Credit for electing pass-through entity owner - tax preference performance statement - legislative declaration

(1) (a) The general assembly hereby finds and declares that the purpose of this tax credit is to:

(I) Ensure the state does not have a net tax revenue change while accomplishing the purpose set forth in section 39-22-341; and

(II) Replace a related state income tax deduction.

(b) (I) Notwithstanding section 39-21-304 (2), the purpose of the tax expenditure created in this section is to avoid double taxation of income on electing pass-through entity owners.

(II) The general assembly and the state auditor shall measure the effectiveness of the credit created in this section in achieving the purpose specified in subsection (1)(b)(I) of this section based on whether the amount of the credit is equal to the amount of the tax revenue collected under section 39-22-344.

(2) Subject to the limitations set forth in subsection (3) of this section, for income tax years commencing on or after January 1, 2018, an electing pass-through entity owner is allowed a credit against the tax imposed by this article 22 that is an amount equal to the share of the tax imposed pursuant to section 39-22-344 (1) on the electing pass-through entity with respect to the electing pass-through entity owner's income.

(3) No credit is allowed to an electing pass-through entity owner under subsection (2) of this section unless the electing pass-through entity paid the tax imposed under this article 22 and provided sufficient information on the electing pass-through entity tax return, as prescribed by the department of revenue, to identify that electing pass-through entity owner.

(4) Any amount of the credit allowed by this section that exceeds the electing pass-through entity owner's income taxes due is refunded to the electing pass-through entity owner.