Utah Code 48-5-406. Taxation
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(1) If a decentralized autonomous organization recognized by this act is eligible to elect to be classified as a corporation for federal tax purposes, and the decentralized autonomous organization makes that election, the decentralized autonomous organization shall be subject to the provisions of Title 59, Chapter 7, Corporate Franchise and Income Taxes.
Terms Used In Utah Code 48-5-406
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Decentralized: means that decision-making is distributed among multiple persons. See Utah Code 48-5-101
- Decentralized autonomous organization: means an organization:(6)(a) created by one or more smart contracts;(6)(b) that implements rules enabling individuals to coordinate for decentralized governance of an organization; and(6)(c) that is an entity formed under this chapter. See Utah Code 48-5-101
- Member: means a person who has governance rights in a decentralized autonomous organization. See Utah Code 48-5-101
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
(2)(2)(a) Unless the decentralized autonomous organization makes the election described in Subsection (1), a decentralized autonomous organization recognized by this act shall be classified as a partnership for tax purposes and subject to the provisions of Title 59, Chapter 10, Part 14, Pass-Through Entities and Pass-Through Entity Taxpayers Act.(2)(b) For purposes of taxation, a decentralized autonomous organization shall allocate the distributive share of income, gain, loss, deduction, and credit derived from the decentralized autonomous organization’s activities, to each member of the decentralized autonomous organization in proportion to the member’s membership interest in the entity.