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H0666...............................................by REVENUE AND TAXATION
INCOME TAX - Amends existing law to decrease the personal income tax; and
to decrease the corporate and franchise tax rate to seven and eight-tenths
percent.
02/23 House intro - 1st rdg - to printing
02/24 Rpt prt - to Rev/Tax
H0666
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fifth Legislature Second Regular Session - 2000
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 666
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO INCOME TAX; AMENDING SECTION 63-3024, IDAHO CODE, TO DECREASE THE
3 INDIVIDUAL INCOME TAX RATES; AMENDING SECTION 63-3025, IDAHO CODE, TO
4 REDUCE THE TAX ON CORPORATE INCOME; AMENDING SECTION 63-3025A, IDAHO CODE,
5 TO REDUCE THE FRANCHISE TAX AND TO MAKE TECHNICAL CORRECTIONS; DECLARING
6 AN EMERGENCY AND PROVIDING AN EFFECTIVE DATE.
7 Be It Enacted by the Legislature of the State of Idaho:
8 SECTION 1. That Section 63-3024, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 63-3024. INDIVIDUALS' TAX AND TAX ON ESTATES AND TRUSTS. For each taxable
11 year, a tax measured by Idaho taxable income as defined in this chapter is
12 hereby imposed upon every individual, trust, or estate required by this chap-
13 ter to file a return.
14 (a) The tax imposed upon individuals, trusts and estates shall be com-
15 puted at the following rates:
16 When Idaho taxable income is: The rate is:
17 Less than $1,000 Two One and eight-tenths percent (2.01.8%)
18 $1,000 but less than $2,000 $20, plus four three and eight-tenths
19 percent (4.03.8%) of the amount over $1,000
20 $2,000 but less than $3,000 $60, plus four and one-half three-tenths
21 percent (4.53%) of the amount over $2,000
22 $3,000 but less than $4,000 $105, plus five and one-half three-tenths
23 percent (5.53%) of the amount over $3,000
24 $4,000 but less than $5,000 $160, plus six and one-half three-tenths
25 percent (6.53%) of the amount over $4,000
26 $5,000 but less than $7,500 $225, plus seven and one-half three-tenths
27 percent (7.53%) of the amount over $5,000
28 $7,500 but less than $20,000 $412.50, plus seven and eight six-tenths
29 percent (7.86%) of the amount over $7,500
30 Over $20,000 $1,387.50, plus eight and two-tenths
31 percent (8.20%) of the amount over $20,000
32 (b) In case a joint return is filed by husband and wife pursuant to the
33 provisions of section 63-3031, Idaho Code, the tax imposed by this section
34 shall be twice the tax which would be imposed on one-half (1/2) of the aggre-
35 gate Idaho taxable income. For the purposes of this section, a return of a
36 surviving spouse, as defined in section 2(a) of the Internal Revenue Code, and
37 a head of household, as defined in section 2(b) of the Internal Revenue Code,
38 shall be treated as a joint return and the tax imposed shall be twice the tax
39 which would be imposed on one-half (1/2) of the Idaho taxable income.
40 (c) The state tax commission shall compute and publish Idaho income tax
41 liability for taxpayers at the midpoint of each bracket of Idaho taxable
42 income in fifty dollar ($50.00) steps to fifty thousand dollars ($50,000),
43 rounding such calculations to the nearest dollar. Taxpayers having income
2
1 within such brackets shall file returns based upon and pay taxes according to
2 the schedule thus established. The state tax commission shall promulgate rules
3 defining the conditions upon which such returns shall be filed.
4 SECTION 2. That Section 63-3025, Idaho Code, be, and the same is hereby
5 amended to read as follows:
6 63-3025. TAX ON CORPORATE INCOME. For taxable years commencing on and
7 after January 1, 1987, a tax is hereby imposed on the Idaho taxable income of
8 a corporation which transacts or is authorized to transact business in this
9 state or which has income attributable to this state. The tax shall be equal
10 to eight seven and eight-tenths percent (7.8%) of Idaho taxable income; pro-
11 vided, however, that the tax shall not be less than twenty dollars ($20.00);
12 provided further that the twenty dollar ($20.00) minimum payment shall not be
13 collected from nonproductive mining corporations. The tax imposed by this sec-
14 tion shall not apply to corporations taxed pursuant to the provisions of sec-
15 tion 63-3025A, Idaho Code.
16 SECTION 3. That Section 63-3025A, Idaho Code, be, and the same is hereby
17 amended to read as follows:
18 63-3025A. FRANCHISE TAX. For taxable years commencing on and after Janu-
19 ary 1, 1987, a franchise tax shall be imposed upon any corporation for the
20 privilege of exercising its corporate franchise within the state during such
21 taxable year, including, but not limited to, corporations engaged in business
22 in Idaho for the exclusive purpose of performing contracts with the United
23 States department of energy at the Idaho national engineering and environmen-
24 tal laboratory, which tax shall be measured by income which is attributable to
25 this state under the provisions of this chapter and which tax shall be equal
26 to eight seven and eight-tenths percent (7.8%) of Idaho taxable income; pro-
27 vided, however, that the tax shall not be less than twenty dollars ($20.00);
28 provided further that the twenty dollar ($20.00) minimum payment shall not be
29 collected from nonproductive mining corporations; but the twenty dollar
30 ($20.00) minimum tax shall apply to corporations qualified to file returns and
31 actually filing returns under the provisions of subchapter "S" of the Internal
32 Revenue Code.
33 SECTION 4. An emergency existing therefor, which emergency is hereby
34 declared to exist, this act shall be in full force and effect on and after its
35 passage and approval, and retroactively to January 1, 2000.
STATEMENT OF PURPOSE
RS09815Cl
The purpose of this legislation is to decrease the individual income tax rates and
reduce the tax on corporate income.
FISCAL NOTE
The Division of financial Management estimates that lowering all Idaho
Individual Income Tax rates by two-tenths of a percentage point will reduce the
FY 2001 General Fund by approximately $25,000,000. Reducing the Idaho
corporate Income Tax rate from 8.0% to 7.8% would cause a $2,900,000 decline
in the General Fund in FY 2001.
CONTACT: Senator J.L. "Jerry" Thorne
208-331-1323
STATEMENT OF PURPOSE/ FISCAL NOTE H 666