Print Friendly HOUSE BILL NO. 484 – Income tax deductions/certn deleted
HOUSE BILL NO. 484
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H0484...............................................by REVENUE AND TAXATION
INCOME TAX - DEDUCTIONS - Repeals and amends existing law relating to state
income tax to delete deductions for contributions to medical assistance
accounts and personal health care services, to delete the deductions for
weatherization and conservation expenses and to delete the provision
requiring individual taxpayers to indicate on their tax forms the school
district in which they reside.
01/20 House intro - 1st rdg - to printing
01/21 Rpt prt - to Rev/Tax
02/03 Rpt out - rec d/p - to 2nd rdg
02/04 2nd rdg - to 3rd rdg
02/05 3rd rdg - PASSED - 69-0-1
AYES -- Alltus, Barraclough, Barrett, Bell, Bieter, Bivens,
Black(15), Black(23), Boe, Bruneel, Callister, Campbell, Chase,
Clark, Crane, Crow, Cuddy, Deal, Denney, Ellsworth, Field(13),
Field(20), Gagner, Geddes, Gould, Hadley, Hansen, Henbest, Hornbeck,
Jaquet, Jones(9), Jones(22), Jones(20), Judd, Kellogg, Kempton,
Kendell, Kjellander, Kunz, Lake, Linford, Loertscher, Mader, Marley,
McKague, Meyer, Miller, Mortensen, Pischner, Pomeroy, Reynolds,
Richman, Ridinger, Robison, Sali, Schaefer, Stevenson, Stoicheff,
Stone, Stubbs, Taylor, Tilman, Tippets, Trail, Watson, Wheeler, Wood,
Zimmermann, Mr Speaker
NAYS -- None
Absent and excused -- Newcomb
Floor Sponsor - Chase
Title apvd - to Senate
02/06 Senate intro - 1st rdg - to Loc Gov
02/12 Rpt out - rec d/p - to 2nd rdg
02/13 2nd rdg - to 3rd rdg
02/20 3rd rdg - PASSED - 34-0-1
AYES--Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
Crow, Danielson, Darrington, Deide, Dunklin, Frasure, Geddes, Hansen,
Hawkins, Ingram, Ipsen, Keough, King, Lee, McLaughlin, Noh, Parry,
Richardson, Riggs, Risch, Sandy, Schroeder, Sorensen, Stennett,
Sweeney, Thorne, Wheeler, Whitworth
Absent and excused--Twiggs
Floor Sponsor - Geddes
Title apvd - to House
02/23 To enrol
02/24 Rpt enrol - Sp signed
02/25 Pres signed
02/26 To Governor
02/27 Governor signed
Session Law Chapter 20
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fourth Legislature Second Regular Session - 1998
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 484
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO INCOME TAXES; AMENDING SECTION 63-3022, IDAHO CODE, TO DELETE PRO-
3 VISIONS RELATING TO DEDUCTIONS FOR CONTRIBUTIONS TO MEDICAL ASSISTANCE
4 ACCOUNTS AND PERSONAL HEALTH CARE SERVICES; REPEALING SECTIONS 63-3022F
5 AND 63-3089, IDAHO CODE; DECLARING AN EMERGENCY AND PROVIDING A RETROAC-
6 TIVE EFFECTIVE DATE.
7 Be It Enacted by the Legislature of the State of Idaho:
8 SECTION 1. That Section 63-3022, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 63-3022. ADJUSTMENTS TO TAXABLE INCOME. The additions and subtractions
11 set forth in this section, and in sections 63-3022A through 63-3022L, Idaho
12 Code, are to be applied to the extent allowed in computing Idaho taxable
14 (a) Add interest and dividends received or accrued during the taxable
15 year from foreign securities and from securities issued by states and other
16 political subdivisions, other than those issued by the state of Idaho, its
17 cities and political subdivisions, exempt from federal income tax under the
18 Internal Revenue Code, less applicable amortization.
19 (1) In the case of a corporation whose income is taxable under this chap-
20 ter, no deduction shall be allowed for interest on indebtedness incurred
21 or continued to purchase after January 1, 1983, or to carry obligations
22 acquired after January 1, 1983, the interest of which is wholly exempt
23 from the taxes imposed under this chapter. The amount of interest on
24 indebtedness thus incurred or continued shall be an amount which bears the
25 same ratio to the aggregate amount allowable (determined without regard to
26 this section) to the taxpayer as a deduction for interest for the taxable
27 year as the taxpayer's average adjusted basis of the obligations mentioned
28 in the preceding sentence bears to such average adjusted basis for all
29 assets of the taxpayer, or, at the option of the taxpayer, an amount which
30 bears the same ratio to the aggregate amount allowable (determined without
31 regard to this section) to the taxpayer as a deduction for interest for
32 the taxable year as the taxpayer's interest income from the obligations
33 mentioned in the preceding sentence bears to the taxpayer's total income
34 for the taxable year.
35 (2) In the case of a corporation whose Idaho taxable income is computed
36 pursuant to section 63-3027, Idaho Code, the interest expense deductible
37 shall be an amount equal to interest and dividend income subject to
38 apportionment, plus the amount, if any, by which the balance of interest
39 expense exceeds interest and dividend income not subject to apportionment.
40 Interest expense not included in the preceding sentence shall be directly
41 offset against interest and dividend income not subject to apportionment.
42 This provision shall not apply to dividend income excluded pursuant to
43 section 63-3027C(c) and (e), Idaho Code.
1 (b) Add any state taxes, measured by net income, paid or accrued during
2 the taxable year adjusted for state tax refunds used in arriving at taxable
4 (c) Add the net operating loss deduction used in arriving at taxable
6 (d) (1) A net operating loss for any taxable year commencing on and after
7 January 1, 1990, shall be a net operating loss carryback not to exceed a
8 total of one hundred thousand dollars ($100,000) to the three (3) immedi-
9 ately preceding taxable years. Any portion of the net operating loss not
10 subtracted in the three (3) preceding years may be subtracted in the next
11 fifteen (15) years succeeding the taxable year in which the loss arises in
12 order until exhausted. The sum of the deductions may not exceed the amount
13 of the net operating loss deduction incurred. At the election of the tax-
14 payer, the three (3) year carryback may be foregone and the loss sub-
15 tracted from income received in taxable years arising in the next fifteen
16 (15) years succeeding the taxable year in which the loss arises in order
17 until exhausted. The election shall be made as under section 172(b)(3) of
18 the Internal Revenue Code. An election under this subsection must be in
19 the manner prescribed in the rules of the state tax commission and once
20 made is irrevocable for the year in which it is made. The term "income" as
21 used in this subsection (d) means Idaho taxable income as defined in this
22 chapter as modified by section 63-3021(b)(2), (3) and (4), Idaho Code.
23 (2) Net operating losses incurred by a corporation during a year in which
24 such corporation did not transact business in Idaho may not be subtracted.
25 Net operating losses incurred by a person, other than a corporation, in
26 business activities not taxable by Idaho may not be subtracted.
27 (e) In the case of a corporation, add the amount deducted under the pro-
28 visions of sections 243(a) and (c), 244, 245 and 246A of the Internal Revenue
29 Code (relating to dividends received by corporations) as limited by section
30 246(b)(1) of said code.
31 (f) In the case of a corporation, subtract an amount determined under
32 section 78 of the Internal Revenue Code to be taxable as dividends.
33 (g) Subtract the amount of any income received or accrued during the tax-
34 able year which is exempt from taxation by this state, under the provisions of
35 any other law of this state or a law of the United States, if not previously
36 subtracted in arriving at taxable income.
37 (h) In the case of corporations and partnerships, add Idaho taxable
38 income of nonresident officers, directors, shareholders, partners or members
39 to the extent such income is attributed to the corporation or partnership in
40 section 63-3022L, Idaho Code.
41 (i) For the purpose of determining the Idaho taxable income of the bene-
42 ficiary of a trust or of an estate, distributable net income as defined for
43 federal tax purposes shall be corrected for the other adjustments required by
44 this section. In the event that a nonresident beneficiary of a trust or estate
45 fails to file an Idaho income tax return reporting all or any part of distrib-
46 utable net income taxable in Idaho or fails to pay any tax due thereon, the
47 trust or estate making the payment or distribution shall be taxable upon the
48 amount of such distribution or payment at the rates established by section
49 63-3024, Idaho Code.
50 (j) In the case of an individual who is on active duty as a full-time
51 officer, enlistee or draftee, with the armed forces of the United States,
52 which full-time duty is or will be continuous and uninterrupted for one hun-
53 dred twenty (120) consecutive days or more, deduct compensation paid by the
54 armed forces of the United States for services performed outside this state.
55 The deduction is allowed only to the extent such income is included in taxable
1 income, and provided that appropriate adjustments shall be made in determining
2 the deductions and exemptions allowed pursuant to section 63-3026A(4), Idaho
4 (k) In the case of a corporation, add any capital loss deducted which
5 loss was incurred during any year in which such corporation did not transact
6 business in Idaho. In the case of persons, other than corporations, add any
7 capital loss deducted which was incurred in business activities not taxable by
8 Idaho at the time such loss was incurred. In computing the income taxable to
9 an S corporation or partnership under this section, deduction shall not be
10 allowed for a carryover or carryback of a net operating loss provided for in
11 subsection (d) of this section or a capital loss provided for in section 1212
12 of the Internal Revenue Code.
13 (l) In the case of an individual, there shall be allowed as a deduction
14 from gross income either (1) or (2) at the option of the taxpayer:
15 (1) a. The standard deduction as defined in section 63,
16 Internal Revenue Code , plus contributions made to the state of
17 Idaho for credit to the medical assistance account, if such contribu-
18 tions were not previously subtracted in arriving at taxable income,
20 b. Itemized expenditures of not to exceed one thousand dollars
21 ($1,000) per cared for member incurred in providing personal care
22 services to or for an immediate member of the taxpayer's family; such
23 services may be provided either in the taxpayer's home or the family
24 member's home; personal care services shall be as defined in chapter
25 56, title 39, Idaho Code, but the cared for member need not be medic-
26 aid eligible for the purposes of this section only, if he substan-
27 tially meets all of the other requirements of chapter 56, title 39,
28 Idaho Code; in order for the deduction under this paragraph to be
29 allowed, the expenditures claimed must not have been reimbursed by
30 medicare, medicaid or private insurance, and such expenditures must
31 not have been previously subtracted in arriving at taxable income
33 (2) a. Itemized deductions as defined in section 63 of the
34 Internal Revenue Code except state income taxes as specified in sec-
35 tion 164 of the Internal Revenue Code , plus
36 b. Contributions made to the state of Idaho for credit to the medi-
37 cal assistance account, if such contributions were not previously
38 subtracted in arriving at taxable income, plus
39 c. Itemized expenditures of not to exceed one thousand dollars
40 ($1,000) per cared for member incurred in providing personal care
41 services to or for an immediate member of the taxpayer's family; such
42 services may be provided either in the taxpayer's home or the family
43 member's home; personal care services shall be as defined in chapter
44 56, title 39, Idaho Code, but the cared for member need not be medic-
45 aid eligible for the purposes of this section only, if he substan-
46 tially meets all of the other requirements of chapter 56, title 39,
47 Idaho Code; in order for the deduction under this paragraph c. to be
48 allowed, the expenditures claimed must not have been reimbursed by
49 medicare, medicaid or private insurance, and such expenditures must
50 not have been previously subtracted in arriving at taxable income
52 (m) Deduct any amounts added to gross income under section 87 of
53 the Internal Revenue Code for tax credits allowable to the taxpayer under sec-
54 tion 40 of the Internal Revenue Code.
55 (n) Add the taxable amount of any lump sum distribution deducted
1 from gross income pursuant to section 402(d)(3) of the Internal Revenue Code.
2 The taxable amount will include the ordinary income portion and the amount
3 eligible for the capital gain election.
4 ( o n ) Deduct any amounts included in gross
5 income under the provisions of section 86 of the Internal Revenue Code relat-
6 ing to certain social security and railroad benefits.
7 ( p o ) In the case of a self-employed individual,
8 deduct the actual cost of premiums paid to secure worker's compensation insur-
9 ance for coverage in Idaho, if such cost has not been deducted in arriving at
10 taxable income.
11 (q) Add the amount claimed as a credit under section 63-3029G,
12 Idaho Code, if previously deducted in arriving at taxable income.
13 SECTION 2. That Sections 63-3022F and 63-3089, Idaho Code, be, and the
14 same are hereby repealed.
15 SECTION 3. An emergency existing therefor, which emergency is hereby
16 declared to exist, this act shall be in full force and effect on and after its
17 passage and approval, and retroactively to January 1, 1998.
STATEMENT OF PURPOSE
This bill repeals the following little used sections of the Income Tax Act:
1. Deductions for contributions to medical assistance accounts and personal health care
. Deductions for expenses incurred for participation in residential weatherization and
conservation programs administered by the Idaho Public Utilities Commission.
. Provision requiring individual taxpayers to designate the school district in which they reside.
4. Deduction for IRC Section 87 adjustments.
Additional $5,000 to the General Fund.
Name: Dan John/Ted Spangler
Agency State Tax Commission
Statement of Purpose/Fiscal Impact