View Daily Data Tracking History
View Bill Text
View Amendment
View Engrossed Bill (Original Bill with Amendment(s) Incorporated)
View Statement of Purpose / Fiscal Impact
H0377aaS............................................by REVENUE AND TAXATION
INCOME TAX - Amends, repeals and adds to existing law to reduce the
individual income tax rates for taxable year 2001 and each year thereafter;
to increase the grocery tax credit for individuals; to reduce the corporate
income tax rate; to provide income tax credits for research and development
expenditures, creation of new jobs, installing broadband communications
equipment and investing in counties with high unemployment or low personal
income; and to provide an income tax deduction for certain health insurance
costs.
03/26 House intro - 1st rdg - to printing
Rpt prt - rls susp - PASSED - 59-7-4
AYES -- Barraclough, Barrett, Bedke, Bell, Black, Bolz, Bradford,
Bruneel, Callister, Campbell, Clark, Collins, Crow, Cuddy, Deal,
Denney, Ellis, Ellsworth, Eskridge, Field(13), Field(20), Gagner,
Gould, Hadley, Hammond, Hansen, Harwood, Henbest(Farley), Hornbeck,
Jones, Kellogg, Kendell, Kunz, Lake, Langford, Loertscher, Mader,
McKague, Montgomery, Mortensen, Moss, Moyle, Pearce, Pomeroy,
Raybould, Ridinger, Roberts, Sali, Schaefer, Sellman, Smith, Smylie,
Stevenson, Stone, Tilman, Trail, Wood, Young, Mr. Speaker
NAYS -- Bieter, Boe, Chase, Jaquet, Marley, Robison, Shepherd
Absent and excused -- Higgins, Meyer, Pischner, Wheeler
Floor Sponsor -- Crow
Title apvd - to Senate
03/28 Senate intro - 1st rdg - to Loc Gov
Rpt out - to 14th Ord
Rpt out amen - to 1st rdg as amen
1st rdg - to 2nd rdg as amen
Rls susp - PASSED as amen - 34-1-0
AYES -- Andreason, Boatright, Branch, Brandt, Bunderson, Burtenshaw,
Cameron, Danielson, Darrington, Davis, Deide, Dunklin, Frasure,
Geddes, Goedde, Hawkins, Ingram, Ipsen, Keough, King-Barrutia, Lee,
Lodge, Noh, Richardson, Risch, Sandy, Schroeder, Sims, Sorensen,
Stegner, Stennett, Thorne, Wheeler, Williams,
NAYS -- Whitworth
Absent and excused -- None
Floor Sponsor -- Thorne
Title apvd - to House
03/29 House concurred in Senate amend - to engros
Rpt engros - 1st rdg to 2nd rdg as amen
Rls susp - PASSED as amen - 62-0-8
AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Black, Boe, Bolz,
Bradford, Bruneel, Callister, Chase, Clark, Collins, Cuddy, Deal,
Denney, Ellis, Ellsworth, Eskridge, Field(13), Gagner, Gould, Hadley,
Hammond, Hansen, Harwood, Henbest(Farley), Hornbeck, Jaquet, Jones,
Kellogg, Kendell, Kunz, Lake, Langford, Loertscher, Marley, McKague,
Meyer, Moss, Moyle, Pearce, Pischner, Pomeroy, Raybould, Ridinger,
Roberts, Robison, Sali, Schaefer, Shepherd, Smith, Smylie, Stevenson,
Stone, Tilman, Trail, Wheeler, Wood, Young(Young), Mr. Speaker
NAYS -- None
Absent and excused -- Campbell, Crow, Field(20), Higgins, Mader,
Montgomery, Mortensen, Sellman
Floor Sponsor -- Crow
Title apvd - to enrol
03/30 Rpt enrol - Sp signed - Pres signed
To Governor
04/11 Governor signed
Session Law Chapter 386
Effective: 01/01/01, Secs 1-12 & 16
01/01/02, Secs 13-15
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 377
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO TAXATION; AMENDING SECTION 63-3024, IDAHO CODE, TO PROVIDE FOR A
3 REDUCTION IN RATES FOR TAXABLE YEAR 2001 AND EACH YEAR THEREAFTER; AMEND-
4 ING SECTION 63-3022H, IDAHO CODE, TO INCREASE THE DEDUCTION ALLOWED FOR
5 QUALIFIED CAPITAL GAINS AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SEC-
6 TION 63-3025, IDAHO CODE, TO REDUCE THE CORPORATE INCOME TAX RATE FROM
7 EIGHT TO SEVEN AND SIX-TENTHS PERCENT FOR TAXABLE YEAR 2001 AND EACH YEAR
8 THEREAFTER; AMENDING SECTION 63-3025A, IDAHO CODE, TO REDUCE THE CORPORATE
9 FRANCHISE TAX RATE FROM EIGHT PERCENT TO THE RATE OF THE CORPORATE INCOME
10 TAX AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 63-3029B, IDAHO
11 CODE, TO PROVIDE THAT TAXPAYERS MAKING EXPENDITURES FOR QUALIFIED
12 BROADBAND EQUIPMENT ARE ENTITLED TO THE CREDIT AND TO REVISE PROCEDURES
13 FOR RECAPTURE; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION
14 OF A NEW SECTION 63-3029G, IDAHO CODE, TO PROVIDE AN INCOME TAX CREDIT FOR
15 CERTAIN EXPENDITURES RELATING TO RESEARCH ACTIVITIES CONDUCTED IN IDAHO,
16 TO PROVIDE A SUNSET, TO PROVIDE A CARRYOVER OF UNUSED CREDITS, TO PROVIDE
17 DEFINITIONS AND TO PROVIDE PROCEDURES; AMENDING SECTION 63-3029H, IDAHO
18 CODE, TO REDESIGNATE THE SECTION; AMENDING CHAPTER 30, TITLE 63, IDAHO
19 CODE, BY THE ADDITION OF A NEW SECTION 63-3029I, IDAHO CODE, TO PROVIDE
20 AN INCOME TAX CREDIT FOR CERTAIN EXPENDITURES RELATING TO HIGH SPEED
21 BROADBAND COMMUNICATIONS ACCESS IN IDAHO, TO PROVIDE A SUNSET, TO PROVIDE
22 A CARRYOVER OF UNUSED CREDITS, TO PROVIDE DEFINITIONS AND TO PROVIDE PRO-
23 CEDURES; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A
24 NEW SECTION 63-3022P, IDAHO CODE, TO PROVIDE, WITH RESPECT TO AN INDIVID-
25 UAL TAXPAYER, AN AMOUNT EQUAL TO THE AMOUNT PAID BY THE TAXPAYER DURING
26 THE TAXABLE YEAR FOR INSURANCE, WHICH CONSTITUTES MEDICAL CARE FOR THE
27 TAXPAYER, THE SPOUSE OR DEPENDENTS OF THE TAXPAYER WHICH IS NOT OTHERWISE
28 DEDUCTED OR ACCOUNTED FOR BY THE TAXPAYER FOR IDAHO INCOME TAX PURPOSES
29 SHALL BE ALLOWED AS A DEDUCTION AGAINST IDAHO TAXABLE INCOME, AND TO PRO-
30 VIDE A DEFINITION OF INSURANCE WHICH CONSTITUTES MEDICAL CARE; AMENDING
31 CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW SECTION
32 63-3029J, IDAHO CODE, TO PROVIDE AN INCOME TAX CREDIT FOR CERTAIN EXPENDI-
33 TURES RELATING TO INVESTMENT IN AREAS IN IDAHO WITH HIGH UNEMPLOYMENT OR
34 LOW PERSONAL INCOME AT THE ELECTION OF THE TAXPAYER FOR TAXABLE YEAR 2001,
35 TO PROVIDE A CARRYOVER OF UNUSED CREDITS, TO PROVIDE DEFINITIONS AND TO
36 PROVIDE PROCEDURES; AMENDING SECTIONS 63-3029E AND 63-3029F, IDAHO CODE,
37 TO EXPAND THE NEW JOBS CREDIT BY REMOVING THE LIMITATION OF QUALIFYING
38 TAXPAYERS TO REVENUE-PRODUCING ENTERPRISE CREATING VALUE-ADDED NATURAL
39 RESOURCE PRODUCTS; REPEALING SECTIONS 63-3029E AND 63-3029F, IDAHO CODE;
40 AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW SEC-
41 TION 63-3029E, IDAHO CODE, TO PROVIDE DEFINITIONS AND CONSTRUCTION OF
42 TERMS; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW
43 SECTION 63-3029F, IDAHO CODE, TO PROVIDE SPECIAL CREDITS TO THE INCOME TAX
44 FOR NEW EMPLOYEES FOR AN ENTERPRISE THAT PRODUCES, ASSEMBLES, FABRICATES
45 OR PROCESSES NATURAL RESOURCE PRODUCTS; PROVIDING FOR NONSEVERABILITY OF
46 CERTAIN PROVISIONS OF THIS ACT; DECLARING AN EMERGENCY AND PROVIDING RET-
2
1 ROACTIVE APPLICATION FOR CERTAIN PROVISIONS OF THIS ACT, AND PROVIDING AN
2 EFFECTIVE DATE FOR CERTAIN PROVISIONS OF THIS ACT.
3 Be It Enacted by the Legislature of the State of Idaho:
4 SECTION 1. That Section 63-3024, Idaho Code, be, and the same is hereby
5 amended to read as follows:
6 63-3024. INDIVIDUALS' TAX AND TAX ON ESTATES AND TRUSTS. For taxable year
7 20001, and each taxable year thereafter, a tax measured by Idaho taxable
8 income as defined in this chapter is hereby imposed upon every individual,
9 trust, or estate required by this chapter to file a return.
10 (a) (i) The tax imposed upon individuals, trusts and estates shall be
11 computed at the following rates:
12 When Idaho taxable income is: The rate is:
13 Less than $1,000 One and nine six-tenths percent (1.96%)
14 $1,000 but less than $2,000 $196, plus three and nine six-tenths
15 percent (3.96%) of the amount over $1,000
16 $2,000 but less than $3,000 $582, plus four
17 and four one-tenths
18 percent (4.41%) of the amount over $2,000
19 $3,000 but less than $4,000 $10293, plus five
20 and four one-tenths
21 percent (5.41%) of the amount over $3,000
22 $4,000 but less than $5,000 $15644, plus six
23 and four one-tenths
24 percent (6.41%) of the amount over $4,000
25 $5,000 but less than $7,500 $2205, plus seven
26 and four one-tenths
27 percent (7.41%) of the amount over $5,000
28 $7,500 but less than $20,000 $405383, plus seven and seven four-tenths
29 percent (7.74%) of the amount over $7,500
30 Over $20,000 $1,367.508, plus eight and one-tenth seven
31 and eight-tenths percent
32 (8.17.8%) of the amount over $20,000
33 (ii) For taxable year 2001 and each taxable year thereafter, a tax mea-
34 sured by Idaho taxable income as defined in this chapter is hereby imposed
35 upon every individual, trust, or estate required by this chapter to file a
36 return.
37 The tax imposed upon individuals, trusts and estates shall be computed at the
38 following rates:
39 When Idaho taxable income is: The rate is:
40 Less than $1,000 Two percent (2.0%)
41 $1,000 but less than $2,000 $20, plus four percent (4.0%)
42 of the amount over $1,000
43 $2,000 but less than $3,000 $60, plus four and one-half percent
44 (4.5%) of the amount over $2,000
45 $3,000 but less than $4,000 $105, plus five and one-half percent
46 (5.5%) of the amount over $3,000
47 $4,000 but less than $5,000 $160, plus six and one-half percent
48 (6.5%) of the amount over $4,000
49 $5,000 but less than $7,500 $225, plus seven and one-half percent
50 (7.5%) of the amount over $5,000
51 $7,500 but less than $20,000 $412.50, plus seven and eight-tenths percent
52 (7.8%) of the amount over $7,500
3
1 Over $20,000 $1,387.50, plus eight and two-tenths percent
2 (8.2%) of the amount over $20,000
3 For taxable year 2000 and each year thereafter, the state tax commission
4 shall prescribe a factor which shall be used to compute the Idaho income tax
5 brackets provided in subsections (a)(i) and (a)(ii) of this section. The fac-
6 tor shall provide an adjustment to the Idaho tax brackets so that inflation
7 will not result in a tax increase. The Idaho tax brackets shall be adjusted as
8 follows: multiply the bracket amounts by the percentage (the consumer price
9 index for the calendar year immediately preceding the calendar year to which
10 the adjusted brackets will apply divided by the consumer price index for cal-
11 endar year 1998). For the purpose of this computation, the consumer price
12 index for any calendar year is the average of the consumer price index as of
13 the close of the twelve (12) month period for the immediately preceding calen-
14 dar year as adopted by the state tax commission. This adoption shall be exempt
15 from the provisions of chapter 52, title 67, Idaho Code. The consumer price
16 index shall mean the consumer price index for all U.S. urban consumers pub-
17 lished by the United States department of labor. The state tax commission
18 shall annually include the factor as provided in this subsection to multiply
19 against Idaho taxable income in the brackets above to arrive at that year's
20 taxable income for tax bracket purposes.
21 (b) In case a joint return is filed by husband and wife pursuant to the
22 provisions of section 63-3031, Idaho Code, the tax imposed by this section
23 shall be twice the tax which would be imposed on one-half (1/2) of the aggre-
24 gate Idaho taxable income. For the purposes of this section, a return of a
25 surviving spouse, as defined in section 2(a) of the Internal Revenue Code, and
26 a head of household, as defined in section 2(b) of the Internal Revenue Code,
27 shall be treated as a joint return and the tax imposed shall be twice the tax
28 which would be imposed on one-half (1/2) of the Idaho taxable income.
29 (c) The state tax commission shall compute and publish Idaho income tax
30 liability for taxpayers at the midpoint of each bracket of Idaho taxable
31 income in fifty dollar ($50.00) steps to fifty thousand dollars ($50,000),
32 rounding such calculations to the nearest dollar. Taxpayers having income
33 within such brackets shall file returns based upon and pay taxes according to
34 the schedule thus established. The state tax commission shall promulgate rules
35 defining the conditions upon which such returns shall be filed.
36 SECTION 2. That Section 63-3022H, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 63-3022H. DEDUCTION OF CAPITAL GAINS. (1) If an individual taxpayer
39 reports a net capital gain in determining taxable income, sixty one hundred
40 percent (6100%) of the net capital gain from the sale or exchange of qualified
41 property shall be a deduction in determining taxable income.
42 (2) The deduction provided in this section is limited to the amount of
43 the net capital gain from all property included in federal taxable income. Net
44 capital gains treated as ordinary income by the iInternal rRevenue cCode do
45 not qualify for the deduction allowed in this section. The deduction otherwise
46 allowable under this section shall be reduced by the amount of any federal
47 capital gains deduction relating to such property, but not below zero.
48 (3) As used in this section "qualified property" means the following
49 property having an Idaho situs at the time of sale:
50 (a) Real property held at least eighteen (18) months;
51 (b) Tangible personal property used in Idaho for at least twelve (12)
52 months by a revenue-producing enterprise;
53 (c) Cattle or horses held for breeding, draft, dairy or sporting purposes
4
1 for at least twenty-four (24) months if more than one-half (1/2) of the
2 taxpayer's gross income (as defined in section 61(a) of the iInternal
3 rRevenue cCode) for the taxable year is from farming or ranching opera-
4 tions in Idaho;
5 (d) Breeding livestock other than cattle or horses held at least twelve
6 (12) months if more than one-half (1/2) of the taxpayer's gross income (as
7 defined in section 61(a) of the iInternal rRevenue cCode) for the taxable
8 year is from farming or ranching operations in Idaho;
9 (e) Timber grown in Idaho and held at least twenty-four (24) months;
10 (f) In determining the period for which property subject to this section
11 has been held by a taxpayer, the provisions of section 1223 of the
12 iInternal rRevenue cCode shall apply, except that when the holding period
13 includes any period during which the taxpayer held property other than the
14 property sold, all property held during the holding period must qualify
15 under this section.
16 (4) If an individual reports a capital gain from qualified property from
17 an S corporation or a partnership, a deduction shall be allowed under this
18 section only to the extent the individual held his interest in the income of
19 the S corporation or the partnership for the time required by subsection (3)
20 of this section for the property sold.
21 (5) If an individual reports a capital gain from an estate, no deduction
22 shall be allowed under this section unless the holding period required in sub-
23 section (3) of this section was satisfied by the decedent, the estate, or the
24 beneficiary, or a combination thereof.
25 (6) If an individual reports a capital gain from a trust, no deduction
26 shall be allowed under this section unless the holding period required in sub-
27 section (3) of this section was satisfied by the grantor, the trust, or the
28 beneficiary, or a combination thereof.
29 (7) As used in this section "revenue-producing enterprise" means:
30 (a) The production, assembly, fabrication, manufacture, or processing of
31 any agricultural, mineral or manufactured product;
32 (b) The storage, warehousing, distribution, or sale at wholesale of any
33 products of agriculture, mining or manufacturing;
34 (c) The feeding of livestock at a feedlot;
35 (d) The operation of laboratories or other facilities for scientific,
36 agricultural, animal husbandry, or industrial research, development, or
37 testing.
38 SECTION 3. That Section 63-3025, Idaho Code, be, and the same is hereby
39 amended to read as follows:
40 63-3025. TAX ON CORPORATE INCOME. For taxable years commencing on and
41 after January 1, 1987 2001, a tax is hereby imposed on the Idaho taxable
42 income of a corporation which transacts or is authorized to transact business
43 in this state or which has income attributable to this state. The tax shall be
44 equal to eight seven and six-tenths percent (87.6%) of Idaho taxable income;
45 provided, however, that the tax shall not be less than twenty dollars
46 ($20.00); provided further that the twenty dollar ($20.00) minimum payment
47 shall not be collected from nonproductive mining corporations. The tax imposed
48 by this section shall not apply to corporations taxed pursuant to the provi-
49 sions of section 63-3025A, Idaho Code.
50 SECTION 4. That Section 63-3025A, Idaho Code, be, and the same is hereby
51 amended to read as follows:
5
1 63-3025A. FRANCHISE TAX. For taxable years commencing on and after Janu-
2 ary 1, 1987 2001, a franchise tax shall be imposed upon any corporation for
3 the privilege of exercising its corporate franchise within the state during
4 such taxable year, including, but not limited to, corporations engaged in
5 business in Idaho for the exclusive purpose of performing contracts with the
6 United States department of energy at the Idaho national engineering and envi-
7 ronmental laboratory, which tax shall be measured by income which is attribut-
8 able to this state under the provisions of this chapter and which tax shall be
9 equal to eight percent (8%) of Idaho taxable income at the rate provided in
10 section 63-3025, Idaho Code; provided, however, that the tax shall not be less
11 than twenty dollars ($20.00); provided further that the twenty dollar ($20.00)
12 minimum payment shall not be collected from nonproductive mining corporations;
13 but the twenty dollar ($20.00) minimum tax shall apply to corporations quali-
14 fied to file returns and actually filing returns under the provisions of sub-
15 chapter "S" of the Internal Revenue Code.
16 SECTION 5. That Section 63-3029B, Idaho Code, be, and the same is hereby
17 amended to read as follows:
18 63-3029B. INCOME TAX CREDIT FOR CAPITAL INVESTMENT. (1) At the election
19 of the taxpayer there shall be allowed, subject to the applicable limitations
20 provided herein as a credit against the income tax imposed by chapter 30,
21 title 63, Idaho Code, an amount equal to the sum of:
22 (a) The tax credit carryovers; and
23 (b) The tax credit for the taxable year.
24 (2) The maximum allowable amount of the credit for the current taxable
25 year shall be three percent (3%) of the amount of qualified investments made
26 during the taxable year.
27 (3) As used in this section "qualified investment" means certain depre-
28 ciable property which:
29 (a) (i) Is eligible for the federal investment tax credit, as defined in
30 sections 46(c) and 48 of the Internal Revenue Code subject to the
31 limitations provided for certain regulated companies in section 46(f)
32 of the Internal Revenue Code and is not a motor vehicle under eight
33 thousand (8,000) pounds gross weight; or
34 (ii) Is qualified broadband equipment as defined in section 63-3029I,
35 Idaho Code; and
36 (b) Is acquired, constructed, reconstructed, erected or placed into ser-
37 vice after December 31, 1981; and
38 (c) Has a situs in Idaho.
39 (4) Notwithstanding the provisions of subsections (1) and (2) of this
40 section, the amount of the credit allowed shall not exceed fifty percent (50%)
41 of the tax liability of the taxpayer.
42 (5) If the sum of credit carryovers from the credit allowed by subsection
43 (2) of this section and the amount of credit for the taxable year from the
44 credit allowed by subsection (2) of this section exceed the limitation imposed
45 by subsection (4) of this section for the current taxable year, the excess
46 attributable to the current taxable year's credit shall be an investment
47 credit carryover to the fourteen (14) succeeding taxable years. In the case of
48 a group of corporations filing a combined report under section 63-3027, Idaho
49 Code, or sections 63-3027B through 63-3027E, Idaho Code, credit earned by one
50 (1) member of the group but not used by that member may be used by another
51 member of the group, subject to the provisions of subsection (4) of this sec-
52 tion, instead of carried over. The entire amount of unused credit shall be
53 carried forward to the earliest of the succeeding years, wherein the oldest
6
1 available unused credit shall be used first, so long as the qualified invest-
2 ment property for which the unused credit was granted still maintains Idaho
3 situs. For a combined group of corporations, credit carried forward may be
4 claimed by any member of the group unless the member who earned the credit is
5 no longer included in the combined group.
6 (6) Any recapture of the credit allowed by subsection (2) of this section
7 on property disposed of or ceasing to qualify, prior to the close of its use-
8 ful life the recapture period, shall be determined according to the applicable
9 recapture provisions of the Internal Revenue Code. In the case of a unitary
10 group of corporations, the increase in tax due to the recapture of investment
11 tax credit must be reported by the member of the group who earned the credit
12 regardless of which member claimed the credit against tax.
13 (7) For the purpose of determining whether property placed in service is
14 a "qualified investment" as defined in subsection (3) of this section, the
15 provisions of section 49 of the Internal Revenue Code shall be disregarded.
16 (8) For purposes of this section, property has a situs in Idaho during a
17 taxable year if it is used in Idaho at any time during the taxable year. Prop-
18 erty not used in Idaho during a taxable year does not have a situs in Idaho in
19 the taxable year during which the property is not used in Idaho or in any sub-
20 sequent taxable year. No credit or carryover of credit is permitted under this
21 section if the credit or carryover relates to property that does not have a
22 situs in Idaho during the taxable year for which the credit or carryover is
23 claimed. The Idaho situs of property must be established by records maintained
24 by the taxpayer which are created reasonably contemporaneously with the use of
25 the property.
26 (9) In the case of property used both in and outside Idaho, the taxpayer,
27 electing to claim the credit provided in this section, must elect to compute
28 the qualified investment in property with a situs in Idaho for all such
29 investments first qualifying during that year in one (1), but only one (1), of
30 the following ways:
31 (a) The amount of each qualified investment in a specific asset shall be
32 separately computed based on the percentage of the actual use of the prop-
33 erty in Idaho by using a measure of the use, such as total miles or total
34 machine hours, that most accurately reflects the beneficial use during the
35 taxable year in which it is first acquired, constructed, reconstructed,
36 erected or placed into service; provided, that the asset is placed in ser-
37 vice more than ninety (90) days before the end of the taxable year. In the
38 case of assets acquired, constructed, reconstructed, erected or placed
39 into service within ninety (90) days prior to the end of the taxable year
40 in which the investment first qualifies, the measure of the use of that
41 asset within Idaho for that year shall be based upon the percentage of use
42 in Idaho during the first ninety (90) days of use of the asset;
43 (b) The investment in qualified property used both inside and outside
44 Idaho during the taxable year in which it is first acquired, constructed,
45 reconstructed, erected or placed into service shall be multiplied by the
46 percent of the investment that would be included in the numerator of the
47 Idaho property factor determined pursuant to section 63-3027, Idaho Code,
48 for the same year.
49 (10) Only for the purposes of subsections (3)(a) and (7) of this section,
50 references to sections of the "Internal Revenue Code" mean the sections
51 referred to as they existed in the Internal Revenue Code of 1986 prior to
52 November 5, 1990.
53 SECTION 6. That Chapter 30, Title 63, Idaho Code, be, and the same is
54 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
7
1 ignated as Section 63-3029G, Idaho Code, and to read as follows:
2 63-3029G. CREDITS FOR RESEARCH ACTIVITIES CONDUCTED IN THIS STATE --
3 CARRY FORWARD.
4 (1) (a) Subject to the limitations of this section, for taxable years
5 beginning between January 1, 2001, and December 31, 2005, inclusive, there
6 shall be allowed to a taxpayer a nonrefundable credit against taxes
7 imposed by sections 63-3024, 63-3025 and 63-3025A, Idaho Code, for
8 increasing research activities in Idaho during any consecutive five (5)
9 year period beginning, at the election of the taxpayer, either:
10 (i) January 1, 2001, or
11 (ii) The first day of the taxpayer's taxable year beginning in 2001.
12 (b) The credit allowed by subsection (1)(a) of this section shall be the
13 sum of:
14 (i) Five percent (5%) of the excess of qualified research payments
15 for research conducted in Idaho over the base amount; and
16 (ii) Five percent (5%) basic research payments allowable under sub-
17 section (e) of section 41 of the Internal Revenue Code for basic
18 research conducted in Idaho.
19 (c) Subject to the limitation in subsection (3) of this section, a tax-
20 payer making the election permitted by subsection (1)(a)(i) of this sec-
21 tion, credit for research activities occurring prior to the beginning of
22 the taxpayer's taxable year beginning in 2001 shall be claimed on the
23 taxpayer's return for its taxable year 2001 in addition to credit relating
24 to activity in that year.
25 (2) As used in this section:
26 (a) The terms "qualified research payments," "qualified research," "basic
27 research payments" and "basic research" shall be as defined in section 41
28 of the Internal Revenue Code except that the research must be conducted in
29 Idaho.
30 (b) The term "base amount" shall mean an amount calculated as provided in
31 sections 41(c) and 41(h) of the Internal Revenue Code, except that:
32 (i) The base amount does not include the calculation of the alter-
33 native incremental credit provided for in section 41(c)(4) of the
34 Internal Revenue Code;
35 (ii) A taxpayer's gross receipts include only those gross receipts
36 attributable to sources within this state as provided in subsections
37 (q) and (r) of section 63-3027, Idaho Code; and
38 (iii) Notwithstanding section 41(c) of the Internal Revenue Code, for
39 purposes of calculating the base amount, a taxpayer:
40 (A) May elect to be treated as a start-up company as provided
41 in section 41(c)(3)(B) of the Internal Revenue Code, regardless
42 of whether the taxpayer meets the requirements of section
43 41(c)(3)(B)(i)(I) or (II) of the Internal Revenue Code; and
44 (B) May not revoke an election to be treated as a start-up com-
45 pany.
46 (3) The credit allowed by subsection (1)(a) of this section together with
47 any credits carried forward under subsection (5) of this section shall not
48 exceed the amount of tax due under sections 63-3024, 63-3025 and 63-3025A,
49 Idaho Code, after allowance for all other credits permitted by this chapter.
50 When credits earned in more than one (1) taxable year are available, the old-
51 est credits shall be applied first.
52 (4) In the case of a group of corporations filing a combined report under
53 subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
54 of the group but not used by that member may be used by another member of the
8
1 group. For a combined group of corporations, any member of the group may claim
2 credit carried forward unless the member who earned the credit is no longer
3 included in the combined group.
4 (5) The credit allowed by subsection (1)(a) of this section shall be
5 claimed for the taxable year during which the taxpayer qualifies for the
6 credit. If the credit exceeds the limitation under subsection (3) of this sec-
7 tion, the excess amount may be carried forward for a period that does not
8 exceed the next fourteen (14) taxable years.
9 (6) In addition to other needed rules, the state tax commission may pro-
10 mulgate rules prescribing, in the case of S corporations, partnerships, trusts
11 or estates, a method of attributing the credit under this section to the
12 shareholders, partners or beneficiaries in proportion to their share of the
13 income from the S corporation, partnership, trust or estate.
14 SECTION 7. That Section 63-3029H, Idaho Code, be, and the same is hereby
15 amended to read as follows:
16 63-3029HP. PRIORITY OF CREDITS. When a taxpayer subject to any taxes
17 imposed under this chapter is entitled to two (2) or more credits against such
18 taxes, the priority of credits shall be determined in the following order:
19 (a) Nonrefundable credits. Nonrefundable credits shall be applied to the
20 tax liability before application of refundable credits. If a taxpayer is enti-
21 tled to more than one (1) nonrefundable credit, the credits shall be applied
22 in the order in which the statutes authorizing the credits were enacted by the
23 legislature.
24 (b) Refundable credits. Refundable credits shall be applied to the tax
25 liability after application of any nonrefundable credits.
26 SECTION 8. That Chapter 30, Title 63, Idaho Code, be, and the same is
27 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
28 ignated as Section 63-3029I, Idaho Code, and to read as follows:
29 63-3029I. INCOME TAX CREDIT FOR INVESTMENT IN BROADBAND EQUIPMENT. (1)
30 Subject to the limitations of this section, for taxable years beginning
31 between January 1, 2001, and December 31, 2005, inclusive, there shall be
32 allowed to a taxpayer a nonrefundable credit against taxes imposed by sections
33 63-3024, 63-3025 and 63-3025A, Idaho Code, for qualified expenditures in qual-
34 ified broadband equipment in Idaho.
35 (2) The credit permitted in subsection (1) of this section shall be three
36 percent (3%) of the qualified investment in qualified broadband equipment in
37 Idaho and shall be in addition to the credit for capital investment permitted
38 by section 63-3029B, Idaho Code.
39 (3) As used in this section the term:
40 (a) "Qualified investment" shall be as defined in section 63-3029B, Idaho
41 Code.
42 (b) "Qualified broadband equipment" means equipment that qualifies for
43 the credit for capital investment permitted by section 63-3029B, Idaho
44 Code, and is capable of transmitting signals at a rate of at least two
45 hundred thousand (200,000) bits per second to a subscriber and at least
46 one hundred twenty-five thousand (125,000) bits per second from a sub-
47 scriber, and
48 (i) In the case of a telecommunications carrier, such qualifying
49 equipment shall be necessary to the provision of broadband service
50 and an integral part of a broadband network. "Telecommunications car-
51 rier" has the meaning given such term by section 3(44) of the commu-
9
1 nications act of 1934, as amended, but does not include a commercial
2 mobile service provider.
3 (ii) In the case of a commercial mobile service carrier, such quali-
4 fying equipment shall extend from the subscriber side of the mobile
5 telecommunications switching office to a transmitting/receiving
6 antenna, including such antenna, on the outside of the structure in
7 which the subscriber is located. "Commercial mobile service carrier"
8 means any person authorized to provide commercial mobile radio ser-
9 vice to subscribers as defined in section 20.3 of title 47, Code of
10 Federal Regulations (10-1-99 ed.), as amended.
11 (iii) In the case of a cable or open video system operator, such
12 qualifying equipment shall extend from the subscriber's side of the
13 headend to the outside of the structure in which the subscriber is
14 located. The terms "cable operator" and "open video system operator"
15 have the meanings given such terms by sections 602(5) and 653,
16 respectively, of the communications act of 1934, as amended.
17 (iv) In the case of a satellite carrier or a wireless carrier other
18 than listed above, such qualifying equipment is only that equipment
19 that extends from a transmitting/receiving antenna, including such
20 antenna, which transmits and receives signals to or from multiple
21 subscribers to a transmitting/receiving antenna on the outside of the
22 structure in which the subscriber is located. "Satellite carrier"
23 means any person using the facilities of a satellite or satellite
24 services licensed by the federal communications commission and oper-
25 ating a fixed-satellite service or direct broadcast satellite ser-
26 vices to provide point-to-multipoint distribution of signals. "Other
27 wireless carrier" means any person, other than a telecommunications
28 carrier, commercial mobile service carrier, cable operator, open
29 video operator, or satellite carrier, providing broadband services to
30 subscribers through the radio transmission of energy.
31 (v) In the case of packet switching equipment, such packet equip-
32 ment installed in connection with other qualifying equipment listed
33 in subsections (2)(b)(i) through (2)(b)(iv) of this section, provided
34 it is the last in a series of equipment that transmits signals to a
35 subscriber or the first in a series of equipment that transmits sig-
36 nals from a subscriber. "Packet switching" means controlling or
37 routing the path of a digital transmission signal which is assembled
38 into packets or cells.
39 (vi) In the case of multiplexing and demultiplexing equipment, such
40 equipment only to the extent that it is deployed in connection with
41 providing broadband services in locations between packet switching
42 equipment and the structure in which the subscriber is located.
43 "Multiplexing" means the transmission of two (2) or more signals over
44 a communications circuit without regard to the communications tech-
45 nology.
46 (vii) Any property not primarily used to provide services in Idaho to
47 public subscribers is not qualified broadband equipment.
48 (4) No equipment described in subsections (2)(b)(i) through (2)(b)(vi) of
49 this section shall qualify for the credit provided in subsection (1) of this
50 section until the taxpayer applies to and obtains from the Idaho public utili-
51 ties commission an order confirming that the installed equipment is qualified
52 broadband equipment. Applications submitted to the commission shall be gov-
53 erned by the commission's rules of procedure. The commission may issue proce-
54 dural orders necessary to implement this section.
55 (5) The credit allowed by subsection (1) of this section together with
10
1 any credits carried forward under subsection (7) of this section shall not, in
2 any one (1) taxable year, exceed the lesser of:
3 (a) The amount of tax due under sections 63-3024, 63-3025 and 63-3025A,
4 Idaho Code, after allowance for all other credits permitted by this chap-
5 ter; or
6 (b) Seven hundred fifty thousand dollars ($750,000).
7 When credits earned in more than one (1) taxable year are available, the old-
8 est credits shall be applied first.
9 (6) In the case of a group of corporations filing a combined report under
10 subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
11 of the group but not used by that member may be used by another member of the
12 group, subject to the provisions of subsection (7) of this section, instead of
13 carried over. For a combined group of corporations, credit carried forward may
14 be claimed by any member of the group unless the member who earned the credit
15 is no longer included in the combined group.
16 (7) If the credit allowed by subsection (1) of this section exceeds the
17 limitation under subsection (5) of this section, the excess amount may be car-
18 ried forward for a period that does not exceed the next fourteen (14) taxable
19 years.
20 (8) In the event that qualified broadband equipment upon which the credit
21 allowed by this section has been used ceases to qualify for the credit allowed
22 by section 63-3029B, Idaho Code, or is subject to recapture of that credit,
23 the recapture of credit under this section shall be in the same proportion and
24 subject to the same provisions as the amount of credit required to be recap-
25 tured under section 63-3029B, Idaho Code.
26 (9) (a) Subject to the requirements of this subsection, a taxpayer enti-
27 tled to the credit or to an unused portion of the credit allowed by this
28 section may transfer the unused credit to another taxpayer required to
29 file a return under this chapter.
30 (b) Before completing a transfer under this subsection, the transferor
31 shall notify the state tax commission of its intention to transfer the
32 credit and the identity of the transferee. The state tax commission shall
33 provide the transferor with a written statement of the amount of credit
34 available under this section as then appearing in the commission's records
35 and the number of years the credit may be carried over. The transferee
36 shall attach a copy of the statement to any return in regard to which the
37 transferred credit is claimed.
38 (c) In the event that after the transfer the state tax commission deter-
39 mines that the amount of credit properly available under this section is
40 less than the amount claimed by the transferor of the credit or that the
41 credit is subject to recapture, the commission shall assess the amount of
42 overstated or recaptured credit as taxes due from the transferor and not
43 the transferee. The assessment shall be made in the manner provided for a
44 deficiency in taxes under this chapter.
45 (10) In addition to other needed rules, the state tax commission may pro-
46 mulgate rules prescribing, in the case of S corporations, partnerships, trusts
47 or estates, a method of attributing the credit under this section to the
48 shareholders, partners or beneficiaries in proportion to their share of the
49 income from the S corporation, partnership, trust or estate.
50 SECTION 9. That Chapter 30, Title 63, Idaho Code, be, and the same is
51 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
52 ignated as Section 63-3022P, Idaho Code, and to read as follows:
53 63-3022P. HEALTH INSURANCE COSTS. With respect to an individual taxpayer,
11
1 an amount equal to the amount paid by the taxpayer during the taxable year for
2 insurance which constitutes medical care for the taxpayer, the spouse or
3 dependents of the taxpayer which is not otherwise deducted or accounted for by
4 the taxpayer for Idaho income tax purposes shall be allowed as a deduction for
5 Idaho taxable income. As used in this section, "insurance which constitutes
6 medical care" includes any hospital or medical policy or certificate, any sub-
7 scriber contract, policies or certificates of insurance for specific disease,
8 hospital confinement indemnity, accident-only, credit, dental, vision, single
9 employer self-funded coverage, meaning that portion of health insurance which
10 is the retained risk of the employer, student health benefits only or coverage
11 for medical care or treatment issued as a supplement to liability insurance.
12 Employers shall provide to the employee a statement as to whether an
13 employee's contribution for health insurance has been excluded from taxable
14 income.
15 SECTION 10. That Chapter 30, Title 63, Idaho Code, be, and the same is
16 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
17 ignated as Section 63-3029J, Idaho Code, and to read as follows:
18 63-3029J. INCENTIVE INCOME TAX INVESTMENT CREDIT. (1) Subject to the lim-
19 itations of this section, for taxable year 2001 only, there shall be allowed
20 to a taxpayer a nonrefundable credit against taxes imposed by sections
21 63-3024, 63-3025 and 63-3025A, Idaho Code, in the amount allowed by subsection
22 (2) of this section for qualified investments in Idaho. The credit shall be in
23 addition to the credit for capital investment permitted by section 63-3029B,
24 Idaho Code.
25 (2) The credit permitted in subsection (1) of this section shall be at
26 the percentage rate determined under either subsection (2)(a) or (2)(b) of
27 this section at the election of the taxpayer.
28 (a) (i) One-half (1/2) of the amount by which the average three-year
29 unemployment rate in the county in which the property is located
30 exceeds six percent (6%). In the case of mobile property, the prop-
31 erty shall be located in the county in which it is primarily based.
32 (ii) For purposes of this section the director of the department of
33 labor shall, on or before the first day of September of each calendar
34 year, establish and certify to the state tax commission the average
35 three-year unemployment rate in each county in Idaho for the immedi-
36 ately preceding three (3) calendar years. The rates thus certified
37 shall apply to the calculation of the credit under subsection
38 (2)(a)(i) of this section for property qualifying in the taxable year
39 beginning during the next calendar year.
40 (b) (i) One-tenth of one percent (.1%) for each full percent that the
41 three-year average per capita personal income level in the county in
42 which the property is located is below ninety percent (90%) of the
43 average statewide per capita personal income level.
44 (ii) For purposes of this section the director of the department of
45 commerce shall, on or before the first day of September of each cal-
46 endar year, establish and certify to the state tax commission the
47 most current three-year average per capita personal income level in
48 each county in Idaho and the statewide per capita personal income
49 level for the most current preceding three (3) calendar years. The
50 levels thus certified shall apply to the calculation of the credit
51 under subsection (2)(b)(i) of this section for property qualifying in
52 the taxable year beginning during the next calendar year.
53 (3) As used in this section the term "qualified investment" shall be
12
1 defined as in section 63-3029B, Idaho Code.
2 (4) The credit allowed by subsection (1) of this section together with
3 any credits carried forward under subsection (6) of this section shall not
4 exceed in any one (1) taxable year the lesser of:
5 (a) The amount of tax due under sections 63-3024, 63-3025 and 63-3025A,
6 Idaho Code, after allowance for all other credits permitted by this chap-
7 ter; or
8 (b) Five hundred thousand dollars ($500,000).
9 (5) In the case of a group of corporations filing a combined report under
10 subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
11 of the group but not used by that member may be used by another member of the
12 group, subject to the provisions of subsection (6) of this section, instead of
13 carried over. For a combined group of corporations, credit carried forward may
14 be claimed by any member of the group unless the member who earned the credit
15 is no longer included in the combined group.
16 (6) If the credit allowed by subsection (1) of this section exceeds the
17 limitation under subsection (4) of this section, the excess amount may be car-
18 ried forward for a period that does not exceed the next fourteen (14) taxable
19 years.
20 (7) In the event that property upon which the credit allowed by this sec-
21 tion has been used ceases to qualify for the credit allowed by section
22 63-3029B, Idaho Code, the recapture of credit under this section shall be in
23 the same proportion and subject to the same provisions as the amount of credit
24 required to be recaptured under section 63-3029B, Idaho Code.
25 (8) (a) Subject to the requirements of this subsection, a taxpayer enti-
26 tled to the credit or to an unused portion of the credit allowed by this
27 section may transfer the unused credit to another taxpayer required to
28 file a return under this chapter.
29 (b) Before completing a transfer under this subsection, the transferor
30 shall notify the state tax commission of its intention to transfer the
31 credit and the identity of the transferee. The state tax commission shall
32 provide the transferor with a written statement of the amount of credit
33 available under this section as then appearing in the commission's records
34 and the number of years the credit may be carried over. The transferor
35 shall provide the transferee with the original statement. The transferee
36 shall attach a copy of the statement to any return in regard to which the
37 transferred credit is claimed.
38 (c) In the event that after the transfer the state tax commission deter-
39 mines that the amount of credit properly available under this section is
40 less than the amount claimed by the transferor of the credit and shown in
41 the statement described in subsection (8)(b) of this section or that the
42 credit is subject to recapture, the commission shall assess the amount of
43 overstated credit as taxes due from the transferor and not the transferee.
44 The assessment shall be made in the manner provided for a deficiency in
45 taxes under this chapter.
46 (9) In addition to other needed rules, the state tax commission may pro-
47 mulgate rules prescribing:
48 (a) In the case of S corporations, partnerships, trusts or estates, a
49 method of attributing the credit under this section to the shareholders,
50 partners or beneficiaries in proportion to their share of the income from
51 the S corporation, partnership, trust or estate.
52 (b) A requirement that a transferor under subsection (8) of this section,
53 prior to obtaining the written statement provided in subsection (8)(b) of
54 this section, post such bond or security as the state tax commission may
55 require to secure any liability referred to in subsection (8)(c) of this
13
1 section. Such rules shall provide an opportunity for a taxpayer, upon a
2 showing of financial responsibility, to have the bond waiver, for notice
3 of denial of waiver in accordance with section 63-3045, Idaho Code, and
4 for review in accordance with section 63-3045B, Idaho Code.
5 SECTION 11. That Section 63-3029E, Idaho Code, be, and the same is hereby
6 amended to read as follows:
7 63-3029E. DEFINITIONS -- CONSTRUCTION OF TERMS. As used in this section
8 and in section 63-3029F, Idaho Code:
9 (1) (a) "New employee" means a person from whom Idaho income tax has been
10 withheld, employed by the taxpayer, in a revenue-producing enterprise cre-
11 ating value-added natural resource products, and covered for unemployment
12 insurance purposes under chapter 13, title 72, Idaho Code, during the tax-
13 able year for which the credit allowed by section 63-3029F, Idaho Code, is
14 claimed. A person shall be deemed to be so engaged if such person performs
15 duties on:
16 (i) A regular full-time basis; or
17 (ii) A part-time basis if such person is customarily performing such
18 duties at least twenty (20) hours per week.
19 No credit shall be earned unless the new employee shall have performed
20 such duties for the taxpayer for a minimum of nine (9) months during the
21 taxable year for which the credit is claimed.
22 (b) The provisions of paragraph (a) of this subsection notwithstanding,
23 no credit shall be allowed for employment of persons by a taxpayer who
24 acquires a revenue-producing enterprise from another taxpayer or who oper-
25 ates in a place of business the same or a substantially identical revenue-
26 producing value-added natural resource products enterprise business as
27 operated by another taxpayer within the prior twelve (12) months, except
28 as the prior taxpayer would have qualified under the provisions of para-
29 graph (c) of this subsection. Employees transferred from a related tax-
30 payer shall not be included in the computation of the credit.
31 (c) The number of employees during any taxable year for any taxpayer
32 shall be the mathematical average of the number of employees reported to
33 the Idaho department of labor for employment security purposes during the
34 twelve (12) months of the taxable year which qualified under paragraph (a)
35 of this subsection. In the event the business is in operation for less
36 than the entire taxable year, the number of employees of the business for
37 the year shall be the average number actually employed during the months
38 of operation, providing that the qualifications of paragraph (a) of this
39 subsection are met.
40 (2) "Revenue-producing enterprise" means the production, assembly, fabri-
41 cation, manufacture or processing of any natural resource product.
42 (3) "Same or a substantially identical revenue-producing enterprise busi-
43 ness" means a revenue-producing enterprise business in which the products pro-
44 duced or sold, or the activities conducted are the same in character and use
45 and are produced, sold or conducted in the same manner as, or for the same
46 types of customers as, the products or activities produced, sold or conducted
47 in another revenue-producing enterprise business.
48 SECTION 12. That Section 63-3029F, Idaho Code, be, and the same is hereby
49 amended to read as follows:
50 63-3029F. SPECIAL CREDIT AVAILABLE -- NEW EMPLOYEES. (1) Any taxpayer
51 shall be allowed a credit, in an amount determined under subsection (2) of
14
1 this section, against the tax imposed by this chapter, other than the tax
2 imposed by section 63-3082, Idaho Code, for any taxable year during which the
3 taxpayer's employment of new employees, as defined under section 63-3029E(1),
4 Idaho Code, increases above the taxpayer's average employment for either: (a)
5 the prior taxable year, or (b) the average of three (3) prior taxable years,
6 whichever is higher. No credit shall be allowed under this section unless the
7 number of new employees equals or exceeds one (1) person.
8 (2) The credit authorized in subsection (1) of this section shall be five
9 hundred dollars ($500) per new employee, but the total credit allowed shall
10 not exceed three and one-quarter percent (3.25%) of net income from the
11 taxpayer's corporate, proprietorship, partnership, small business corporation
12 or limited liability company revenue-producing enterprise business in which
13 the employment occurred. Additionally, the total of this and all other credits
14 allowed under this chapter except for the credits allowed under sections
15 63-3024A, 63-3025D and 63-3029, Idaho Code, taken during any taxable year
16 shall not exceed forty-five percent (45%) of the tax otherwise imposed on the
17 taxpayer for the taxable year for which such credit is allowed.
18 (3) If the sum of the credit carryovers from the credit allowed by sub-
19 section (2) of this section and the amount of credit for the taxable year from
20 the credit allowed by subsection (2) of this section exceed the limitation
21 imposed by subsection (2) of this section for the current taxable year, the
22 excess attributable to the current taxable year's credit shall be a credit
23 carryover to the three (3) succeeding taxable years. The entire amount of
24 unused credit shall be carried forward to the earliest of the succeeding
25 years, wherein the oldest available unused credit shall be used first, so long
26 as the employment level for which the credit was granted is still maintained.
27 SECTION 13. That Sections 63-3029E and 63-3029F, Idaho Code, be, and the
28 same are hereby repealed.
29 SECTION 14. That Chapter 30, Title 63, Idaho Code, be, and the same is
30 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
31 ignated as Section 63-3029E, Idaho Code, and to read as follows:
32 63-3029E. DEFINITIONS -- CONSTRUCTION OF TERMS. As used in this section
33 and in section 63-3029F, Idaho Code:
34 (1) (a) "New employee" means a person from whom Idaho income tax has
35 been withheld, employed by the taxpayer in a revenue-producing enterprise
36 creating value-added natural resource products, and covered for unemploy-
37 ment insurance purposes under chapter 13, title 72, Idaho Code, during the
38 taxable year for which the credit allowed by section 63-3029F, Idaho Code,
39 is claimed. A person shall be deemed to be so engaged if such person per-
40 forms duties on:
41 (i) A regular full-time basis; or
42 (ii) A part-time basis if such person is customarily performing such
43 duties at least twenty (20) hours per week.
44 No credit shall be earned unless the new employee shall have performed
45 such duties for the taxpayer for a minimum of nine (9) months during the
46 taxable year for which the credit is claimed.
47 (b) The provisions of paragraph (a) of this subsection notwithstanding,
48 no credit shall be allowed for employment of persons by a taxpayer who
49 acquires a revenue-producing enterprise from another taxpayer or who oper-
50 ates in a place of business the same or a substantially identical revenue-
51 producing value-added natural resource products enterprise as operated by
52 another taxpayer within the prior twelve (12) months, except as the prior
15
1 taxpayer would have qualified under the provisions of paragraph (c) of
2 this subsection. Employees transferred from a related taxpayer shall not
3 be included in the computation of the credit.
4 (c) The number of employees during any taxable year for any taxpayer
5 shall be the mathematical average of the number of employees reported to
6 the Idaho department of labor for employment security purposes during the
7 twelve (12) months of the taxable year which qualified under paragraph (a)
8 of this subsection. In the event the business is in operation for less
9 than the entire taxable year, the number of employees of the business for
10 the year shall be the average number actually employed during the months
11 of operation, providing that the qualifications of paragraph (a) of this
12 subsection are met.
13 (2) "Revenue-producing enterprise" means the production, assembly, fabri-
14 cation, manufacture or processing of any natural resource product.
15 (3) "Same or a substantially identical revenue-producing enterprise"
16 means a revenue-producing enterprise in which the products produced or sold,
17 or the activities conducted are the same in character and use and are pro-
18 duced, sold or conducted in the same manner as, or for the same types of cus-
19 tomers as, the products or activities produced, sold or conducted in another
20 revenue-producing enterprise.
21 SECTION 15. That Chapter 30, Title 63, Idaho Code, be, and the same is
22 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
23 ignated as Section 63-3029F, Idaho Code, and to read as follows:
24 63-3029F. SPECIAL CREDIT AVAILABLE -- NEW EMPLOYEES. (1) Any taxpayer
25 shall be allowed a credit, in an amount determined under subsection (2) of
26 this section, against the tax imposed by this chapter, other than the tax
27 imposed by section 63-3082, Idaho Code, for any taxable year during which the
28 taxpayer's employment of new employees, as defined under section 63-3029E(1),
29 Idaho Code, increases above the taxpayer's average employment for either: (a)
30 the prior taxable year, or (b) the average of three (3) prior taxable years,
31 whichever is higher. No credit shall be allowed under this section unless the
32 number of new employees equals or exceeds one (1) person.
33 (2) The credit authorized in subsection (1) of this section shall be five
34 hundred dollars ($500) per new employee, but the total credit allowed shall
35 not exceed three and one-quarter percent (3.25%) of net income from the
36 taxpayer's corporate, proprietorship, partnership, small business corporation
37 or limited liability company revenue-producing enterprise in which the employ-
38 ment occurred. Additionally, the total of this and all other credits allowed
39 under this chapter except for the credits allowed under sections 63-3024A,
40 63-3025D and 63-3029, Idaho Code, taken during any taxable year shall not
41 exceed forty-five percent (45%) of the tax otherwise imposed on the taxpayer
42 for the taxable year for which such credit is allowed.
43 (3) If the sum of the credit carryovers from the credit allowed by sub-
44 section (2) of this section and the amount of credit for the taxable year from
45 the credit allowed by subsection (2) of this section exceed the limitation
46 imposed by subsection (2) of this section for the current taxable year, the
47 excess attributable to the current taxable year's credit shall be a credit
48 carryover to the three (3) succeeding taxable years. The entire amount of
49 unused credit shall be carried forward to the earliest of the succeeding
50 years, wherein the oldest available unused credit shall be used first, so long
51 as the employment level for which the credit was granted is still maintained.
52 SECTION 16. The provisions of Sections 5, 6, 8, 10, 11 and 12 of this act
16
1 are hereby declared to be nonseverable from other provisions within each sec-
2 tion and if any provision of any of those sections or the application of such
3 provision to any person or circumstance is declared invalid for any reason,
4 such declaration shall render the entire section invalid but not other sec-
5 tions of this act.
6 SECTION 17. An emergency existing therefor, which emergency is hereby
7 declared to exist, Sections 1 through 12 and Section 16 of this act shall be
8 in full force and effect on and after passage and approval, and retroactively
9 to January 1, 2001. Sections 13, 14 and 15 of this act shall be in full force
10 and effect on and after January 1, 2002.
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
Moved by Thorne
Seconded by Wheeler
IN THE SENATE
SENATE AMENDMENT TO H.B. NO. 377
1 AMENDMENT TO THE BILL
2 On page 3 of the printed bill, delete lines 32 through 53; and on page 4,
3 delete lines 1 through 33, and insert:
4 "SECTION 2. That Section 63-3024A, Idaho Code, be, and the same is hereby
5 amended to read as follows:
6 63-3024A. CREDITS AND REFUNDS. (a) Any resident individual not entitled
7 to the credit allowed in subsection (b)(1), who is required to file by law and
8 who has filed an Idaho income tax return, shall be allowed a credit against
9 taxes due under the Idaho income tax act equal to the amount of fifteen twenty
10 dollars ($1520.00) for each personal exemption for which a deduction is per-
11 mitted by section 151(b) and (c) of the Internal Revenue Code if such deduc-
12 tion is claimed on the taxpayer's Idaho income tax return, and if the individ-
13 ual for whom the deduction is claimed is a resident of the state of Idaho. If
14 taxes due are less than the total credit allowed, the taxpayer shall be paid a
15 refund equal to the balance of the unused credit. If the credit or refund is
16 not claimed for the year for which the individual income tax return is filed,
17 the right thereafter to claim such credit or refund shall be forfeited. The
18 state tax commission shall prescribe the method by which the refund, if any,
19 is to be made to the taxpayer.
20 (b) (1) A resident individual who has reached his sixty-fifth birthday
21 before the end of his taxable year, who is required to file by law and who
22 has filed an Idaho income tax return, shall be allowed a credit against
23 taxes due under the Idaho income tax act equal to the amount of
24 thirty-five dollars ($305.00) for each personal exemption representing
25 himself, a spouse over the age of sixty-five (65) years, or a dependent
26 over the age of sixty-five (65) years, but shall be allowed a credit
27 against taxes due under the Idaho income tax act equal to fifteen twenty
28 dollars ($1520.00) for each personal exemption representing a spouse or
29 dependent under the age of sixty-five (65) years. If taxes due are less
30 than the total credit allowed, the taxpayer shall be paid a refund equal
31 to the balance of the unused credit. If the credit or refund is not
32 claimed for the year for which the individual income tax return is filed,
33 the right thereafter to claim such credit or refund shall be forfeited.
34 The state tax commission shall prescribe the method by which the refund,
35 if any, is to be made to the taxpayer.
36 (2) A resident individual who has reached his sixty-fifth birthday and
37 is not required by law to file an Idaho income tax return and who has
38 received no credit or refund under any other subsection of this section,
39 shall be entitled to a refund of thirty-five dollars ($305.00). Any refund
40 shall be paid to such individual only upon his making application therefor
41 at such time and in such manner as may be prescribed by the state tax com-
42 mission.
43 (c) A resident individual of the state of Idaho who is:
2
1 (i) blind, or
2 (ii) a disabled American veteran of any war engaged in by the United
3 States, whose disability is recognized as a service connected disability
4 of a degree of ten per cent percent (10%) or more, or who is in receipt of
5 a pension for nonservice connected disabilities, in accordance with laws
6 and regulations administered by the United States veterans administration,
7 substantiated by a statement as to status signed by a responsible officer
8 of the United States veterans administration, or
9 (iii) over sixty-two (62) years of age, and has been allowed none, or less
10 than all, of the credit provided by subsection (a) or subsection (b) of
11 this section, shall be entitled to a payment from the refund fund in an
12 amount equal to fifteen twenty dollars ($1520.00), or the balance of his
13 unused credit, whichever is less, upon making application therefor at such
14 time and in such manner as the state tax commission may prescribe.
15 (d) Any part-year resident entitled to a credit under this section shall
16 receive a proportionate credit, in the manner above provided, reflecting the
17 part of the year in which he was domiciled in this state.
18 (e) No credit or refund may be claimed for an exemption which represents
19 a person who has himself filed an Idaho income tax return claiming a deduction
20 for his own personal exemption, and in no event shall more than one (1) tax-
21 payer be allowed a credit or refund for the same exemption, or under more than
22 one (1) subsection of this section.
23 (f) The refunds authorized by this section shall be paid from the state
24 refund fund in the same manner as the refunds authorized by section 63-3067,
25 Idaho Code.
26 (g) An application for any refund which is due and payable under the pro-
27 visions of this section must be filed with the state tax commission within
28 three (3) years of:
29 (i) the due date, including extensions, of the return required under sec-
30 tion 63-3030, Idaho Code, if the applicant is required to file a return,
31 or
32 (ii) the 15th day of April of the year following the year to which the
33 application relates if the applicant is not required to file a return.".
34 CORRECTIONS TO TITLE
35 On page 1, in line 3, following "THEREAFTER;" delete the remainder of the
36 line; delete line 4; and in line 5, delete "QUALIFIED CAPITAL GAINS AND TO
37 MAKE TECHNICAL CORRECTIONS" and insert: "AMENDING SECTION 63-3024A, IDAHO
38 CODE, TO INCREASE THE INCOME TAX CREDIT FOR SALES TAXES PAID BY CERTAIN INDI-
39 VIDUALS AND TO MAKE TECHNICAL CORRECTIONS".
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 377, As Amended in the Senate
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO TAXATION; AMENDING SECTION 63-3024, IDAHO CODE, TO PROVIDE FOR A
3 REDUCTION IN RATES FOR TAXABLE YEAR 2001 AND EACH YEAR THEREAFTER; AMEND-
4 ING SECTION 63-3024A, IDAHO CODE, TO INCREASE THE INCOME TAX CREDIT FOR
5 SALES TAXES PAID BY CERTAIN INDIVIDUALS AND TO MAKE TECHNICAL CORRECTIONS;
6 AMENDING SECTION 63-3025, IDAHO CODE, TO REDUCE THE CORPORATE INCOME TAX
7 RATE FROM EIGHT TO SEVEN AND SIX-TENTHS PERCENT FOR TAXABLE YEAR 2001 AND
8 EACH YEAR THEREAFTER; AMENDING SECTION 63-3025A, IDAHO CODE, TO REDUCE THE
9 CORPORATE FRANCHISE TAX RATE FROM EIGHT PERCENT TO THE RATE OF THE CORPO-
10 RATE INCOME TAX AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION
11 63-3029B, IDAHO CODE, TO PROVIDE THAT TAXPAYERS MAKING EXPENDITURES FOR
12 QUALIFIED BROADBAND EQUIPMENT ARE ENTITLED TO THE CREDIT AND TO REVISE
13 PROCEDURES FOR RECAPTURE; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY
14 THE ADDITION OF A NEW SECTION 63-3029G, IDAHO CODE, TO PROVIDE AN INCOME
15 TAX CREDIT FOR CERTAIN EXPENDITURES RELATING TO RESEARCH ACTIVITIES CON-
16 DUCTED IN IDAHO, TO PROVIDE A SUNSET, TO PROVIDE A CARRYOVER OF UNUSED
17 CREDITS, TO PROVIDE DEFINITIONS AND TO PROVIDE PROCEDURES; AMENDING SEC-
18 TION 63-3029H, IDAHO CODE, TO REDESIGNATE THE SECTION; AMENDING CHAPTER
19 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 63-3029I,
20 IDAHO CODE, TO PROVIDE AN INCOME TAX CREDIT FOR CERTAIN EXPENDITURES
21 RELATING TO HIGH SPEED BROADBAND COMMUNICATIONS ACCESS IN IDAHO, TO PRO-
22 VIDE A SUNSET, TO PROVIDE A CARRYOVER OF UNUSED CREDITS, TO PROVIDE DEFI-
23 NITIONS AND TO PROVIDE PROCEDURES; AMENDING CHAPTER 30, TITLE 63, IDAHO
24 CODE, BY THE ADDITION OF A NEW SECTION 63-3022P, IDAHO CODE, TO PROVIDE,
25 WITH RESPECT TO AN INDIVIDUAL TAXPAYER, AN AMOUNT EQUAL TO THE AMOUNT PAID
26 BY THE TAXPAYER DURING THE TAXABLE YEAR FOR INSURANCE, WHICH CONSTITUTES
27 MEDICAL CARE FOR THE TAXPAYER, THE SPOUSE OR DEPENDENTS OF THE TAXPAYER
28 WHICH IS NOT OTHERWISE DEDUCTED OR ACCOUNTED FOR BY THE TAXPAYER FOR IDAHO
29 INCOME TAX PURPOSES SHALL BE ALLOWED AS A DEDUCTION AGAINST IDAHO TAXABLE
30 INCOME, AND TO PROVIDE A DEFINITION OF INSURANCE WHICH CONSTITUTES MEDICAL
31 CARE; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW
32 SECTION 63-3029J, IDAHO CODE, TO PROVIDE AN INCOME TAX CREDIT FOR CERTAIN
33 EXPENDITURES RELATING TO INVESTMENT IN AREAS IN IDAHO WITH HIGH UNEMPLOY-
34 MENT OR LOW PERSONAL INCOME AT THE ELECTION OF THE TAXPAYER FOR TAXABLE
35 YEAR 2001, TO PROVIDE A CARRYOVER OF UNUSED CREDITS, TO PROVIDE DEFINI-
36 TIONS AND TO PROVIDE PROCEDURES; AMENDING SECTIONS 63-3029E AND 63-3029F,
37 IDAHO CODE, TO EXPAND THE NEW JOBS CREDIT BY REMOVING THE LIMITATION OF
38 QUALIFYING TAXPAYERS TO REVENUE-PRODUCING ENTERPRISE CREATING VALUE-ADDED
39 NATURAL RESOURCE PRODUCTS; REPEALING SECTIONS 63-3029E AND 63-3029F, IDAHO
40 CODE; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW
41 SECTION 63-3029E, IDAHO CODE, TO PROVIDE DEFINITIONS AND CONSTRUCTION OF
42 TERMS; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW
43 SECTION 63-3029F, IDAHO CODE, TO PROVIDE SPECIAL CREDITS TO THE INCOME TAX
44 FOR NEW EMPLOYEES FOR AN ENTERPRISE THAT PRODUCES, ASSEMBLES, FABRICATES
45 OR PROCESSES NATURAL RESOURCE PRODUCTS; PROVIDING FOR NONSEVERABILITY OF
46 CERTAIN PROVISIONS OF THIS ACT; DECLARING AN EMERGENCY AND PROVIDING RET-
2
1 ROACTIVE APPLICATION FOR CERTAIN PROVISIONS OF THIS ACT, AND PROVIDING AN
2 EFFECTIVE DATE FOR CERTAIN PROVISIONS OF THIS ACT.
3 Be It Enacted by the Legislature of the State of Idaho:
4 SECTION 1. That Section 63-3024, Idaho Code, be, and the same is hereby
5 amended to read as follows:
6 63-3024. INDIVIDUALS' TAX AND TAX ON ESTATES AND TRUSTS. For taxable year
7 20001, and each taxable year thereafter, a tax measured by Idaho taxable
8 income as defined in this chapter is hereby imposed upon every individual,
9 trust, or estate required by this chapter to file a return.
10 (a) (i) The tax imposed upon individuals, trusts and estates shall be
11 computed at the following rates:
12 When Idaho taxable income is: The rate is:
13 Less than $1,000 One and nine six-tenths percent (1.96%)
14 $1,000 but less than $2,000 $196, plus three and nine six-tenths
15 percent (3.96%) of the amount over $1,000
16 $2,000 but less than $3,000 $582, plus four
17 and four one-tenths
18 percent (4.41%) of the amount over $2,000
19 $3,000 but less than $4,000 $10293, plus five
20 and four one-tenths
21 percent (5.41%) of the amount over $3,000
22 $4,000 but less than $5,000 $15644, plus six
23 and four one-tenths
24 percent (6.41%) of the amount over $4,000
25 $5,000 but less than $7,500 $2205, plus seven
26 and four one-tenths
27 percent (7.41%) of the amount over $5,000
28 $7,500 but less than $20,000 $405383, plus seven and seven four-tenths
29 percent (7.74%) of the amount over $7,500
30 Over $20,000 $1,367.508, plus eight and one-tenth seven
31 and eight-tenths percent
32 (8.17.8%) of the amount over $20,000
33 (ii) For taxable year 2001 and each taxable year thereafter, a tax mea-
34 sured by Idaho taxable income as defined in this chapter is hereby imposed
35 upon every individual, trust, or estate required by this chapter to file a
36 return.
37 The tax imposed upon individuals, trusts and estates shall be computed at the
38 following rates:
39 When Idaho taxable income is: The rate is:
40 Less than $1,000 Two percent (2.0%)
41 $1,000 but less than $2,000 $20, plus four percent (4.0%)
42 of the amount over $1,000
43 $2,000 but less than $3,000 $60, plus four and one-half percent
44 (4.5%) of the amount over $2,000
45 $3,000 but less than $4,000 $105, plus five and one-half percent
46 (5.5%) of the amount over $3,000
47 $4,000 but less than $5,000 $160, plus six and one-half percent
48 (6.5%) of the amount over $4,000
49 $5,000 but less than $7,500 $225, plus seven and one-half percent
50 (7.5%) of the amount over $5,000
51 $7,500 but less than $20,000 $412.50, plus seven and eight-tenths percent
52 (7.8%) of the amount over $7,500
3
1 Over $20,000 $1,387.50, plus eight and two-tenths percent
2 (8.2%) of the amount over $20,000
3 For taxable year 2000 and each year thereafter, the state tax commission
4 shall prescribe a factor which shall be used to compute the Idaho income tax
5 brackets provided in subsections (a)(i) and (a)(ii) of this section. The fac-
6 tor shall provide an adjustment to the Idaho tax brackets so that inflation
7 will not result in a tax increase. The Idaho tax brackets shall be adjusted as
8 follows: multiply the bracket amounts by the percentage (the consumer price
9 index for the calendar year immediately preceding the calendar year to which
10 the adjusted brackets will apply divided by the consumer price index for cal-
11 endar year 1998). For the purpose of this computation, the consumer price
12 index for any calendar year is the average of the consumer price index as of
13 the close of the twelve (12) month period for the immediately preceding calen-
14 dar year as adopted by the state tax commission. This adoption shall be exempt
15 from the provisions of chapter 52, title 67, Idaho Code. The consumer price
16 index shall mean the consumer price index for all U.S. urban consumers pub-
17 lished by the United States department of labor. The state tax commission
18 shall annually include the factor as provided in this subsection to multiply
19 against Idaho taxable income in the brackets above to arrive at that year's
20 taxable income for tax bracket purposes.
21 (b) In case a joint return is filed by husband and wife pursuant to the
22 provisions of section 63-3031, Idaho Code, the tax imposed by this section
23 shall be twice the tax which would be imposed on one-half (1/2) of the aggre-
24 gate Idaho taxable income. For the purposes of this section, a return of a
25 surviving spouse, as defined in section 2(a) of the Internal Revenue Code, and
26 a head of household, as defined in section 2(b) of the Internal Revenue Code,
27 shall be treated as a joint return and the tax imposed shall be twice the tax
28 which would be imposed on one-half (1/2) of the Idaho taxable income.
29 (c) The state tax commission shall compute and publish Idaho income tax
30 liability for taxpayers at the midpoint of each bracket of Idaho taxable
31 income in fifty dollar ($50.00) steps to fifty thousand dollars ($50,000),
32 rounding such calculations to the nearest dollar. Taxpayers having income
33 within such brackets shall file returns based upon and pay taxes according to
34 the schedule thus established. The state tax commission shall promulgate rules
35 defining the conditions upon which such returns shall be filed.
36 SECTION 2. That Section 63-3024A, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 63-3024A. CREDITS AND REFUNDS. (a) Any resident individual not entitled
39 to the credit allowed in subsection (b)(1), who is required to file by law and
40 who has filed an Idaho income tax return, shall be allowed a credit against
41 taxes due under the Idaho income tax act equal to the amount of fifteen twenty
42 dollars ($1520.00) for each personal exemption for which a deduction is per-
43 mitted by section 151(b) and (c) of the Internal Revenue Code if such deduc-
44 tion is claimed on the taxpayer's Idaho income tax return, and if the individ-
45 ual for whom the deduction is claimed is a resident of the state of Idaho. If
46 taxes due are less than the total credit allowed, the taxpayer shall be paid a
47 refund equal to the balance of the unused credit. If the credit or refund is
48 not claimed for the year for which the individual income tax return is filed,
49 the right thereafter to claim such credit or refund shall be forfeited. The
50 state tax commission shall prescribe the method by which the refund, if any,
51 is to be made to the taxpayer.
52 (b) (1) A resident individual who has reached his sixty-fifth birthday
53 before the end of his taxable year, who is required to file by law and who
4
1 has filed an Idaho income tax return, shall be allowed a credit against
2 taxes due under the Idaho income tax act equal to the amount of
3 thirty-five dollars ($305.00) for each personal exemption representing
4 himself, a spouse over the age of sixty-five (65) years, or a dependent
5 over the age of sixty-five (65) years, but shall be allowed a credit
6 against taxes due under the Idaho income tax act equal to fifteen twenty
7 dollars ($1520.00) for each personal exemption representing a spouse or
8 dependent under the age of sixty-five (65) years. If taxes due are less
9 than the total credit allowed, the taxpayer shall be paid a refund equal
10 to the balance of the unused credit. If the credit or refund is not
11 claimed for the year for which the individual income tax return is filed,
12 the right thereafter to claim such credit or refund shall be forfeited.
13 The state tax commission shall prescribe the method by which the refund,
14 if any, is to be made to the taxpayer.
15 (2) A resident individual who has reached his sixty-fifth birthday and
16 is not required by law to file an Idaho income tax return and who has
17 received no credit or refund under any other subsection of this section,
18 shall be entitled to a refund of thirty-five dollars ($305.00). Any refund
19 shall be paid to such individual only upon his making application therefor
20 at such time and in such manner as may be prescribed by the state tax com-
21 mission.
22 (c) A resident individual of the state of Idaho who is:
23 (i) blind, or
24 (ii) a disabled American veteran of any war engaged in by the United
25 States, whose disability is recognized as a service connected disability
26 of a degree of ten per cent percent (10%) or more, or who is in receipt of
27 a pension for nonservice connected disabilities, in accordance with laws
28 and regulations administered by the United States veterans administration,
29 substantiated by a statement as to status signed by a responsible officer
30 of the United States veterans administration, or
31 (iii) over sixty-two (62) years of age, and has been allowed none, or less
32 than all, of the credit provided by subsection (a) or subsection (b) of
33 this section, shall be entitled to a payment from the refund fund in an
34 amount equal to fifteen twenty dollars ($1520.00), or the balance of his
35 unused credit, whichever is less, upon making application therefor at such
36 time and in such manner as the state tax commission may prescribe.
37 (d) Any part-year resident entitled to a credit under this section shall
38 receive a proportionate credit, in the manner above provided, reflecting the
39 part of the year in which he was domiciled in this state.
40 (e) No credit or refund may be claimed for an exemption which represents
41 a person who has himself filed an Idaho income tax return claiming a deduction
42 for his own personal exemption, and in no event shall more than one (1) tax-
43 payer be allowed a credit or refund for the same exemption, or under more than
44 one (1) subsection of this section.
45 (f) The refunds authorized by this section shall be paid from the state
46 refund fund in the same manner as the refunds authorized by section 63-3067,
47 Idaho Code.
48 (g) An application for any refund which is due and payable under the pro-
49 visions of this section must be filed with the state tax commission within
50 three (3) years of:
51 (i) the due date, including extensions, of the return required under sec-
52 tion 63-3030, Idaho Code, if the applicant is required to file a return,
53 or
54 (ii) the 15th day of April of the year following the year to which the
55 application relates if the applicant is not required to file a return.
5
1 SECTION 3. That Section 63-3025, Idaho Code, be, and the same is hereby
2 amended to read as follows:
3 63-3025. TAX ON CORPORATE INCOME. For taxable years commencing on and
4 after January 1, 1987 2001, a tax is hereby imposed on the Idaho taxable
5 income of a corporation which transacts or is authorized to transact business
6 in this state or which has income attributable to this state. The tax shall be
7 equal to eight seven and six-tenths percent (87.6%) of Idaho taxable income;
8 provided, however, that the tax shall not be less than twenty dollars
9 ($20.00); provided further that the twenty dollar ($20.00) minimum payment
10 shall not be collected from nonproductive mining corporations. The tax imposed
11 by this section shall not apply to corporations taxed pursuant to the provi-
12 sions of section 63-3025A, Idaho Code.
13 SECTION 4. That Section 63-3025A, Idaho Code, be, and the same is hereby
14 amended to read as follows:
15 63-3025A. FRANCHISE TAX. For taxable years commencing on and after Janu-
16 ary 1, 1987 2001, a franchise tax shall be imposed upon any corporation for
17 the privilege of exercising its corporate franchise within the state during
18 such taxable year, including, but not limited to, corporations engaged in
19 business in Idaho for the exclusive purpose of performing contracts with the
20 United States department of energy at the Idaho national engineering and envi-
21 ronmental laboratory, which tax shall be measured by income which is attribut-
22 able to this state under the provisions of this chapter and which tax shall be
23 equal to eight percent (8%) of Idaho taxable income at the rate provided in
24 section 63-3025, Idaho Code; provided, however, that the tax shall not be less
25 than twenty dollars ($20.00); provided further that the twenty dollar ($20.00)
26 minimum payment shall not be collected from nonproductive mining corporations;
27 but the twenty dollar ($20.00) minimum tax shall apply to corporations quali-
28 fied to file returns and actually filing returns under the provisions of sub-
29 chapter "S" of the Internal Revenue Code.
30 SECTION 5. That Section 63-3029B, Idaho Code, be, and the same is hereby
31 amended to read as follows:
32 63-3029B. INCOME TAX CREDIT FOR CAPITAL INVESTMENT. (1) At the election
33 of the taxpayer there shall be allowed, subject to the applicable limitations
34 provided herein as a credit against the income tax imposed by chapter 30,
35 title 63, Idaho Code, an amount equal to the sum of:
36 (a) The tax credit carryovers; and
37 (b) The tax credit for the taxable year.
38 (2) The maximum allowable amount of the credit for the current taxable
39 year shall be three percent (3%) of the amount of qualified investments made
40 during the taxable year.
41 (3) As used in this section "qualified investment" means certain depre-
42 ciable property which:
43 (a) (i) Is eligible for the federal investment tax credit, as defined in
44 sections 46(c) and 48 of the Internal Revenue Code subject to the
45 limitations provided for certain regulated companies in section 46(f)
46 of the Internal Revenue Code and is not a motor vehicle under eight
47 thousand (8,000) pounds gross weight; or
48 (ii) Is qualified broadband equipment as defined in section 63-3029I,
49 Idaho Code; and
50 (b) Is acquired, constructed, reconstructed, erected or placed into ser-
6
1 vice after December 31, 1981; and
2 (c) Has a situs in Idaho.
3 (4) Notwithstanding the provisions of subsections (1) and (2) of this
4 section, the amount of the credit allowed shall not exceed fifty percent (50%)
5 of the tax liability of the taxpayer.
6 (5) If the sum of credit carryovers from the credit allowed by subsection
7 (2) of this section and the amount of credit for the taxable year from the
8 credit allowed by subsection (2) of this section exceed the limitation imposed
9 by subsection (4) of this section for the current taxable year, the excess
10 attributable to the current taxable year's credit shall be an investment
11 credit carryover to the fourteen (14) succeeding taxable years. In the case of
12 a group of corporations filing a combined report under section 63-3027, Idaho
13 Code, or sections 63-3027B through 63-3027E, Idaho Code, credit earned by one
14 (1) member of the group but not used by that member may be used by another
15 member of the group, subject to the provisions of subsection (4) of this sec-
16 tion, instead of carried over. The entire amount of unused credit shall be
17 carried forward to the earliest of the succeeding years, wherein the oldest
18 available unused credit shall be used first, so long as the qualified invest-
19 ment property for which the unused credit was granted still maintains Idaho
20 situs. For a combined group of corporations, credit carried forward may be
21 claimed by any member of the group unless the member who earned the credit is
22 no longer included in the combined group.
23 (6) Any recapture of the credit allowed by subsection (2) of this section
24 on property disposed of or ceasing to qualify, prior to the close of its use-
25 ful life the recapture period, shall be determined according to the applicable
26 recapture provisions of the Internal Revenue Code. In the case of a unitary
27 group of corporations, the increase in tax due to the recapture of investment
28 tax credit must be reported by the member of the group who earned the credit
29 regardless of which member claimed the credit against tax.
30 (7) For the purpose of determining whether property placed in service is
31 a "qualified investment" as defined in subsection (3) of this section, the
32 provisions of section 49 of the Internal Revenue Code shall be disregarded.
33 (8) For purposes of this section, property has a situs in Idaho during a
34 taxable year if it is used in Idaho at any time during the taxable year. Prop-
35 erty not used in Idaho during a taxable year does not have a situs in Idaho in
36 the taxable year during which the property is not used in Idaho or in any sub-
37 sequent taxable year. No credit or carryover of credit is permitted under this
38 section if the credit or carryover relates to property that does not have a
39 situs in Idaho during the taxable year for which the credit or carryover is
40 claimed. The Idaho situs of property must be established by records maintained
41 by the taxpayer which are created reasonably contemporaneously with the use of
42 the property.
43 (9) In the case of property used both in and outside Idaho, the taxpayer,
44 electing to claim the credit provided in this section, must elect to compute
45 the qualified investment in property with a situs in Idaho for all such
46 investments first qualifying during that year in one (1), but only one (1), of
47 the following ways:
48 (a) The amount of each qualified investment in a specific asset shall be
49 separately computed based on the percentage of the actual use of the prop-
50 erty in Idaho by using a measure of the use, such as total miles or total
51 machine hours, that most accurately reflects the beneficial use during the
52 taxable year in which it is first acquired, constructed, reconstructed,
53 erected or placed into service; provided, that the asset is placed in ser-
54 vice more than ninety (90) days before the end of the taxable year. In the
55 case of assets acquired, constructed, reconstructed, erected or placed
7
1 into service within ninety (90) days prior to the end of the taxable year
2 in which the investment first qualifies, the measure of the use of that
3 asset within Idaho for that year shall be based upon the percentage of use
4 in Idaho during the first ninety (90) days of use of the asset;
5 (b) The investment in qualified property used both inside and outside
6 Idaho during the taxable year in which it is first acquired, constructed,
7 reconstructed, erected or placed into service shall be multiplied by the
8 percent of the investment that would be included in the numerator of the
9 Idaho property factor determined pursuant to section 63-3027, Idaho Code,
10 for the same year.
11 (10) Only for the purposes of subsections (3)(a) and (7) of this section,
12 references to sections of the "Internal Revenue Code" mean the sections
13 referred to as they existed in the Internal Revenue Code of 1986 prior to
14 November 5, 1990.
15 SECTION 6. That Chapter 30, Title 63, Idaho Code, be, and the same is
16 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
17 ignated as Section 63-3029G, Idaho Code, and to read as follows:
18 63-3029G. CREDITS FOR RESEARCH ACTIVITIES CONDUCTED IN THIS STATE --
19 CARRY FORWARD.
20 (1) (a) Subject to the limitations of this section, for taxable years
21 beginning between January 1, 2001, and December 31, 2005, inclusive, there
22 shall be allowed to a taxpayer a nonrefundable credit against taxes
23 imposed by sections 63-3024, 63-3025 and 63-3025A, Idaho Code, for
24 increasing research activities in Idaho during any consecutive five (5)
25 year period beginning, at the election of the taxpayer, either:
26 (i) January 1, 2001, or
27 (ii) The first day of the taxpayer's taxable year beginning in 2001.
28 (b) The credit allowed by subsection (1)(a) of this section shall be the
29 sum of:
30 (i) Five percent (5%) of the excess of qualified research payments
31 for research conducted in Idaho over the base amount; and
32 (ii) Five percent (5%) basic research payments allowable under sub-
33 section (e) of section 41 of the Internal Revenue Code for basic
34 research conducted in Idaho.
35 (c) Subject to the limitation in subsection (3) of this section, a tax-
36 payer making the election permitted by subsection (1)(a)(i) of this sec-
37 tion, credit for research activities occurring prior to the beginning of
38 the taxpayer's taxable year beginning in 2001 shall be claimed on the
39 taxpayer's return for its taxable year 2001 in addition to credit relating
40 to activity in that year.
41 (2) As used in this section:
42 (a) The terms "qualified research payments," "qualified research," "basic
43 research payments" and "basic research" shall be as defined in section 41
44 of the Internal Revenue Code except that the research must be conducted in
45 Idaho.
46 (b) The term "base amount" shall mean an amount calculated as provided in
47 sections 41(c) and 41(h) of the Internal Revenue Code, except that:
48 (i) The base amount does not include the calculation of the alter-
49 native incremental credit provided for in section 41(c)(4) of the
50 Internal Revenue Code;
51 (ii) A taxpayer's gross receipts include only those gross receipts
52 attributable to sources within this state as provided in subsections
53 (q) and (r) of section 63-3027, Idaho Code; and
8
1 (iii) Notwithstanding section 41(c) of the Internal Revenue Code, for
2 purposes of calculating the base amount, a taxpayer:
3 (A) May elect to be treated as a start-up company as provided
4 in section 41(c)(3)(B) of the Internal Revenue Code, regardless
5 of whether the taxpayer meets the requirements of section
6 41(c)(3)(B)(i)(I) or (II) of the Internal Revenue Code; and
7 (B) May not revoke an election to be treated as a start-up com-
8 pany.
9 (3) The credit allowed by subsection (1)(a) of this section together with
10 any credits carried forward under subsection (5) of this section shall not
11 exceed the amount of tax due under sections 63-3024, 63-3025 and 63-3025A,
12 Idaho Code, after allowance for all other credits permitted by this chapter.
13 When credits earned in more than one (1) taxable year are available, the old-
14 est credits shall be applied first.
15 (4) In the case of a group of corporations filing a combined report under
16 subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
17 of the group but not used by that member may be used by another member of the
18 group. For a combined group of corporations, any member of the group may claim
19 credit carried forward unless the member who earned the credit is no longer
20 included in the combined group.
21 (5) The credit allowed by subsection (1)(a) of this section shall be
22 claimed for the taxable year during which the taxpayer qualifies for the
23 credit. If the credit exceeds the limitation under subsection (3) of this sec-
24 tion, the excess amount may be carried forward for a period that does not
25 exceed the next fourteen (14) taxable years.
26 (6) In addition to other needed rules, the state tax commission may pro-
27 mulgate rules prescribing, in the case of S corporations, partnerships, trusts
28 or estates, a method of attributing the credit under this section to the
29 shareholders, partners or beneficiaries in proportion to their share of the
30 income from the S corporation, partnership, trust or estate.
31 SECTION 7. That Section 63-3029H, Idaho Code, be, and the same is hereby
32 amended to read as follows:
33 63-3029HP. PRIORITY OF CREDITS. When a taxpayer subject to any taxes
34 imposed under this chapter is entitled to two (2) or more credits against such
35 taxes, the priority of credits shall be determined in the following order:
36 (a) Nonrefundable credits. Nonrefundable credits shall be applied to the
37 tax liability before application of refundable credits. If a taxpayer is enti-
38 tled to more than one (1) nonrefundable credit, the credits shall be applied
39 in the order in which the statutes authorizing the credits were enacted by the
40 legislature.
41 (b) Refundable credits. Refundable credits shall be applied to the tax
42 liability after application of any nonrefundable credits.
43 SECTION 8. That Chapter 30, Title 63, Idaho Code, be, and the same is
44 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
45 ignated as Section 63-3029I, Idaho Code, and to read as follows:
46 63-3029I. INCOME TAX CREDIT FOR INVESTMENT IN BROADBAND EQUIPMENT. (1)
47 Subject to the limitations of this section, for taxable years beginning
48 between January 1, 2001, and December 31, 2005, inclusive, there shall be
49 allowed to a taxpayer a nonrefundable credit against taxes imposed by sections
50 63-3024, 63-3025 and 63-3025A, Idaho Code, for qualified expenditures in qual-
51 ified broadband equipment in Idaho.
9
1 (2) The credit permitted in subsection (1) of this section shall be three
2 percent (3%) of the qualified investment in qualified broadband equipment in
3 Idaho and shall be in addition to the credit for capital investment permitted
4 by section 63-3029B, Idaho Code.
5 (3) As used in this section the term:
6 (a) "Qualified investment" shall be as defined in section 63-3029B, Idaho
7 Code.
8 (b) "Qualified broadband equipment" means equipment that qualifies for
9 the credit for capital investment permitted by section 63-3029B, Idaho
10 Code, and is capable of transmitting signals at a rate of at least two
11 hundred thousand (200,000) bits per second to a subscriber and at least
12 one hundred twenty-five thousand (125,000) bits per second from a sub-
13 scriber, and
14 (i) In the case of a telecommunications carrier, such qualifying
15 equipment shall be necessary to the provision of broadband service
16 and an integral part of a broadband network. "Telecommunications car-
17 rier" has the meaning given such term by section 3(44) of the commu-
18 nications act of 1934, as amended, but does not include a commercial
19 mobile service provider.
20 (ii) In the case of a commercial mobile service carrier, such quali-
21 fying equipment shall extend from the subscriber side of the mobile
22 telecommunications switching office to a transmitting/receiving
23 antenna, including such antenna, on the outside of the structure in
24 which the subscriber is located. "Commercial mobile service carrier"
25 means any person authorized to provide commercial mobile radio ser-
26 vice to subscribers as defined in section 20.3 of title 47, Code of
27 Federal Regulations (10-1-99 ed.), as amended.
28 (iii) In the case of a cable or open video system operator, such
29 qualifying equipment shall extend from the subscriber's side of the
30 headend to the outside of the structure in which the subscriber is
31 located. The terms "cable operator" and "open video system operator"
32 have the meanings given such terms by sections 602(5) and 653,
33 respectively, of the communications act of 1934, as amended.
34 (iv) In the case of a satellite carrier or a wireless carrier other
35 than listed above, such qualifying equipment is only that equipment
36 that extends from a transmitting/receiving antenna, including such
37 antenna, which transmits and receives signals to or from multiple
38 subscribers to a transmitting/receiving antenna on the outside of the
39 structure in which the subscriber is located. "Satellite carrier"
40 means any person using the facilities of a satellite or satellite
41 services licensed by the federal communications commission and oper-
42 ating a fixed-satellite service or direct broadcast satellite ser-
43 vices to provide point-to-multipoint distribution of signals. "Other
44 wireless carrier" means any person, other than a telecommunications
45 carrier, commercial mobile service carrier, cable operator, open
46 video operator, or satellite carrier, providing broadband services to
47 subscribers through the radio transmission of energy.
48 (v) In the case of packet switching equipment, such packet equip-
49 ment installed in connection with other qualifying equipment listed
50 in subsections (2)(b)(i) through (2)(b)(iv) of this section, provided
51 it is the last in a series of equipment that transmits signals to a
52 subscriber or the first in a series of equipment that transmits sig-
53 nals from a subscriber. "Packet switching" means controlling or
54 routing the path of a digital transmission signal which is assembled
55 into packets or cells.
10
1 (vi) In the case of multiplexing and demultiplexing equipment, such
2 equipment only to the extent that it is deployed in connection with
3 providing broadband services in locations between packet switching
4 equipment and the structure in which the subscriber is located.
5 "Multiplexing" means the transmission of two (2) or more signals over
6 a communications circuit without regard to the communications tech-
7 nology.
8 (vii) Any property not primarily used to provide services in Idaho to
9 public subscribers is not qualified broadband equipment.
10 (4) No equipment described in subsections (2)(b)(i) through (2)(b)(vi) of
11 this section shall qualify for the credit provided in subsection (1) of this
12 section until the taxpayer applies to and obtains from the Idaho public utili-
13 ties commission an order confirming that the installed equipment is qualified
14 broadband equipment. Applications submitted to the commission shall be gov-
15 erned by the commission's rules of procedure. The commission may issue proce-
16 dural orders necessary to implement this section.
17 (5) The credit allowed by subsection (1) of this section together with
18 any credits carried forward under subsection (7) of this section shall not, in
19 any one (1) taxable year, exceed the lesser of:
20 (a) The amount of tax due under sections 63-3024, 63-3025 and 63-3025A,
21 Idaho Code, after allowance for all other credits permitted by this chap-
22 ter; or
23 (b) Seven hundred fifty thousand dollars ($750,000).
24 When credits earned in more than one (1) taxable year are available, the old-
25 est credits shall be applied first.
26 (6) In the case of a group of corporations filing a combined report under
27 subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
28 of the group but not used by that member may be used by another member of the
29 group, subject to the provisions of subsection (7) of this section, instead of
30 carried over. For a combined group of corporations, credit carried forward may
31 be claimed by any member of the group unless the member who earned the credit
32 is no longer included in the combined group.
33 (7) If the credit allowed by subsection (1) of this section exceeds the
34 limitation under subsection (5) of this section, the excess amount may be car-
35 ried forward for a period that does not exceed the next fourteen (14) taxable
36 years.
37 (8) In the event that qualified broadband equipment upon which the credit
38 allowed by this section has been used ceases to qualify for the credit allowed
39 by section 63-3029B, Idaho Code, or is subject to recapture of that credit,
40 the recapture of credit under this section shall be in the same proportion and
41 subject to the same provisions as the amount of credit required to be recap-
42 tured under section 63-3029B, Idaho Code.
43 (9) (a) Subject to the requirements of this subsection, a taxpayer enti-
44 tled to the credit or to an unused portion of the credit allowed by this
45 section may transfer the unused credit to another taxpayer required to
46 file a return under this chapter.
47 (b) Before completing a transfer under this subsection, the transferor
48 shall notify the state tax commission of its intention to transfer the
49 credit and the identity of the transferee. The state tax commission shall
50 provide the transferor with a written statement of the amount of credit
51 available under this section as then appearing in the commission's records
52 and the number of years the credit may be carried over. The transferee
53 shall attach a copy of the statement to any return in regard to which the
54 transferred credit is claimed.
55 (c) In the event that after the transfer the state tax commission deter-
11
1 mines that the amount of credit properly available under this section is
2 less than the amount claimed by the transferor of the credit or that the
3 credit is subject to recapture, the commission shall assess the amount of
4 overstated or recaptured credit as taxes due from the transferor and not
5 the transferee. The assessment shall be made in the manner provided for a
6 deficiency in taxes under this chapter.
7 (10) In addition to other needed rules, the state tax commission may pro-
8 mulgate rules prescribing, in the case of S corporations, partnerships, trusts
9 or estates, a method of attributing the credit under this section to the
10 shareholders, partners or beneficiaries in proportion to their share of the
11 income from the S corporation, partnership, trust or estate.
12 SECTION 9. That Chapter 30, Title 63, Idaho Code, be, and the same is
13 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
14 ignated as Section 63-3022P, Idaho Code, and to read as follows:
15 63-3022P. HEALTH INSURANCE COSTS. With respect to an individual taxpayer,
16 an amount equal to the amount paid by the taxpayer during the taxable year for
17 insurance which constitutes medical care for the taxpayer, the spouse or
18 dependents of the taxpayer which is not otherwise deducted or accounted for by
19 the taxpayer for Idaho income tax purposes shall be allowed as a deduction for
20 Idaho taxable income. As used in this section, "insurance which constitutes
21 medical care" includes any hospital or medical policy or certificate, any sub-
22 scriber contract, policies or certificates of insurance for specific disease,
23 hospital confinement indemnity, accident-only, credit, dental, vision, single
24 employer self-funded coverage, meaning that portion of health insurance which
25 is the retained risk of the employer, student health benefits only or coverage
26 for medical care or treatment issued as a supplement to liability insurance.
27 Employers shall provide to the employee a statement as to whether an
28 employee's contribution for health insurance has been excluded from taxable
29 income.
30 SECTION 10. That Chapter 30, Title 63, Idaho Code, be, and the same is
31 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
32 ignated as Section 63-3029J, Idaho Code, and to read as follows:
33 63-3029J. INCENTIVE INCOME TAX INVESTMENT CREDIT. (1) Subject to the lim-
34 itations of this section, for taxable year 2001 only, there shall be allowed
35 to a taxpayer a nonrefundable credit against taxes imposed by sections
36 63-3024, 63-3025 and 63-3025A, Idaho Code, in the amount allowed by subsection
37 (2) of this section for qualified investments in Idaho. The credit shall be in
38 addition to the credit for capital investment permitted by section 63-3029B,
39 Idaho Code.
40 (2) The credit permitted in subsection (1) of this section shall be at
41 the percentage rate determined under either subsection (2)(a) or (2)(b) of
42 this section at the election of the taxpayer.
43 (a) (i) One-half (1/2) of the amount by which the average three-year
44 unemployment rate in the county in which the property is located
45 exceeds six percent (6%). In the case of mobile property, the prop-
46 erty shall be located in the county in which it is primarily based.
47 (ii) For purposes of this section the director of the department of
48 labor shall, on or before the first day of September of each calendar
49 year, establish and certify to the state tax commission the average
50 three-year unemployment rate in each county in Idaho for the immedi-
51 ately preceding three (3) calendar years. The rates thus certified
12
1 shall apply to the calculation of the credit under subsection
2 (2)(a)(i) of this section for property qualifying in the taxable year
3 beginning during the next calendar year.
4 (b) (i) One-tenth of one percent (.1%) for each full percent that the
5 three-year average per capita personal income level in the county in
6 which the property is located is below ninety percent (90%) of the
7 average statewide per capita personal income level.
8 (ii) For purposes of this section the director of the department of
9 commerce shall, on or before the first day of September of each cal-
10 endar year, establish and certify to the state tax commission the
11 most current three-year average per capita personal income level in
12 each county in Idaho and the statewide per capita personal income
13 level for the most current preceding three (3) calendar years. The
14 levels thus certified shall apply to the calculation of the credit
15 under subsection (2)(b)(i) of this section for property qualifying in
16 the taxable year beginning during the next calendar year.
17 (3) As used in this section the term "qualified investment" shall be
18 defined as in section 63-3029B, Idaho Code.
19 (4) The credit allowed by subsection (1) of this section together with
20 any credits carried forward under subsection (6) of this section shall not
21 exceed in any one (1) taxable year the lesser of:
22 (a) The amount of tax due under sections 63-3024, 63-3025 and 63-3025A,
23 Idaho Code, after allowance for all other credits permitted by this chap-
24 ter; or
25 (b) Five hundred thousand dollars ($500,000).
26 (5) In the case of a group of corporations filing a combined report under
27 subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
28 of the group but not used by that member may be used by another member of the
29 group, subject to the provisions of subsection (6) of this section, instead of
30 carried over. For a combined group of corporations, credit carried forward may
31 be claimed by any member of the group unless the member who earned the credit
32 is no longer included in the combined group.
33 (6) If the credit allowed by subsection (1) of this section exceeds the
34 limitation under subsection (4) of this section, the excess amount may be car-
35 ried forward for a period that does not exceed the next fourteen (14) taxable
36 years.
37 (7) In the event that property upon which the credit allowed by this sec-
38 tion has been used ceases to qualify for the credit allowed by section
39 63-3029B, Idaho Code, the recapture of credit under this section shall be in
40 the same proportion and subject to the same provisions as the amount of credit
41 required to be recaptured under section 63-3029B, Idaho Code.
42 (8) (a) Subject to the requirements of this subsection, a taxpayer enti-
43 tled to the credit or to an unused portion of the credit allowed by this
44 section may transfer the unused credit to another taxpayer required to
45 file a return under this chapter.
46 (b) Before completing a transfer under this subsection, the transferor
47 shall notify the state tax commission of its intention to transfer the
48 credit and the identity of the transferee. The state tax commission shall
49 provide the transferor with a written statement of the amount of credit
50 available under this section as then appearing in the commission's records
51 and the number of years the credit may be carried over. The transferor
52 shall provide the transferee with the original statement. The transferee
53 shall attach a copy of the statement to any return in regard to which the
54 transferred credit is claimed.
55 (c) In the event that after the transfer the state tax commission deter-
13
1 mines that the amount of credit properly available under this section is
2 less than the amount claimed by the transferor of the credit and shown in
3 the statement described in subsection (8)(b) of this section or that the
4 credit is subject to recapture, the commission shall assess the amount of
5 overstated credit as taxes due from the transferor and not the transferee.
6 The assessment shall be made in the manner provided for a deficiency in
7 taxes under this chapter.
8 (9) In addition to other needed rules, the state tax commission may pro-
9 mulgate rules prescribing:
10 (a) In the case of S corporations, partnerships, trusts or estates, a
11 method of attributing the credit under this section to the shareholders,
12 partners or beneficiaries in proportion to their share of the income from
13 the S corporation, partnership, trust or estate.
14 (b) A requirement that a transferor under subsection (8) of this section,
15 prior to obtaining the written statement provided in subsection (8)(b) of
16 this section, post such bond or security as the state tax commission may
17 require to secure any liability referred to in subsection (8)(c) of this
18 section. Such rules shall provide an opportunity for a taxpayer, upon a
19 showing of financial responsibility, to have the bond waiver, for notice
20 of denial of waiver in accordance with section 63-3045, Idaho Code, and
21 for review in accordance with section 63-3045B, Idaho Code.
22 SECTION 11. That Section 63-3029E, Idaho Code, be, and the same is hereby
23 amended to read as follows:
24 63-3029E. DEFINITIONS -- CONSTRUCTION OF TERMS. As used in this section
25 and in section 63-3029F, Idaho Code:
26 (1) (a) "New employee" means a person from whom Idaho income tax has been
27 withheld, employed by the taxpayer, in a revenue-producing enterprise cre-
28 ating value-added natural resource products, and covered for unemployment
29 insurance purposes under chapter 13, title 72, Idaho Code, during the tax-
30 able year for which the credit allowed by section 63-3029F, Idaho Code, is
31 claimed. A person shall be deemed to be so engaged if such person performs
32 duties on:
33 (i) A regular full-time basis; or
34 (ii) A part-time basis if such person is customarily performing such
35 duties at least twenty (20) hours per week.
36 No credit shall be earned unless the new employee shall have performed
37 such duties for the taxpayer for a minimum of nine (9) months during the
38 taxable year for which the credit is claimed.
39 (b) The provisions of paragraph (a) of this subsection notwithstanding,
40 no credit shall be allowed for employment of persons by a taxpayer who
41 acquires a revenue-producing enterprise from another taxpayer or who oper-
42 ates in a place of business the same or a substantially identical revenue-
43 producing value-added natural resource products enterprise business as
44 operated by another taxpayer within the prior twelve (12) months, except
45 as the prior taxpayer would have qualified under the provisions of para-
46 graph (c) of this subsection. Employees transferred from a related tax-
47 payer shall not be included in the computation of the credit.
48 (c) The number of employees during any taxable year for any taxpayer
49 shall be the mathematical average of the number of employees reported to
50 the Idaho department of labor for employment security purposes during the
51 twelve (12) months of the taxable year which qualified under paragraph (a)
52 of this subsection. In the event the business is in operation for less
53 than the entire taxable year, the number of employees of the business for
14
1 the year shall be the average number actually employed during the months
2 of operation, providing that the qualifications of paragraph (a) of this
3 subsection are met.
4 (2) "Revenue-producing enterprise" means the production, assembly, fabri-
5 cation, manufacture or processing of any natural resource product.
6 (3) "Same or a substantially identical revenue-producing enterprise busi-
7 ness" means a revenue-producing enterprise business in which the products pro-
8 duced or sold, or the activities conducted are the same in character and use
9 and are produced, sold or conducted in the same manner as, or for the same
10 types of customers as, the products or activities produced, sold or conducted
11 in another revenue-producing enterprise business.
12 SECTION 12. That Section 63-3029F, Idaho Code, be, and the same is hereby
13 amended to read as follows:
14 63-3029F. SPECIAL CREDIT AVAILABLE -- NEW EMPLOYEES. (1) Any taxpayer
15 shall be allowed a credit, in an amount determined under subsection (2) of
16 this section, against the tax imposed by this chapter, other than the tax
17 imposed by section 63-3082, Idaho Code, for any taxable year during which the
18 taxpayer's employment of new employees, as defined under section 63-3029E(1),
19 Idaho Code, increases above the taxpayer's average employment for either: (a)
20 the prior taxable year, or (b) the average of three (3) prior taxable years,
21 whichever is higher. No credit shall be allowed under this section unless the
22 number of new employees equals or exceeds one (1) person.
23 (2) The credit authorized in subsection (1) of this section shall be five
24 hundred dollars ($500) per new employee, but the total credit allowed shall
25 not exceed three and one-quarter percent (3.25%) of net income from the
26 taxpayer's corporate, proprietorship, partnership, small business corporation
27 or limited liability company revenue-producing enterprise business in which
28 the employment occurred. Additionally, the total of this and all other credits
29 allowed under this chapter except for the credits allowed under sections
30 63-3024A, 63-3025D and 63-3029, Idaho Code, taken during any taxable year
31 shall not exceed forty-five percent (45%) of the tax otherwise imposed on the
32 taxpayer for the taxable year for which such credit is allowed.
33 (3) If the sum of the credit carryovers from the credit allowed by sub-
34 section (2) of this section and the amount of credit for the taxable year from
35 the credit allowed by subsection (2) of this section exceed the limitation
36 imposed by subsection (2) of this section for the current taxable year, the
37 excess attributable to the current taxable year's credit shall be a credit
38 carryover to the three (3) succeeding taxable years. The entire amount of
39 unused credit shall be carried forward to the earliest of the succeeding
40 years, wherein the oldest available unused credit shall be used first, so long
41 as the employment level for which the credit was granted is still maintained.
42 SECTION 13. That Sections 63-3029E and 63-3029F, Idaho Code, be, and the
43 same are hereby repealed.
44 SECTION 14. That Chapter 30, Title 63, Idaho Code, be, and the same is
45 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
46 ignated as Section 63-3029E, Idaho Code, and to read as follows:
47 63-3029E. DEFINITIONS -- CONSTRUCTION OF TERMS. As used in this section
48 and in section 63-3029F, Idaho Code:
49 (1) (a) "New employee" means a person from whom Idaho income tax has
50 been withheld, employed by the taxpayer in a revenue-producing enterprise
15
1 creating value-added natural resource products, and covered for unemploy-
2 ment insurance purposes under chapter 13, title 72, Idaho Code, during the
3 taxable year for which the credit allowed by section 63-3029F, Idaho Code,
4 is claimed. A person shall be deemed to be so engaged if such person per-
5 forms duties on:
6 (i) A regular full-time basis; or
7 (ii) A part-time basis if such person is customarily performing such
8 duties at least twenty (20) hours per week.
9 No credit shall be earned unless the new employee shall have performed
10 such duties for the taxpayer for a minimum of nine (9) months during the
11 taxable year for which the credit is claimed.
12 (b) The provisions of paragraph (a) of this subsection notwithstanding,
13 no credit shall be allowed for employment of persons by a taxpayer who
14 acquires a revenue-producing enterprise from another taxpayer or who oper-
15 ates in a place of business the same or a substantially identical revenue-
16 producing value-added natural resource products enterprise as operated by
17 another taxpayer within the prior twelve (12) months, except as the prior
18 taxpayer would have qualified under the provisions of paragraph (c) of
19 this subsection. Employees transferred from a related taxpayer shall not
20 be included in the computation of the credit.
21 (c) The number of employees during any taxable year for any taxpayer
22 shall be the mathematical average of the number of employees reported to
23 the Idaho department of labor for employment security purposes during the
24 twelve (12) months of the taxable year which qualified under paragraph (a)
25 of this subsection. In the event the business is in operation for less
26 than the entire taxable year, the number of employees of the business for
27 the year shall be the average number actually employed during the months
28 of operation, providing that the qualifications of paragraph (a) of this
29 subsection are met.
30 (2) "Revenue-producing enterprise" means the production, assembly, fabri-
31 cation, manufacture or processing of any natural resource product.
32 (3) "Same or a substantially identical revenue-producing enterprise"
33 means a revenue-producing enterprise in which the products produced or sold,
34 or the activities conducted are the same in character and use and are pro-
35 duced, sold or conducted in the same manner as, or for the same types of cus-
36 tomers as, the products or activities produced, sold or conducted in another
37 revenue-producing enterprise.
38 SECTION 15. That Chapter 30, Title 63, Idaho Code, be, and the same is
39 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
40 ignated as Section 63-3029F, Idaho Code, and to read as follows:
41 63-3029F. SPECIAL CREDIT AVAILABLE -- NEW EMPLOYEES. (1) Any taxpayer
42 shall be allowed a credit, in an amount determined under subsection (2) of
43 this section, against the tax imposed by this chapter, other than the tax
44 imposed by section 63-3082, Idaho Code, for any taxable year during which the
45 taxpayer's employment of new employees, as defined under section 63-3029E(1),
46 Idaho Code, increases above the taxpayer's average employment for either: (a)
47 the prior taxable year, or (b) the average of three (3) prior taxable years,
48 whichever is higher. No credit shall be allowed under this section unless the
49 number of new employees equals or exceeds one (1) person.
50 (2) The credit authorized in subsection (1) of this section shall be five
51 hundred dollars ($500) per new employee, but the total credit allowed shall
52 not exceed three and one-quarter percent (3.25%) of net income from the
53 taxpayer's corporate, proprietorship, partnership, small business corporation
16
1 or limited liability company revenue-producing enterprise in which the employ-
2 ment occurred. Additionally, the total of this and all other credits allowed
3 under this chapter except for the credits allowed under sections 63-3024A,
4 63-3025D and 63-3029, Idaho Code, taken during any taxable year shall not
5 exceed forty-five percent (45%) of the tax otherwise imposed on the taxpayer
6 for the taxable year for which such credit is allowed.
7 (3) If the sum of the credit carryovers from the credit allowed by sub-
8 section (2) of this section and the amount of credit for the taxable year from
9 the credit allowed by subsection (2) of this section exceed the limitation
10 imposed by subsection (2) of this section for the current taxable year, the
11 excess attributable to the current taxable year's credit shall be a credit
12 carryover to the three (3) succeeding taxable years. The entire amount of
13 unused credit shall be carried forward to the earliest of the succeeding
14 years, wherein the oldest available unused credit shall be used first, so long
15 as the employment level for which the credit was granted is still maintained.
16 SECTION 16. The provisions of Sections 5, 6, 8, 10, 11 and 12 of this act
17 are hereby declared to be nonseverable from other provisions within each sec-
18 tion and if any provision of any of those sections or the application of such
19 provision to any person or circumstance is declared invalid for any reason,
20 such declaration shall render the entire section invalid but not other sec-
21 tions of this act.
22 SECTION 17. An emergency existing therefor, which emergency is hereby
23 declared to exist, Sections 1 through 12 and Section 16 of this act shall be
24 in full force and effect on and after passage and approval, and retroactively
25 to January 1, 2001. Sections 13, 14 and 15 of this act shall be in full force
26 and effect on and after January 1, 2002.
STATEMENT OF PURPOSE
RS11301
This income tax and property tax relief bill permanently
reduces all individual income tax rates by 0.4 percent. It
permanently reduces the corpporate income tax rate 0.4 percent.
It expands the current capital gains exclusin from 60% to 100%
for certain tangible assets, on going. Provides for an income
tax credit for Research and Development expenditure, for five
years. New jobs credit, one year only. Broadband Communications
Investment Tax Credit, five years. County incentive, one time.
It allows an income tax deduction for individual health
insurance, on going.
FISCAL IMPACT
FY 2002
Reduce individual income tax rates $58.4
Reduce corporate income tax rates 6.8
Research and Development 7.0**
Boradband ITC 3.5**
County Incentive 7.2*
Expanded Job Credit 1.5*
Capital Gains Tax (eliminate 40% portion) 8.7
Inc. tax deduction for indiv. Health insurance 4.5
TOTAL REDUCTION IN GENERAL FUND for 2002 $97.6
* One time only 8.7
* Sunsets in five years
TOTAL REDUCTION IN GENERAL FUND FOR 2003 $88.9
Contact
Name: Representative Dolores Crow
Representative Mike Moyle
Phone: 332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 37