View Daily Data Tracking History
View Bill Text
View Statement of Purpose / Fiscal Impact
H0656...............................................by REVENUE AND TAXATION
INCOME TAX - Amends and adds to existing law to provide an income tax
deduction for certain expenses of a taxpayer who is a self-employed
individual treated as an employee; to provide an additional deduction of
three hundred dollars which shall be allowed in the case of a joint return
where the standard deduction is claimed; to provide an income tax credit
for tax year 2000 of five percent of the taxpayer's state income tax
liability; to decrease the corporate income tax rate and franchise tax rate
beginning in tax year 2001; to provide that for tax year 2001 and
thereafter, the State Tax Commission shall prescribe a factor to compute
taxable income so that inflation will not result in a tax increase, to
provide the formula and provide duties of the State Tax Commission.
02/22 House intro - 1st rdg - to printing
02/23 Rpt prt - to Rev/Tax
H0656
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fifth Legislature Second Regular Session - 2000
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 656
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO INCOME TAX POLICIES; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY
3 THE ADDITION OF A NEW SECTION 63-3022O, IDAHO CODE, TO PROVIDE AN INCOME
4 TAX DEDUCTION FOR A TAXPAYER WHO IS A SELF-EMPLOYED INDIVIDUAL TREATED AS
5 AN EMPLOYEE PURSUANT TO SECTION 401(c)(1) OF THE INTERNAL REVENUE CODE, AN
6 AMOUNT EQUAL TO THE AMOUNT PAID BY THE TAXPAYER DURING THE TAXABLE YEAR
7 FOR INSURANCE WHICH CONSTITUTES MEDICAL CARE FOR THE TAXPAYER AND THE
8 SPOUSE AND DEPENDENTS OF THE TAXPAYER WHICH IS NOT OTHERWISE DEDUCTIBLE BY
9 THE TAXPAYER FOR FEDERAL INCOME TAX PURPOSES BECAUSE THE APPLICABLE PER-
10 CENTAGE FOR THAT TAXABLE YEAR AS SPECIFIED PURSUANT TO SECTION 162(1) OF
11 THE INTERNAL REVENUE CODE IS LESS THAN ONE HUNDRED PERCENT; AMENDING SEC-
12 TION 63-3022N, IDAHO CODE, TO PROVIDE AN ADDITIONAL DEDUCTION OF THREE
13 HUNDRED DOLLARS WHICH SHALL BE ALLOWED IN THE CASE OF A JOINT RETURN WHERE
14 THE STANDARD DEDUCTION IS CLAIMED; AMENDING CHAPTER 30, TITLE 63, IDAHO
15 CODE, BY THE ADDITION OF A NEW SECTION 63-3022P, IDAHO CODE, TO PROVIDE AN
16 INCOME TAX CREDIT FOR TAX YEAR 2000 OF FIVE PERCENT OF THE TAXPAYER'S
17 STATE INCOME TAX LIABILITY; AMENDING SECTION 63-3025, IDAHO CODE, TO
18 DECREASE THE CORPORATE INCOME TAX RATE; AMENDING SECTION 63-3025A, IDAHO
19 CODE, TO DECREASE THE FRANCHISE TAX RATE AND TO MAKE TECHNICAL CORREC-
20 TIONS; AMENDING SECTION 63-3024, IDAHO CODE, TO REVISE BRACKETS AND PER-
21 CENTAGE OF STATE INCOME TAX; DECLARING AN EMERGENCY, PROVIDING RETROACTIVE
22 APPLICATION AND PROVIDING EFFECTIVE DATES.
23 Be It Enacted by the Legislature of the State of Idaho:
24 SECTION 1. That Chapter 30, Title 63, Idaho Code, be, and the same is
25 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
26 ignated as Section 63-3022O, Idaho Code, and to read as follows:
27 63-3022O. HEALTH INSURANCE COSTS. With respect to a taxpayer who is a
28 self-employed individual treated as an employee pursuant to section 401(c)(1)
29 of the Internal Revenue Code, an amount equal to the amount paid by the tax-
30 payer during the taxable year for insurance, which constitutes medical care
31 for the taxpayer and the spouse and dependents of the taxpayer which is not
32 otherwise deductible by the taxpayer for federal income tax purposes because
33 the applicable percentage for that taxable year as specified pursuant to sec-
34 tion 162(1) of the Internal Revenue Code is less than one hundred percent
35 (100%), shall be allowed as a deduction against taxable income.
36 SECTION 2. That Section 63-3022N, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 63-3022N. MARRIAGE PENALTY REDUCTION. For taxable years commencing on and
39 after January 1, 19992000, an additional deduction of one hundred fifty three
40 hundred dollars ($15300) shall be allowed in the case of a joint return where
41 the standard deduction as defined in section 63-3022, Idaho Code, is claimed.
2
1 SECTION 3. That Chapter 30, Title 63, Idaho Code, be, and the same is
2 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
3 ignated as Section 63-3022P, Idaho Code, and to read as follows:
4 63-3022P. INCOME TAX CREDIT FOR TAX YEAR 2000. For tax year 2000 only,
5 there shall be allowed a credit equal to five percent (5%) of the taxpayer's
6 income tax liability for tax year 2000 as computed by section 63-3024, Idaho
7 Code.
8 SECTION 4. That Section 63-3025, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 63-3025. TAX ON CORPORATE INCOME. For taxable years commencing on and
11 after January 1, 19872000, a tax is hereby imposed on the Idaho taxable income
12 of a corporation which transacts or is authorized to transact business in this
13 state or which has income attributable to this state. The tax shall be equal
14 to seven and eight-tenths percent (7.8%) of Idaho taxable income; provided,
15 however, that the tax shall not be less than twenty dollars ($20.00); provided
16 further that the twenty dollar ($20.00) minimum payment shall not be collected
17 from nonproductive mining corporations. The tax imposed by this section shall
18 not apply to corporations taxed pursuant to the provisions of section
19 63-3025A, Idaho Code.
20 SECTION 5. That Section 63-3025A, Idaho Code, be, and the same is hereby
21 amended to read as follows:
22 63-3025A. FRANCHISE TAX. For taxable years commencing on and after Janu-
23 ary 1, 19872000, a franchise tax shall be imposed upon any corporation for the
24 privilege of exercising its corporate franchise within the state during such
25 taxable year, including, but not limited to, corporations engaged in business
26 in Idaho for the exclusive purpose of performing contracts with the United
27 States department of energy at the Idaho national engineering and environmen-
28 tal laboratory, which tax shall be measured by income which is attributable to
29 this state under the provisions of this chapter and which tax shall be equal
30 to seven and eight-tenths percent (7.8%) of Idaho taxable income; provided,
31 however, that the tax shall not be less than twenty dollars ($20.00); provided
32 further that the twenty dollar ($20.00) minimum payment shall not be collected
33 from nonproductive mining corporations; but the twenty dollar ($20.00) minimum
34 tax shall apply to corporations qualified to file returns and actually filing
35 returns under the provisions of subchapter "S" of the Internal Revenue Code.
36 SECTION 6. That Section 63-3024, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 63-3024. INDIVIDUALS' TAX AND TAX ON ESTATES AND TRUSTS. For each taxable
39 year on and after January 1, 2001, a tax measured by Idaho taxable income as
40 defined in this chapter is hereby imposed upon every individual, trust, or
41 estate required by this chapter to file a return.
42 (a) The tax imposed upon individuals, trusts and estates shall be com-
43 puted at the following rates:
44 When Idaho taxable income is: The rate is:
45 Less than $1,000 Two percent (2.0%)
46 $1,000 but less than $2,000 $20, plus four percent (4.0%)
47 of the amount over $1,000
48 $2,000 but less than $3,000 $60, plus four and one-half percent
3
1 (4.5%) of the amount over $2,000
2 $3,000 but less than $4,000 $105, plus five and one-half percent
3 (5.5%) of the amount over $3,000
4 $4,000 but less than $5,000 $160, plus six and one-half percent
5 (6.5%) of the amount over $4,000
6 $5,000 but less than $7,500 $225, plus seven and one-half percent
7 (7.5%) of the amount over $5,000
8 $7,500 but less than $20,000 $412.50, plus seven and eight-tenths percent
9 (7.8%) of the amount over $7,500
10 Over $20,000 $1,387.50, plus eight and two-tenths percent
11 (8.2%) of the amount over $20,000
12 (1) On the first $1,000 of such taxable income or any part thereof, at
13 the rate of two percent (2.0%);
14 (2) On the second $1,000 of such taxable income or any part thereof, at
15 the rate of four percent (4.0%);
16 (3) On the third $1,000 of such taxable income or any part thereof, at
17 the rate of four and one-half percent (4.5%);
18 (4) On the fourth $1,000 of such taxable income or any part thereof, at
19 the rate of five and one-half percent (5.5%);
20 (5) On the fifth $1,000 of such taxable income or any part thereof, at
21 the rate of six and one-half percent (6.5%);
22 (6) On any taxable income in excess of $5,000 at the rate of seven and
23 one-half percent (7.5%).
24 (b) In case a joint return is filed by husband and wife pursuant to the
25 provisions of section 63-3031, Idaho Code, the tax imposed by this section
26 shall be twice the tax which would be imposed on one-half (1/2) of the aggre-
27 gate Idaho taxable income. For the purposes of this section, a return of a
28 surviving spouse, as defined in section 2(a) of the Internal Revenue Code, and
29 a head of household, as defined in section 2(b) of the Internal Revenue Code,
30 shall be treated as a joint return and the tax imposed shall be twice the tax
31 which would be imposed on one-half (1/2) of the Idaho taxable income.
32 (c) The state tax commission shall compute and publish Idaho income tax
33 liability for taxpayers at the midpoint of each bracket of Idaho taxable
34 income in fifty dollar ($50.00) steps to fifty thousand dollars ($50,000),
35 rounding such calculations to the nearest dollar. Taxpayers having income
36 within such brackets shall file returns based upon and pay taxes according to
37 the schedule thus established. The state tax commission shall promulgate rules
38 defining the conditions upon which such returns shall be filed.
39 SECTION 7. An emergency existing therefor, which emergency is hereby
40 declared to exist, Sections 1, 2, 3, 4 and 5 of this act shall be in full
41 force and effect on and after its passage and approval, and retroactively to
42 January 1, 2000; and Section 6 shall be in full force and effect on and after
43 January 1, 2001.
STATEMENT OF PURPOSE
RS10138
The purpose of this legislation is to provide that a self-employed person
may deduct medical insurance premiums from their state income tax which may
not otherwise be deductible for federal income tax purposes. Further, this
legislation adds an additional deduction of $300 for joint returns where the
standard deduction is claimed and gives a one-time tax credit of 5% for their state
income tax liability for the tax year 2000.
This legislation decreases the corporate income tax rate and revises
brackets and percentages of state income tax rates back to 1987 state income tax
rates beginning in the year 2001.
FISCAL NOTE
The fiscal impact is projected as follows:
Health Insurance Deduction for Self-Employed 1,600,000
Additional Joint Filer Deduction Raised to $300 1,225,000
A One-time 5% Individual Income Tax Credit 44,510,000
Decreases Corporate Income Tax Rates to 7.8% 2,900,000
Total: $50,235,000
CONTACT: Rep. Dolores Crow
Rep. Mike Moyle
Phone: 208) 334-1000
STATEMENT OF PURPOSE/ FISCAL IMPACT H 656