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H0087aaS............................................by REVENUE AND TAXATION
INCOME TAX - Amends existing law to increase the percentage of net capital
gain for taxable year 2001 from the sale or exchange of qualified property
which shall be a deduction in determining taxable income.
01/24 House intro - 1st rdg - to printing
01/25 Rpt prt - to Rev/Tax
03/29 Rpt out - rec d/p - to 2nd rdg
Rls susp - PASSED - 55-6-9
AYES -- Barraclough, Barrett, Bedke, Black, Bolz, Bradford, Bruneel,
Callister, Collins, Cuddy, Deal, Denney, Ellis, Ellsworth, Eskridge,
Field(13), Field(20), Gagner, Gould, Hadley, Hammond, Harwood,
Hornbeck, Jaquet, Jones, Kellogg, Kendell, Kunz, Langford,
Loertscher, McKague, Meyer, Mortensen, Moss, Moyle, Pearce, Pischner,
Pomeroy, Raybould, Ridinger, Roberts, Sali, Schaefer, Sellman,
Shepherd, Smith, Smylie, Stevenson, Stone, Tilman, Trail, Wheeler,
Wood, Young(Young), Mr. Speaker
NAYS -- Bieter, Boe, Chase, Henbest(Farley), Marley, Robison
Absent and excused -- Bell, Campbell, Clark, Crow, Hansen, Higgins,
Lake, Mader, Montgomery
Floor Sponsor -- Moyle
Title apvd - to Senate
03/29 Senate intro - 1st rdg - to Loc Gov
03/30 Rpt out - rec d/p - to 2nd rdg
To 14th Ord
Rpt out amen - to 1st rdg as amen
Rls susp - PASSED as amen - 31-4-0
AYES -- Andreason, Boatright, Branch, Brandt, Bunderson, Burtenshaw,
Cameron, Danielson, Darrington, Davis, Deide, Frasure, Geddes,
Goedde, Hawkins, Ingram, Ipsen, Keough, King-Barrutia, Lee, Lodge,
Noh, Richardson, Risch, Sandy, Sims, Sorensen, Stennett, Thorne,
Wheeler, Williams
NAYS -- Dunklin, Schroeder, Stegner, Whitworth
Absent and excused -- None
Floor Sponsor -- Frasure
Title apvd - to House
03/30 House concurred in Senate amens - to engros
Rpt engros - 1st rdg - to 2nd rdg as amen
Rls susp - PASSED as amen - 53-2-15
AYES -- Barraclough, Barrett, Bedke, Bell, Black, Boe, Bolz,
Bradford, Bruneel, Clark, Collins, Cuddy, Deal, Denney, Ellis,
Eskridge, Field(13), Field(20), Gagner, Gould, Hadley, Harwood,
Henbest(Farley), Hornbeck, Jaquet, Jones, Kellogg, Kendell, Kunz,
Lake, Langford, Loertscher, Marley, McKague, Meyer, Montgomery,
Mortensen, Moss, Moyle, Pischner, Pomeroy, Raybould, Ridinger,
Roberts, Sali, Schaefer, Shepherd, Smylie, Stevenson, Tilman, Trail,
Wood, Young(Young), Mr. Speaker
NAYS -- Bieter, Robison
Absent and excused -- Callister, Campbell, Chase, Crow, Ellis
Ellsworth, Hammond, Hansen, Higgins, Mader, Pearce, Sellman, Smith,
Stone Wheeler
Floor Sponsor -- Gould
Title apvd - to enrol
04/02 Rpt enrol - Sp signed - Pres signed
04/04 Governor signed
Session Law Chapter 323
Effective: 01/01/01
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 87
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO CAPITAL GAINS; AMENDING SECTION 63-3022H, IDAHO CODE, TO INCREASE
3 THE PERCENTAGE OF THE NET CAPITAL GAIN OVER A TWO TAXABLE YEAR PERIOD FROM
4 THE SALE OR EXCHANGE OF QUALIFIED PROPERTY WHICH SHALL BE A DEDUCTION IN
5 DETERMINING TAXABLE INCOME AND TO MAKE TECHNICAL CORRECTIONS; DECLARING AN
6 EMERGENCY AND PROVIDING RETROACTIVE APPLICATION.
7 Be It Enacted by the Legislature of the State of Idaho:
8 SECTION 1. That Section 63-3022H, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 63-3022H. DEDUCTION OF CAPITAL GAINS. (1) If an individual taxpayer
11 reports a net capital gain in determining taxable income, sixty eighty percent
12 (80%) in taxable year 2001 and one hundred percent (6100%) in taxable years
13 thereafter of the net capital gain from the sale or exchange of qualified
14 property shall be a deduction in determining taxable income.
15 (2) The deduction provided in this section is limited to the amount of
16 the net capital gain from all property included in federal taxable income. Net
17 capital gains treated as ordinary income by the iInternal rRevenue cCode do
18 not qualify for the deduction allowed in this section. The deduction otherwise
19 allowable under this section shall be reduced by the amount of any federal
20 capital gains deduction relating to such property, but not below zero.
21 (3) As used in this section "qualified property" means the following
22 property having an Idaho situs at the time of sale:
23 (a) Real property held at least eighteen (18) months;
24 (b) Tangible personal property used in Idaho for at least twelve (12)
25 months by a revenue-producing enterprise;
26 (c) Cattle or horses held for breeding, draft, dairy or sporting purposes
27 for at least twenty-four (24) months if more than one-half (1/2) of the
28 taxpayer's gross income (as defined in section 61(a) of the iInternal
29 rRevenue cCode) for the taxable year is from farming or ranching opera-
30 tions in Idaho;
31 (d) Breeding livestock other than cattle or horses held at least twelve
32 (12) months if more than one-half (1/2) of the taxpayer's gross income (as
33 defined in section 61(a) of the iInternal rRevenue cCode) for the taxable
34 year is from farming or ranching operations in Idaho;
35 (e) Timber grown in Idaho and held at least twenty-four (24) months;
36 (f) In determining the period for which property subject to this section
37 has been held by a taxpayer, the provisions of section 1223 of the
38 iInternal rRevenue cCode shall apply, except that when the holding period
39 includes any period during which the taxpayer held property other than the
40 property sold, all property held during the holding period must qualify
41 under this section.
42 (4) If an individual reports a capital gain from qualified property from
43 an S corporation or a partnership, a deduction shall be allowed under this
2
1 section only to the extent the individual held his interest in the income of
2 the S corporation or the partnership for the time required by subsection (3)
3 of this section for the property sold.
4 (5) If an individual reports a capital gain from an estate, no deduction
5 shall be allowed under this section unless the holding period required in sub-
6 section (3) of this section was satisfied by the decedent, the estate, or the
7 beneficiary, or a combination thereof.
8 (6) If an individual reports a capital gain from a trust, no deduction
9 shall be allowed under this section unless the holding period required in sub-
10 section (3) of this section was satisfied by the grantor, the trust, or the
11 beneficiary, or a combination thereof.
12 (7) As used in this section "revenue-producing enterprise" means:
13 (a) The production, assembly, fabrication, manufacture, or processing of
14 any agricultural, mineral or manufactured product;
15 (b) The storage, warehousing, distribution, or sale at wholesale of any
16 products of agriculture, mining or manufacturing;
17 (c) The feeding of livestock at a feedlot;
18 (d) The operation of laboratories or other facilities for scientific,
19 agricultural, animal husbandry, or industrial research, development, or
20 testing.
21 SECTION 2. An emergency existing therefor, which emergency is hereby
22 declared to exist, this act shall be in full force and effect on and after its
23 passage and approval, and retroactively to January 1, 2001.
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
Moved by Thorne
Seconded by Stegner
IN THE SENATE
SENATE AMENDMENT TO H.B. NO. 87
1 AMENDMENTS TO SECTION 1
2 On page 1 of the printed bill, in line 12, delete "one hundred" and
3 insert: "sixty"; and also in line 12, delete "6100" and insert: "60".
4 CORRECTION TO TITLE
5 On page 1, delete line 3, and insert: "THE PERCENTAGE OF THE NET CAPITAL
6 GAIN FOR TAXABLE YEAR 2001 FROM".
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 87, As Amended in the Senate
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO CAPITAL GAINS; AMENDING SECTION 63-3022H, IDAHO CODE, TO INCREASE
3 THE PERCENTAGE OF THE NET CAPITAL GAIN FOR TAXABLE YEAR 2001 FROM THE SALE
4 OR EXCHANGE OF QUALIFIED PROPERTY WHICH SHALL BE A DEDUCTION IN DETERMIN-
5 ING TAXABLE INCOME AND TO MAKE TECHNICAL CORRECTIONS; DECLARING AN EMER-
6 GENCY AND PROVIDING RETROACTIVE APPLICATION.
7 Be It Enacted by the Legislature of the State of Idaho:
8 SECTION 1. That Section 63-3022H, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 63-3022H. DEDUCTION OF CAPITAL GAINS. (1) If an individual taxpayer
11 reports a net capital gain in determining taxable income, sixty eighty percent
12 (80%) in taxable year 2001 and sixty percent (60%) in taxable years thereafter
13 of the net capital gain from the sale or exchange of qualified property shall
14 be a deduction in determining taxable income.
15 (2) The deduction provided in this section is limited to the amount of
16 the net capital gain from all property included in federal taxable income. Net
17 capital gains treated as ordinary income by the iInternal rRevenue cCode do
18 not qualify for the deduction allowed in this section. The deduction otherwise
19 allowable under this section shall be reduced by the amount of any federal
20 capital gains deduction relating to such property, but not below zero.
21 (3) As used in this section "qualified property" means the following
22 property having an Idaho situs at the time of sale:
23 (a) Real property held at least eighteen (18) months;
24 (b) Tangible personal property used in Idaho for at least twelve (12)
25 months by a revenue-producing enterprise;
26 (c) Cattle or horses held for breeding, draft, dairy or sporting purposes
27 for at least twenty-four (24) months if more than one-half (1/2) of the
28 taxpayer's gross income (as defined in section 61(a) of the iInternal
29 rRevenue cCode) for the taxable year is from farming or ranching opera-
30 tions in Idaho;
31 (d) Breeding livestock other than cattle or horses held at least twelve
32 (12) months if more than one-half (1/2) of the taxpayer's gross income (as
33 defined in section 61(a) of the iInternal rRevenue cCode) for the taxable
34 year is from farming or ranching operations in Idaho;
35 (e) Timber grown in Idaho and held at least twenty-four (24) months;
36 (f) In determining the period for which property subject to this section
37 has been held by a taxpayer, the provisions of section 1223 of the
38 iInternal rRevenue cCode shall apply, except that when the holding period
39 includes any period during which the taxpayer held property other than the
40 property sold, all property held during the holding period must qualify
41 under this section.
42 (4) If an individual reports a capital gain from qualified property from
43 an S corporation or a partnership, a deduction shall be allowed under this
2
1 section only to the extent the individual held his interest in the income of
2 the S corporation or the partnership for the time required by subsection (3)
3 of this section for the property sold.
4 (5) If an individual reports a capital gain from an estate, no deduction
5 shall be allowed under this section unless the holding period required in sub-
6 section (3) of this section was satisfied by the decedent, the estate, or the
7 beneficiary, or a combination thereof.
8 (6) If an individual reports a capital gain from a trust, no deduction
9 shall be allowed under this section unless the holding period required in sub-
10 section (3) of this section was satisfied by the grantor, the trust, or the
11 beneficiary, or a combination thereof.
12 (7) As used in this section "revenue-producing enterprise" means:
13 (a) The production, assembly, fabrication, manufacture, or processing of
14 any agricultural, mineral or manufactured product;
15 (b) The storage, warehousing, distribution, or sale at wholesale of any
16 products of agriculture, mining or manufacturing;
17 (c) The feeding of livestock at a feedlot;
18 (d) The operation of laboratories or other facilities for scientific,
19 agricultural, animal husbandry, or industrial research, development, or
20 testing.
21 SECTION 2. An emergency existing therefor, which emergency is hereby
22 declared to exist, this act shall be in full force and effect on and after its
23 passage and approval, and retroactively to January 1, 2001.
STATEMENT OF PURPOSE
RS10738
AMENDMENTS TO THE REVENUE AND TAXATION STATUTE
In 1987 the Idaho Legislature passed legislation to restore
favorable capital gains treatment on certain assets for tax
purposes.
The purpose of this legislation is to increase the exclusion
from 60% to 100% over two years effectively eliminating
state assessed capital gains tax on the assets described in
the existing statute.
To qualify for the exclusion the asset must have been located
in Idaho at the time of sale. Assets outlined for favorable
treatment in Idaho include: real property held at least 18
months; tangible personal property that was used in
manufacturing, mining, agriculture, wholesaling or research
and development held longer than 12 months; cattle or horses
held for 24 months or more; other breeding livestock held for
12 months or more; or private timber held for 24 months or
longer.
FISCAL IMPACT
A reduction in the General Fund of $4,350,000 in 2001 and a
reduction in the General Fund of $4,715,400 in 2002
reflecting an 8.4% increase between the two years.
Contact
Name: Rep. Dolores Crow
Phone: 332-1125
Rep. Celia Gould
332-1127
Rep. Cameron Wheeler
332-1000
Rep. Lee Gagner
332-1000
Rep. Mike Moyle
332-1000
Alex LaBeau, Idaho Association of REALTORS
342-3585
STATEMENT OF PURPOSE/FISCAL NOTE Bill No. H008