Tax Commission, Auditing

Section R865-9I-21

Return By Partnership Pursuant to Utah Code Ann. Sections 59-10-507 and 59-10-514

Notice of Proposed Rule

(Amendment)

DAR File No.: 33646
Filed: 05/13/2010 03:39:38 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The proposed amendment is necessary to complete the implementation of S.B. 23 (2009). (DAR NOTE: S.B. 23 (2009) is found at Chapter 312, Laws of Utah 2009, and was effective 03/25/2009.)

Summary of the rule or change:

The proposed amendments indicate the forms a partnership is required to file with the commission; and modify the provision allowing a partnership to satisfy the return filing requirements by simply maintaining records to apply only if the partnership is not a pass-through entity taxpayer.

State statutory or constitutional authorization for this rule:

• Section 59-10-507
• Section 59-10-514

Anticipated cost or savings to:

the state budget:

None--Any fiscal impacts were taken into account in S.B. 23 (2009).

local governments:

None--Any fiscal impacts were taken into account in S.B. 23 (2009).

small businesses:

None--Any fiscal impacts were taken into account in S.B. 23 (2009).

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

None--Any fiscal impacts were taken into account in S.B. 23 (2009).

Compliance costs for affected persons:

A partnership that met the filing requirements by simply maintaining records may now be required to file a return with the commission; in addition, partnerships will now file different schedules.

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

Implements new schedules, some may be required to file returns.

Michael J. 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:

• Michael Cragun at the above address, by phone at 801-297-3907, by FAX at 801-297-3919, or by Internet E-mail at mcragun@utah.gov

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

07/01/2010

This rule may become effective on:

07/08/2010

Authorized by:

R. Bruce Johnson, Tax Commission Chair

R865. Tax Commission, Auditing.

R865-9I. Income Tax.

R865-9I-21. Return By Partnership Pursuant to Utah Code Ann. Sections 59-10-507 and 59-10-514.

(1) Every partnership having a nonresident partner and income derived from sources in this state shall file a return in accordance with forms and instructions provided by the Tax Commission.

(2) If the partnership has income derived from or connected with sources both inside and outside Utah and if any partner was not a resident of Utah, the portion derived from or connected with sources in this state must be determined and shown on the Utah forms TC-65 Schedule K and Schedule K-1.

[(a) The Utah portion must be determined and shown for each item of the partnership's, and each nonresident partner's, distributive shares of income, credits, deductions, etc., shown on Schedules K and K-1 of the federal return.

(b) The Utah portion may be shown:

(i) alongside the total for each item on the federal schedules K and K-1; or

(ii) on an attachment to the Utah return.

](3) A partnership[, all of whose partners are resident individuals, shall] may satisfy the requirement to file a return with the commission by[:

(a)] maintaining records that show each partner's share of income, losses, credits, and other distributive items[;], and[

(b)] making those records available for audit if:

(a) all of the partnership's partners are resident individuals; and

(b) the partnership is not a pass-through entity taxpayer.

 

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

Date of Enactment or Last Substantive Amendment: [April 8 ], 2010

Notice of Continuation: March 20, 2007

Authorizing, and Implemented or Interpreted Law: 59-10-507; 59-10-514