§ 59-10-402 — Requirement of withholding -- Exceptions.

(1) As used in this section:

(1)(a) "Day" means any period of time during a calendar day that an individual is present in the state, unless the presence is solely for transportation through the state.
(1)(b) "Related entity" means:
(1)(b)(i) a stockholder who is an individual, or a member of the stockholder's family as described in Section 318, Internal Revenue Code, if the stockholder and the members of the stockholder's family own, in the aggregate, at least 50% of the value of the nonresident individual's outstanding stock;
(1)(b)(ii) a stockholder, or a stockholder's partnership, limited liability company, estate, trust, or corporation, if the stockholder and the stockholder's partnerships, limited liability companies, estates, trusts, or corporations own, in the aggregate, at least 50% of the value of the nonresident individual's outstanding stock; or
(1)(b)(iii) a corporation, or a party related to the corporation in a manner that would require an attribution of stock from the corporation to the party or from the party to the corporation under the attribution rules of the Internal Revenue Code if the taxpayer owns, directly, indirectly, beneficially, or constructively, at least 50% of the value of the corporation's outstanding stock.
(1)(c) "Related person" means a person that, with respect to the nonresident individual during all or any portion of the taxable year, is:
(1)(c)(i) a related entity;
(1)(c)(ii) a component member as defined in Subsection 1563(b), Internal Revenue Code;
(1)(c)(iii) a person to or from whom there is attribution of stock ownership in accordance with Subsection 1563(e), Internal Revenue Code; or
(1)(c)(iv) a person that, notwithstanding the form of organization, bears the same relationship to the nonresident individual as a person described in Subsection (1)(c)(i), (ii), or (iii).
(2) For purposes of determining whether the ownership requirements of a related entity are satisfied, a person shall:

(2)(a) use the attribution rules of the Internal Revenue Code; and
(2)(b) include direct, indirect, beneficial, or constructive ownership.
(3) Each employer making payment of wages shall deduct and withhold from wages an amount to be determined by a commission rule that will, as closely as possible, pay the income tax imposed by this chapter.
(4) (4)(a) Any employer described in Subsection (3) that is to do business within the state for a period not to exceed 60 days in the aggregate during any calendar year may be relieved from the requirement provided for under this part for such period by furnishing to the commission in advance a certificate so certifying.
(4)(b) If an employer described in Subsection (4)(a) thereafter does business within the state for a period in excess of 60 days, that employer shall be liable for all the tax that the employer would have been required to deduct and withhold.
(4)(c) Upon a showing of good cause by the employer, the commission may extend for a period of not to exceed 30 days the time during which the employer is not required to deduct and withhold the tax.
(5) (5)(a) (5)(a)(i) An employer described in Subsection (3) may not deduct or withhold any amount from wages paid to a nonresident individual if the nonresident individual's wages are excluded from state source income in accordance with Section 59-10-117.5 without regard to Subsection 59-10-117.5(2)(a).
(5)(a)(ii) For purposes of Subsection (5)(a)(i), an employer shall calculate the number of days described in Subsection 59-10-117.5(2)(b) by including the days the nonresident employee is present in the state to perform employment duties on behalf of the employer or any related person.
(5)(b) If a nonresident individual is present in this state to perform employment duties for the employer, a related person, or a combination of the employer and a related person for more than 20 days during a calendar year, the employer shall be liable for all the tax that the employer would have been required to deduct and withhold.
(6) The exceptions described in Subsections (4)(a) and (5)(a) are from the withholding requirement described in Subsection (3), not from an individual's obligation to pay income taxes as provided in Part 1, Determination and Reporting of Tax Liability and Information.
(7) (7)(a) The amount withheld under this section shall be allowed to the recipient of the income as a credit against the tax imposed by this chapter.
(7)(b) Except as provided in Subsection (7)(c), the amount withheld during any calendar year shall be allowed as a credit for the taxable year that begins in the calendar year in which the amount is withheld.
(7)(c) If more than one taxable year begins in a calendar year, the withheld amount shall be allowed as a credit for the last taxable year that begins in the calendar year in which the amount is withheld.

Legislative History

Amended by Chapter 252, 2022 General Session