2001 Legislation
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HOUSE BILL NO. 386 – Income tax, capital gains, corp

HOUSE BILL NO. 386

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Daily Data Tracking History



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

Bill Text


                                                                        
                                                                        
  ||||              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 / Fiscal Impact


                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