Date of
Publication: March 9, 2009
Utah Senate Bill 23
I am sure that many business owners and managers are well
aware that the 2009 Utah General Legislative Session has bought
out many different people for different purposes at the Capital
Building. One Bill that I haven’t seen in the news is S.B. 23
and its amendments. S.B. 23 will increase revenue to the Utah
Education Fund and it will change the way that taxes are
withheld if you have an S-Corporation.
Are you a Resident?
The fine print of the 42 page bill discussions that
S-Corporations with non-resident stock owners will be required
to withhold taxes. This could result in a decrease of taxes for
some S-Corporations, but it does depend on whether you have a
stock owner who is not a resident of Utah.
So, the first question is: Do you have a stock owner in an
S-Corporation that is not a resident of Utah? If you do, this
bill might be important for you to watch – especially if it is
enacted into law. As of this writing, the bill was in the House
Rules Committee to determine the fiscal impact on the State.
Pages 15-16 of the proposed law would enact a tax credit for a
“pass-through entity taxpayer.” The S-Corporation is required
under Section 59-7-5-4 to make estimated state tax payments. For
those of you with an LLC (limited liability company), you might
also be considered an S-Corporation for taxation purposes.
There are Definitions of the bill in Section 59-10-1402 that
would define a “Pass-through entity taxpayer” as “a resident or
nonresident individual, a resident or nonresident business
entity, or a resident or nonresident estate or trust that is for
a general partnership, a partner; for a limited liability
company, a member; for a limited liability partnership, a
partner; for a limited partnership, a partner; for an S
corporation, a shareholder; or for a business entity . . . to
which the income, gain, loss, deduction or credit of a
pass-through entity is pass through.”
Based on this definition, even if you don’t have an S-corp, this
change in the law can affect you. You should seek the advise of
a comptent tax professional or attorney to assist you with this
change. {-}
If you or a member of your family needs the services of an experienced
Business attorney, please contact Jeremy Eveland at the law firm
of Eveland & Associates, PLLC. I am committed to helping you protect your company and your
personal assets
.