Print Friendly HOUSE BILL NO. 173 – Income tax/intangble persnl proprty
HOUSE BILL NO. 173
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H0173...............................................by REVENUE AND TAXATION
INCOME TAX - Amends existing law to include intangible personal property
held at least twelve months under the definition of qualifying property for
capital gains treatment under Idaho income tax law.
02/07 House intro - 1st rdg - to printing
02/08 Rpt prt - to Rev/Tax
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 173
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO INCOME TAXATION; AMENDING SECTION 63-3022H, IDAHO CODE, TO INCLUDE
3 INTANGIBLE PERSONAL PROPERTY HELD AT LEAST TWELVE MONTHS UNDER THE DEFINI-
4 TION OF QUALIFYING PROPERTY AND TO MAKE TECHNICAL CORRECTIONS; DECLARING
5 AN EMERGENCY AND PROVIDING RETROACTIVE APPLICATION.
6 Be It Enacted by the Legislature of the State of Idaho:
7 SECTION 1. That Section 63-3022H, Idaho Code, be, and the same is hereby
8 amended to read as follows:
9 63-3022H. DEDUCTION OF CAPITAL GAINS. (1) If an individual taxpayer
10 reports a net capital gain in determining taxable income, sixty percent (60%)
11 of the net capital gain from the sale or exchange of qualified property shall
12 be a deduction in determining taxable income.
13 (2) The deduction provided in this section is limited to the amount of
14 the net capital gain from all property included in federal taxable income. Net
15 capital gains treated as ordinary income by the iInternal rRevenue cCode do
16 not qualify for the deduction allowed in this section. The deduction otherwise
17 allowable under this section shall be reduced by the amount of any federal
18 capital gains deduction relating to such property, but not below zero.
19 (3) As used in this section "qualified property" means the following
20 property having an Idaho situs at the time of sale:
21 (a) Real property held at least eighteen (18) months;
22 (b) Tangible personal property used in Idaho for at least twelve (12)
23 months by a revenue-producing enterprise;
24 (c) Cattle or horses held for breeding, draft, dairy or sporting purposes
25 for at least twenty-four (24) months if more than one-half (1/2) of the
26 taxpayer's gross income (as defined in section 61(a) of the iInternal
27 rRevenue cCode) for the taxable year is from farming or ranching opera-
28 tions in Idaho;
29 (d) Breeding livestock other than cattle or horses held at least twelve
30 (12) months if more than one-half (1/2) of the taxpayer's gross income (as
31 defined in section 61(a) of the iInternal rRevenue cCode) for the taxable
32 year is from farming or ranching operations in Idaho;
33 (e) Timber grown in Idaho and held at least twenty-four (24) months;
34 (f) Intangible personal property held at least twelve (12) months;
35 (g) 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
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
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
The purpose of this legislation is to make the capital gains tax
fairer. Current law does not allow gains from the sale of stocks and
other intangibles to qualify for the capital gains exclusion. This
legislation will convert Idaho s definition to the federal definition.
The estimated fiscal cost is $20 million
Name: Rep. Jim Clark
Phone: 332 1000
Name: Senator Grant Ipsen
Phone: 332 1326
STATEMENT OF PURPOSE/FISCAL NOTE H 17