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H0088...............................................by REVENUE AND TAXATION
INCOME TAX - Amends existing law to increase from sixty percent to one
hundred percent the net capital gain 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 - 57-6-7
AYES -- Barraclough, Barrett, Bedke, Bell, Black, Boe, Bolz,
Bradford, Bruneel, Callister, Collins, Cuddy, Deal, Denney, Ellis,
Ellsworth, Eskridge, Field(13), Field(20), Gagner, Gould, Hadley,
Hammond, Harwood, Higgins, Hornbeck, Jaquet, Jones, Kellogg, Kendell,
Kunz, Langford, Loertscher, McKague, Meyer, Mortensen, Moss, Moyle,
Pearce, Pischner, Pomeroy, Raybould, Roberts, Sali, Schaefer,
Sellman, Shepherd, Smith, Smylie, Stevenson, Stone, Tilman, Trail,
Wheeler, Wood, Young(Young), Mr. Speaker
NAYS -- Bieter, Chase, Henbest(Farley), Marley, Ridinger, Robison
Absent and excused -- Campbell, Clark, Crow, Hansen, Lake, Mader,
Montgomery
Floor Sponsor -- Moyle
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. 88
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 FROM THE SALE OR EXCHANGE OF QUALI-
4 FIED PROPERTY WHICH SHALL BE A DEDUCTION IN DETERMINING TAXABLE INCOME AND
5 TO MAKE TECHNICAL CORRECTIONS; DECLARING AN EMERGENCY AND PROVIDING RETRO-
6 ACTIVE 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 one hundred
12 percent (6100%) of the net capital gain from the sale or exchange of qualified
13 property shall be a deduction in determining taxable income.
14 (2) The deduction provided in this section is limited to the amount of
15 the net capital gain from all property included in federal taxable income. Net
16 capital gains treated as ordinary income by the iInternal rRevenue cCode do
17 not qualify for the deduction allowed in this section. The deduction otherwise
18 allowable under this section shall be reduced by the amount of any federal
19 capital gains deduction relating to such property, but not below zero.
20 (3) As used in this section "qualified property" means the following
21 property having an Idaho situs at the time of sale:
22 (a) Real property held at least eighteen (18) months;
23 (b) Tangible personal property used in Idaho for at least twelve (12)
24 months by a revenue-producing enterprise;
25 (c) Cattle or horses held for breeding, draft, dairy or sporting purposes
26 for at least twenty-four (24) months if more than one-half (1/2) of the
27 taxpayer's gross income (as defined in section 61(a) of the iInternal
28 rRevenue cCode) for the taxable year is from farming or ranching opera-
29 tions in Idaho;
30 (d) Breeding livestock other than cattle or horses held at least twelve
31 (12) months if more than one-half (1/2) of the taxpayer's gross income (as
32 defined in section 61(a) of the iInternal rRevenue cCode) for the taxable
33 year is from farming or ranching operations in Idaho;
34 (e) Timber grown in Idaho and held at least twenty-four (24) months;
35 (f) In determining the period for which property subject to this section
36 has been held by a taxpayer, the provisions of section 1223 of the
37 iInternal rRevenue cCode shall apply, except that when the holding period
38 includes any period during which the taxpayer held property other than the
39 property sold, all property held during the holding period must qualify
40 under this section.
41 (4) If an individual reports a capital gain from qualified property from
42 an S corporation or a partnership, a deduction shall be allowed under this
43 section only to the extent the individual held his interest in the income of
2
1 the S corporation or the partnership for the time required by subsection (3)
2 of this section for the property sold.
3 (5) If an individual reports a capital gain from an estate, no deduction
4 shall be allowed under this section unless the holding period required in sub-
5 section (3) of this section was satisfied by the decedent, the estate, or the
6 beneficiary, or a combination thereof.
7 (6) If an individual reports a capital gain from a trust, no deduction
8 shall be allowed under this section unless the holding period required in sub-
9 section (3) of this section was satisfied by the grantor, the trust, or the
10 beneficiary, or a combination thereof.
11 (7) As used in this section "revenue-producing enterprise" means:
12 (a) The production, assembly, fabrication, manufacture, or processing of
13 any agricultural, mineral or manufactured product;
14 (b) The storage, warehousing, distribution, or sale at wholesale of any
15 products of agriculture, mining or manufacturing;
16 (c) The feeding of livestock at a feedlot;
17 (d) The operation of laboratories or other facilities for scientific,
18 agricultural, animal husbandry, or industrial research, development, or
19 testing.
20 SECTION 2. An emergency existing therefor, which emergency is hereby
21 declared to exist, this act shall be in full force and effect on and after its
22 passage and approval, and retroactively to January 1, 2001.
STATEMENT OF PURPOSE
RS10737
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% 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 $8,700,000
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. 8