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H0225..................................................by REVENUE AND TAXATION
INCOME TAX - CREDITS - Amends existing law to clarify that the state income
tax credit for investment in broadband equipment is transferable only by the
taxpayer who earned the credit; and to provide that the incentive investment
state income tax credit is transferable only by the taxpayer who earned the
credit.
02/11 House intro - 1st rdg - to printing
02/12 Rpt prt - to Rev/Tax
02/18 Rpt out - rec d/p - to 2nd rdg
02/19 2nd rdg - to 3rd rdg
02/21 3rd rdg - PASSED - 70-0-0
AYES -- Andersen, Barraclough, Barrett, Bauer, Bedke, Bell, Bieter,
Black, Block, Boe, Bolz, Bradford, Campbell, Cannon, Clark, Collins,
Crow, Cuddy, Deal, Denney, Douglas, Eberle, Edmunson, Ellsworth,
Eskridge, Field(18), Field(23), Gagner, Garrett, Harwood, Henbest,
Jaquet, Jones, Kellogg, Kulczyk, Lake, Langford, Langhorst, Martinez,
McGeachin, McKague, Meyer, Miller, Mitchell, Moyle, Naccarato, Nielsen,
Raybould, Ridinger, Ring, Ringo, Roberts, Robison, Rydalch, Sali,
Sayler, Schaefer(Schaefer), Shepherd, Shirley, Skippen, Smith(30),
Smith(24), Smylie, Snodgrass, Stevenson, Tilman, Trail, Wills, Wood, Mr.
Speaker.
NAYS -- None
Absent and excused -- None
Floor Sponsor - Moyle
Title apvd - to Senate
02/24 Senate intro - 1st rdg - to Loc Gov
02/27 Rpt out - rec d/p - to 2nd rdg
02/28 2nd rdg - to 3rd rdg
03/10 3rd rdg - PASSED - 33-0-2
AYES -- Andreason, Bailey, Brandt, Bunderson, Burtenshaw, Calabretta,
Cameron, Compton, Darrington, Gannon, Geddes, Goedde, Hill, Ingram,
Kennedy, Keough, Little, Lodge, Malepeai, Marley, McKenzie, McWilliams,
Noble, Noh, Pearce, Richardson, Schroeder, Sorensen, Stegner, Stennett,
Sweet, Werk, Williams
NAYS -- None
Absent and excused -- Burkett, Davis
Floor Sponsor - McKenzie
Title apvd - to House
03/11 To enrol
03/12 Rpt enrol - Sp signed
03/13 Pres signed
03/14 To Governor
03/17 Governor signed
Session Law Chapter 89
Effective: 01/01/03
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-seventh Legislature First Regular Session - 2003
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 225
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO INCOME TAX CREDITS; AMENDING SECTION 63-3029I, IDAHO CODE, TO
3 CLARIFY THAT THE TAX CREDIT FOR INVESTMENT IN BROADBAND EQUIPMENT IS
4 TRANSFERABLE ONLY BY THE TAXPAYER WHO EARNED THE CREDIT AND TO PROVIDE FOR
5 THE TRANSFER; AMENDING SECTION 63-3029J, IDAHO CODE, TO CLARIFY THAT THE
6 INCENTIVE INVESTMENT TAX CREDIT IS TRANSFERABLE ONLY BY THE TAXPAYER WHO
7 EARNED THE CREDIT; DECLARING AN EMERGENCY AND PROVIDING A RETROACTIVE
8 EFFECTIVE DATE.
9 Be It Enacted by the Legislature of the State of Idaho:
10 SECTION 1. That Section 63-3029I, Idaho Code, be, and the same is hereby
11 amended to read as follows:
12 63-3029I. INCOME TAX CREDIT FOR INVESTMENT IN BROADBAND EQUIPMENT. (1)
13 Subject to the limitations of this section, for taxable years beginning
14 between January 1, 2001, and December 31, 2005, inclusive, there shall be
15 allowed to a taxpayer a nonrefundable credit against taxes imposed by sections
16 63-3024, 63-3025 and 63-3025A, Idaho Code, for qualified expenditures in qual-
17 ified broadband equipment in Idaho.
18 (2) The credit permitted in subsection (1) of this section shall be three
19 percent (3%) of the qualified investment in qualified broadband equipment in
20 Idaho and shall be in addition to the credit for capital investment permitted
21 by section 63-3029B, Idaho Code.
22 (3) As used in this section the term:
23 (a) "Qualified investment" shall be as defined in section 63-3029B, Idaho
24 Code.
25 (b) "Qualified broadband equipment" means equipment that qualifies for
26 the credit for capital investment permitted by section 63-3029B, Idaho
27 Code, and is capable of transmitting signals at a rate of at least two
28 hundred thousand (200,000) bits per second to a subscriber and at least
29 one hundred twenty-five thousand (125,000) bits per second from a sub-
30 scriber, and
31 (i) In the case of a telecommunications carrier, such qualifying
32 equipment shall be necessary to the provision of broadband service
33 and an integral part of a broadband network. "Telecommunications car-
34 rier" has the meaning given such term by section 3(44) of the commu-
35 nications act of 1934, as amended, but does not include a commercial
36 mobile service provider.
37 (ii) In the case of a commercial mobile service carrier, such quali-
38 fying equipment shall extend from the subscriber side of the mobile
39 telecommunications switching office to a transmitting/receiving
40 antenna, including such antenna, on the outside of the structure in
41 which the subscriber is located. "Commercial mobile service carrier"
42 means any person authorized to provide commercial mobile radio ser-
43 vice to subscribers as defined in section 20.3 of title 47, Code of
2
1 Federal Regulations (10-1-99 ed.), as amended.
2 (iii) In the case of a cable or open video system operator, such
3 qualifying equipment shall extend from the subscriber's side of the
4 headend to the outside of the structure in which the subscriber is
5 located. The terms "cable operator" and "open video system operator"
6 have the meanings given such terms by sections 602(5) and 653,
7 respectively, of the communications act of 1934, as amended.
8 (iv) In the case of a satellite carrier or a wireless carrier other
9 than listed above, such qualifying equipment is only that equipment
10 that extends from a transmitting/receiving antenna, including such
11 antenna, which transmits and receives signals to or from multiple
12 subscribers to a transmitting/receiving antenna on the outside of the
13 structure in which the subscriber is located. "Satellite carrier"
14 means any person using the facilities of a satellite or satellite
15 services licensed by the federal communications commission and oper-
16 ating a fixed-satellite service or direct broadcast satellite ser-
17 vices to provide point-to-multipoint distribution of signals. "Other
18 wireless carrier" means any person, other than a telecommunications
19 carrier, commercial mobile service carrier, cable operator, open
20 video operator, or satellite carrier, providing broadband services to
21 subscribers through the radio transmission of energy.
22 (v) In the case of packet switching equipment, such packet equip-
23 ment installed in connection with other qualifying equipment listed
24 in subsections (2)(b)(i) through (2)(b)(iv) of this section, provided
25 it is the last in a series of equipment that transmits signals to a
26 subscriber or the first in a series of equipment that transmits sig-
27 nals from a subscriber. "Packet switching" means controlling or
28 routing the path of a digital transmission signal which is assembled
29 into packets or cells.
30 (vi) In the case of multiplexing and demultiplexing equipment, such
31 equipment only to the extent that it is deployed in connection with
32 providing broadband services in locations between packet switching
33 equipment and the structure in which the subscriber is located.
34 "Multiplexing" means the transmission of two (2) or more signals over
35 a communications circuit without regard to the communications tech-
36 nology.
37 (vii) Any property not primarily used to provide services in Idaho to
38 public subscribers is not qualified broadband equipment.
39 (4) No equipment described in subsections (2)(b)(i) through (2)(b)(vi) of
40 this section shall qualify for the credit provided in subsection (1) of this
41 section until the taxpayer applies to and obtains from the Idaho public utili-
42 ties commission an order confirming that the installed equipment is qualified
43 broadband equipment. Applications submitted to the commission shall be gov-
44 erned by the commission's rules of procedure. The commission may issue proce-
45 dural orders necessary to implement this section.
46 (5) The credit allowed by subsection (1) of this section together with
47 any credits carried forward under subsection (7) of this section shall not, in
48 any one (1) taxable year, exceed the lesser of:
49 (a) The amount of tax due under sections 63-3024, 63-3025 and 63-3025A,
50 Idaho Code, after allowance for all other credits permitted by this chap-
51 ter; or
52 (b) Seven hundred fifty thousand dollars ($750,000).
53 When credits earned in more than one (1) taxable year are available, the old-
54 est credits shall be applied first.
55 (6) In the case of a group of corporations filing a combined report under
3
1 subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
2 of the group but not used by that member may be used by another member of the
3 group, subject to the provisions of subsection (7) of this section, instead of
4 carried over. For a combined group of corporations, credit carried forward may
5 be claimed by any member of the group unless the member who earned the credit
6 is no longer included in the combined group.
7 (7) If the credit allowed by subsection (1) of this section exceeds the
8 limitation under subsection (5) of this section, the excess amount may be car-
9 ried forward for a period that does not exceed the next fourteen (14) taxable
10 years.
11 (8) In the event that qualified broadband equipment upon which the credit
12 allowed by this section has been used ceases to qualify for the credit allowed
13 by section 63-3029B, Idaho Code, or is subject to recapture of that credit,
14 the recapture of credit under this section shall be in the same proportion and
15 subject to the same provisions as the amount of credit required to be recap-
16 tured under section 63-3029B, Idaho Code.
17 (9) (a) Subject to the requirements of this subsection, a taxpayer who
18 earns and is entitled to the credit or to an unused portion of the credit
19 allowed by this section may transfer all or a portion of the unused credit
20 to:
21 (i) Aanother taxpayer required to file a return under this chapter;
22 or
23 (ii) To an intermediary for its use or for resale to a taxpayer
24 required to file a return under this chapter.
25 In the event of either such a transfer, the transferee may claim the
26 credit on the transferee's income tax return originally filed during the
27 calendar year in which the transfer takes place and, in the case of carry-
28 over of the credit, on the transferee's returns for the number of years of
29 carryover available to the transferor at the time of the transfer unless
30 earlier exhausted.
31 (b) Before completing a transfer under this subsection, the transferor
32 shall notify the state tax commission of its intention to transfer the
33 credit and the identity of the transferee. The state tax commission shall
34 provide the transferor with a written statement of the amount of credit
35 available under this section as then appearing in the commission's records
36 and the number of years the credit may be carried over. The transferee
37 shall attach a copy of the statement to any return in regard to which the
38 transferred credit is claimed.
39 (c) In the event that after the transfer the state tax commission deter-
40 mines that the amount of credit properly available under this section is
41 less than the amount claimed by the transferor of the credit or that the
42 credit is subject to recapture, the commission shall assess the amount of
43 overstated or recaptured credit as taxes due from the transferor and not
44 the transferee. The assessment shall be made in the manner provided for a
45 deficiency in taxes under this chapter.
46 (10) In addition to other needed rules, the state tax commission may pro-
47 mulgate rules prescribing, in the case of S corporations, partnerships, trusts
48 or estates, a method of attributing the credit under this section to the
49 shareholders, partners or beneficiaries in proportion to their share of the
50 income from the S corporation, partnership, trust or estate.
51 SECTION 2. That Section 63-3029J, Idaho Code, be, and the same is hereby
52 amended to read as follows:
53 63-3029J. INCENTIVE INCOME TAX INVESTMENT CREDIT. (1) Subject to the lim-
4
1 itations of this section, for taxable year 2001 only, there shall be allowed
2 to a taxpayer a nonrefundable credit against taxes imposed by sections
3 63-3024, 63-3025 and 63-3025A, Idaho Code, in the amount allowed by subsection
4 (2) of this section for qualified investments in Idaho. The credit shall be in
5 addition to the credit for capital investment permitted by section 63-3029B,
6 Idaho Code.
7 (2) The credit permitted in subsection (1) of this section shall be at
8 the percentage rate determined under either subsection (2)(a) or (2)(b) of
9 this section at the election of the taxpayer.
10 (a) (i) One-half (1/2) of the amount by which the average three-year
11 unemployment rate in the county in which the property is located
12 exceeds six percent (6%). In the case of mobile property, the prop-
13 erty shall be located in the county in which it is primarily based.
14 (ii) For purposes of this section the director of the department of
15 labor shall, on or before the first day of September of each calendar
16 year, establish and certify to the state tax commission the average
17 three-year unemployment rate in each county in Idaho for the immedi-
18 ately preceding three (3) calendar years. The rates thus certified
19 shall apply to the calculation of the credit under subsection
20 (2)(a)(i) of this section for property qualifying in the taxable year
21 beginning during the next calendar year.
22 (b) (i) One-tenth of one percent (.1%) for each full percent that the
23 three-year average per capita personal income level in the county in
24 which the property is located is below ninety percent (90%) of the
25 average statewide per capita personal income level.
26 (ii) For purposes of this section the director of the department of
27 commerce shall, on or before the first day of September of each cal-
28 endar year, establish and certify to the state tax commission the
29 most current three-year average per capita personal income level in
30 each county in Idaho and the statewide per capita personal income
31 level for the most current preceding three (3) calendar years. The
32 levels thus certified shall apply to the calculation of the credit
33 under subsection (2)(b)(i) of this section for property qualifying in
34 the taxable year beginning during the next calendar year.
35 (3) As used in this section the term "qualified investment" shall be
36 defined as in section 63-3029B, Idaho Code.
37 (4) The credit allowed by subsection (1) of this section together with
38 any credits carried forward under subsection (6) of this section shall not
39 exceed in any one (1) taxable year the lesser of:
40 (a) The amount of tax due under sections 63-3024, 63-3025 and 63-3025A,
41 Idaho Code, after allowance for all other credits permitted by this chap-
42 ter; or
43 (b) Five hundred thousand dollars ($500,000).
44 (5) In the case of a group of corporations filing a combined report under
45 subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
46 of the group but not used by that member may be used by another member of the
47 group, subject to the provisions of subsection (6) of this section, instead of
48 carried over. For a combined group of corporations, credit carried forward may
49 be claimed by any member of the group unless the member who earned the credit
50 is no longer included in the combined group.
51 (6) If the credit allowed by subsection (1) of this section exceeds the
52 limitation under subsection (4) of this section, the excess amount may be car-
53 ried forward for a period that does not exceed the next fourteen (14) taxable
54 years.
55 (7) In the event that property upon which the credit allowed by this sec-
5
1 tion has been used ceases to qualify for the credit allowed by section
2 63-3029B, Idaho Code, the recapture of credit under this section shall be in
3 the same proportion and subject to the same provisions as the amount of credit
4 required to be recaptured under section 63-3029B, Idaho Code.
5 (8) (a) Subject to the requirements of this subsection, a taxpayer who
6 earns and is entitled to the credit or to an unused portion of the credit
7 allowed by this section may transfer the unused credit to another taxpayer
8 required to file a return under this chapter.
9 (b) Before completing a transfer under this subsection, the transferor
10 shall notify the state tax commission of its intention to transfer the
11 credit and the identity of the transferee. The state tax commission shall
12 provide the transferor with a written statement of the amount of credit
13 available under this section as then appearing in the commission's
14 records and the number of years the credit may be carried over. The trans-
15 feror shall provide the transferee with the original statement. The
16 transferee shall attach a copy of the statement to any return in regard to
17 which the transferred credit is claimed.
18 (c) In the event that after the transfer the state tax commission deter-
19 mines that the amount of credit properly available under this section is
20 less than the amount claimed by the transferor of the credit and shown in
21 the statement described in subsection (8)(b) of this section or that the
22 credit is subject to recapture, the commission shall assess the amount of
23 overstated credit as taxes due from the transferor and not the transferee.
24 The assessment shall be made in the manner provided for a deficiency in
25 taxes under this chapter.
26 (9) In addition to other needed rules, the state tax commission may pro-
27 mulgate rules prescribing:
28 (a) In the case of S corporations, partnerships, trusts or estates, a
29 method of attributing the credit under this section to the shareholders,
30 partners or beneficiaries in proportion to their share of the income from
31 the S corporation, partnership, trust or estate.
32 (b) A requirement that a transferor under subsection (8) of this section,
33 prior to obtaining the written statement provided in subsection (8)(b) of
34 this section, post such bond or security as the state tax commission may
35 require to secure any liability referred to in subsection (8)(c) of this
36 section. Such rules shall provide an opportunity for a taxpayer, upon a
37 showing of financial responsibility, to have the bond waiver, for notice
38 of denial of waiver in accordance with section 63-3045, Idaho Code, and
39 for review in accordance with section 63-3045B, Idaho Code.
40 SECTION 3. An emergency existing therefor, which emergency is hereby
41 declared to exist, this act shall be in full force and effect on and after its
42 passage and approval, and retroactively to January 1, 2003.
STATEMENT OF PURPOSE
RS 12941
This bill clarifies the transferability of the tax credits
for investment in broadband equipment and the incentive income
tax investment credit. Once the credit has been transferred to a
taxpayer for use on the transferee's return, it may not be
transferred again. In the case of the broadband credit, the
taxpayer who earned the credit may make the transfer through an
intermediary.
FISCAL NOTE
No fiscal effect.
Contact
Name: Dan John / Ted Spangler
Agency: State Tax Commission
Phone: 334-7530
STATEMENT OF PURPOSE/FISCAL NOTE H 225