1998 Legislation
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SENATE BILL NO. 1426 – Income tax/capital gain/proprty hld

SENATE BILL NO. 1426

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Daily Data Tracking History



S1426......................................by LOCAL GOVERNMENT AND TAXATION
INCOME TAX - CAPITAL GAINS - Amends existing law to revise the holding
period to eighteen months for real property to qualify.

02/10    Senate intro - 1st rdg - to printing
02/11    Rpt prt - to Loc Gov
02/24    Rpt out - rec d/p - to 2nd rdg
02/25    2nd rdg - to 3rd rdg
03/03    3rd rdg - PASSED - 30-3-2
      AYES--Andreason, Boatright, Branch, Burtenshaw, Cameron, Crow,
      Danielson, Darrington, Deide, Dunklin, Frasure, Geddes, Hansen,
      Hawkins, Ingram, Ipsen, Keough, King, Lee, Parry, Richardson, Riggs,
      Risch, Sandy, Schroeder, Stennett, Sweeney, Thorne, Wheeler,
      Whitworth
      NAYS--McLaughlin, Noh, Twiggs
      Absent and excused--Bunderson, Sorensen
    Floor Sponsor - Stennett
    Title apvd - to House
03/04    House intro - 1st rdg - to Loc Gov
03/09    Rpt out - to Rev/Tax
03/17    Rpt out - rec d/p - to 2nd rdg
03/18    2nd rdg - to 3rd rdg
03/18    Rls susp - PASSED - 57-3-10
      AYES -- Alltus, Barraclough, Bieter, Bivens, Black(15), Black(23),
      Boe, Bruneel, Callister, Campbell, Chase, Clark, Cuddy, Deal, Denney,
      Ellsworth, Field(13), Field(20), Gagner, Geddes, Gould, Hadley,
      Henbest, Hornbeck, Jaquet, Jones(9), Jones(22), Jones(20), Judd,
      Kellogg, Kempton, Kendell, Kjellander, Kunz, Lake, Linford,
      Loertscher, Mader, Marley, McKague, Meyer, Mortensen, Pischner,
      Pomeroy, Reynolds, Richman, Ridinger, Robison, Schaefer, Stone,
      Stubbs, Taylor, Tilman, Watson, Wheeler, Zimmermann, Mr Speaker
      NAYS -- Bell, Sali, Stoicheff
      Absent and excused -- Barrett, Crane, Crow, Hansen, Miller, Newcomb,
      Stevenson, Tippets, Trail, Wood
    Floor Sponsor - Kellogg
    Title apvd - to Senate
03/19    To enrol
03/20    Rpt enrol - Pres signed
03/23    Sp signed - to Governor
03/27    Governor signed
         Session Law Chapter 414
         Effective: 01/01/98

Bill Text


S1426


                                                                        
 ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
Fifty-fourth Legislature                 Second Regular Session - 1998
                                                                        

                                      IN THE SENATE

                                   SENATE BILL NO. 1426

                        BY LOCAL GOVERNMENT AND TAXATION COMMITTEE

 1                                        AN ACT
 2    RELATING TO INCOME TAX TREATMENT OF CAPITAL GAINS; AMENDING SECTION  63-3022H,
 3        IDAHO  CODE, TO CHANGE THE HOLDING PERIOD REQUIREMENTS AND TO MAKE TECHNI-
 4        CAL CORRECTIONS; DECLARING AN EMERGENCY AND PROVIDING RETROACTIVE APPLICA-
 5        TION.

 6    Be It Enacted by the Legislature of the State of Idaho:

 7        SECTION 1.  That Section 63-3022H, Idaho Code, be, and the same is  hereby
 8    amended to read as follows:

 9        63-3022H.  DEDUCTION  OF  CAPITAL  GAINS.  (1)  If  an individual taxpayer
10    reports a net capital gain in determining taxable income, sixty percent  (60%)
11    of  the net capital gain from the sale or exchange of qualified property shall
12    be a deduction in determining taxable income.
13        (2)  The deduction provided in this section is limited to  the  amount  of
14    the net capital gain from all property included in federal taxable income. Net
15    capital  gains  treated as ordinary income by the internal revenue code do not
16    qualify for the deduction allowed in this  section.  The  deduction  otherwise
17    allowable  under  this  section  shall be reduced by the amount of any federal
18    capital gains deduction relating to such property, but not below zero.
19        (3)  As used in this section  "qualified  property"  means  the  following
20    property having an Idaho situs at the time of sale:
21        (a)  Real  property  held at least  five (5) years   eigh-
22        teen (18) months ;
23        (b)  Tangible personal property used in Idaho for  at  least  twelve  (12)
24        months by a revenue-producing enterprise;
25        (c)  Cattle or horses held for breeding, draft, dairy or sporting purposes
26        for  at  least  twenty-four (24) months if more than one-half (1/2) of the
27        taxpayer's gross income (as defined in section 61(a) of the internal reve-
28        nue code) for the taxable year is from farming or ranching  operations  in
29        Idaho .  ; 
30        (d)  Breeding  livestock  other than cattle or horses held at least twelve
31        (12) months if more than one-half (1/2) of the taxpayer's gross income (as
32        defined in section 61(a) of the internal revenue  code)  for  the  taxable
33        year  is from farming or ranching operations in Idaho .  ;
34        
35        (e)  Timber grown in Idaho and held at least twenty-four (24)  months
36        .  ; 
37        (f)  In  determining the period for which property subject to this section
38        has been held by a taxpayer, the provisions of section 1223 of the  inter-
39        nal revenue code shall apply, except that when the holding period includes
40        any period during which the taxpayer held property other than the property
41        sold,  all property held during the holding period must qualify under this
42        section.
43        (4)  If an individual reports a capital gain from qualified property  from


                                          2

 1    an  S  corporation  or  a partnership, a deduction shall be allowed under this
 2    section only to the extent the individual held his interest in the  income  of
 3    the  S  corporation or the partnership for the time required by subsection (3)
 4    of this section for the property sold.
 5        (5)  If an individual reports a capital gain from an estate, no  deduction
 6    shall be allowed under this section unless the holding period required in sub-
 7    section  (3) of this section was satisfied by the decedent, the estate, or the
 8    beneficiary, or a combination thereof.
 9        (6)  If an individual reports a capital gain from a  trust,  no  deduction
10    shall be allowed under this section unless the holding period required in sub-
11    section  (3)  of  this section was satisfied by the grantor, the trust, or the
12    beneficiary, or a combination thereof.
13        (7)  As used in this section "revenue-producing enterprise" means:
14        (a)  The production, assembly, fabrication, manufacture, or processing  of
15        any agricultural, mineral or manufactured product;
16        (b)  The  storage,  warehousing, distribution, or sale at wholesale of any
17        products of agriculture, mining or manufacturing;
18        (c)  The feeding of livestock at a feedlot;
19        (d)  The operation of laboratories or  other  facilities  for  scientific,
20        agricultural,  animal  husbandry,  or industrial research, development, or
21        testing.

22        SECTION 2.  An emergency existing  therefor,  which  emergency  is  hereby
23    declared to exist, this act shall be in full force and effect on and after its
24    passage and approval, and retroactively to January 1, 1998.

Statement of Purpose / Fiscal Impact


    





                           STATEMENT OF PURPOSE
    
                                RS07676Cl
    
    The purpose of this legislation is to bring Idaho's capital gains 
    tax law into conformance with federal law by lowering the holding 
    period for real estate from 5 years to 18 months.
    
                               FISCAL NOTE
    
    The fiscal impact could potentially amount to $940,000. However, 
    the actual impact is unknown since there is no way of knowing how 
    much real estate will be impacted by this change.
    
    CONTACT: Sen. Clint Stennett
             332-1358
    
    STATEMENT OF PURPOSE/ FISCAL NOTE
    
    Bill No. S 1426
    
    Reprinted by request of Senate Local Government & Taxation
    Committee.
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