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H0121...............................................by REVENUE AND TAXATION
INCOME TAX - Amends existing law to allow employees to claim fewer
personal exemptions for state income tax withholding than are claimed for
federal income tax withholding; and to coordinate the filing and payment of
withholding taxes for certain agricultural employers with the payment of
contributions under the Employment Security Law.
01/27 House intro - 1st rdg - to printing
01/29 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 - 67-0-3
AYES -- Alltus, Barraclough, Barrett, Bell, 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 -- None
Absent and excused -- Ellsworth, Taylor, Williams
Floor Sponsor - Gould
Title apvd - to Senate
02/09 Senate intro - 1st rdg - to Loc Gov
02/19 Rpt out - rec d/p - to 2nd rdg
02/22 2nd rdg - to 3rd rdg
02/25 3rd rdg - PASSED - 29-0-6
AYES--Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
Crow, Davis, Deide, Dunklin, Frasure, Geddes, Hawkins, Ingram, Ipsen,
Keough, King, Lee, Noh, Richardson, Riggs, Risch, Sandy, Schroeder,
Sorensen, Stegner, Thorne, Wheeler, Whitworth
NAYS--None
Absent and excused--Danielson, Darrington, McLaughlin, Parry,
Stennett, Twiggs
Floor Sponsor - Schroeder
Title apvd - to House
02/26 To enrol
03/01 Rpt enrol - Sp signed
03/02 Pres signed - to Governor
03/08 Governor signed
Session Law Chapter 41
Effective: 01/01/99
H0121|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature First Regular Session - 1999IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 121 BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO WITHHOLDING STATE INCOME TAXES; AMENDING SECTION 63-3035, IDAHO 3 CODE, TO ALLOW EMPLOYEES TO CLAIM FEWER PERSONAL EXEMPTIONS FOR STATE 4 INCOME TAX WITHHOLDING THAN ARE CLAIMED FOR FEDERAL INCOME TAX WITHHOLD- 5 ING; AMENDING SECTION 63-3036, IDAHO CODE, TO COORDINATE THE FILING AND 6 PAYMENT OF WITHHOLDING TAXES FOR CERTAIN AGRICULTURAL EMPLOYERS WITH THE 7 PAYMENT OF CONTRIBUTIONS UNDER THE EMPLOYMENT SECURITY LAW; DECLARING AN 8 EMERGENCY AND PROVIDING A RETROACTIVE EFFECTIVE DATE. 9 Be It Enacted by the Legislature of the State of Idaho: 10 SECTION 1. That Section 63-3035, Idaho Code, be, and the same is hereby 11 amended to read as follows: 12 63-3035. STATE WITHHOLDING TAX ON PERCENTAGE BASIS -- WITHHOLDING, COL- 13 LECTION AND PAYMENT OF TAX. (a) Every employer who is required under the pro- 14 visions of the Internal Revenue Code to withhold, collect and pay income tax 15 on wages or salaries paid by such employer to any employee (other than employ- 16 ees specified in Internal Revenue Code section 3401(a)(2)) shall, at the time 17 of such payment of wages, salary, bonus or other emolument to such employee, 18 deduct and retain therefrom an amount substantially equivalent to the tax rea- 19 sonably calculated by the state tax commission to be due from the employee 20 under this chapter. The state tax commission shall prepare tables showing 21 amounts to be withheld, and shall supply same to each employer subject to this 22 section. In the event that an employer can demonstrate administrative inconve- 23 nience in complying with the exact requirements set forth in these tables, he 24 may, with the consent of the state tax commission and upon application to it, 25 use a different method which will produce substantially the same amount of 26 taxes withheld. Every employer making payments of wages or salaries earned in 27 Idaho, regardless of the place where such payment is made: 28 (1) shall be liable to the state of Idaho for the payment of the tax 29 required to be deducted and withheld under this section and shall not be 30 liable to any individual for the amount deducted from his wages and paid 31 over in compliance or intended compliance with this section; 32 (2) must pay to the state tax commission monthly on or before the 20th 33 day of the succeeding month, or at such other times as the state tax com- 34 mission may allow, an amount of tax which, under the provisions of this 35 chapter, he is required to deduct and withhold; 36 (3) shall register with the state tax commission, in the manner pre- 37 scribed by it, to establish an employer's withholding account number. The 38 account number will be used to report all amounts withheld, for the annual 39 reconciliation required in this section, and for such other purposes 40 relating to withholding as the state tax commission may require; and 41 (4) must, notwithstanding the provisions of paragraphs (1) and (2) of 42 this subsection, if the amount of withholding of such employer for the 43 preceding twelve (12) month period equals or exceeds sixty thousand dol- 2 1 lars ($60,000) per annum or an average of five thousand dollars ($5,000) 2 per month per annum, pay to the state tax commission on the basis of with- 3 holding periods which begin on the 16th day of the month and end on the 4 15th day of the following month, and payment shall be made not later than 5 five (5) days after the end of the withholding period. 6 (5) If the payments made pursuant to subsections (a)(2) and (a)(4) of 7 this section are equal to the withholding under this section shown or 8 required to be shown on the return required by subsection (b)(1) of this 9 section, no penalty shall apply to the underpayment for the period between 10 the due date of the payment and the due date of the return. Interest, at 11 the rate provided by section 63-3045, Idaho Code, shall apply to any such 12 underpayment. 13 (6) Commencing in 1994, the state tax commission shall determine whether 14 the threshold amounts established by subsection (a)(4) of this section 15 must be adjusted to reflect fluctuations in the cost of living. The com- 16 mission shall base its determination on the cumulative effect of the 17 annual cost-of-living percentage modifications determined by the United 18 States secretary of health and human services pursuant to 42 USC 415(i). 19 When the cumulative percentage applied to the monthly threshold amount 20 equals or exceeds one thousand dollars ($1,000), the commission shall pro- 21 mulgate a rule adjusting the monthly threshold amount by one thousand dol- 22 lars ($1,000) and making the necessary proportional adjustment to the 23 annual threshold amount. The rule shall be effective for the next succeed- 24 ing calendar year and each year thereafter until again adjusted by the 25 commission. The tax commission shall determine subsequent adjustments in 26 the same manner, in each case using the year of the last adjustment as the 27 base year. 28 (b) (1) Every employer shall, file a return upon such form as shall be 29 prescribed by the state tax commission, but not more frequently than quar- 30 terly, or as required pursuant to any agreement between the state tax com- 31 mission and the department of labor under section 63-3035B, Idaho Code. 32 The return shall show, for the period to which it relates, the total 33 amount of wages, salary, bonus or other emoluments paid to his employees, 34 the amount deducted therefrom in accordance with the provisions of the 35 Internal Revenue Code, the amount deducted therefrom in accordance with 36 the provisions of this section, the amount of any previous payments made 37 pursuant to this section, and such pertinent and necessary information as 38 the state tax commission may require. 39 (2) Every employer making a declaration of withholding as provided herein 40 shall furnish to the employees annually, but not later than thirty (30) 41 days after the end of the calendar year, a record of the amount of tax 42 withheld from such employee on forms to be prescribed, prepared and fur- 43 nished by the state tax commission and on or before the last day of Febru- 44 ary every employer shall file a copy thereof with the state tax commis- 45 sion. Every employer who is required, under Internal Revenue Code section 46 6011, to file returns on magnetic media or in other machine readable form 47 may be required by rules of the state tax commission to file corresponding 48 state returns on similar magnetic media or other machine readable form. 49 (c) All moneys deducted and withheld by every employer shall immediately 50 upon such deduction be state money and every employer who deducts and retains 51 any amount of money under the provisions of this chapter shall hold the same 52 in trust for the state of Idaho and for the payment thereof to the state tax 53 commission in the manner and at the times in this chapter provided. Any 54 employer who does not possess real property situated within the state of 55 Idaho, which, in the opinion of the state tax commission, is of sufficient 3 1 value to cover his probable tax liability, may be required to post a surety 2 bond in such sum as the state tax commission shall deem adequate to protect 3 the state. 4 (d) The provisions of this chapter relating to additions to tax in case 5 of delinquency, and penalties, shall apply to employers subject to the provi- 6 sions of this section and for these purposes any amount deducted, or required 7 to be deducted and remitted to the state tax commission under this section, 8 shall be considered to be the tax of the employer and with respect to such 9 amount he shall be considered the taxpayer. 10 (e) Amounts deducted from wages of an employee during any calendar year 11 in accordance with the provisions of this section shall be considered to be in 12 part payment of the tax imposed on such employee for his tax year which begins 13 within such calendar year and the return made by the employer under this sub- 14 section (e) shall be accepted by the state tax commission as evidence in favor 15 of the employee of the amount so deducted from his wages. Where the total 16 amount so deducted exceeds the amount of tax on the employee, based on his 17 Idaho taxable income, or where his income is not taxable under this chapter, 18 the state tax commission shall, after examining the annual return filed by the 19 employee in accordance with this chapter, but not later than sixty (60) days 20 after the filing of each return, refund the amount of the excess deducted. No 21 credit or refund shall be made to an employee who fails to file his return, as 22 required under this chapter, within three (3) years from the due date of the 23 return, without regard to extensions, in respect of which the tax withheld 24 might have been credited. In the event that the excess tax deducted is less 25 than one dollar ($1.00), no refund shall be made unless specifically requested 26 by the taxpayer at the time such return is filed. 27 (f) This section shall in no way relieve any taxpayer from his obligation 28 of filing a return at the time required under this chapter, and, should the 29 amount withheld under the provisions of this section be insufficient to pay 30 the total tax of such taxpayer, such unpaid tax shall be paid at the time pre- 31 scribed by section 63-3034, Idaho Code. 32 (g) An employee receiving wages shall on any day be entitled to not 33 more than, but may claim fewer than, thesamenumber of 34 withholding exemptions to which he is entitled under the Internal Revenue Code 35 for federal income tax withholding purposes. 36 (h) An employer shall use the exemption certificate filed by the employee 37 with the employer under the withholding exemption provisions of the Internal 38 Revenue Code in determining the amount of tax to be withheld from the 39 employee's wages or salary under this chapter. The tax commission may redeter- 40 mine the number of withholding exemptions to which an employee is entitled 41 under subsection (g) of this section, and the state tax commission may require 42 such exemption certificate to be filed on a form prescribed by the commission 43 in any circumstance where the commission finds that the exemption certificate 44 filed for Internal Revenue Code purposes does not properly reflect the number 45 of withholding exemptions to which the employee is entitled under this chap- 46 ter. In no event shall any employee give an exemption certificate which claims 47 a higher number of withholding exemptions than the number to which the 48 employee is entitled by subsection (g) of this section. 49 SECTION 2. That Section 63-3036, Idaho Code, be, and the same is hereby 50 amended to read as follows: 51 63-3036. STATE WITHHOLDING TAX FOR FARMERS. (1) Every farmer who is an 52 employer shall at the time of the payment of wages, salaries, bonuses or other 53 emoluments to an employee, deduct and retain therefrom an amount determined in 4 1 accordance with section 63-3035, Idaho Code, and the amount so withheld and 2 deducted shall be held by said farmer-employer in trust for the state of Idaho 3 and for the payment thereof to the state tax commission. Provided, that no 4 tax need be withheld from an employee whose wages, salaries, bonuses and other 5 emoluments total less than one thousand dollars ($1,000) for the tax year. 6 (2) The tax so withheld by a farmer-employer subject to this section 7 shall be paid to the state tax commission: 8 (a) Except as provided in paragraph (b) of this subsection, on or before 9 the last day of February of the year following the year in which such 10 deduction was made. 11 (b)On the last day of the month following the close of a calendar12quarter if, in that quarter, a farmer-employer subject to this section13pays gross wages, salaries, bonuses and other emoluments exceeding twenty14thousand dollars ($20,000)In the case of an employer who is 15 a "covered employer" paying wages for "agricultural labor," as those terms 16 are defined in the employment security law in chapter 13, title 72, Idaho 17 Code, on or before the date on which contributions are due from the 18 employer to the department of labor under the employment security law 19 . 20 (3) The farmer-employer shall deliver to the state tax commission a 21 return upon such form as shall be prescribed by said state tax commission 22 showing the amounts of wages, salaries, bonuses or other emoluments paid to 23 his employee, the amount deducted therefrom in accordance with this section, 24 and such other pertinent and necessary information as the state tax commission 25 may require on or before the date payments required by this section are due. 26 (4) The farmer-employer making such a deduction as provided for in this 27 section shall furnish to the employee annually, but not later than thirty (30) 28 days after the end of the calendar year, a record of the amount of the tax 29 withheld from such employee on forms to be prescribed, prepared and furnished 30 by the state tax commission and at the same time every employer shall file a 31 copy thereof with the state tax commission. The provisions of subsections (d), 32 (e), (f), (g) and (h) of section 63-3035, Idaho Code, shall be applicable to 33 the tax withheld by the farmer-employer under this section. 34 SECTION 3. An emergency existing therefor, which emergency is hereby 35 declared to exist, this act shall be in full force and effect on and after its 36 passage and approval, and retroactively to January 1, 1999.
STATEMENT OF PURPOSE
RS08400
This bill amends code sections relating to withholding state
income taxes.
Section 1 allows employees to claim fewer personal exemptions
for state income tax withholding than are claimed for federal
income tax withholding.
Section 2 coordinates the filing and payment of withholding
taxes for certain agricultural employers with the payment of
contributions under the employment security law.
Section 3 provides a retroactive effective date to January 1,
1999.
FISCAL IMPACT
No fiscal effect.
CONTACT Name: Dan John/Ted Spangler
Agency: State Tax Commission
Phone: 334-7530
Statement of Purpose/Fiscal Impact H 121