2023 Utah Code › Title 59 - Revenue and Taxation › Chapter 10 - Individual Income Tax Act › Part 4 - Withholding of Tax › Section 405.5 - Definitions -- Withholding tax license requirements -- Penalty -- Application process and requirements -- Fee not required -- Bonds -- Exception.

Effective 1/1/2023
59-10-405.5.
Definitions -- Withholding tax license requirements -- Penalty -- Application process and requirements -- Fee not required -- Bonds -- Exception.
(1) As used in this section:
(a) "Applicant" means a person that:
(i) is required by this section to obtain a license; and
(ii) submits an application:
(A) to the commission; and
(B) for a license under this section.
(b) "Application" means an application for a license under this section.
(c) "Fiduciary of the applicant" means a person that:
(i) is required to collect, truthfully account for, and pay over an amount under this part for an applicant; and
(ii)
(A) is a corporate officer of the applicant described in Subsection (1)(c)(i);
(B) is a director of the applicant described in Subsection (1)(c)(i);
(C) is an employee of the applicant described in Subsection (1)(c)(i);
(D) is a partner of the applicant described in Subsection (1)(c)(i);
(E) is a trustee of the applicant described in Subsection (1)(c)(i); or
(F) has a relationship to the applicant described in Subsection (1)(c)(i) that is similar to a relationship described in Subsections (1)(c)(ii)(A) through (E) as determined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
(d) "Fiduciary of the licensee" means a person that:
(i) is required to collect, truthfully account for, and pay over an amount under this part for a licensee; and
(ii)
(A) is a corporate officer of the licensee described in Subsection (1)(d)(i);
(B) is a director of the licensee described in Subsection (1)(d)(i);
(C) is an employee of the licensee described in Subsection (1)(d)(i);
(D) is a partner of the licensee described in Subsection (1)(d)(i);
(E) is a trustee of the licensee described in Subsection (1)(d)(i); or
(F) has a relationship to the licensee described in Subsection (1)(d)(i) that is similar to a relationship described in Subsections (1)(d)(ii)(A) through (E) as determined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
(e) "License" means a license under this section.
(f) "Licensee" means a person that is licensed under this section by the commission.
(2) The following persons are guilty of a criminal violation as provided in Section 59-1-401:
(a) a person that:
(i) is required to withhold, report, or remit any amounts under this part; and
(ii) engages in business within the state before obtaining a license under this section; or
(b) a person that:
(i) pays wages under this part; and
(ii) engages in business within the state before obtaining a license under this section.
(3) The license described in Subsection (2):
(a) shall be granted and issued:
(i) by the commission in accordance with this section;
(ii) without a license fee; and
(iii) if:
(A) an applicant:
(I) states the applicant's name and address in the application; and
(II) provides other information in the application that the commission may require; and
(B) the person meets the requirements of this section to be granted a license as determined by the commission;
(b) may not be assigned to another person; and
(c) is valid:
(i) only for the person named on the license; and
(ii) until:
(A) the person described in Subsection (3)(c)(i):
(I) ceases to do business; or
(II) changes that person's business address; or
(B) the commission revokes the license.
(4) The commission shall review an application and determine whether:
(a) the applicant meets the requirements of this section to be issued a license; and
(b) a bond is required to be posted with the commission in accordance with Subsections (5) and (6) before the applicant may be issued a license.
(5)
(a) Except as provided in Subsection (5)(c), an applicant shall post a bond with the commission before the commission may issue the applicant a license if:
(i) a license under this section was revoked for a delinquency under this part for:
(A) the applicant;
(B) a fiduciary of the applicant; or
(C) a person for which the applicant or the fiduciary of the applicant is required to collect, truthfully account for, and pay over an amount under this part; or
(ii) there is a delinquency in withholding, reporting, or remitting any amount under this part for:
(A) an applicant;
(B) a fiduciary of the applicant; or
(C) a person for which the applicant or the fiduciary of the applicant is required to collect, truthfully account for, and pay over an amount under this part.
(b) If the commission determines it is necessary to ensure compliance with this part, the commission may require a licensee to:
(i) for a licensee that has not posted a bond under this section with the commission, post a bond with the commission in accordance with Subsection (6); or
(ii) for a licensee that has posted a bond under this section with the commission, increase the amount of the bond posted with the commission.
(c) The commission may waive the bond requirement described in Subsection (5)(a), if the applicant is in compliance with a payment agreement that:
(i) relates to the delinquency; and
(ii) is approved by the commission.
(6)
(a) A bond required by Subsection (5) shall be:
(i) executed by:
(A) for an applicant, the applicant as principal, with a corporate surety; or
(B) for a licensee, the licensee as principal, with a corporate surety; and
(ii) payable to the commission conditioned upon the faithful performance of all of the requirements of this part including:
(A) the withholding or remitting of any amount under this part;
(B) the payment of any:
(I) penalty as provided in Section 59-1-401; or
(II) interest as provided in Section 59-1-402; or
(C) any other obligation of the applicant or the licensee under this part.
(b) Except as provided in Subsection (6)(d), the commission shall calculate the amount of a bond required by Subsection (5) on the basis of:
(i) commission estimates of:
(A) for an applicant, any amounts the applicant withholds, reports, or remits under this part; or
(B) for a licensee, any amounts the licensee withholds, reports, or remits under this part; and
(ii) any amount of a delinquency described in Subsection (6)(c).
(c) Except as provided in Subsection (6)(d), for purposes of Subsection (6)(b)(ii):
(i) for an applicant, the amount of the delinquency is the sum of:
(A) the amount of any delinquency that served as a basis for revoking the license under this section of:
(I) the applicant;
(II) a fiduciary of the applicant; or
(III) a person for which the applicant or the fiduciary of the applicant is required to collect, truthfully account for, and pay over an amount under this part; or
(B) the amount that any of the following owe under this part:
(I) the applicant;
(II) a fiduciary of the applicant; and
(III) a person for which the applicant or the fiduciary of the applicant is required to collect, truthfully account for, and pay over an amount under this part; or
(ii) for a licensee, the amount of the delinquency is the sum of:
(A) the amount of any delinquency that served as a basis for revoking the license under this section of:
(I) the licensee;
(II) a fiduciary of the licensee; or
(III) a person for which the licensee or the fiduciary of the licensee is required to collect, truthfully account for, and pay over an amount under this part; or
(B) the amount that any of the following owe under this part:
(I) the licensee;
(II) a fiduciary of the licensee; and
(III) a person for which the licensee or the fiduciary of the licensee is required to collect, truthfully account for, and pay over an amount under this part.
(d) Notwithstanding Subsection (6)(b) or (c), a bond required by Subsection (5) may not:
(i) be less than $25,000; or
(ii) exceed $500,000.
(7)
(a) The commission shall revoke a license under this section if:
(i) a licensee violates any provision of this part; and
(ii) before the commission revokes the license the commission provides the licensee:
(A) reasonable notice; and
(B) a hearing.
(b) If the commission revokes a licensee's license in accordance with Subsection (7)(a), the commission may not issue another license to that licensee until that licensee complies with the requirements of this part, including:
(i) paying any:
(A) amounts due under this part;
(B) penalty as provided in Section 59-1-401; or
(C) interest as provided in Section 59-1-402; and
(ii) posting a bond in accordance with Subsections (5) and (6).
(8) An employer that has erroneously applied the exception described in Subsection 59-10-402(5)(a) solely as a result of miscalculating the number of days a nonresident individual is present in this state to perform employment duties may not be assessed a penalty under this section if:
(a) the employer relied on a regularly maintained time and attendance system that:
(i) requires the employee to record, on a contemporaneous basis, the work location each day the employee is present in a state other than:
(A) the employee's state of residence; or
(B) the place where services are considered performed for purposes of Section 35A-4-204; and
(ii) is used by the employer to allocate the employee's wages between all taxing jurisdictions in which the employee performs employment duties;
(b) the employer does not maintain a time and attendance system described in Subsection (8)(a) and relied on employee travel records that the employer requires the employee to maintain and record on a regular and contemporaneous basis; or
(c) the employer does not maintain a time and attendance system described in Subsection (8)(a) or require the maintenance of employee records described in Subsection (8)(b) and relied on travel expense reimbursement records that the employer requires the employee to submit on a regular and contemporaneous basis.
Amended by Chapter 252, 2022 General Session