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H0386...............................................by REVENUE AND TAXATION
INCOME TAX - Adds to existing law to provide for a deduction of capital
gains for qualifying taxpayers which are corporations involved in
agriculture, timber or mining; to provide limitation; to define terms; and
to provide procedures.
03/29 House intro - 1st rdg - to printing
03/29 Rpt prt - to 2nd rdg
Rls susp - PASSED - 56-6-8
AYES -- Barraclough, Barrett, Bedke, Black, Bolz, Bradford,
Callister, Collins, Cuddy, Deal, Denney, Ellis, Ellsworth, Eskridge,
Field(13), Field(20), Gagner, Gould, Hadley, Hammond, Hansen,
Harwood, Higgins, 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, Bruneel, Campbell, Clark, Crow, Lake,
Mader, Montgomery
Floor Sponsors -- Gould & Cuddy
Title apvd - to Senate
03/29 Senate intro - 1st rdg - to Loc Gov
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 386
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO INCOME TAXATION; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE
3 ADDITION OF A NEW SECTION 63-3022Q, IDAHO CODE, TO PROVIDE FOR A DEDUCTION
4 OF CAPITAL GAINS FOR QUALIFYING TAXPAYERS, TO PROVIDE LIMITATION, TO
5 DEFINE TERMS AND TO PROVIDE PROCEDURES; DECLARING AN EMERGENCY AND PROVID-
6 ING RETROACTIVE APPLICATION.
7 Be It Enacted by the Legislature of the State of Idaho:
8 SECTION 1. That Chapter 30, Title 63, Idaho Code, be, and the same is
9 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
10 ignated as Section 63-3022Q, Idaho Code, and to read as follows:
11 63-3022Q. DEDUCTION OF CAPITAL GAINS FOR QUALIFYING TAXPAYERS. (1) For
12 taxable year 2001 and each taxable year thereafter, if a qualifying taxpayer
13 reports a net capital gain in determining taxable income, one hundred percent
14 (100%) of the net capital gain from the sale or exchange of qualified property
15 shall be a deduction before allocation and apportionment in determining tax-
16 able income.
17 (2) The deduction provided in this section is limited to the amount of
18 the net capital gain from all property included in federal taxable income. Net
19 capital gains treated as ordinary income by the Internal Revenue Code do not
20 qualify for the deduction allowed in this section. The deduction otherwise
21 allowable under this section shall be reduced by the amount of any federal
22 capital gains deduction relating to such property, but not below zero (0).
23 (3) As used in this section "qualified property" means the following
24 property owned by a qualifying taxpayer having an Idaho situs at the time of
25 sale:
26 (a) Real property owned by a qualifying taxpayer and held at least eigh-
27 teen (18) months;
28 (b) Tangible personal property used in Idaho for at least twelve (12)
29 months by a revenue-producing enterprise;
30 (c) Cattle or horses held for breeding, draft, dairy or sporting purposes
31 for at least twenty-four (24) months if more than one-half (1/2) of the
32 taxpayer's gross income, as defined in section 61(a) of the Internal Reve-
33 nue Code, for the taxable year is from farming or ranching operations in
34 Idaho;
35 (d) Breeding livestock other than cattle or horses held at least twelve
36 (12) months if more than one-half (1/2) of the taxpayer's gross income, as
37 defined in section 61(a) of the Internal Revenue Code, for the taxable
38 year is from farming or ranching operations in Idaho;
39 (e) Timber grown in Idaho and held at least twenty-four (24) months;
40 (f) In determining the period for which property subject to this section
41 has been held by a qualifying taxpayer, the provisions of section 1223 of
42 the Internal Revenue Code shall apply, except that when the holding period
43 includes any period during which the qualifying taxpayer held property
2
1 other than the property sold, all property held during the holding period
2 must qualify under this section.
3 (4) If a qualifying taxpayer reports a capital gain from a trust, no
4 deduction shall be allowed under this section unless the holding period
5 required in subsection (3) of this section was satisfied by the grantor, the
6 trust, or the beneficiary, or a combination thereof.
7 (5) As used in this section, "revenue-producing enterprise" means:
8 (a) The production, assembly, fabrication, manufacture or processing of
9 any agricultural, mineral or timber product;
10 (b) The storage, warehousing, distribution, or sale at wholesale of any
11 products of agriculture, mining or timber;
12 (c) The feeding of livestock at a feedlot;
13 (d) The operation of laboratories or other facilities for agricultural,
14 animal husbandry, or natural resource research, development or testing.
15 (6) As used in this section, "qualifying taxpayer" means a corporation.
16 Additionally, a qualifying taxpayer shall be subject to taxation pursuant to
17 chapter 28, title 63, Idaho Code; or shall own lands taxed pursuant to chapter
18 17, title 63, Idaho Code; or shall own agricultural crops as defined in sec-
19 tion 63-602R, Idaho Code; or shall own land actively devoted to agriculture as
20 defined in section 63-604, Idaho Code.
21 (7) The state tax commission may promulgate rules, in compliance with
22 chapter 52, title 67, Idaho Code, and prescribe necessary forms and software
23 to implement the provisions of this section.
24 SECTION 2. An emergency existing therefor, which emergency is hereby
25 declared to exist, this act shall be in full force and effect on and after its
26 passage and approval, and retroactively to January 1, 2001.
STATEMENT OF PURPOSE
RS 11318
This bill will extend the Idaho capital gains deduction to
corporations engaged in agriculture, timber or mining. The
deduction is 100% of the capital gains from qualified Idaho
properties.
FISCAL IMPACT
$6.6 million from the general fund.
Contact
Name: Representative Gould
Representative Cuddy
Phone: 332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 386