corporation Franchise Tax Purposes Pursuant to Utah Code Ann. Sections 59-7-106, 59-7-108, 59-7-501, and 59-7-502.

    [A.](1) It is the policy of the [Tax Commission]commission, in matters involving the determination of [net] income for Utah corporation franchise tax purposes, to follow as closely as possible federal requirements with respect to the same matters. In some instances[, of course,] the federal and state statutes differ[; and due to such conflict], and as a result the federal rulings, regulations, and decisions [cannot]may not be followed. Furthermore, in some instances, the [Tax Commission]commission may disagree with the federal determinations and does not consider them controlling for Utah corporation franchise tax purposes.

    [1.](2) The items of major importance ordinarily allowed in conformity with federal requirements are:

    [a.](a) depreciation[ (see rule R865-6F-9)],

    [b.](b) depletion,

    [c.](c) exploration and development expenses,

    [d.](d) intangible drilling costs,

    [e.](e) accounting methods and periods[ (see rule R865-6F-2)], and

    [f.](f) Subpart F income.

    [2.](3) The following are the major items [which]that require different treatment under the state and federal statutes:

    [a.](a) [installment sales (see rule R865-6F-15)]combined reporting,

    [b.](b) consolidated returns[ (see rule R865-6F-4)],

    [c.](c) [liquidating dividends]dividends received deduction,

    [d.](d) municipal bond interest,

    [e.](e) capital loss deduction,

    [f.](f) loss carry-overs and carry-backs, and

    [g.](g) gross-up on foreign dividends.

    [ Note: The only reserves permitted in determining net-income for Utah corporation franchise tax purposes are depreciation, depletion, and bad debts.

    ]

    KEY: taxation, franchises, historic preservation, trucking industries

    Date of Enactment or Last Substantive Amendment: [June 23, ]2011

    Notice of Continuation: March 8, 2007

    Authorizing, and Implemented or Interpreted Law: 9-2-401 through 9-2-415; 16-10a-1501 through 16-10a-1533; 53B-8a-112; 59-1-1301 through 59-1-1309; 59-6-102; 59-7; 59-7-101; 59-7-102; 59-7-104 through 59-7-106; 59-7-108; 59-7-109; 59-7-110; 59-7-112; 59-7-302 through 59-7-321; 59-7-402; 59-7-403; 59-7-501; 59-7-502; 59-7-505; 59-7-601 through 59-7-614; 59-7-608; 59-7-701; 59-7-703; 59-10-603; 59-13-202; 59-13-301; 63M-1; 63M-1-401 through 63M-1-416

     

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Document Information

Effective Date:
10/10/2011
Publication Date:
09/01/2011
Filed Date:
08/11/2011
Agencies:
Tax Commission,Auditing
Rulemaking Authority:

Section 59-7-106

Section 59-7-501

Section 59-7-502

Section 59-7-108

Authorized By:
Michael Cragun, Tax Commissioner
DAR File No.:
35144
Related Chapter/Rule NO.: (1)
R865-6F-14. Extent to Which Federal Income Tax Provisions Are Followed for Corporation Franchise Tax Purposes Pursuant to Utah Code Ann. Sections 59-7-106, 59-7-108, 59-7-501, and 59-7-502.