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

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

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

(a) depreciation,

(b) depletion,

(c) exploration and development expenses,

(d) intangible drilling costs,

(e) accounting methods and periods, and

(f) Subpart F income.

(3) The following are the major items that require different treatment under the state and federal statutes:

(a) combined reporting,

(b) consolidated returns,

(c) dividends received deduction,

(d) municipal bond interest,

(e) capital loss deduction,

(f) loss carry-overs and carry-backs, and

(g) gross-up on foreign dividends.