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H0357...............................................by REVENUE AND TAXATION INCOME TAX - WITHHOLDING - Amends existing law to delete the requirement that certain employers must remit payment of state income tax withholding to the State Tax Commission five days after the end of the withholding period; and to delete the inflation adjustment of certain income limits for reporting purposes. 03/09 House intro - 1st rdg - to printing 03/12 Rpt prt - to Rev/Tax 03/14 Rpt out - rec d/p - to 2nd rdg 03/15 2nd rdg - to 3rd rdg 03/16 3rd rdg - PASSED - 58-0-12 AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Black, Bolz, Bruneel, Callister, Chase, Collins, Crow, Cuddy, Deal, Denney, Ellsworth, Eskridge, Field(20), Gagner, Hadley, Hammond, Harwood, Higgins, Hornbeck, Jaquet, Jones, Kellogg, Kendell, Kunz, Lake, Langford, Loertscher, Mader, Marley, Meyer, Montgomery, Moss, Pearce, Pischner, Pomeroy, Raybould, Ridinger, Roberts, Robison, Sali, Schaefer, Sellman, Shepherd, Smith, Smylie, Stevenson, Stone, Swan(Block), Tilman, Trail, Wood, Young, Mr. Speaker NAYS -- None Absent and excused -- Boe, Bradford, Campbell, Clark, Ellis, Field(13), Gould, Henbest, McKague, Mortensen, Moyle, Wheeler Floor Sponsor -- Kellogg Title apvd - to Senate 03/19 Senate intro - 1st rdg - to Loc Gov
|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-sixth Legislature First Regular Session - 2001IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 357 BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO INCOME TAX WITHHOLDING; AMENDING SECTION 63-3035, IDAHO CODE, TO 3 DELETE THE REQUIREMENT FOR CERTAIN EMPLOYERS TO REMIT PAYMENT TO THE STATE 4 TAX COMMISSION FIVE DAYS AFTER THE END OF THE WITHHOLDING PERIOD, TO 5 DELETE THE INFLATION ADJUSTMENT FOR CERTAIN INCOME LIMITS FOR REPORTING 6 PURPOSES AND TO MAKE A TECHNICAL CORRECTION; AND PROVIDING AN EFFECTIVE 7 DATE. 8 Be It Enacted by the Legislature of the State of Idaho: 9 SECTION 1. That Section 63-3035, Idaho Code, be, and the same is hereby 10 amended to read as follows: 11 63-3035. STATE WITHHOLDING TAX ON PERCENTAGE BASIS -- WITHHOLDING, COL- 12 LECTION AND PAYMENT OF TAX. (a) Every employer who is required under the pro- 13 visions of the Internal Revenue Code to withhold, collect and pay income tax 14 on wages or salaries paid by such employer to any employee (other than employ- 15 ees specified in Internal Revenue Code section 3401(a)(2)) shall, at the time 16 of such payment of wages, salary, bonus or other emolument to such employee, 17 deduct and retain therefrom an amount substantially equivalent to the tax rea- 18 sonably calculated by the state tax commission to be due from the employee 19 under this chapter. The state tax commission shall prepare tables showing 20 amounts to be withheld, and shall supply same to each employer subject to this 21 section. In the event that an employer can demonstrate administrative inconve- 22 nience in complying with the exact requirements set forth in these tables, he 23 may, with the consent of the state tax commission and upon application to it, 24 use a different method which will produce substantially the same amount of 25 taxes withheld. Every employer making payments of wages or salaries earned in 26 Idaho, regardless of the place where such payment is made: 27 (1) shall be liable to the state of Idaho for the payment of the tax 28 required to be deducted and withheld under this section and shall not be 29 liable to any individual for the amount deducted from his wages and paid 30 over in compliance or intended compliance with this section; 31 (2) must pay to the state tax commission monthly on or before the 20th 32 day of the succeeding month, or at such other times as the state tax com- 33 mission may allow, an amount of tax which, under the provisions of this 34 chapter, he is required to deduct and withhold; and 35 (3) shall register with the state tax commission, in the manner pre- 36 scribed by it, to establish an employer's withholding account number. The 37 account number will be used to report all amounts withheld, for the annual 38 reconciliation required in this section, and for such other purposes 39 relating to withholding as the state tax commission may require.; and40 (4)must, notwithstanding the provisions of paragraphs (1) and (2) of41this subsection, if the amount of withholding of such employer for the42preceding twelve (12) month period equals or exceeds sixty thousand dol-43lars ($60,000) per annum or an average of five thousand dollars ($5,000)2 1per month per annum, pay to the state tax commission on the basis of with-2holding periods which begin on the 16th day of the month and end on the315th day of the following month, and payment shall be made not later than4five (5) days after the end of the withholding period.5(5)If the payments made pursuant to subsections(a)(2)and (a)(4)of 6 this section are equal to the withholding under this section shown or 7 required to be shown on the return required by subsection (b)(1) of this 8 section, no penalty shall apply to the underpayment for the period between 9 the due date of the payment and the due date of the return. Interest, at 10 the rate provided by section 63-3045, Idaho Code, shall apply to any such 11 underpayment. 12(6) Commencing in 1994, the state tax commission shall determine whether13the threshold amounts established by subsection (a)(4) of this section14must be adjusted to reflect fluctuations in the cost of living. The com-15mission shall base its determination on the cumulative effect of the16annual cost-of-living percentage modifications determined by the United17States secretary of health and human services pursuant to 42 USC 415(i).18When the cumulative percentage applied to the monthly threshold amount19equals or exceeds one thousand dollars ($1,000), the commission shall pro-20mulgate a rule adjusting the monthly threshold amount by one thousand dol-21lars ($1,000) and making the necessary proportional adjustment to the22annual threshold amount. The rule shall be effective for the next succeed-23ing calendar year and each year thereafter until again adjusted by the24commission. The tax commission shall determine subsequent adjustments in25the same manner, in each case using the year of the last adjustment as the26base year.27 (b) (1) Every employer shall,file a return upon such form as shall be 28 prescribed by the state tax commission, but not more frequently than quar- 29 terly, or as required pursuant to any agreement between the state tax com- 30 mission and the department of labor under section 63-3035B, Idaho Code. 31 The return shall show, for the period to which it relates, the total 32 amount of wages, salary, bonus or other emoluments paid to his employees, 33 the amount deducted therefrom in accordance with the provisions of the 34 Internal Revenue Code, the amount deducted therefrom in accordance with 35 the provisions of this section, the amount of any previous payments made 36 pursuant to this section, and such pertinent and necessary information as 37 the state tax commission may require. 38 (2) Every employer making a declaration of withholding as provided herein 39 shall furnish to the employees annually, but not later than thirty (30) 40 days after the end of the calendar year, a record of the amount of tax 41 withheld from such employee on forms to be prescribed, prepared and fur- 42 nished by the state tax commission and on or before the last day of Febru- 43 ary every employer shall file a copy thereof with the state tax commis- 44 sion. Every employer who is required, under Internal Revenue Code section 45 6011, to file returns on magnetic media or in other machine readable form 46 may be required by rules of the state tax commission to file corresponding 47 state returns on similar magnetic media or other machine readable form. 48 (c) All moneys deducted and withheld by every employer shall immediately 49 upon such deduction be state money and every employer who deducts and retains 50 any amount of money under the provisions of this chapter shall hold the same 51 in trust for the state of Idaho and for the payment thereof to the state tax 52 commission in the manner and at the times in this chapter provided. Any 53 employer who does not possess real property situated within the state of 54 Idaho, which, in the opinion of the state tax commission, is of sufficient 55 value to cover his probable tax liability, may be required to post a surety 3 1 bond in such sum as the state tax commission shall deem adequate to protect 2 the state. 3 (d) The provisions of this chapter relating to additions to tax in case 4 of delinquency, and penalties, shall apply to employers subject to the provi- 5 sions of this section and for these purposes any amount deducted, or required 6 to be deducted and remitted to the state tax commission under this section, 7 shall be considered to be the tax of the employer and with respect to such 8 amount he shall be considered the taxpayer. 9 (e) Amounts deducted from wages of an employee during any calendar year 10 in accordance with the provisions of this section shall be considered to be in 11 part payment of the tax imposed on such employee for his tax year which begins 12 within such calendar year and the return made by the employer under this sub- 13 section (e) shall be accepted by the state tax commission as evidence in favor 14 of the employee of the amount so deducted from his wages. Where the total 15 amount so deducted exceeds the amount of tax on the employee, based on his 16 Idaho taxable income, or where his income is not taxable under this chapter, 17 the state tax commission shall, after examining the annual return filed by the 18 employee in accordance with this chapter, but not later than sixty (60) days 19 after the filing of each return, refund the amount of the excess deducted. No 20 credit or refund shall be made to an employee who fails to file his return, as 21 required under this chapter, within three (3) years from the due date of the 22 return, without regard to extensions, in respect of which the tax withheld 23 might have been credited. In the event that the excess tax deducted is less 24 than one dollar ($1.00), no refund shall be made unless specifically requested 25 by the taxpayer at the time such return is filed. 26 (f) This section shall in no way relieve any taxpayer from his obligation 27 of filing a return at the time required under this chapter, and, should the 28 amount withheld under the provisions of this section be insufficient to pay 29 the total tax of such taxpayer, such unpaid tax shall be paid at the time pre- 30 scribed by section 63-3034, Idaho Code. 31 (g) An employee receiving wages shall on any day be entitled to not more 32 than, but may claim fewer than, the number of withholding exemptions to which 33 he is entitled under the Internal Revenue Code for federal income tax with- 34 holding purposes. 35 (h) An employer shall use the exemption certificate filed by the employee 36 with the employer under the withholding exemption provisions of the Internal 37 Revenue Code in determining the amount of tax to be withheld from the 38 employee's wages or salary under this chapter. The tax commission may redeter- 39 mine the number of withholding exemptions to which an employee is entitled 40 under subsection (g) of this section, and the state tax commission may require 41 such exemption certificate to be filed on a form prescribed by the commission 42 in any circumstance where the commission finds that the exemption certificate 43 filed for Internal Revenue Code purposes does not properly reflect the number 44 of withholding exemptions to which the employee is entitled under this chap- 45 ter. In no event shall any employee give an exemption certificate which claims 46 a higher number of withholding exemptions than the number to which the 47 employee is entitled by subsection (g) of this section. 48 SECTION 2. This act shall be in full force and effect on and after July 49 1, 2002.
STATEMENT OF PURPOSE RS11230 This bill simplifies Idaho incom tax withholding for large employers. It will repeal the "split month withholding" adopted as a revenue acceleration measure in 1983 and still required of large employers. It will return them to calendar motnh filers. FISCAL NOTE No increase or decrease int total tax revenues over time. An estimated $20 million would shift from FY 2002 to FY 2003. This is a one-time effect. Contact Name: Representative Hilde Kellogg Phone: 332-1000 STATEMENT OF PURPOSE/FISCAL NOTE H 357