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House approves ban on new "corporation sole" entities to curb tax abuse
Summary
The Utah House passed Senate Bill 144 to prohibit the formation of new "corporation sole" religious entities and require registration steps for existing ones, a move sponsors said would close an avenue for tax avoidance. The bill passed 62–2.
Representative Thomas Snow, sponsor of Senate Bill 144, told the House the measure would prohibit the creation of new "corporation soles" — single-person religious corporations historically used for tax-exempt purposes — while not affecting existing entities retroactively.
"This bill will prohibit any new corporation soles in this state," Snow said, and added existing corporation soles must register an in-state office and a registration agent when they undergo changes so the state can track them. Snow argued the statute has "outlived its usefulness" and that modern 501(c) alternatives make the one-person form unnecessary.
Representative Michael Philpott questioned whether closing the statute would produce a fiscal benefit or impose burdens on small religious groups. Snow replied the bill is not retroactive and pointed to 501(c) options as acceptable alternatives for legitimate religious and charitable organizations. Representative Dunnegan, citing committee testimony, said many of the entities at issue are organized for out-of-state interests that use Utah law to "end run" taxes.
Opponents raised concerns about administrative burden and identifying religion in statute; supporters said the change is a fairness and anti-abuse measure. After summation the House opened voting; the clerk announced the bill passed the House 62 yes, 2 no. The measure was to be signed by the Speaker and returned to the Senate with amendments.
The next procedural step is transmittal to the Senate for consideration of the House amendments.
