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H0306aa,aa..........................................by REVENUE AND TAXATION
CORPORATE HEADQUARTERS INCENTIVE ACT - Adds to and amends existing law to
provide the "Idaho Corporate Headquarters Incentive Act of 2005"; to
provide an enhanced income tax incentive credit for certain qualified
investments; to provide an income tax credit for certain real property
improvements; to provide an enhanced new jobs credit for certain
employment; to authorize the State Tax Commission to adopt certain
administrative rules; to establish limitations; to permit sharing of
credits among taxpayers included in a combined report of income; to permit
carryovers of unused credits; to provide for recapture of income tax
credits in case of failure to meet tax incentive criteria; to provide for a
rebate of sales and use taxes paid on qualified projects; to provide
recapture in case of failure to meet tax incentive criteria; to provide for
a rebate of certain property taxes paid on qualified projects; to provide
limitations; to provide for recapture of the rebate in case of failure to
meet tax incentive criteria; to provide for administration by the State Tax
Commission; and to provide a continuous appropriation of income tax
receipts to fund certain property tax rebates.
03/08 House intro - 1st rdg - to printing
Rpt prt - to Rev/Tax
03/09 Rpt out - rec d/p - to 2nd rdg
03/10 To Gen Ord
Rpt out amen - to engros
03/11 Rpt engros - 1st rdg - to 2nd rdg as amen
03/14 2nd rdg - to 3rd rdg as amen
03/17 To Gen Ord
Rpt out amen - to engros
03/18 Rpt engros - 1st rdg - to 2nd rdg as amen
03/21 2nd rdg - to 3rd rdg as amen
03/22 3rd rdg as amen - PASSED - 61-9-0
AYES -- Anderson, Andrus, Barraclough, Bastian, Bayer, Bedke, Bell,
Bilbao, Black, Block, Boe, Bolz, Bradford, Cannon, Chadderdon,
Collins, Crow, Deal, Denney, Edmunson(Barker), Ellsworth, Eskridge,
Field(18), Field(23), Garrett, Harwood, Henbest, Henderson, Jaquet,
Jones, Kemp, LeFavour, Martinez, Mathews, McKague, Miller, Mitchell,
Moyle, Nielsen, Nonini, Pasley-Stuart, Pence, Raybould, Ring, Ringo,
Rusche, Rydalch, Sali, Sayler, Schaefer, Shepherd(2), Shirley,
Skippen, Smith(30), Smylie, Snodgrass, Stevenson, Trail, Wills, Wood,
Mr. Speaker
NAYS -- Barrett, Clark, Hart, Lake, Loertscher, McGeachin, Roberts,
Shepherd(8), Smith(24)
Absent and excused -- None
Floor Sponsors - Mr. Speaker & Crow
Title apvd - to Senate
03/22 Senate intro - 1st rdg - to Loc Gov
03/24 Rpt out - rec d/p - to 2nd rdg
03/25 2nd rdg - to 3rd rdg
03/29 3rd rdg - PASSED - 30-5-0
AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett,
Burtenshaw, Cameron, Coiner, Corder, Darrington, Davis, Fulcher,
Gannon, Geddes, Hill, Kelly, Keough, Langhorst, Lodge, Malepeai,
Marley, McGee, McKenzie, Pearce, Richardson, Schroeder, Stennett,
Sweet, Werk, Williams
NAYS -- Compton, Goedde, Jorgenson, Little, Stegner
Absent and excused -- None
Floor Sponsors - Bunderson & Corder
Title apvd - to House
03/30 To enrol
03/31 Rpt enrol - Sp signed - Pres signed
04/04 To Governor
04/13 Governor signed
Session Law Chapter 369
Effective: 01/01/05
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature First Regular Session - 2005
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 306
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO TAXATION AND TO THE ENACTMENT OF THE IDAHO CORPORATE HEADQUARTERS
3 INCENTIVE ACT OF 2005; AMENDING TITLE 63, IDAHO CODE, BY THE ADDITION OF A
4 NEW CHAPTER 29, TITLE 63, IDAHO CODE, TO PROVIDE A SHORT TITLE, TO DEFINE
5 TERMS, TO PROVIDE AN ADDITIONAL INCOME TAX INVESTMENT CREDIT FOR CERTAIN
6 QUALIFIED INVESTMENTS AND LIMITATIONS THEREON, TO PROVIDE AN INCOME TAX
7 CREDIT FOR CERTAIN REAL PROPERTY IMPROVEMENTS AND LIMITATIONS THEREON, TO
8 PROVIDE AN ADDITIONAL NEW JOBS CREDIT FOR CERTAIN EMPLOYMENT AND LIMITA-
9 TIONS THEREON, TO AUTHORIZE THE STATE TAX COMMISSION TO ADOPT ADMINISTRA-
10 TIVE RULES RELATING TO S CORPORATIONS, PARTNERSHIPS, ESTATES AND TRUSTS,
11 AND RELATING TO REORGANIZATIONS, MERGERS AND LIQUIDATIONS, TO ESTABLISH
12 LIMITATIONS, TO PERMIT SHARING OF CREDITS AMONG TAXPAYERS INCLUDED IN A
13 COMBINED REPORT OF INCOME, TO PERMIT CARRYOVERS OF UNUSED CREDITS, TO PRO-
14 VIDE FOR RECAPTURE OF INCOME TAX CREDITS IN CASE OF FAILURE TO MEET TAX
15 INCENTIVE CRITERIA, TO PROVIDE FOR A REBATE OF SALES AND USE TAXES PAID ON
16 QUALIFIED PROJECTS AND TO PROVIDE FOR RECAPTURE OF THE REBATE IN CASE OF
17 FAILURE TO MEET TAX INCENTIVE CRITERIA, TO PROVIDE FOR A REBATE OF CERTAIN
18 PROPERTY TAXES PAID ON QUALIFIED PROJECTS AND TO PROVIDE LIMITATIONS
19 THEREON, TO PROVIDE FOR RECAPTURE OF THE REBATE IN CASE OF FAILURE TO MEET
20 TAX INCENTIVE CRITERIA AND TO PROVIDE FOR ADMINISTRATION BY THE STATE TAX
21 COMMISSION; AMENDING SECTION 63-3067, IDAHO CODE, TO PROVIDE A CONTINUOUS
22 APPROPRIATION OF INCOME TAX RECEIPTS TO FUND CERTAIN PROPERTY TAX REBATES;
23 PROVIDING SEVERABILITY; DECLARING AN EMERGENCY AND PROVIDING A RETROACTIVE
24 EFFECTIVE DATE.
25 Be It Enacted by the Legislature of the State of Idaho:
26 SECTION 1. That Title 63, Idaho Code, be, and the same is hereby amended
27 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
28 ter 29, Title 63, Idaho Code, and to read as follows:
29 CHAPTER 29
30 THE IDAHO CORPORATE HEADQUARTERS INCENTIVE ACT OF 2005
31 63-2901. SHORT TITLE. This chapter shall be known and may be cited as
32 "The Idaho Corporate Headquarters Incentive Act of 2005."
33 63-2902. DEFINITIONS. (1) The definitions contained in the Idaho income
34 tax act, shall apply to this chapter unless modified in this chapter or unless
35 the context clearly requires another definition.
36 (2) As used in this chapter:
37 (a) "Commission" means the Idaho state tax commission.
38 (b) "Headquarters or administrative facilities" means facility or facili-
39 ties, including related parking facilities, where corporate staff employ-
40 ees are physically employed, and where the majority of the company's ser-
41 vices are handled either on a regional or national basis. Company ser-
2
1 vices may include: accounts receivable and payable, accounting, data proc-
2 essing, distribution management, employee benefit plan, financial and
3 securities accounting, information technology, insurance, legal, merchan-
4 dising, payroll, personnel, purchasing/procurement, planning, reporting
5 and compliance, tax, treasury, or other headquarters-related services.
6 (c) "Idaho income tax act" means chapter 30, title 63, Idaho Code.
7 (d) "Investment in new plant" means investment in headquarters or admin-
8 istrative facilities, that are:
9 (i) Qualified investments; or
10 (ii) Buildings or structural components of buildings.
11 (e) "New employee":
12 (i) Means an individual, employed primarily within the project site
13 by the taxpayer, subject to Idaho income tax withholding whether or
14 not any amounts are required to be withheld, covered for unemployment
15 insurance purposes under chapter 13, title 72, Idaho Code, and who
16 was eligible to receive employer provided coverage under an accident
17 or health plan described in section 105 of the Internal Revenue Code
18 during the taxable year. A person shall be deemed to be so employed
19 if such person performs duties on a regular full-time basis.
20 (ii) The number of employees employed primarily within the project
21 site by the taxpayer, during any taxable year for a taxpayer shall be
22 the mathematical average of the number of such employees reported to
23 the Idaho department of commerce and labor for employment security
24 purposes during the twelve (12) months of the taxable year which
25 qualified under paragraph (e)(i) of this subsection (2). In the event
26 the business is in operation for less than the entire taxable year,
27 the number of employees of the taxpayer for the year shall be the
28 average number actually employed during the months of operation, pro-
29 vided that the qualifications of paragraph (e)(i) of this subsection
30 (2) are met.
31 (iii) Existing employees of the taxpayer who obtain new qualifying
32 positions within the project site and employees transferred from a
33 related taxpayer or acquired as part of the acquisition of a trade or
34 business from another taxpayer within the prior twelve (12) months
35 are not included in this definition unless the new position or trans-
36 fer creates a net new job in Idaho.
37 (f) "Project period" means the period of time beginning at the earlier of
38 a physical change to the project site or the first employment of new
39 employees located in Idaho who are related to the activities at the proj-
40 ect site, but no earlier than January 1, 2005, and ending when the facili-
41 ties constituting the project are placed in service, but no later than
42 December 31, 2009.
43 (g) "Project site" means an area or areas at which headquarters and head-
44 quarters facilities are located and at which the tax incentive criteria
45 have been or will be met and which are either:
46 (i) A single geographic area located in this state at which the
47 headquarters or administrative facilities owned or leased by the tax-
48 payer are located; or
49 (ii) One (1) or more geographic areas located in this state if
50 eighty percent (80%) or more of the investment required by subsection
51 (2)(j)(i) of this section is made at one (1) of the areas.
52 (iii) The project site must be identified and described to the com-
53 mission by a taxpayer subject to tax under the Idaho income tax act,
54 in the form and manner prescribed by the commission.
55 (h) "Qualified investment" shall be defined as in section 63-3029B, Idaho
3
1 Code.
2 (i) "Recapture period" means:
3 (i) In the case of credits described in sections 63-2903 and
4 63-2904, Idaho Code, the same period for which a recapture of invest-
5 ment tax credit under section 63-3029B, Idaho Code, is required; or
6 (ii) In the case of credits described in section 63-2905, Idaho
7 Code, five (5) years from the date the project period ends.
8 (j) "Tax incentive criteria" means a taxpayer meeting at a project site
9 the requirements of both subparagraphs (i) and (ii) of this paragraph (j).
10 (i) During the project period, making capital investments in new
11 plant of at least fifty million dollars ($50,000,000) at the project
12 site.
13 (ii) During a period of time beginning on January 1, 2005, and end-
14 ing at the conclusion of the project period:
15 1. Increasing employment at the project site by at least five
16 hundred (500) new employees:
17 (A) Each of whom must earn at least twenty-four dollars
18 and four cents ($24.04) per hour worked during the
19 taxpayer's taxable year; or
20 (B) Each of whom is part of a group of five hundred (500)
21 or more employees at the project site which group on aver-
22 age earns at least twenty-eight dollars and eighty-five
23 cents ($28.85) per hour worked during the taxpayer's tax-
24 able year. Calculation of the group average earnings may
25 not include amounts paid to any employee earning more than
26 ninety-six dollars and fifteen cents ($96.15) or less than
27 fifteen dollars and fifty cents ($15.50) per hour worked
28 during the taxpayer's taxable year.
29 (C) Earnings calculated pursuant to subparagraph (ii) of
30 this paragraph (j) shall include income upon which Idaho
31 income tax withholding is required under section 63-3035,
32 Idaho Code, but shall not include income such as stock
33 options or restricted stock grants.
34 (D) For purposes of determining whether the increased
35 employment threshold has been met, employment at the proj-
36 ect site shall be determined by calculating the increase of
37 such new employees reported to the Idaho department of com-
38 merce and labor for employment security purposes over the
39 employees so reported as of the beginning of the project
40 period or no earlier than January 1, 2005, whichever is
41 larger; and
42 2. Maintaining net increased employment in Idaho required by
43 subparagraph (ii)1. of this paragraph (j) during the remainder
44 of the project period.
45 (k) "Taxpayer," for purposes of paragraphs (j) and (e) of this subsection
46 (2), means either:
47 (i) A single taxpayer; or
48 (ii) In the context of a unitary group filing a combined report
49 under section 63-3027(t), Idaho Code, all members of a unitary group
50 includable in a combined report for the tax years in which the credit
51 provided for by this chapter may be claimed.
52 For all other purposes, the terms of section 63-3009, Idaho Code, and sec-
53 tion 63-3027(t)(1), Idaho Code, apply to the meaning of "taxpayer."
54 63-2903. ADDITIONAL INCOME TAX CREDIT FOR CAPITAL INVESTMENT. (1) For
4
1 taxable years beginning on or after January 1, 2005, and before December 31,
2 2009, and subject to the limitations of this chapter, a taxpayer who has cer-
3 tified that the tax incentive criteria will be met within a project site dur-
4 ing a project period shall, in regard to qualified investments made after the
5 beginning of the project period and before December 31, 2009, in lieu of the
6 investment tax credit provided in section 63-3029B, Idaho Code, be allowed a
7 nonrefundable credit against taxes imposed by sections 63-3024, 63-3025 and
8 63-3025A, Idaho Code, in the amount of six percent (6%) of the amount of qual-
9 ified investment made during a taxable year, wherever located within this
10 state.
11 (2) The credit allowed by this section shall not be subject to the fifty
12 percent (50%) limitation provided in section 63-3029B, Idaho Code.
13 (3) The credit allowed by this section shall not exceed five million dol-
14 lars ($5,000,000) in any one (1) taxable year.
15 63-2904. REAL PROPERTY IMPROVEMENT TAX CREDIT. (1) For taxable years
16 beginning on or after January 1, 2005, and before December 31, 2009, subject
17 to the limitations of this chapter, a taxpayer who has certified that the tax
18 incentive criteria will be met within a project site during a project period
19 shall be allowed a nonrefundable credit against taxes imposed by sections
20 63-3024, 63-3025 and 63-3025A, Idaho Code, in the amount of ten percent (10%)
21 of the investment in new plant which is incurred during the project period
22 applicable to the project site in which the investment is made.
23 (2) The credit allowed by this section shall not exceed five hundred
24 thousand dollars ($500,000) in any one (1) taxable year.
25 (3) No credit is allowable under this section for a qualified investment
26 in regard to which a credit under section 63-2903, Idaho Code, is available.
27 (4) The credit allowed by this section is limited to buildings and struc-
28 tural components of buildings related to headquarters or administrative facil-
29 ities.
30 63-2905. ADDITIONAL INCOME TAX CREDIT FOR NEW JOBS. (1) Subject to the
31 limitations of this chapter, for taxable years beginning on or after January
32 1, 2005, and before December 31, 2009, a taxpayer who has certified that the
33 tax incentive criteria will be met within a project site during a project
34 period shall, for the number of new employees earning more than a rate of
35 twenty-four dollars and four cents ($24.04) per hour worked, in lieu of the
36 credit amount in subsection (2)(a) of section 63-3029F, Idaho Code, be allowed
37 the credit provided by this section. The number of new employees is the
38 increase in the number of employees for the current taxable year over the
39 greater of the following:
40 (a) The number of employees for the prior taxable year; or
41 (b) The average of the number of employees for the three (3) prior tax-
42 able years.
43 (2) The credit provided by this section shall be:
44 (a) One thousand five hundred dollars ($1,500) for each new employee
45 whose annual salary during the taxable year for which the credit is earned
46 is greater than twenty-four dollars and four cents ($24.04) per hour
47 worked but equal to or less than an average rate of twenty-eight dollars
48 and eighty-five cents ($28.85) per hour worked;
49 (b) Two thousand dollars ($2,000) for each new employee whose annual sal-
50 ary during the taxable year for which the credit is earned is greater than
51 an average rate of twenty-eight dollars and eighty-five cents ($28.85) per
52 hour worked but equal to or less than an average rate of thirty-six dol-
53 lars and six cents ($36.06) per hour worked;
5
1 (c) Two thousand five hundred dollars ($2,500) for each new employee
2 whose annual salary during the taxable year for which the credit is earned
3 is greater than an average rate of thirty-six dollars and six cents
4 ($36.06) per hour worked but equal to or less than an average rate of for-
5 ty-three dollars and twenty-seven cents ($43.27) per hour worked;
6 (d) Three thousand dollars ($3,000) for each new employee whose annual
7 salary during the taxable year for which the credit is earned is greater
8 than an average rate of forty-three dollars and twenty-seven cents
9 ($43.27) per hour worked.
10 (3) The credit allowed by subsection (1) of this section shall apply only
11 to employment primarily within the project site. No credit shall be earned
12 unless such employee shall have performed such duties for the taxpayer for a
13 minimum of nine (9) months during the taxable year for which the credit is
14 claimed.
15 (4) The credit allowed by this section shall not be subject to the fifty
16 percent (50%) limitation provided in section 63-3029F, Idaho Code.
17 (5) Employees transferred from a related taxpayer or acquired from
18 another taxpayer within the prior twelve (12) months shall not be included in
19 the computation of the credit unless the transfer creates a net new job in
20 Idaho.
21 63-2906. LIMITATIONS, AND OTHER PROVISIONS ON CREDITS AGAINST INCOME
22 TAXES. (1) In addition to other needed rules, the state tax commission may
23 promulgate rules prescribing:
24 (a) In the case of S corporations, partnerships, trusts or estates, a
25 method of attributing a credit under this chapter to the shareholders,
26 partners or beneficiaries in proportion to their share of the income from
27 the S corporation, partnership, trust or estate; and
28 (b) The method by which the carryover of credits and the duty to recap-
29 ture credits shall survive and be transferred in the event of reorganiza-
30 tions, mergers or liquidations.
31 (2) In the case of a unitary group of corporations filing a combined
32 report under subsection (t) of section 63-3027, Idaho Code, credits against
33 income tax provided by sections 63-2903, 63-2904 and 63-2905, Idaho Code,
34 earned by one (1) member of the group but not used by that member may be used
35 by another member of the group, subject to the limitation in subsection (3) of
36 this section, instead of carried over. For a combined group of corporations,
37 credit carried forward may be claimed by any member of the group unless the
38 member or members who earned the credit are no longer included in the combined
39 group.
40 (3) The total of all credits allowed by sections 63-2903, 63-2904 and
41 63-2905, Idaho Code, together with any credits carried forward under subsec-
42 tion (4) of this section shall not exceed the amount of tax due under sections
43 63-3024, 63-3025 and 63-3025A, Idaho Code, after allowance for all other cre-
44 dits permitted by this chapter and the Idaho income tax act.
45 (4) If the credits exceed the limitation under subsection (3) of this
46 section, the excess amount may be carried forward for a period that does not
47 exceed:
48 (a) The next fourteen (14) taxable years in the case of credits allowed
49 by sections 63-2903 and 63-2904, Idaho Code; or
50 (b) The next ten (10) taxable years in the case of credits allowed by
51 section 63-2905, Idaho Code.
52 63-2907. RECAPTURE. (1) In the event that any person to whom a tax credit
53 allowed by section 63-2903, 63-2904 or 63-2905, Idaho Code, fails to meet the
6
1 tax incentive criteria, the full amount of the credit shall be subject to
2 recapture by the commission.
3 (2) If, during any taxable year, an investment in new plant is disposed
4 of, or otherwise ceases to qualify with respect to the taxpayer, prior to the
5 close of the recapture period, recapture of the credit allowed by sections
6 63-2903 and 63-2904, Idaho Code, shall be determined for such taxable year in
7 the same proportion and subject to the same provisions as an amount of credit
8 required to be recaptured under section 63-3029B, Idaho Code.
9 (3) In the event that the employment required in section 63-2902(2)(j),
10 Idaho Code, is not maintained for the entire recapture period, recapture of
11 the credit allowed in section 63-2905, Idaho Code, shall be determined for
12 such taxable year in the same proportion as an amount of credit required to be
13 recaptured under section 63-3029B, Idaho Code. This subsection shall not be
14 construed to require that the required level of employment must be met by the
15 same individual employees.
16 (4) Any amount subject to recapture is a deficiency in tax for the amount
17 of the credit in the taxable year in which the disqualification first occurs
18 and may be enforced and collected in the manner provided by the Idaho income
19 tax act, provided however, that in lieu of the provisions of section
20 63-3068(a), Idaho Code, the period of time within which the commission may
21 issue a notice under section 63-3045, Idaho Code, in regard to an amount sub-
22 ject to recapture shall be the later of five (5) years after the end of the
23 taxable year in which the project period ends or three (3) years after the end
24 of the taxable year in which any amounts carried forward under section
25 63-2906, Idaho Code, expire.
26 63-2908. SALES AND USE TAX INCENTIVES -- REBATES -- RECAPTURE. (1) For
27 calendar years beginning on January 1, 2005, and ending on December 31, 2009,
28 subject to the limitations of this chapter, a taxpayer who has certified that
29 the tax incentive criteria will be met within the project site shall be enti-
30 tled to receive a rebate of all sales and use taxes imposed by chapter 36,
31 title 63, Idaho Code, and that the taxpayer or its contractors actually paid
32 in regard to any property constructed, located or installed within the project
33 site during the project period for that site.
34 (2) Upon filing of a written refund claim by the taxpayer entitled to the
35 rebate, and subject to such reasonable documentation and verification as the
36 commission may require, the rebate shall be paid by the commission as a refund
37 allowable under section 63-3626, Idaho Code. A claim for rebate under this
38 section must be filed on or before the last day of the third calendar year
39 following the year in which the taxes sought to be rebated were paid or the
40 right to the rebate is lost.
41 (3) Any rebate paid shall be subject to recapture by the commission:
42 (a) At one hundred percent (100%) in the event that the tax incentive
43 criteria are not met at the project site during the project period, or
44 (b) In the event that the property is not used, stored or otherwise con-
45 sumed within the project site for a period of sixty (60) consecutive full
46 months after the property was placed in service, or
47 (c) In the event that the employment required in section 63-2902(2)(j),
48 Idaho Code, is not maintained for sixty (60) consecutive full months from
49 the date the project period ends.
50 (d) Any recapture required by subsection (3)(b) or (3)(c) of this section
51 shall be in the same proportion as an amount of credit required to be
52 recaptured under section 63-3029B, Idaho Code.
53 (4) Any recapture amount due under this section shall be a deficiency in
54 tax for the period in which the disqualification first occurs for purposes of
7
1 section 63-3629, Idaho Code, and may be enforced and collected in the manner
2 provided by the Idaho sales tax act, provided however, that in lieu of the
3 provisions of section 63-3633, Idaho Code, the period of time within which the
4 commission may issue a notice under section 63-3629, Idaho Code, in regard to
5 an amount subject to recapture, shall be the later of five (5) years after the
6 end of the taxable year, for income tax purposes, in which the project period
7 ends.
8 (5) The rebate allowed by this section is limited to sales and use taxes
9 actually paid by the taxpayer or its contractors for taxable property related
10 to headquarters or administrative facilities.
11 63-2909. PROPERTY TAX INCENTIVES. (1) Subject to the limitations of this
12 chapter, both improvements to real property and personal property which are
13 newly constructed, including construction in progress during the year, or
14 acquired during a project period and located in the project site and owned by
15 a taxpayer who has certified that the tax incentive criteria will be met in
16 regard to that site, shall be entitled to receive a rebate of the lesser of:
17 (a) All property taxes the taxpayer actually paid for any of the years
18 2005 through 2012 that are properly levied upon any property constructed
19 or installed within the project site during the project period for that
20 site; or
21 (b) All property tax the taxpayer actually paid for any of the years 2005
22 through 2012 that are properly levied upon any property constructed or
23 installed within the area described in subsection (2)(g)(ii) of section
24 63-2902, Idaho Code, within which eighty percent (80%) or more of the
25 investment required in subsection (2)(j)(i) of section 63-2902, Idaho
26 Code, is made during the project period for that site.
27 Property upon which tax is rebated by this section, which is included on the
28 new construction roll provided in section 63-301A, Idaho Code, shall be sepa-
29 rately identified on that roll.
30 (2) Upon filing of a written claim by the taxpayer entitled to the
31 rebate, which shall include a description of the property upon which the tax
32 sought to be rebated was levied, the property's assessed value for property
33 tax purposes, and its location and subject to such reasonable documentation
34 and verification as the commission may require, the rebate shall be paid by
35 the commission as provided in section 63-3067, Idaho Code. A claim for rebate
36 under this section must be filed on or before the last day of the third calen-
37 dar year following the year of the property taxes sought to be rebated or the
38 right to the rebate is lost.
39 (3) The taxpayer shall be subject to recapture of any rebate paid under
40 this section:
41 (a) At one hundred percent (100%) in the event that the tax incentive
42 criteria are not met at the project site during the project period, or
43 (b) In the event that the property is disposed of, or otherwise ceases to
44 qualify with respect to the taxpayer before five (5) full years from the
45 date the project period ends, or
46 (c) In the event that the employment required in section 63-2902(2)(j),
47 Idaho Code, is not maintained for sixty (60) consecutive full months from
48 the date the project period ends.
49 (d) Any recapture required by subsection (3)(b) or (3)(c) of this section
50 shall be in the same proportion of the credit required to be recaptured
51 under section 63-3029B, Idaho Code.
52 (e) Any amount subject to recapture is a deficiency in tax for the amount
53 of the rebate in the taxable year in which the disqualification first
54 occurs and may be enforced and collected in the manner provided by the
8
1 Idaho income tax act, provided however, that in lieu of the provisions of
2 section 63-3068(a), Idaho Code, the period of time within which the com-
3 mission may issue a notice under section 63-3045, Idaho Code, in regard to
4 an amount subject to recapture shall be five (5) years after the end of
5 the taxable year in which the project period ends.
6 (4) The rebate allowed by this section is limited to improvements to real
7 property and personal property which are newly constructed, including con-
8 struction in progress during the year, or acquired related to headquarters or
9 administrative facilities.
10 63-2910. ADMINISTRATION. The commission shall enforce the provisions of
11 this chapter and may prescribe, adopt, and enforce reasonable rules relating
12 to the administration and enforcement of those provisions, including the pro-
13 mulgation of rules relating to information necessary to certify that the
14 incentive criteria have been or will be met. For the purpose of carrying out
15 its duties to enforce or administer the provisions of this chapter, the com-
16 mission shall have the powers and duties provided by sections 63-3038,
17 63-3039, 63-3042 through 63-3067, 63-3068, 63-3071, 63-3074 through 63-3078
18 and 63-217, Idaho Code.
19 SECTION 2. That Section 63-3067, Idaho Code, be, and the same is hereby
20 amended to read as follows:
21 63-3067. REVENUE RECEIVED -- STATE REFUND ACCOUNT. (1) A sum equal to the
22 amount withheld under section 63-3035A, Idaho Code, shall be distributed fifty
23 percent (50%) to the public school income fund to be utilized to facilitate
24 and provide substance abuse programs in the public school system, and fifty
25 percent (50%) shall be distributed to the counties to be utilized for county
26 juvenile probation services. These funds shall be distributed quarterly to the
27 counties based upon the percentage the population of the county bears to the
28 population of the state as a whole.
29 (2) All moneys except as provided in subsection (1) of this section, and
30 except as hereinafter provided, received by the state of Idaho under this act
31 shall be deposited by the state tax commission, as received by it, with the
32 state treasurer and shall be placed in and become a part of the general
33 account under the custody of the state treasurer. Providing however,
34 (a) that an amount equal to twenty percent (20%) of the amount deposited
35 with the state treasurer shall be placed in the "state refund account"
36 which is hereby created for the purpose of repaying overpayments, for the
37 purpose of remitting to counties and taxing districts for personal prop-
38 erty exempt from taxation pursuant to section 63-602EE, Idaho Code, as
39 provided in subsection (3) of this section, for the purpose of depositing
40 in the trust accounts specified in section 63-3067A, Idaho Code, such
41 amounts as may be designated by individuals for the purpose of depositing
42 in the Idaho ag in the classroom account an amount as may be designated by
43 the individual receiving a refund for such overpayment, and for the pur-
44 pose of paying any other erroneous receipts illegally assessed or col-
45 lected, penalties collected without authority and taxes and licenses
46 unjustly assessed, collected or which are excessive in amount. Whenever
47 necessary for the purpose of making prompt payment of refunds, the board
48 of examiners, upon request from the state tax commission, and after
49 review, may authorize the state tax commission to transfer any additional
50 specific amount from income tax collections to the "state refund
51 account." There is appropriated out of the state refund account so much
52 thereof as may be necessary for the payment of the refunds herein pro-
9
1 vided. Claims for, and payment of refunds under the provisions of this
2 section shall be made in the same manner as other claims against the state
3 of Idaho;
4 (b) an amount equal to any amount required to be rebated under section
5 63-2909, Idaho Code, is continuously appropriated for the purpose of pay-
6 ing any such rebate.
7 (3) Any unencumbered balance remaining in the state refund account on
8 June 30 of each and every year in excess of the sum of one million five hun-
9 dred thousand dollars ($1,500,000) shall be transferred to the general fund
10 and the state controller is hereby authorized and directed on such dates to
11 make such transfers unless the board of examiners, which is hereby authorized
12 to do so, changes the date of transfer or sum to be transferred.
13 SECTION 3. SEVERABILITY. The provisions of this act are hereby declared
14 to be severable and if any provision of this act or the application of such
15 provision to any person or circumstance is declared invalid for any reason,
16 such declaration shall not affect the validity of the remaining portions of
17 this act.
18 SECTION 4. An emergency existing therefor, which emergency is hereby
19 declared to exist, this act shall be in full force and effect on and after its
20 passage and approval, and retroactively to January 1, 2005.
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature First Regular Session - 2005
Moved by Moyle
Seconded by Crow
IN THE HOUSE OF REPRESENTATIVES
HOUSE AMENDMENT TO H.B. NO. 306, As Amended
1 AMENDMENT TO SECTION 1
2 On page 2 of the engrossed bill, delete lines 16 and 17 and insert: "was
3 eligible to receive employer provided coverage under a health benefit plan as
4 described in section 41-4703, Idaho Code,".
2
Moved by Crow
Seconded by Mr. Speaker
IN THE HOUSE OF REPRESENTATIVES
HOUSE AMENDMENT TO H.B. NO. 306
1 AMENDMENT TO SECTION 1
2 On page 7 of the printed bill, in line 26, following "site" delete "." and
3 insert: "; or"; and following line 26 insert:
4 "(c) Two million dollars ($2,000,000) of property tax paid in any one (1)
5 calendar year.".
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature First Regular Session - 2005
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 306, As Amended, As Amended
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO TAXATION AND TO THE ENACTMENT OF THE IDAHO CORPORATE HEADQUARTERS
3 INCENTIVE ACT OF 2005; AMENDING TITLE 63, IDAHO CODE, BY THE ADDITION OF A
4 NEW CHAPTER 29, TITLE 63, IDAHO CODE, TO PROVIDE A SHORT TITLE, TO DEFINE
5 TERMS, TO PROVIDE AN ADDITIONAL INCOME TAX INVESTMENT CREDIT FOR CERTAIN
6 QUALIFIED INVESTMENTS AND LIMITATIONS THEREON, TO PROVIDE AN INCOME TAX
7 CREDIT FOR CERTAIN REAL PROPERTY IMPROVEMENTS AND LIMITATIONS THEREON, TO
8 PROVIDE AN ADDITIONAL NEW JOBS CREDIT FOR CERTAIN EMPLOYMENT AND LIMITA-
9 TIONS THEREON, TO AUTHORIZE THE STATE TAX COMMISSION TO ADOPT ADMINISTRA-
10 TIVE RULES RELATING TO S CORPORATIONS, PARTNERSHIPS, ESTATES AND TRUSTS,
11 AND RELATING TO REORGANIZATIONS, MERGERS AND LIQUIDATIONS, TO ESTABLISH
12 LIMITATIONS, TO PERMIT SHARING OF CREDITS AMONG TAXPAYERS INCLUDED IN A
13 COMBINED REPORT OF INCOME, TO PERMIT CARRYOVERS OF UNUSED CREDITS, TO PRO-
14 VIDE FOR RECAPTURE OF INCOME TAX CREDITS IN CASE OF FAILURE TO MEET TAX
15 INCENTIVE CRITERIA, TO PROVIDE FOR A REBATE OF SALES AND USE TAXES PAID ON
16 QUALIFIED PROJECTS AND TO PROVIDE FOR RECAPTURE OF THE REBATE IN CASE OF
17 FAILURE TO MEET TAX INCENTIVE CRITERIA, TO PROVIDE FOR A REBATE OF CERTAIN
18 PROPERTY TAXES PAID ON QUALIFIED PROJECTS AND TO PROVIDE LIMITATIONS
19 THEREON, TO PROVIDE FOR RECAPTURE OF THE REBATE IN CASE OF FAILURE TO MEET
20 TAX INCENTIVE CRITERIA AND TO PROVIDE FOR ADMINISTRATION BY THE STATE TAX
21 COMMISSION; AMENDING SECTION 63-3067, IDAHO CODE, TO PROVIDE A CONTINUOUS
22 APPROPRIATION OF INCOME TAX RECEIPTS TO FUND CERTAIN PROPERTY TAX REBATES;
23 PROVIDING SEVERABILITY; DECLARING AN EMERGENCY AND PROVIDING A RETROACTIVE
24 EFFECTIVE DATE.
25 Be It Enacted by the Legislature of the State of Idaho:
26 SECTION 1. That Title 63, Idaho Code, be, and the same is hereby amended
27 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
28 ter 29, Title 63, Idaho Code, and to read as follows:
29 CHAPTER 29
30 THE IDAHO CORPORATE HEADQUARTERS INCENTIVE ACT OF 2005
31 63-2901. SHORT TITLE. This chapter shall be known and may be cited as
32 "The Idaho Corporate Headquarters Incentive Act of 2005."
33 63-2902. DEFINITIONS. (1) The definitions contained in the Idaho income
34 tax act, shall apply to this chapter unless modified in this chapter or unless
35 the context clearly requires another definition.
36 (2) As used in this chapter:
37 (a) "Commission" means the Idaho state tax commission.
38 (b) "Headquarters or administrative facilities" means facility or facili-
39 ties, including related parking facilities, where corporate staff employ-
40 ees are physically employed, and where the majority of the company's ser-
41 vices are handled either on a regional or national basis. Company ser-
2
1 vices may include: accounts receivable and payable, accounting, data proc-
2 essing, distribution management, employee benefit plan, financial and
3 securities accounting, information technology, insurance, legal, merchan-
4 dising, payroll, personnel, purchasing/procurement, planning, reporting
5 and compliance, tax, treasury, or other headquarters-related services.
6 (c) "Idaho income tax act" means chapter 30, title 63, Idaho Code.
7 (d) "Investment in new plant" means investment in headquarters or admin-
8 istrative facilities, that are:
9 (i) Qualified investments; or
10 (ii) Buildings or structural components of buildings.
11 (e) "New employee":
12 (i) Means an individual, employed primarily within the project site
13 by the taxpayer, subject to Idaho income tax withholding whether or
14 not any amounts are required to be withheld, covered for unemployment
15 insurance purposes under chapter 13, title 72, Idaho Code, and who
16 was eligible to receive employer provided coverage under a health
17 benefit plan as described in section 41-4703, Idaho Code, during the
18 taxable year. A person shall be deemed to be so employed if such per-
19 son performs duties on a regular full-time basis.
20 (ii) The number of employees employed primarily within the project
21 site by the taxpayer, during any taxable year for a taxpayer shall be
22 the mathematical average of the number of such employees reported to
23 the Idaho department of commerce and labor for employment security
24 purposes during the twelve (12) months of the taxable year which
25 qualified under paragraph (e)(i) of this subsection (2). In the event
26 the business is in operation for less than the entire taxable year,
27 the number of employees of the taxpayer for the year shall be the
28 average number actually employed during the months of operation, pro-
29 vided that the qualifications of paragraph (e)(i) of this subsection
30 (2) are met.
31 (iii) Existing employees of the taxpayer who obtain new qualifying
32 positions within the project site and employees transferred from a
33 related taxpayer or acquired as part of the acquisition of a trade or
34 business from another taxpayer within the prior twelve (12) months
35 are not included in this definition unless the new position or trans-
36 fer creates a net new job in Idaho.
37 (f) "Project period" means the period of time beginning at the earlier of
38 a physical change to the project site or the first employment of new
39 employees located in Idaho who are related to the activities at the proj-
40 ect site, but no earlier than January 1, 2005, and ending when the facili-
41 ties constituting the project are placed in service, but no later than
42 December 31, 2009.
43 (g) "Project site" means an area or areas at which headquarters and head-
44 quarters facilities are located and at which the tax incentive criteria
45 have been or will be met and which are either:
46 (i) A single geographic area located in this state at which the
47 headquarters or administrative facilities owned or leased by the tax-
48 payer are located; or
49 (ii) One (1) or more geographic areas located in this state if
50 eighty percent (80%) or more of the investment required by subsection
51 (2)(j)(i) of this section is made at one (1) of the areas.
52 (iii) The project site must be identified and described to the com-
53 mission by a taxpayer subject to tax under the Idaho income tax act,
54 in the form and manner prescribed by the commission.
55 (h) "Qualified investment" shall be defined as in section 63-3029B, Idaho
3
1 Code.
2 (i) "Recapture period" means:
3 (i) In the case of credits described in sections 63-2903 and
4 63-2904, Idaho Code, the same period for which a recapture of invest-
5 ment tax credit under section 63-3029B, Idaho Code, is required; or
6 (ii) In the case of credits described in section 63-2905, Idaho
7 Code, five (5) years from the date the project period ends.
8 (j) "Tax incentive criteria" means a taxpayer meeting at a project site
9 the requirements of both subparagraphs (i) and (ii) of this paragraph (j).
10 (i) During the project period, making capital investments in new
11 plant of at least fifty million dollars ($50,000,000) at the project
12 site.
13 (ii) During a period of time beginning on January 1, 2005, and end-
14 ing at the conclusion of the project period:
15 1. Increasing employment at the project site by at least five
16 hundred (500) new employees:
17 (A) Each of whom must earn at least twenty-four dollars
18 and four cents ($24.04) per hour worked during the
19 taxpayer's taxable year; or
20 (B) Each of whom is part of a group of five hundred (500)
21 or more employees at the project site which group on aver-
22 age earns at least twenty-eight dollars and eighty-five
23 cents ($28.85) per hour worked during the taxpayer's tax-
24 able year. Calculation of the group average earnings may
25 not include amounts paid to any employee earning more than
26 ninety-six dollars and fifteen cents ($96.15) or less than
27 fifteen dollars and fifty cents ($15.50) per hour worked
28 during the taxpayer's taxable year.
29 (C) Earnings calculated pursuant to subparagraph (ii) of
30 this paragraph (j) shall include income upon which Idaho
31 income tax withholding is required under section 63-3035,
32 Idaho Code, but shall not include income such as stock
33 options or restricted stock grants.
34 (D) For purposes of determining whether the increased
35 employment threshold has been met, employment at the proj-
36 ect site shall be determined by calculating the increase of
37 such new employees reported to the Idaho department of com-
38 merce and labor for employment security purposes over the
39 employees so reported as of the beginning of the project
40 period or no earlier than January 1, 2005, whichever is
41 larger; and
42 2. Maintaining net increased employment in Idaho required by
43 subparagraph (ii)1. of this paragraph (j) during the remainder
44 of the project period.
45 (k) "Taxpayer," for purposes of paragraphs (j) and (e) of this subsection
46 (2), means either:
47 (i) A single taxpayer; or
48 (ii) In the context of a unitary group filing a combined report
49 under section 63-3027(t), Idaho Code, all members of a unitary group
50 includable in a combined report for the tax years in which the credit
51 provided for by this chapter may be claimed.
52 For all other purposes, the terms of section 63-3009, Idaho Code, and sec-
53 tion 63-3027(t)(1), Idaho Code, apply to the meaning of "taxpayer."
54 63-2903. ADDITIONAL INCOME TAX CREDIT FOR CAPITAL INVESTMENT. (1) For
4
1 taxable years beginning on or after January 1, 2005, and before December 31,
2 2009, and subject to the limitations of this chapter, a taxpayer who has cer-
3 tified that the tax incentive criteria will be met within a project site dur-
4 ing a project period shall, in regard to qualified investments made after the
5 beginning of the project period and before December 31, 2009, in lieu of the
6 investment tax credit provided in section 63-3029B, Idaho Code, be allowed a
7 nonrefundable credit against taxes imposed by sections 63-3024, 63-3025 and
8 63-3025A, Idaho Code, in the amount of six percent (6%) of the amount of qual-
9 ified investment made during a taxable year, wherever located within this
10 state.
11 (2) The credit allowed by this section shall not be subject to the fifty
12 percent (50%) limitation provided in section 63-3029B, Idaho Code.
13 (3) The credit allowed by this section shall not exceed five million dol-
14 lars ($5,000,000) in any one (1) taxable year.
15 63-2904. REAL PROPERTY IMPROVEMENT TAX CREDIT. (1) For taxable years
16 beginning on or after January 1, 2005, and before December 31, 2009, subject
17 to the limitations of this chapter, a taxpayer who has certified that the tax
18 incentive criteria will be met within a project site during a project period
19 shall be allowed a nonrefundable credit against taxes imposed by sections
20 63-3024, 63-3025 and 63-3025A, Idaho Code, in the amount of ten percent (10%)
21 of the investment in new plant which is incurred during the project period
22 applicable to the project site in which the investment is made.
23 (2) The credit allowed by this section shall not exceed five hundred
24 thousand dollars ($500,000) in any one (1) taxable year.
25 (3) No credit is allowable under this section for a qualified investment
26 in regard to which a credit under section 63-2903, Idaho Code, is available.
27 (4) The credit allowed by this section is limited to buildings and struc-
28 tural components of buildings related to headquarters or administrative facil-
29 ities.
30 63-2905. ADDITIONAL INCOME TAX CREDIT FOR NEW JOBS. (1) Subject to the
31 limitations of this chapter, for taxable years beginning on or after January
32 1, 2005, and before December 31, 2009, a taxpayer who has certified that the
33 tax incentive criteria will be met within a project site during a project
34 period shall, for the number of new employees earning more than a rate of
35 twenty-four dollars and four cents ($24.04) per hour worked, in lieu of the
36 credit amount in subsection (2)(a) of section 63-3029F, Idaho Code, be allowed
37 the credit provided by this section. The number of new employees is the
38 increase in the number of employees for the current taxable year over the
39 greater of the following:
40 (a) The number of employees for the prior taxable year; or
41 (b) The average of the number of employees for the three (3) prior tax-
42 able years.
43 (2) The credit provided by this section shall be:
44 (a) One thousand five hundred dollars ($1,500) for each new employee
45 whose annual salary during the taxable year for which the credit is earned
46 is greater than twenty-four dollars and four cents ($24.04) per hour
47 worked but equal to or less than an average rate of twenty-eight dollars
48 and eighty-five cents ($28.85) per hour worked;
49 (b) Two thousand dollars ($2,000) for each new employee whose annual sal-
50 ary during the taxable year for which the credit is earned is greater than
51 an average rate of twenty-eight dollars and eighty-five cents ($28.85) per
52 hour worked but equal to or less than an average rate of thirty-six dol-
53 lars and six cents ($36.06) per hour worked;
5
1 (c) Two thousand five hundred dollars ($2,500) for each new employee
2 whose annual salary during the taxable year for which the credit is earned
3 is greater than an average rate of thirty-six dollars and six cents
4 ($36.06) per hour worked but equal to or less than an average rate of for-
5 ty-three dollars and twenty-seven cents ($43.27) per hour worked;
6 (d) Three thousand dollars ($3,000) for each new employee whose annual
7 salary during the taxable year for which the credit is earned is greater
8 than an average rate of forty-three dollars and twenty-seven cents
9 ($43.27) per hour worked.
10 (3) The credit allowed by subsection (1) of this section shall apply only
11 to employment primarily within the project site. No credit shall be earned
12 unless such employee shall have performed such duties for the taxpayer for a
13 minimum of nine (9) months during the taxable year for which the credit is
14 claimed.
15 (4) The credit allowed by this section shall not be subject to the fifty
16 percent (50%) limitation provided in section 63-3029F, Idaho Code.
17 (5) Employees transferred from a related taxpayer or acquired from
18 another taxpayer within the prior twelve (12) months shall not be included in
19 the computation of the credit unless the transfer creates a net new job in
20 Idaho.
21 63-2906. LIMITATIONS, AND OTHER PROVISIONS ON CREDITS AGAINST INCOME
22 TAXES. (1) In addition to other needed rules, the state tax commission may
23 promulgate rules prescribing:
24 (a) In the case of S corporations, partnerships, trusts or estates, a
25 method of attributing a credit under this chapter to the shareholders,
26 partners or beneficiaries in proportion to their share of the income from
27 the S corporation, partnership, trust or estate; and
28 (b) The method by which the carryover of credits and the duty to recap-
29 ture credits shall survive and be transferred in the event of reorganiza-
30 tions, mergers or liquidations.
31 (2) In the case of a unitary group of corporations filing a combined
32 report under subsection (t) of section 63-3027, Idaho Code, credits against
33 income tax provided by sections 63-2903, 63-2904 and 63-2905, Idaho Code,
34 earned by one (1) member of the group but not used by that member may be used
35 by another member of the group, subject to the limitation in subsection (3) of
36 this section, instead of carried over. For a combined group of corporations,
37 credit carried forward may be claimed by any member of the group unless the
38 member or members who earned the credit are no longer included in the combined
39 group.
40 (3) The total of all credits allowed by sections 63-2903, 63-2904 and
41 63-2905, Idaho Code, together with any credits carried forward under subsec-
42 tion (4) of this section shall not exceed the amount of tax due under sections
43 63-3024, 63-3025 and 63-3025A, Idaho Code, after allowance for all other cre-
44 dits permitted by this chapter and the Idaho income tax act.
45 (4) If the credits exceed the limitation under subsection (3) of this
46 section, the excess amount may be carried forward for a period that does not
47 exceed:
48 (a) The next fourteen (14) taxable years in the case of credits allowed
49 by sections 63-2903 and 63-2904, Idaho Code; or
50 (b) The next ten (10) taxable years in the case of credits allowed by
51 section 63-2905, Idaho Code.
52 63-2907. RECAPTURE. (1) In the event that any person to whom a tax credit
53 allowed by section 63-2903, 63-2904 or 63-2905, Idaho Code, fails to meet the
6
1 tax incentive criteria, the full amount of the credit shall be subject to
2 recapture by the commission.
3 (2) If, during any taxable year, an investment in new plant is disposed
4 of, or otherwise ceases to qualify with respect to the taxpayer, prior to the
5 close of the recapture period, recapture of the credit allowed by sections
6 63-2903 and 63-2904, Idaho Code, shall be determined for such taxable year in
7 the same proportion and subject to the same provisions as an amount of credit
8 required to be recaptured under section 63-3029B, Idaho Code.
9 (3) In the event that the employment required in section 63-2902(2)(j),
10 Idaho Code, is not maintained for the entire recapture period, recapture of
11 the credit allowed in section 63-2905, Idaho Code, shall be determined for
12 such taxable year in the same proportion as an amount of credit required to be
13 recaptured under section 63-3029B, Idaho Code. This subsection shall not be
14 construed to require that the required level of employment must be met by the
15 same individual employees.
16 (4) Any amount subject to recapture is a deficiency in tax for the amount
17 of the credit in the taxable year in which the disqualification first occurs
18 and may be enforced and collected in the manner provided by the Idaho income
19 tax act, provided however, that in lieu of the provisions of section
20 63-3068(a), Idaho Code, the period of time within which the commission may
21 issue a notice under section 63-3045, Idaho Code, in regard to an amount sub-
22 ject to recapture shall be the later of five (5) years after the end of the
23 taxable year in which the project period ends or three (3) years after the end
24 of the taxable year in which any amounts carried forward under section
25 63-2906, Idaho Code, expire.
26 63-2908. SALES AND USE TAX INCENTIVES -- REBATES -- RECAPTURE. (1) For
27 calendar years beginning on January 1, 2005, and ending on December 31, 2009,
28 subject to the limitations of this chapter, a taxpayer who has certified that
29 the tax incentive criteria will be met within the project site shall be enti-
30 tled to receive a rebate of all sales and use taxes imposed by chapter 36,
31 title 63, Idaho Code, and that the taxpayer or its contractors actually paid
32 in regard to any property constructed, located or installed within the project
33 site during the project period for that site.
34 (2) Upon filing of a written refund claim by the taxpayer entitled to the
35 rebate, and subject to such reasonable documentation and verification as the
36 commission may require, the rebate shall be paid by the commission as a refund
37 allowable under section 63-3626, Idaho Code. A claim for rebate under this
38 section must be filed on or before the last day of the third calendar year
39 following the year in which the taxes sought to be rebated were paid or the
40 right to the rebate is lost.
41 (3) Any rebate paid shall be subject to recapture by the commission:
42 (a) At one hundred percent (100%) in the event that the tax incentive
43 criteria are not met at the project site during the project period, or
44 (b) In the event that the property is not used, stored or otherwise con-
45 sumed within the project site for a period of sixty (60) consecutive full
46 months after the property was placed in service, or
47 (c) In the event that the employment required in section 63-2902(2)(j),
48 Idaho Code, is not maintained for sixty (60) consecutive full months from
49 the date the project period ends.
50 (d) Any recapture required by subsection (3)(b) or (3)(c) of this section
51 shall be in the same proportion as an amount of credit required to be
52 recaptured under section 63-3029B, Idaho Code.
53 (4) Any recapture amount due under this section shall be a deficiency in
54 tax for the period in which the disqualification first occurs for purposes of
7
1 section 63-3629, Idaho Code, and may be enforced and collected in the manner
2 provided by the Idaho sales tax act, provided however, that in lieu of the
3 provisions of section 63-3633, Idaho Code, the period of time within which the
4 commission may issue a notice under section 63-3629, Idaho Code, in regard to
5 an amount subject to recapture, shall be the later of five (5) years after the
6 end of the taxable year, for income tax purposes, in which the project period
7 ends.
8 (5) The rebate allowed by this section is limited to sales and use taxes
9 actually paid by the taxpayer or its contractors for taxable property related
10 to headquarters or administrative facilities.
11 63-2909. PROPERTY TAX INCENTIVES. (1) Subject to the limitations of this
12 chapter, both improvements to real property and personal property which are
13 newly constructed, including construction in progress during the year, or
14 acquired during a project period and located in the project site and owned by
15 a taxpayer who has certified that the tax incentive criteria will be met in
16 regard to that site, shall be entitled to receive a rebate of the lesser of:
17 (a) All property taxes the taxpayer actually paid for any of the years
18 2005 through 2012 that are properly levied upon any property constructed
19 or installed within the project site during the project period for that
20 site; or
21 (b) All property tax the taxpayer actually paid for any of the years 2005
22 through 2012 that are properly levied upon any property constructed or
23 installed within the area described in subsection (2)(g)(ii) of section
24 63-2902, Idaho Code, within which eighty percent (80%) or more of the
25 investment required in subsection (2)(j)(i) of section 63-2902, Idaho
26 Code, is made during the project period for that site; or
27 (c) Two million dollars ($2,000,000) of property tax paid in any one (1)
28 calendar year.
29 Property upon which tax is rebated by this section, which is included on the
30 new construction roll provided in section 63-301A, Idaho Code, shall be sepa-
31 rately identified on that roll.
32 (2) Upon filing of a written claim by the taxpayer entitled to the
33 rebate, which shall include a description of the property upon which the tax
34 sought to be rebated was levied, the property's assessed value for property
35 tax purposes, and its location and subject to such reasonable documentation
36 and verification as the commission may require, the rebate shall be paid by
37 the commission as provided in section 63-3067, Idaho Code. A claim for rebate
38 under this section must be filed on or before the last day of the third calen-
39 dar year following the year of the property taxes sought to be rebated or the
40 right to the rebate is lost.
41 (3) The taxpayer shall be subject to recapture of any rebate paid under
42 this section:
43 (a) At one hundred percent (100%) in the event that the tax incentive
44 criteria are not met at the project site during the project period, or
45 (b) In the event that the property is disposed of, or otherwise ceases to
46 qualify with respect to the taxpayer before five (5) full years from the
47 date the project period ends, or
48 (c) In the event that the employment required in section 63-2902(2)(j),
49 Idaho Code, is not maintained for sixty (60) consecutive full months from
50 the date the project period ends.
51 (d) Any recapture required by subsection (3)(b) or (3)(c) of this section
52 shall be in the same proportion of the credit required to be recaptured
53 under section 63-3029B, Idaho Code.
54 (e) Any amount subject to recapture is a deficiency in tax for the amount
8
1 of the rebate in the taxable year in which the disqualification first
2 occurs and may be enforced and collected in the manner provided by the
3 Idaho income tax act, provided however, that in lieu of the provisions of
4 section 63-3068(a), Idaho Code, the period of time within which the com-
5 mission may issue a notice under section 63-3045, Idaho Code, in regard to
6 an amount subject to recapture shall be five (5) years after the end of
7 the taxable year in which the project period ends.
8 (4) The rebate allowed by this section is limited to improvements to real
9 property and personal property which are newly constructed, including con-
10 struction in progress during the year, or acquired related to headquarters or
11 administrative facilities.
12 63-2910. ADMINISTRATION. The commission shall enforce the provisions of
13 this chapter and may prescribe, adopt, and enforce reasonable rules relating
14 to the administration and enforcement of those provisions, including the pro-
15 mulgation of rules relating to information necessary to certify that the
16 incentive criteria have been or will be met. For the purpose of carrying out
17 its duties to enforce or administer the provisions of this chapter, the com-
18 mission shall have the powers and duties provided by sections 63-3038,
19 63-3039, 63-3042 through 63-3067, 63-3068, 63-3071, 63-3074 through 63-3078
20 and 63-217, Idaho Code.
21 SECTION 2. That Section 63-3067, Idaho Code, be, and the same is hereby
22 amended to read as follows:
23 63-3067. REVENUE RECEIVED -- STATE REFUND ACCOUNT. (1) A sum equal to the
24 amount withheld under section 63-3035A, Idaho Code, shall be distributed fifty
25 percent (50%) to the public school income fund to be utilized to facilitate
26 and provide substance abuse programs in the public school system, and fifty
27 percent (50%) shall be distributed to the counties to be utilized for county
28 juvenile probation services. These funds shall be distributed quarterly to the
29 counties based upon the percentage the population of the county bears to the
30 population of the state as a whole.
31 (2) All moneys except as provided in subsection (1) of this section, and
32 except as hereinafter provided, received by the state of Idaho under this act
33 shall be deposited by the state tax commission, as received by it, with the
34 state treasurer and shall be placed in and become a part of the general
35 account under the custody of the state treasurer. Providing however,
36 (a) that an amount equal to twenty percent (20%) of the amount deposited
37 with the state treasurer shall be placed in the "state refund account"
38 which is hereby created for the purpose of repaying overpayments, for the
39 purpose of remitting to counties and taxing districts for personal prop-
40 erty exempt from taxation pursuant to section 63-602EE, Idaho Code, as
41 provided in subsection (3) of this section, for the purpose of depositing
42 in the trust accounts specified in section 63-3067A, Idaho Code, such
43 amounts as may be designated by individuals for the purpose of depositing
44 in the Idaho ag in the classroom account an amount as may be designated by
45 the individual receiving a refund for such overpayment, and for the pur-
46 pose of paying any other erroneous receipts illegally assessed or col-
47 lected, penalties collected without authority and taxes and licenses
48 unjustly assessed, collected or which are excessive in amount. Whenever
49 necessary for the purpose of making prompt payment of refunds, the board
50 of examiners, upon request from the state tax commission, and after
51 review, may authorize the state tax commission to transfer any additional
52 specific amount from income tax collections to the "state refund
9
1 account." There is appropriated out of the state refund account so much
2 thereof as may be necessary for the payment of the refunds herein pro-
3 vided. Claims for, and payment of refunds under the provisions of this
4 section shall be made in the same manner as other claims against the state
5 of Idaho;
6 (b) an amount equal to any amount required to be rebated under section
7 63-2909, Idaho Code, is continuously appropriated for the purpose of pay-
8 ing any such rebate.
9 (3) Any unencumbered balance remaining in the state refund account on
10 June 30 of each and every year in excess of the sum of one million five hun-
11 dred thousand dollars ($1,500,000) shall be transferred to the general fund
12 and the state controller is hereby authorized and directed on such dates to
13 make such transfers unless the board of examiners, which is hereby authorized
14 to do so, changes the date of transfer or sum to be transferred.
15 SECTION 3. SEVERABILITY. The provisions of this act are hereby declared
16 to be severable and if any provision of this act or the application of such
17 provision to any person or circumstance is declared invalid for any reason,
18 such declaration shall not affect the validity of the remaining portions of
19 this act.
20 SECTION 4. An emergency existing therefor, which emergency is hereby
21 declared to exist, this act shall be in full force and effect on and after its
22 passage and approval, and retroactively to January 1, 2005.
10
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 306, As Amended
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO TAXATION AND TO THE ENACTMENT OF THE IDAHO CORPORATE HEADQUARTERS
3 INCENTIVE ACT OF 2005; AMENDING TITLE 63, IDAHO CODE, BY THE ADDITION OF A
4 NEW CHAPTER 29, TITLE 63, IDAHO CODE, TO PROVIDE A SHORT TITLE, TO DEFINE
5 TERMS, TO PROVIDE AN ADDITIONAL INCOME TAX INVESTMENT CREDIT FOR CERTAIN
6 QUALIFIED INVESTMENTS AND LIMITATIONS THEREON, TO PROVIDE AN INCOME TAX
7 CREDIT FOR CERTAIN REAL PROPERTY IMPROVEMENTS AND LIMITATIONS THEREON, TO
8 PROVIDE AN ADDITIONAL NEW JOBS CREDIT FOR CERTAIN EMPLOYMENT AND LIMITA-
9 TIONS THEREON, TO AUTHORIZE THE STATE TAX COMMISSION TO ADOPT ADMINISTRA-
10 TIVE RULES RELATING TO S CORPORATIONS, PARTNERSHIPS, ESTATES AND TRUSTS,
11 AND RELATING TO REORGANIZATIONS, MERGERS AND LIQUIDATIONS, TO ESTABLISH
12 LIMITATIONS, TO PERMIT SHARING OF CREDITS AMONG TAXPAYERS INCLUDED IN A
13 COMBINED REPORT OF INCOME, TO PERMIT CARRYOVERS OF UNUSED CREDITS, TO PRO-
14 VIDE FOR RECAPTURE OF INCOME TAX CREDITS IN CASE OF FAILURE TO MEET TAX
15 INCENTIVE CRITERIA, TO PROVIDE FOR A REBATE OF SALES AND USE TAXES PAID ON
16 QUALIFIED PROJECTS AND TO PROVIDE FOR RECAPTURE OF THE REBATE IN CASE OF
17 FAILURE TO MEET TAX INCENTIVE CRITERIA, TO PROVIDE FOR A REBATE OF CERTAIN
18 PROPERTY TAXES PAID ON QUALIFIED PROJECTS AND TO PROVIDE LIMITATIONS
19 THEREON, TO PROVIDE FOR RECAPTURE OF THE REBATE IN CASE OF FAILURE TO MEET
20 TAX INCENTIVE CRITERIA AND TO PROVIDE FOR ADMINISTRATION BY THE STATE TAX
21 COMMISSION; AMENDING SECTION 63-3067, IDAHO CODE, TO PROVIDE A CONTINUOUS
22 APPROPRIATION OF INCOME TAX RECEIPTS TO FUND CERTAIN PROPERTY TAX REBATES;
23 PROVIDING SEVERABILITY; DECLARING AN EMERGENCY AND PROVIDING A RETROACTIVE
24 EFFECTIVE DATE.
25 Be It Enacted by the Legislature of the State of Idaho:
26 SECTION 5. That Title 63, Idaho Code, be, and the same is hereby amended
27 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
28 ter 29, Title 63, Idaho Code, and to read as follows:
29 CHAPTER 29
30 THE IDAHO CORPORATE HEADQUARTERS INCENTIVE ACT OF 2005
31 63-2901. SHORT TITLE. This chapter shall be known and may be cited as
32 "The Idaho Corporate Headquarters Incentive Act of 2005."
33 63-2902. DEFINITIONS. (1) The definitions contained in the Idaho income
34 tax act, shall apply to this chapter unless modified in this chapter or unless
35 the context clearly requires another definition.
36 (2) As used in this chapter:
37 (a) "Commission" means the Idaho state tax commission.
38 (b) "Headquarters or administrative facilities" means facility or facili-
39 ties, including related parking facilities, where corporate staff employ-
40 ees are physically employed, and where the majority of the company's ser-
41 vices are handled either on a regional or national basis. Company ser-
42 vices may include: accounts receivable and payable, accounting, data proc-
43 essing, distribution management, employee benefit plan, financial and
44 securities accounting, information technology, insurance, legal, merchan-
11
1 dising, payroll, personnel, purchasing/procurement, planning, reporting
2 and compliance, tax, treasury, or other headquarters-related services.
3 (c) "Idaho income tax act" means chapter 30, title 63, Idaho Code.
4 (d) "Investment in new plant" means investment in headquarters or admin-
5 istrative facilities, that are:
6 (i) Qualified investments; or
7 (ii) Buildings or structural components of buildings.
8 (e) "New employee":
9 (i) Means an individual, employed primarily within the project site
10 by the taxpayer, subject to Idaho income tax withholding whether or
11 not any amounts are required to be withheld, covered for unemployment
12 insurance purposes under chapter 13, title 72, Idaho Code, and who
13 was eligible to receive employer provided coverage under an accident
14 or health plan described in section 105 of the Internal Revenue Code
15 during the taxable year. A person shall be deemed to be so employed
16 if such person performs duties on a regular full-time basis.
17 (ii) The number of employees employed primarily within the project
18 site by the taxpayer, during any taxable year for a taxpayer shall be
19 the mathematical average of the number of such employees reported to
20 the Idaho department of commerce and labor for employment security
21 purposes during the twelve (12) months of the taxable year which
22 qualified under paragraph (e)(i) of this subsection (2). In the event
23 the business is in operation for less than the entire taxable year,
24 the number of employees of the taxpayer for the year shall be the
25 average number actually employed during the months of operation, pro-
26 vided that the qualifications of paragraph (e)(i) of this subsection
27 (2) are met.
28 (iii) Existing employees of the taxpayer who obtain new qualifying
29 positions within the project site and employees transferred from a
30 related taxpayer or acquired as part of the acquisition of a trade or
31 business from another taxpayer within the prior twelve (12) months
32 are not included in this definition unless the new position or trans-
33 fer creates a net new job in Idaho.
34 (f) "Project period" means the period of time beginning at the earlier of
35 a physical change to the project site or the first employment of new
36 employees located in Idaho who are related to the activities at the proj-
37 ect site, but no earlier than January 1, 2005, and ending when the facili-
38 ties constituting the project are placed in service, but no later than
39 December 31, 2009.
40 (g) "Project site" means an area or areas at which headquarters and head-
41 quarters facilities are located and at which the tax incentive criteria
42 have been or will be met and which are either:
43 (i) A single geographic area located in this state at which the
44 headquarters or administrative facilities owned or leased by the tax-
45 payer are located; or
46 (ii) One (1) or more geographic areas located in this state if
47 eighty percent (80%) or more of the investment required by subsection
48 (2)(j)(i) of this section is made at one (1) of the areas.
49 (iii) The project site must be identified and described to the com-
50 mission by a taxpayer subject to tax under the Idaho income tax act,
51 in the form and manner prescribed by the commission.
52 (h) "Qualified investment" shall be defined as in section 63-3029B, Idaho
53 Code.
54 (i) "Recapture period" means:
55 (i) In the case of credits described in sections 63-2903 and
12
1 63-2904, Idaho Code, the same period for which a recapture of invest-
2 ment tax credit under section 63-3029B, Idaho Code, is required; or
3 (ii) In the case of credits described in section 63-2905, Idaho
4 Code, five (5) years from the date the project period ends.
5 (j) "Tax incentive criteria" means a taxpayer meeting at a project site
6 the requirements of both subparagraphs (i) and (ii) of this paragraph (j).
7 (i) During the project period, making capital investments in new
8 plant of at least fifty million dollars ($50,000,000) at the project
9 site.
10 (ii) During a period of time beginning on January 1, 2005, and end-
11 ing at the conclusion of the project period:
12 1. Increasing employment at the project site by at least five
13 hundred (500) new employees:
14 (A) Each of whom must earn at least twenty-four dollars
15 and four cents ($24.04) per hour worked during the
16 taxpayer's taxable year; or
17 (B) Each of whom is part of a group of five hundred (500)
18 or more employees at the project site which group on aver-
19 age earns at least twenty-eight dollars and eighty-five
20 cents ($28.85) per hour worked during the taxpayer's tax-
21 able year. Calculation of the group average earnings may
22 not include amounts paid to any employee earning more than
23 ninety-six dollars and fifteen cents ($96.15) or less than
24 fifteen dollars and fifty cents ($15.50) per hour worked
25 during the taxpayer's taxable year.
26 (C) Earnings calculated pursuant to subparagraph (ii) of
27 this paragraph (j) shall include income upon which Idaho
28 income tax withholding is required under section 63-3035,
29 Idaho Code, but shall not include income such as stock
30 options or restricted stock grants.
31 (D) For purposes of determining whether the increased
32 employment threshold has been met, employment at the proj-
33 ect site shall be determined by calculating the increase of
34 such new employees reported to the Idaho department of com-
35 merce and labor for employment security purposes over the
36 employees so reported as of the beginning of the project
37 period or no earlier than January 1, 2005, whichever is
38 larger; and
39 2. Maintaining net increased employment in Idaho required by
40 subparagraph (ii)1. of this paragraph (j) during the remainder
41 of the project period.
42 (k) "Taxpayer," for purposes of paragraphs (j) and (e) of this subsection
43 (2), means either:
44 (i) A single taxpayer; or
45 (ii) In the context of a unitary group filing a combined report
46 under section 63-3027(t), Idaho Code, all members of a unitary group
47 includable in a combined report for the tax years in which the credit
48 provided for by this chapter may be claimed.
49 For all other purposes, the terms of section 63-3009, Idaho Code, and sec-
50 tion 63-3027(t)(1), Idaho Code, apply to the meaning of "taxpayer."
51 63-2903. ADDITIONAL INCOME TAX CREDIT FOR CAPITAL INVESTMENT. (1) For
52 taxable years beginning on or after January 1, 2005, and before December 31,
53 2009, and subject to the limitations of this chapter, a taxpayer who has cer-
54 tified that the tax incentive criteria will be met within a project site dur-
13
1 ing a project period shall, in regard to qualified investments made after the
2 beginning of the project period and before December 31, 2009, in lieu of the
3 investment tax credit provided in section 63-3029B, Idaho Code, be allowed a
4 nonrefundable credit against taxes imposed by sections 63-3024, 63-3025 and
5 63-3025A, Idaho Code, in the amount of six percent (6%) of the amount of qual-
6 ified investment made during a taxable year, wherever located within this
7 state.
8 (2) The credit allowed by this section shall not be subject to the fifty
9 percent (50%) limitation provided in section 63-3029B, Idaho Code.
10 (3) The credit allowed by this section shall not exceed five million dol-
11 lars ($5,000,000) in any one (1) taxable year.
12 63-2904. REAL PROPERTY IMPROVEMENT TAX CREDIT. (1) For taxable years
13 beginning on or after January 1, 2005, and before December 31, 2009, subject
14 to the limitations of this chapter, a taxpayer who has certified that the tax
15 incentive criteria will be met within a project site during a project period
16 shall be allowed a nonrefundable credit against taxes imposed by sections
17 63-3024, 63-3025 and 63-3025A, Idaho Code, in the amount of ten percent (10%)
18 of the investment in new plant which is incurred during the project period
19 applicable to the project site in which the investment is made.
20 (2) The credit allowed by this section shall not exceed five hundred
21 thousand dollars ($500,000) in any one (1) taxable year.
22 (3) No credit is allowable under this section for a qualified investment
23 in regard to which a credit under section 63-2903, Idaho Code, is available.
24 (4) The credit allowed by this section is limited to buildings and struc-
25 tural components of buildings related to headquarters or administrative facil-
26 ities.
27 63-2905. ADDITIONAL INCOME TAX CREDIT FOR NEW JOBS. (1) Subject to the
28 limitations of this chapter, for taxable years beginning on or after January
29 1, 2005, and before December 31, 2009, a taxpayer who has certified that the
30 tax incentive criteria will be met within a project site during a project
31 period shall, for the number of new employees earning more than a rate of
32 twenty-four dollars and four cents ($24.04) per hour worked, in lieu of the
33 credit amount in subsection (2)(a) of section 63-3029F, Idaho Code, be allowed
34 the credit provided by this section. The number of new employees is the
35 increase in the number of employees for the current taxable year over the
36 greater of the following:
37 (a) The number of employees for the prior taxable year; or
38 (b) The average of the number of employees for the three (3) prior tax-
39 able years.
40 (2) The credit provided by this section shall be:
41 (a) One thousand five hundred dollars ($1,500) for each new employee
42 whose annual salary during the taxable year for which the credit is earned
43 is greater than twenty-four dollars and four cents ($24.04) per hour
44 worked but equal to or less than an average rate of twenty-eight dollars
45 and eighty-five cents ($28.85) per hour worked;
46 (b) Two thousand dollars ($2,000) for each new employee whose annual sal-
47 ary during the taxable year for which the credit is earned is greater than
48 an average rate of twenty-eight dollars and eighty-five cents ($28.85) per
49 hour worked but equal to or less than an average rate of thirty-six dol-
50 lars and six cents ($36.06) per hour worked;
51 (c) Two thousand five hundred dollars ($2,500) for each new employee
52 whose annual salary during the taxable year for which the credit is earned
53 is greater than an average rate of thirty-six dollars and six cents
14
1 ($36.06) per hour worked but equal to or less than an average rate of for-
2 ty-three dollars and twenty-seven cents ($43.27) per hour worked;
3 (d) Three thousand dollars ($3,000) for each new employee whose annual
4 salary during the taxable year for which the credit is earned is greater
5 than an average rate of forty-three dollars and twenty-seven cents
6 ($43.27) per hour worked.
7 (3) The credit allowed by subsection (1) of this section shall apply only
8 to employment primarily within the project site. No credit shall be earned
9 unless such employee shall have performed such duties for the taxpayer for a
10 minimum of nine (9) months during the taxable year for which the credit is
11 claimed.
12 (4) The credit allowed by this section shall not be subject to the fifty
13 percent (50%) limitation provided in section 63-3029F, Idaho Code.
14 (5) Employees transferred from a related taxpayer or acquired from
15 another taxpayer within the prior twelve (12) months shall not be included in
16 the computation of the credit unless the transfer creates a net new job in
17 Idaho.
18 63-2906. LIMITATIONS, AND OTHER PROVISIONS ON CREDITS AGAINST INCOME
19 TAXES. (1) In addition to other needed rules, the state tax commission may
20 promulgate rules prescribing:
21 (a) In the case of S corporations, partnerships, trusts or estates, a
22 method of attributing a credit under this chapter to the shareholders,
23 partners or beneficiaries in proportion to their share of the income from
24 the S corporation, partnership, trust or estate; and
25 (b) The method by which the carryover of credits and the duty to recap-
26 ture credits shall survive and be transferred in the event of reorganiza-
27 tions, mergers or liquidations.
28 (2) In the case of a unitary group of corporations filing a combined
29 report under subsection (t) of section 63-3027, Idaho Code, credits against
30 income tax provided by sections 63-2903, 63-2904 and 63-2905, Idaho Code,
31 earned by one (1) member of the group but not used by that member may be used
32 by another member of the group, subject to the limitation in subsection (3) of
33 this section, instead of carried over. For a combined group of corporations,
34 credit carried forward may be claimed by any member of the group unless the
35 member or members who earned the credit are no longer included in the combined
36 group.
37 (3) The total of all credits allowed by sections 63-2903, 63-2904 and
38 63-2905, Idaho Code, together with any credits carried forward under subsec-
39 tion (4) of this section shall not exceed the amount of tax due under sections
40 63-3024, 63-3025 and 63-3025A, Idaho Code, after allowance for all other cre-
41 dits permitted by this chapter and the Idaho income tax act.
42 (4) If the credits exceed the limitation under subsection (3) of this
43 section, the excess amount may be carried forward for a period that does not
44 exceed:
45 (a) The next fourteen (14) taxable years in the case of credits allowed
46 by sections 63-2903 and 63-2904, Idaho Code; or
47 (b) The next ten (10) taxable years in the case of credits allowed by
48 section 63-2905, Idaho Code.
49 63-2907. RECAPTURE. (1) In the event that any person to whom a tax credit
50 allowed by section 63-2903, 63-2904 or 63-2905, Idaho Code, fails to meet the
51 tax incentive criteria, the full amount of the credit shall be subject to
52 recapture by the commission.
53 (2) If, during any taxable year, an investment in new plant is disposed
15
1 of, or otherwise ceases to qualify with respect to the taxpayer, prior to the
2 close of the recapture period, recapture of the credit allowed by sections
3 63-2903 and 63-2904, Idaho Code, shall be determined for such taxable year in
4 the same proportion and subject to the same provisions as an amount of credit
5 required to be recaptured under section 63-3029B, Idaho Code.
6 (3) In the event that the employment required in section 63-2902(2)(j),
7 Idaho Code, is not maintained for the entire recapture period, recapture of
8 the credit allowed in section 63-2905, Idaho Code, shall be determined for
9 such taxable year in the same proportion as an amount of credit required to be
10 recaptured under section 63-3029B, Idaho Code. This subsection shall not be
11 construed to require that the required level of employment must be met by the
12 same individual employees.
13 (4) Any amount subject to recapture is a deficiency in tax for the amount
14 of the credit in the taxable year in which the disqualification first occurs
15 and may be enforced and collected in the manner provided by the Idaho income
16 tax act, provided however, that in lieu of the provisions of section
17 63-3068(a), Idaho Code, the period of time within which the commission may
18 issue a notice under section 63-3045, Idaho Code, in regard to an amount sub-
19 ject to recapture shall be the later of five (5) years after the end of the
20 taxable year in which the project period ends or three (3) years after the end
21 of the taxable year in which any amounts carried forward under section
22 63-2906, Idaho Code, expire.
23 63-2908. SALES AND USE TAX INCENTIVES -- REBATES -- RECAPTURE. (1) For
24 calendar years beginning on January 1, 2005, and ending on December 31, 2009,
25 subject to the limitations of this chapter, a taxpayer who has certified that
26 the tax incentive criteria will be met within the project site shall be enti-
27 tled to receive a rebate of all sales and use taxes imposed by chapter 36,
28 title 63, Idaho Code, and that the taxpayer or its contractors actually paid
29 in regard to any property constructed, located or installed within the project
30 site during the project period for that site.
31 (2) Upon filing of a written refund claim by the taxpayer entitled to the
32 rebate, and subject to such reasonable documentation and verification as the
33 commission may require, the rebate shall be paid by the commission as a refund
34 allowable under section 63-3626, Idaho Code. A claim for rebate under this
35 section must be filed on or before the last day of the third calendar year
36 following the year in which the taxes sought to be rebated were paid or the
37 right to the rebate is lost.
38 (3) Any rebate paid shall be subject to recapture by the commission:
39 (a) At one hundred percent (100%) in the event that the tax incentive
40 criteria are not met at the project site during the project period, or
41 (b) In the event that the property is not used, stored or otherwise con-
42 sumed within the project site for a period of sixty (60) consecutive full
43 months after the property was placed in service, or
44 (c) In the event that the employment required in section 63-2902(2)(j),
45 Idaho Code, is not maintained for sixty (60) consecutive full months from
46 the date the project period ends.
47 (d) Any recapture required by subsection (3)(b) or (3)(c) of this section
48 shall be in the same proportion as an amount of credit required to be
49 recaptured under section 63-3029B, Idaho Code.
50 (4) Any recapture amount due under this section shall be a deficiency in
51 tax for the period in which the disqualification first occurs for purposes of
52 section 63-3629, Idaho Code, and may be enforced and collected in the manner
53 provided by the Idaho sales tax act, provided however, that in lieu of the
54 provisions of section 63-3633, Idaho Code, the period of time within which the
16
1 commission may issue a notice under section 63-3629, Idaho Code, in regard to
2 an amount subject to recapture, shall be the later of five (5) years after the
3 end of the taxable year, for income tax purposes, in which the project period
4 ends.
5 (5) The rebate allowed by this section is limited to sales and use taxes
6 actually paid by the taxpayer or its contractors for taxable property related
7 to headquarters or administrative facilities.
8 63-2909. PROPERTY TAX INCENTIVES. (1) Subject to the limitations of this
9 chapter, both improvements to real property and personal property which are
10 newly constructed, including construction in progress during the year, or
11 acquired during a project period and located in the project site and owned by
12 a taxpayer who has certified that the tax incentive criteria will be met in
13 regard to that site, shall be entitled to receive a rebate of the lesser of:
14 (a) All property taxes the taxpayer actually paid for any of the years
15 2005 through 2012 that are properly levied upon any property constructed
16 or installed within the project site during the project period for that
17 site; or
18 (b) All property tax the taxpayer actually paid for any of the years 2005
19 through 2012 that are properly levied upon any property constructed or
20 installed within the area described in subsection (2)(g)(ii) of section
21 63-2902, Idaho Code, within which eighty percent (80%) or more of the
22 investment required in subsection (2)(j)(i) of section 63-2902, Idaho
23 Code, is made during the project period for that site; or
24 (c) Two million dollars ($2,000,000) of property tax paid in any one (1)
25 calendar year.
26 Property upon which tax is rebated by this section, which is included on the
27 new construction roll provided in section 63-301A, Idaho Code, shall be sepa-
28 rately identified on that roll.
29 (2) Upon filing of a written claim by the taxpayer entitled to the
30 rebate, which shall include a description of the property upon which the tax
31 sought to be rebated was levied, the property's assessed value for property
32 tax purposes, and its location and subject to such reasonable documentation
33 and verification as the commission may require, the rebate shall be paid by
34 the commission as provided in section 63-3067, Idaho Code. A claim for rebate
35 under this section must be filed on or before the last day of the third calen-
36 dar year following the year of the property taxes sought to be rebated or the
37 right to the rebate is lost.
38 (3) The taxpayer shall be subject to recapture of any rebate paid under
39 this section:
40 (a) At one hundred percent (100%) in the event that the tax incentive
41 criteria are not met at the project site during the project period, or
42 (b) In the event that the property is disposed of, or otherwise ceases to
43 qualify with respect to the taxpayer before five (5) full years from the
44 date the project period ends, or
45 (c) In the event that the employment required in section 63-2902(2)(j),
46 Idaho Code, is not maintained for sixty (60) consecutive full months from
47 the date the project period ends.
48 (d) Any recapture required by subsection (3)(b) or (3)(c) of this section
49 shall be in the same proportion of the credit required to be recaptured
50 under section 63-3029B, Idaho Code.
51 (e) Any amount subject to recapture is a deficiency in tax for the amount
52 of the rebate in the taxable year in which the disqualification first
53 occurs and may be enforced and collected in the manner provided by the
54 Idaho income tax act, provided however, that in lieu of the provisions of
17
1 section 63-3068(a), Idaho Code, the period of time within which the com-
2 mission may issue a notice under section 63-3045, Idaho Code, in regard to
3 an amount subject to recapture shall be five (5) years after the end of
4 the taxable year in which the project period ends.
5 (4) The rebate allowed by this section is limited to improvements to real
6 property and personal property which are newly constructed, including con-
7 struction in progress during the year, or acquired related to headquarters or
8 administrative facilities.
9 63-2910. ADMINISTRATION. The commission shall enforce the provisions of
10 this chapter and may prescribe, adopt, and enforce reasonable rules relating
11 to the administration and enforcement of those provisions, including the pro-
12 mulgation of rules relating to information necessary to certify that the
13 incentive criteria have been or will be met. For the purpose of carrying out
14 its duties to enforce or administer the provisions of this chapter, the com-
15 mission shall have the powers and duties provided by sections 63-3038,
16 63-3039, 63-3042 through 63-3067, 63-3068, 63-3071, 63-3074 through 63-3078
17 and 63-217, Idaho Code.
18 SECTION 6. That Section 63-3067, Idaho Code, be, and the same is hereby
19 amended to read as follows:
20 63-3067. REVENUE RECEIVED -- STATE REFUND ACCOUNT. (1) A sum equal to the
21 amount withheld under section 63-3035A, Idaho Code, shall be distributed fifty
22 percent (50%) to the public school income fund to be utilized to facilitate
23 and provide substance abuse programs in the public school system, and fifty
24 percent (50%) shall be distributed to the counties to be utilized for county
25 juvenile probation services. These funds shall be distributed quarterly to the
26 counties based upon the percentage the population of the county bears to the
27 population of the state as a whole.
28 (2) All moneys except as provided in subsection (1) of this section, and
29 except as hereinafter provided, received by the state of Idaho under this act
30 shall be deposited by the state tax commission, as received by it, with the
31 state treasurer and shall be placed in and become a part of the general
32 account under the custody of the state treasurer. Providing however,
33 (a) that an amount equal to twenty percent (20%) of the amount deposited
34 with the state treasurer shall be placed in the "state refund account"
35 which is hereby created for the purpose of repaying overpayments, for the
36 purpose of remitting to counties and taxing districts for personal prop-
37 erty exempt from taxation pursuant to section 63-602EE, Idaho Code, as
38 provided in subsection (3) of this section, for the purpose of depositing
39 in the trust accounts specified in section 63-3067A, Idaho Code, such
40 amounts as may be designated by individuals for the purpose of depositing
41 in the Idaho ag in the classroom account an amount as may be designated by
42 the individual receiving a refund for such overpayment, and for the pur-
43 pose of paying any other erroneous receipts illegally assessed or col-
44 lected, penalties collected without authority and taxes and licenses
45 unjustly assessed, collected or which are excessive in amount. Whenever
46 necessary for the purpose of making prompt payment of refunds, the board
47 of examiners, upon request from the state tax commission, and after
48 review, may authorize the state tax commission to transfer any additional
49 specific amount from income tax collections to the "state refund
50 account." There is appropriated out of the state refund account so much
51 thereof as may be necessary for the payment of the refunds herein pro-
52 vided. Claims for, and payment of refunds under the provisions of this
18
1 section shall be made in the same manner as other claims against the state
2 of Idaho;
3 (b) an amount equal to any amount required to be rebated under section
4 63-2909, Idaho Code, is continuously appropriated for the purpose of pay-
5 ing any such rebate.
6 (3) Any unencumbered balance remaining in the state refund account on
7 June 30 of each and every year in excess of the sum of one million five hun-
8 dred thousand dollars ($1,500,000) shall be transferred to the general fund
9 and the state controller is hereby authorized and directed on such dates to
10 make such transfers unless the board of examiners, which is hereby authorized
11 to do so, changes the date of transfer or sum to be transferred.
12 SECTION 7. SEVERABILITY. The provisions of this act are hereby declared
13 to be severable and if any provision of this act or the application of such
14 provision to any person or circumstance is declared invalid for any reason,
15 such declaration shall not affect the validity of the remaining portions of
16 this act.
17 SECTION 8. An emergency existing therefor, which emergency is hereby
18 declared to exist, this act shall be in full force and effect on and after its
19 passage and approval, and retroactively to January 1, 2005.
STATEMENT OF PURPOSE
RS15123
This bill is "The Idaho Corporate Headquarters Incentive Act of
2005." It provides qualifying businesses with:
Income tax credits:
o A six percent investment tax credit with no credit limitation.
o An additional new jobs tax credit with a graduated scale starting
at $1,000 per job and climbing to $3,000 per job.
o A ten percent real property improvement tax credit for investment
in headquarters and administrative buildings of up to $500,000 in
any one year.
A temporary property tax abatement for new headquarters and
administrative buildings of up to $2 million in any year. The state,
not local governments, pays the abatement.
A temporary sales tax abatement for materials used in new headquarters
and administrative buildings.
To qualify a company must:
o Create at least 500 new jobs in Idaho;
o Jobs must have a starting annual salary of at least $50,000 per
year, plus benefits;
o Invest at least $50 million in new headquarters and
administrative buildings; and
o Accomplish this within a five-year period.
Existing recapture provisions apply.
FISCAL NOTE
Impact on General Fund
For Fiscal Year 2006- New New New Net
New Employees New Rev. Local State Costs Impact
If 500 $ 4.2 mil $ 1.2 mil $ 3.1 mil $ 1.8 mil $ 1.3 mil
If 1,000 $ 6.2 mil $ 1.8 mil $ 4.4 mil $ 1.8 mil $ 2.5 mil
If 1,500 $ 8.1 mil $ 2.5 mil $ 5.6 mil $ 1.8 mil $ 3.8 mil
If 2,000 $10.1 mil $ 3.1 mil $ 6.9 mil $ 1.8 mil $ 5.1 mil
Impact on General Fund
For Life of Tax Credits- New New New Net
New Employees New Rev. Local State Costs Impact
If 500 $ 65.4 mil $31.7 mil $33.7 mil $15.8 mil $17.9 mil
If 1,000 $108.4 mil $50.5 mil $57.9 mil $16.9 mil $41.1 mil
If 1,500 $151.4 mil $69.3 mil $82.2 mil $17.8 mil $64.4 mil
If 2,000 $194.4 mil $88.1 mil $106.4 mil $18.8 mil $87.6 mil
Contact
Name: Brian Whitlock
Agency: Governor's Office
Phone: 334-2100
STATEMENT OF PURPOSE/FISCAL NOTE H 306