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H0086...............................................by REVENUE AND TAXATION
INCOME TAX - Amends existing income tax law to allow individual officers,
directors, shareholders, partners or members of a corporation or
partnership transacting business in Idaho to pay Idaho income taxes through
the business entity with which they are associated; to require corporations
and partnerships paying income tax for such individuals to pay the
additional $10.00 tax for each such individual; and to amend the
definitions of "corporation" and "partnership."
01/21 House intro - 1st rdg - to printing
01/22 Rpt prt - to Rev/Tax
02/03 Rpt out - rec d/p - to 2nd rdg
02/04 2nd rdg - to 3rd rdg
02/08 3rd rdg - PASSED - 66-1-3
AYES -- Alltus, Barraclough, Barrett, Bieter, Black, Boe, Bruneel,
Callister, Campbell, Chase, Clark, Crow, Cuddy, Deal, Denney,
Field(13), Field(20), Gagner, Geddes, Gould, Hadley, Hammond,
Hansen(23), Hansen(29), Henbest, Hornbeck, Jaquet, Jones, Judd,
Kellogg, Kempton, Kendell, Kjellander, Kunz, Lake, Limbaugh, Linford,
Loertscher, Mader, Marley, McKague, Meyer, Montgomery, Mortensen,
Moyle, Pischner, Pomeroy, Reynolds, Ridinger, Ringo, Robison, Sali,
Schaefer, Sellman, Smith, Stevenson, Stoicheff, Stone, Tilman,
Tippets, Trail, Watson, Wheeler, Wood, Zimmermann, Mr Speaker
NAYS -- Williams
Absent and excused -- Bell, Ellsworth, Taylor
Floor Sponsor - Bruneel
Title apvd - to Senate
02/09 Senate intro - 1st rdg - to Loc Gov
02/22 Rpt out - rec d/p - to 2nd rdg
02/23 2nd rdg - to 3rd rdg
03/04 3rd rdg - PASSED - 27-0-8
AYES--Andreason, Boatright, Branch, Bunderson, Cameron, Crow,
Danielson, Darrington, Davis, Dunklin, Frasure, Geddes, Hawkins,
Ingram, Keough, Lee, Richardson, Riggs, Risch, Sandy, Schroeder,
Sorensen, Stegner, Stennett, Twiggs, Wheeler, Whitworth
NAYS--None
Absent and excused--Burtenshaw, Deide, Ipsen, King, McLaughlin, Noh,
Parry, Thorne
Floor Sponsor - Frasure
Title apvd - to House
03/05 To enrol
03/08 Rpt enrol - Sp signed - Pres signed
03/09 To Governor
03/15 Governor signed
Session Law Chapter 60
Effective: 01/01/99
H0086|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature First Regular Session - 1999IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 86 BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO INCOME TAXES; AMENDING SECTION 63-3006, IDAHO CODE, TO PROVIDE AN 3 ADDITIONAL REFERENCE TO THE INTERNAL REVENUE CODE; AMENDING SECTION 4 63-3006B, IDAHO CODE, TO EXTEND THE DEFINITION OF "PARTNERSHIP" TO PROVIDE 5 THAT IT SHALL NOT INCLUDE PUBLICLY TRADED PARTNERSHIPS WHICH ARE TAXED AS 6 A CORPORATION UNDER IDAHO LAW; AMENDING SECTION 63-3022L, IDAHO CODE, TO 7 PROVIDE THAT RESIDENT INDIVIDUALS WHO ARE OFFICERS, DIRECTORS, SHARE- 8 HOLDERS, PARTNERS OR MEMBERS OF A CORPORATION OR PARTNERSHIP TRANSACTING 9 BUSINESS IN IDAHO MAY ELECT TO PAY IDAHO INCOME TAXES THROUGH THE BUSINESS 10 ENTITY WITH WHICH THEY ARE ASSOCIATED AND TO MAKE A TECHNICAL CORRECTION; 11 AND AMENDING SECTION 63-3082, IDAHO CODE, TO REQUIRE CORPORATIONS AND 12 PARTNERSHIPS PAYING INCOME TAX FOR RESIDENT OFFICERS, DIRECTORS, SHARE- 13 HOLDERS, PARTNERS OR MEMBERS THEREOF TO PAY THE ADDITIONAL TAX DUE UNDER 14 THE PROVISIONS OF THIS SECTION FOR EACH SUCH PERSON; DECLARING AN EMER- 15 GENCY AND PROVIDING A RETROACTIVE EFFECTIVE DATE. 16 Be It Enacted by the Legislature of the State of Idaho: 17 SECTION 1. That Section 63-3006, Idaho Code, be, and the same is hereby 18 amended to read as follows: 19 63-3006. CORPORATION. The term "corporation" includes any corporation 20 formed under the laws of any government, any common law trust and any associa- 21 tion of whatever kind other than a partnership. "Corporation" also includes 22 any entity classified or taxed as a corporation pursuant to section 7701 23 or 7704 of the Internal Revenue Code and the regulations of the U.S. 24 department of the treasury issued thereunder. 25 SECTION 2. That Section 63-3006B, Idaho Code, be, and the same is hereby 26 amended to read as follows: 27 63-3006B. PARTNERSHIP. "Partnership" shall be as defined in section 7701 28 of the Internal Revenue Code and shall include any entity classified as a 29 partnership pursuant to regulations of the U.S. department of the treasury 30 issued under section 7701 of the Internal Revenue Code , but shall not 31 include a publicly traded partnership taxed as a corporation under section 32 63-3006, Idaho Code . 33 SECTION 3. That Section 63-3022L, Idaho Code, be, and the same is hereby 34 amended to read as follows: 35 63-3022L.NONRESIDENTINDIVIDUAL OFFICERS, 36 DIRECTORS, SHAREHOLDERS, PARTNERS OR MEMBERS OF A CORPORATION OR PARTNERSHIP. 37 (1)NonresidentIndividual officers, directors, 38 shareholders, partners or members of a corporation or partnership transacting 39 business in Idaho may elect to have Idaho taxable income described in subsec- 2 1 tion (2) of this section reported and taxed as Idaho taxable income of the 2 corporation or partnership. Income subject to the election in this subsection 3 shall be taxed at the rate applicable to corporations. The election shall be 4 made on the return of the corporation or partnership from which the income is 5 received and on which the income is reported in Idaho taxable income. The 6 election in this section is not available to a nnonresi-7dentindividual who has Idaho taxable income in addition 8 to income described in subsection (2) of this section. 9 (2) The election in subsection (1) of this section applies to: 10 (a) Wages, salary and other compensation paid by the corporation or 11 partnership to suchnonresidentofficers, directors, 12 shareholders, partners or members to the extent the compensation is Idaho 13 taxable income of thenonresidentindividual to 14 whom it is paid under section 63-3026A, Idaho Code; and 15 (b) The share of any income, loss, deduction or credit of an S corpora- 16 tion or partnership required to be included on suchnonresident17shareholder's, partner's or member's federal return except that 18 such amount shall first be apportioned and allocated in the manner pro- 19 vided in section 63-3027, Idaho Code. 20 (c) When thetotalgross income attributable to 21 a nnonresidentindividual under 22 paragraphs (a) and (b) of this subsection (2) is less than 23 the filing requirement of thenonresidentindividual 24 under section 63-3030(2), Idaho Code, the income is 25 not income under this subsection. 26 (3) If no election is made and a nnonresident27 officer, director, shareholder, partner or member of a corporation or partner- 28 ship transacting business in Idaho fails to file an Idahoindividual29income tax return reporting all or any part of the items described in 30 subsection (2) of this section or fails to pay any tax duethereof31thereon , such corporation or partnership shall include 32 such items in its Idaho taxable income and be taxed at the rate applicable to 33 corporations. 34 (4) The provisions of this section shall not apply to a corporation, 35 other than an S corporation, with less than fiftyper cent36 percent (50%) of its income taxable within this state. 37 SECTION 4. That Section 63-3082, Idaho Code, be, and the same is hereby 38 amended to read as follows: 39 63-3082. ADDITIONAL TAX REQUIRED WHEN FILING INCOME TAX RETURN. (1) Every 40 person required to file an income tax return shall pay a tax of ten dollars 41 ($10.00). For this purpose, a husband and wife filing a joint return shall be 42 deemed a single person. This tax shall be in the nature of an excise tax upon 43 the receipt of the income which requires the filing of such return. 44 (2) When, pursuant to section 63-3022L, Idaho Code, the income of a 45 nnonresidentindividual officer, director, 46 shareholder, partner or member of a corporation or partnership is taxed as 47 Idaho taxable income of the corporation or partnership, the corporation or 48 partnership shall also pay the tax imposed in subsection (1) of this section 49 for eachnonresidentindividual. 50 (3) For purposes of this section, a husband and wife filing 51 a joint federal return may be deemed a single individual. 52 SECTION 5. An emergency existing therefor, which emergency is hereby 3 1 declared to exist, this act shall be in full force and effect on and after its 2 passage and approval, and retroactively to January 1, 1999.
STATEMENT OF PURPOSE
RS08399
This bill refines the Idaho Income Tax Act's rules for the
taxation of S-corporations, partnerships, and limited liability
companies. It amends:
Sections 63-3006 and 63-3006B, Idaho Code, to provide that
publicly traded partnerships taxed as corporations under the
Internal Revenue Code will be taxed as corporations for
purposes of the Idaho Income Tax Act.
Section 63-3022L to permit resident individuals who are
officers, directors, shareholders, partners or members of a
corporation, limited liability company or partnership doing
business in Idaho to make the same election presently allowed
to only nonresident officers, directors, shareholders,
partners or members to pay income taxes of the individual on
the return of the corporation, limited liability company or
partnership.
Section 63-3082, Idaho Code, to require corporations, limited
liability companies partnerships paying income tax for
resident officers, directors, shareholders, partners or
members thereof to also pay the ten dollar permanent building
fund tax for each such individual.
The bill would be effective on and after January 1, 1999.
FISCAL IMPACT
No fiscal effect.
CONTACT
Name: Dan John/Ted Spangler
Age-ncy: State Tax Commission
Phone: 334-7530
Statement of Purpose/Fiscal Impact H 86