Method of apportionment of business income

(1) For a taxable year, a taxpayer shall apportion all business income to this state by multiplying the business income by a fraction calculated as provided in this section. (2) Subject to the other provisions of this part, a sales factor weighted taxpayer shall calculate the fraction for apportioning business income to this state using a fraction where: (a) the numerator of the fraction is the sales factor as calculated under Section 59-7-317; and (b) the denominator of the fraction is one. (3) Subject to the other provisions of this part, an optional apportionment taxpayer that is not a phased-in sales factor weighted taxpayer shall calculate the fraction for apportioning business income to this state using one of the following fractions: (a) the fraction described in Subsection (4); or (b) the fraction where: (i) the numerator of the fraction is the sum of: (A) the property factor as calculated under Section 59-7-312; (B) the payroll factor as calculated under Section 59-7-315; and (C) the sales factor as calculated under Section 59-7-317; and (ii) the denominator of the fraction is three. (4) (a) Subject to other provisions of this part, a phased-in sales factor weighted taxpayer shall calculate the fraction for apportioning business income to this state as provided in Subsections (4)(b) through (d). (b) For the taxable year that begins on or after January 1, 2019, but begins on or before December 31, 2019: (i) the numerator of the fraction is the sum of: (A) the property factor as calculated under Section 59-7-312; (B) the payroll factor as calculated under Section 59-7-315; and (C) the sales factor as calculated under Subsection (4)(e)(i); and (ii) the denominator of the fraction is six. (c) For the taxable year that begins on or after January 1, 2020, but begins on or before December 31, 2020: (i) the numerator of the fraction is the sum of: (A) the property factor as calculated under Section 59-7-312; (B) the payroll factor as calculated under Section 59-7-315; and (C) the sales factor as calculated under Subsection (4)(e)(ii); and (ii) the denominator of the fraction is 10. (d) For a taxable year that begins on or after January 1, 2021, a phased-in sales factor weighted taxpayer shall calculate the fraction as described in Subsection (2). (e) (i) For the taxable year that begins on or after January 1, 2019, but begins on or before December 31, 2019, the sales factor shall be: (A) calculated as described in Section 59-7-317; and (B) multiplied by four. (ii) For the taxable year that begins on or after January 1, 2020, but begins on or before December 31, 2020, the sales factor shall be: (A) calculated as described in Section 59-7-317; and (B) multiplied by eight. (5) (a) The taxpayer shall determine the method for calculating the fraction for apportioning business income to this state under this section on or before the due date for filing the taxpayer's return under this chapter for the taxable year, including extensions. (b) The method described in Subsection (5)(a) is in effect for the taxable year. (6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the commission may make rules providing procedures for a taxpayer to make the election required by Subsection (3).