1. 2018 Proposed Tax Legislation & State Administrative impacts of federal tax reform Chairman john l. Valentine UTAH STATE TAX COMMISSION January 8, 2018

2. Proposed Utah Tax Legislation
HB 21 Certified Tax Rate Amendments
Representative Daniel McCay

3. Proposed Utah Tax Legislation
HB 53 Military Spouse Income Amendments
Representative Steve Eliason

4. Proposed Utah Tax Legislation
HB 54 Individual Income Tax Deduction Amendments
Representative Douglas Sagers

5. Proposed Utah Tax Legislation
HB 57 Utah Intergenerational Poverty Work and
Self-Sufficiency Tax Credit
Representative John Westwood
Source: Utah Department of Workforce Services

6. Proposed Utah Tax Legislation
HB 148 Tax Revisions
Representative Tim Quinn
Lettuce Celery-brate

7. Federal Tax Reform

8. Federal Tax Reform Utah Taxation Starting Points:
Corporations - Federal Taxable income
2016 Fed. Form 1120 – Line 29
Partnerships - Federal Net income (loss)
2016 Fed. Form 1065 – page 5 Schedule. K, Analysis of Net Income, Line 1
Individuals - Federal Adjusted Gross Income (FAGI)
2016 Fed. Form 1040 – Line 37
2016 Fed. Form 1040A – Line 21
2016 Fed. Form 1040NR – Line 36
2016 Fed. Form 1040EZ – Line 4

9. Federal Tax Reform May impact Utah Individual Taxation
Elimination of the personal exemption
Increased standard deduction
Eliminating HELOC interest deduction
Limiting the mortgage interest deduction
Limitations of State and Local Tax Deduction

10. Federal Tax Reform May impact Utah Business Taxation
Limiting deductions for net interest expenses
100% up-front expensing of certain capital expenditures
Elimination of NOL carry-back
Limiting carry-forward to 80% of taxable income

11. Hypothetical Utah Impact
Name: Average Joe
Filing Status: Married Filing Joint
Dependents : 3 Children
FAGI: $70,000

12. Average Joe’s
2017 Utah Tax Return

15. Average Joe’s
2017 Utah Income Tax
$2,500

16. (Federal changes become effective)
2018
Average Joe’s
2018 Utah Tax Return
(Federal changes become effective)
(Income, filing status, and dependents remain the same)

17. 2018 FAGI remains the same as in 2017
Average Joe’s
2018 FAGI remains the same as in 2017

18. - Increased standard deduction does not compensate
2018
Average Joe’s
2018 Utah Taxpayer Tax Credit is reduced by nearly 25% from 2017 due to elimination of personal exemption.
- Increased standard deduction does not compensate
Down from $1,000 in 2017

19. Nearly a 10% state tax increase
2018
Average Joe’s
2018 Utah Income Tax
$2,733
Nearly a 10% state tax increase

20. Summary Name: Average Joe Filing Status: Married Filing Joint
Dependents : 3 Children
FAGI: $70,000
2017
2018
$70,000 income
$15,190 personal exemptions
$0 personal exemptions
$12,700 Standard Deduction
$24,400 Standard Deduction
$1,000 Utah Taxpayer Tax Credit
$767 Utah Taxpayer Tax Credit
$2,500 Utah Income Tax
$2,733 Utah Income Tax

21. QUESTIONS?