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H0110...............................................by REVENUE AND TAXATION
INCOME TAX - Amends existing law to provide a technical clarification
relating to the amount of capital gain; to clarify the required holding
period; and to clarify treatment of property obtained by a beneficiary of
an estate or trust.
01/29 House intro - 1st rdg - to printing
01/30 Rpt prt - to Rev/Tax
02/05 Rpt out - rec d/p - to 2nd rdg
02/06 2nd rdg - to 3rd rdg
02/09 3rd rdg - PASSED - 69-0-1
AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Black, Boe, Bolz,
Bradford, Bruneel, Callister, Campbell, Chase, Clark, Collins, Crow,
Cuddy, Deal, Denney, Ellis, Ellsworth, Eskridge, Field(13),
Field(20), Gagner, Gould, Hadley, Hammond, Harwood, Henbest, Higgins,
Hornbeck, Jaquet, Jones, Kellogg, Kendell, Kunz, Lake, Langford,
Loertscher, Mader, Marley, McKague, Meyer, Montgomery, Mortensen,
Moss, Moyle, Pearce, Pischner, Pomeroy, Raybould, Ridinger, Roberts,
Robison, Sali, Schaefer, Sellman, Shepherd, Smith, Smylie, Stevenson,
Stone, Swan, Tilman, Trail, Wheeler, Young, Mr. Speaker
NAYS -- None
Absent and excused -- Wood
Floor Sponsor -- Collins
Title apvd - to Senate
02/12 Senate intro - 1st rdg - to Loc Gov
02/15 Rpt out - to 14th Ord
03/28 Rpt out NOT amen - to 2nd rdg
Rls susp - PASSED - 35-0-0
AYES -- Andreason, Boatright, Branch, Brandt, Bunderson, Burtenshaw,
Cameron, Danielson, Darrington, Davis, Deide, Dunklin, Frasure,
Geddes, Goedde, Hawkins, Ingram, Ipsen, Keough, King-Barrutia, Lee,
Lodge, Noh, Richardson, Risch, Sandy, Schroeder, Sims, Sorensen,
Stegner, Stennett, Thorne, Wheeler, Whitworth, Williams,
NAYS -- None
Absent and excused -- None
Floor Sponsor -- Frasure
Title apvd - to House
03/29 To enrol - rpt enrol - Sp signed - Pres signed
03/30 To Governor
04/03 Governor signed
Session Law Chapter 321
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. 110
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO INCOME TAX; AMENDING SECTION 63-3022H, IDAHO CODE, TO PROVIDE A
3 TECHNICAL CLARIFICATION RELATING TO THE AMOUNT OF CAPITAL GAIN, TO CLARIFY
4 THAT THE REQUIRED HOLDING PERIOD DOES NOT INCLUDE THE HOLDING PERIOD OF
5 NONQUALIFIED PROPERTY EXCHANGED FOR QUALIFIED PROPERTY, TO CLARIFY THE
6 TREATMENT OF PROPERTY OBTAINED BY A BENEFICIARY OF AN ESTATE OR TRUST AND
7 TO MAKE TECHNICAL CORRECTIONS; DECLARING AN EMERGENCY AND PROVIDING A RET-
8 ROACTIVE EFFECTIVE DATE.
9 Be It Enacted by the Legislature of the State of Idaho:
10 SECTION 1. That Section 63-3022H, Idaho Code, be, and the same is hereby
11 amended to read as follows:
12 63-3022H. DEDUCTION OF CAPITAL GAINS. (1) If an individual taxpayer
13 reports a net capital gain in determining taxable income, sixty percent (60%)
14 of the net capital gain from the sale or exchange of qualified property shall
15 be a deduction in determining taxable income.
16 (2) The deduction provided in this section is limited to the amount of
17 the net capital gain net income from all property included in federal taxable
18 income. Net capital gGains treated as ordinary income by the iInternal
19 rRevenue cCode do not qualify for the deduction allowed in this section. The
20 deduction otherwise allowable under this section shall be reduced by the
21 amount of any federal capital gains deduction relating to such property, but
22 not below zero.
23 (3) As used in this section "qualified property" means the following
24 property having an Idaho situs at the time of sale:
25 (a) Real property held at least eighteen (18) months;
26 (b) Tangible personal property used in Idaho for at least twelve (12)
27 months by a revenue-producing enterprise;
28 (c) Cattle or horses held for breeding, draft, dairy or sporting purposes
29 for at least twenty-four (24) months if more than one-half (1/2) of the
30 taxpayer's gross income (as defined in section 61(a) of the iInternal
31 rRevenue cCode) for the taxable year is from farming or ranching opera-
32 tions in Idaho;
33 (d) Breeding livestock other than cattle or horses held at least twelve
34 (12) months if more than one-half (1/2) of the taxpayer's gross income (as
35 defined in section 61(a) of the iInternal rRevenue cCode) for the taxable
36 year is from farming or ranching operations in Idaho;
37 (e) Timber grown in Idaho and held at least twenty-four (24) months;
38 (f) In determining the period for which property subject to this section
39 has been held by a taxpayer, the provisions of section 1223 of the
40 iInternal rRevenue cCode shall apply, except that when the holding period
41 includes any period during which the taxpayer held property other than the
42 property sold, all property held during shall not include the holding
43 period must qualify of property given up in an exchange, when such prop-
2
1 erty would not have constituted qualified property under this section
2 without regard to meeting the holding period.
3 (4) If an individual reports a capital gain from qualified property from
4 an S corporation or a partnership, a deduction shall be allowed under this
5 section only to the extent the individual held his interest in the income of
6 the S corporation or the partnership for the time required by subsection (3)
7 of this section for the property sold.
8 (5) If an individual reports a capital gain from an estate or a capital
9 gain from property acquired as a beneficiary of an estate, no deduction shall
10 be allowed under this section unless the holding period required in subsection
11 (3) of this section was satisfied by the decedent, the estate, or the benefi-
12 ciary, or a combination thereof.
13 (6) If an individual reports a capital gain from a trust or a capital
14 gain from property acquired as a beneficiary of a trust, no deduction shall be
15 allowed under this section unless the holding period required in subsection
16 (3) of this section was satisfied by the grantor, the trust, or the benefi-
17 ciary, or a combination thereof.
18 (7) As used in this section "revenue-producing enterprise" means:
19 (a) The production, assembly, fabrication, manufacture, or processing of
20 any agricultural, mineral or manufactured product;
21 (b) The storage, warehousing, distribution, or sale at wholesale of any
22 products of agriculture, mining or manufacturing;
23 (c) The feeding of livestock at a feedlot;
24 (d) The operation of laboratories or other facilities for scientific,
25 agricultural, animal husbandry, or industrial research, development, or
26 testing.
27 SECTION 2. An emergency existing therefor, which emergency is hereby
28 declared to exist, this act shall be in full force and effect on and after its
29 passage and approval, and retroactively to January 1, 2001.
STATEMENT OF PURPOSE
R.S. 10468
This bill makes technical and clarifying amendments to the Idaho
Code section providing an Idaho income tax deduction for capital
gains. These changes are:
Replaces "net capital gain" (excess of long-term capital gain over
short-term net capital loss) with technically correct "capital
gain net income" (excess of gains from sales or exchanges of
capital assets over losses from such sales or exchanges).
Clarifies that holding period does not include holding period of
non-qualified property exchanged for qualified property.
Clarifies calculation of the holding period of property acquired by
a beneficiary of an estate or trust.
FISCAL NOTE
None
CONTACT
Name: Dan John/Ted Spangler
Agency: State Tax Commission
Phone: 334-7530
STATEMENT OF PURPOSE/FISCAL NOTE H11