Utah ~ Corporate Income Tax: Changes Made to Provisions Affecting Sales Factor Weighted Taxpayers for Apportionment Purposes

CCH Tax Day Report

For taxable years beginning on or after January 1, 2018, taxpayers with greater than 50% of their total sales everywhere generated by economic activities they perform that are classified in the 2002 or 2007 North American Industry Classification System (NAICS) as Code 336111, Automobile Manufacturing, will be considered “sales factor weighted taxpayers” for purposes of apportioning income for Utah corporate income tax purposes. Sales factor weighted taxpayers must use a one factor sales formula, rather than an evenly weighted three-factor formula or double-weighted sales factor formula.

Also, for each taxable year, taxpayers that are not “sales factor weighted taxpayers” may determine whether they are “optional sales factor weighted taxpayers” (taxpayers with greater than 50% of their total sales everywhere generated by economic activities they perform that are classified in a NAICS code within Subsector 334, Computer and Electronic Product Manufacturing). The determination must be made before the due date (including extensions) for filing the taxpayer’s return for the taxable year. For purposes of making the determination, total sales everywhere include only the total sales everywhere that are made during the taxable year for which the taxpayer makes the determination.

Sales and use tax provisions of the legislation are covered separately. (TAXDAY, 2017/03/27, S.15)

S.B. 132, Laws 2017, effective as noted above

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