2003 Legislation
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HOUSE BILL NO. 79 – Income tax, misc. amens

HOUSE BILL NO. 79

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H0079..................................................by REVENUE AND TAXATION
INCOME TAX - Amends existing law to provide adjustments to federal taxable
income; to delete credit insurance in the deduction for health insurance
costs; to conform the Idaho income tax to the Internal Revenue Code as it
relates to electing small business trusts, except to provide the maximum Idaho
rate for individuals shall apply to the trusts; to provide that for the new
employee credit a new employee includes an employee subject to Idaho income
tax withholding, whether or not any amounts are required to be withheld; and
to increase the limitation on the new employee credit.
                                                                        
01/15    House intro - 1st rdg - to printing
01/16    Rpt prt - to Rev/Tax
01/21    Rpt out - rec d/p - to 2nd rdg
01/22    2nd rdg - to 3rd rdg
01/23    3rd rdg - PASSED - 54-11-5
      AYES -- Barraclough, Barrett, Bauer, Bedke, Bell, Block, Bolz, Bradford,
      Campbell, Cannon, Clark, Collins, Crow, Cuddy, Denney, Eberle, Edmunson,
      Ellsworth, Eskridge, Field(18), Field(23), Gagner, Garrett, Harwood,
      Jones, Kellogg, Kulczyk, Lake, Langford, Langhorst, McGeachin, McKague,
      Meyer, Miller, Moyle, Nielsen, Raybould, Ridinger, Ring, Roberts,
      Robison, Rydalch, Sali, Shepherd, Shirley, Skippen, Smith(24), Smylie,
      Snodgrass, Stevenson, Tilman, Trail, Wills, Mr. Speaker
      NAYS -- Andersen, Bieter, Boe, Douglas, Jaquet, Martinez, Mitchell,
      Naccarato, Ringo, Sayler, Smith(30)
      Absent and excused -- Black, Deal, Henbest, Schaefer, Wood
    Floor Sponsor - Field(18)
    Title apvd - to Senate
01/24    Senate intro - 1st rdg - to Loc Gov
01/28    Rpt out - rec d/p - to 2nd rdg
01/29    2nd rdg - to 3rd rdg
01/31    3rd rdg - PASSED - 34-0-1
      AYES -- Andreason, Bailey, Brandt, Bunderson, Burkett, Burtenshaw,
      Cameron, Compton, Darrington, Davis, Gannon, Geddes, Goedde, Hill,
      Ingram, Kennedy, Keough, Little, Lodge, Malepeai, Marley, McKenzie,
      McWilliams, Noble, Noh, Pearce, Richardson, Schroeder, Sorensen,
      Stegner, Stennett, Sweet, Werk, Williams
      NAYS -- None
      Absent and excused -- Calabretta
    Floor Sponsor - McKenzie
    Title apvd - to House
02/03    To enrol
02/04    Rpt enrol - Sp signed
02/05    Pres signed
02/06    To Governor
02/10    Governor signed
         Session Law Chapter 10
         Effective: 01/01/03

Bill Text


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-seventh Legislature                 First Regular Session - 2003
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 79
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO CORRECTIONS TO THE IDAHO INCOME TAX ACT; AMENDING SECTION 63-3022,
  3        IDAHO CODE, TO REVISE A CROSS REFERENCE; AMENDING SECTION 63-3022P,  IDAHO
  4        CODE, TO DELETE A REFERENCE TO CREDIT INSURANCE; AMENDING SECTION 63-3024,
  5        IDAHO  CODE,  TO  PROVIDE THAT THE PROVISIONS OF THE INTERNAL REVENUE CODE
  6        RELATING TO ELECTING SMALL BUSINESS TRUSTS SHALL APPLY  FOR  IDAHO  INCOME
  7        TAX  PURPOSES  AND  TO PROVIDE THAT THE MAXIMUM IDAHO RATE FOR INDIVIDUALS
  8        SHALL APPLY TO THOSE TRUSTS; AMENDING SECTION  63-3029E,  IDAHO  CODE,  TO
  9        REVISE  THE DEFINITION OF "NEW EMPLOYEE"; AMENDING SECTION 63-3029F, IDAHO
 10        CODE, TO PROVIDE THAT THE CREDIT SHALL NOT EXCEED FIFTY PERCENT OF THE TAX
 11        LIABILITY OF THE TAXPAYER AND TO PROVIDE THAT THE  TAX  LIABILITY  OF  THE
 12        TAXPAYER SHALL BE THE TAX AFTER DEDUCTING THE CREDIT FOR INCOME TAXES PAID
 13        IN  OTHER  STATES;  AMENDING SECTION 63-3042, IDAHO CODE, TO PROVIDE FOR A
 14        COPY OF A SUMMONS; DECLARING AN  EMERGENCY  AND  PROVIDING  A  RETROACTIVE
 15        EFFECTIVE DATE.
                                                                        
 16    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 17        SECTION  1.  That  Section 63-3022, Idaho Code, be, and the same is hereby
 18    amended to read as follows:
                                                                        
 19        63-3022.  ADJUSTMENTS TO TAXABLE INCOME. The  additions  and  subtractions
 20    set  forth  in this section, and in sections 63-3022A through 63-3022MQ, Idaho
 21    Code, are to be applied to the  extent  allowed  in  computing  Idaho  taxable
 22    income:
 23        (a)  Add  any  state  and  local  taxes,  as defined in section 164 of the
 24    Internal Revenue Code and, measured by net income, paid or accrued during  the
 25    taxable  year adjusted for state or local tax refunds used in arriving at tax-
 26    able income.
 27        (b)  Add the net operating loss deduction  used  in  arriving  at  taxable
 28    income.
 29        (c)  (1) A net operating loss for any taxable year commencing on and after
 30        January  1,  2000, shall be a net operating loss carryback not to exceed a
 31        total of one hundred thousand dollars ($100,000) to the  two  (2)  immedi-
 32        ately  preceding  taxable years. Any portion of the net operating loss not
 33        subtracted in the two (2) preceding years may be subtracted  in  the  next
 34        twenty  (20) years succeeding the taxable year in which the loss arises in
 35        order until exhausted. The sum of the deductions may not exceed the amount
 36        of the net operating loss deduction incurred. At the election of the  tax-
 37        payer,  the two (2) year carryback may be foregone and the loss subtracted
 38        from income received in taxable years arising  in  the  next  twenty  (20)
 39        years  succeeding the taxable year in which the loss arises in order until
 40        exhausted. The election shall be made as under section  172(b)(3)  of  the
 41        Internal  Revenue  Code.  An election under this subsection must be in the
 42        manner prescribed in the rules of the state tax commission and  once  made
 43        is irrevocable for the year in which it is made. The term "income" as used
                                                                        
                                           2
                                                                        
  1        in this subsection (c) means Idaho taxable income as defined in this chap-
  2        ter as modified by section 63-3021(b)(2), (3) and (4), Idaho Code.
  3        (2)  Net operating losses incurred by a corporation during a year in which
  4        such corporation did not transact business in Idaho or was not included in
  5        a  group of corporations combined under subsection (t) of section 63-3027,
  6        Idaho Code, may not be subtracted. However, if at least one  (1)  corpora-
  7        tion  within a group of corporations combined under subsection (t) of sec-
  8        tion 63-3027, Idaho Code, was transacting business  in  Idaho  during  the
  9        taxable  year in which the loss was incurred, then the net  operating loss
 10        may be subtracted. Net operating losses incurred by a person, other than a
 11        corporation, in activities not taxable by Idaho may not be subtracted.
 12        (d)  In the case of a corporation, add the amount deducted under the  pro-
 13    visions  of sections 243(a) and (c), 244, 245 and 246A of the Internal Revenue
 14    Code (relating to dividends received by corporations) as  limited  by  section
 15    246(b)(1) of said code.
 16        (e)  In  the  case  of  a corporation, subtract an amount determined under
 17    section 78 of the Internal Revenue Code to be taxable as dividends.
 18        (f)  Subtract the amount of any income received or accrued during the tax-
 19    able year which is exempt from taxation by this state, under the provisions of
 20    any other law of this state or a law of the United States, if  not  previously
 21    subtracted in arriving at taxable income.
 22        (g)  For  the purpose of determining the Idaho taxable income of the bene-
 23    ficiary of a trust or of an estate:
 24        (1)  Distributable net income as defined for federal tax purposes shall be
 25        corrected for the other adjustments required by this section.
 26        (2)  Net operating losses attributable to a  beneficiary  of  a  trust  or
 27        estate under section 642 of the Internal Revenue Code shall be a deduction
 28        for  the  beneficiary  to  the extent that income from the trust or estate
 29        would be attributable to this state under the provisions of this chapter.
 30        (h)  In the case of an individual who is on active  duty  as  a  full-time
 31    officer,  enlistee  or  draftee,  with  the armed forces of the United States,
 32    which full-time duty is or will be continuous and uninterrupted for  one  hun-
 33    dred  twenty  (120)  consecutive days or more, deduct compensation paid by the
 34    armed forces of the United States for services performed outside  this  state.
 35    The deduction is allowed only to the extent such income is included in taxable
 36    income, and provided that appropriate adjustments shall be made in determining
 37    the  deductions  and exemptions allowed pursuant to section 63-3026A(4), Idaho
 38    Code.
 39        (i)  In the case of a corporation, including any corporation included in a
 40    group of corporations combined under subsection (t) of section 63-3027,  Idaho
 41    Code, add any capital loss deducted which loss was incurred during any year in
 42    which such corporation did not transact business in Idaho. However, do not add
 43    any  capital  loss  deducted  if a corporation, including any corporation in a
 44    group of corporations combined under subsection (t) of section 63-3027,  Idaho
 45    Code,  was  transacting business in Idaho during the taxable year in which the
 46    loss was incurred. In the case of persons, other than  corporations,  add  any
 47    capital loss deducted which was incurred in activities not taxable by Idaho at
 48    the  time such loss was incurred. In computing the income taxable to an S cor-
 49    poration or partnership under this section, deduction shall not be allowed for
 50    a carryover or carryback of a net operating loss provided  for  in  subsection
 51    (c)  of  this  section  or  a capital loss provided for in section 1212 of the
 52    Internal Revenue Code.
 53        (j)  In the case of an individual, there shall be allowed as  a  deduction
 54    from gross income either (1) or (2) at the option of the taxpayer:
 55        (1)  The  standard  deduction  as  defined in section 63, Internal Revenue
                                                                        
                                           3
                                                                        
  1        Code.
  2        (2)  Itemized deductions as defined in section 63 of the Internal  Revenue
  3        Code  except state or local taxes measured by net income and as defined in
  4        section 164 of the Internal Revenue Code.
  5        (k)  Add the taxable amount of any lump  sum  distribution  excluded  from
  6    gross income for federal income tax purposes under the ten (10) year averaging
  7    method.  The  taxable  amount will include the ordinary income portion and the
  8    amount eligible for the capital gain election.
  9        (l)  Deduct any amounts included in gross income under the  provisions  of
 10    section  86  of  the Internal Revenue Code relating to certain social security
 11    and railroad benefits.
 12        (m)  In the case of a self-employed individual, deduct the actual cost  of
 13    premiums paid to secure worker's compensation insurance for coverage in Idaho,
 14    if such cost has not been deducted in arriving at taxable income.
 15        (n)  In the case of an individual, deduct the amount contributed to a col-
 16    lege  savings  program  pursuant  to chapter 54, title 33, Idaho Code, but not
 17    more than four thousand dollars ($4,000) per tax year. If the contribution  is
 18    made  on or before April 15, 2001, it may be deducted for tax year 2000 and an
 19    individual can make another contribution and claim the deduction according  to
 20    the  limits provided in this subsection during 2001 for tax year 2001, as long
 21    as the contribution is made on or before December 31, 2001.
 22        (o)  In the case of an individual, add the amount of a nonqualified  with-
 23    drawal  from an individual trust account or savings account established pursu-
 24    ant to chapter 54, title 33, Idaho Code.
                                                                        
 25        SECTION 2.  That Section 63-3022P, Idaho Code, be, and the same is  hereby
 26    amended to read as follows:
                                                                        
 27        63-3022P.  HEALTH INSURANCE COSTS. With respect to an individual taxpayer,
 28    an amount equal to the amount paid by the taxpayer during the taxable year for
 29    insurance  which  constitutes  medical  care  for  the taxpayer, the spouse or
 30    dependents of the taxpayer which is not otherwise deducted or accounted for by
 31    the taxpayer for Idaho income tax purposes shall be allowed as a deduction for
 32    Idaho taxable income. As used in this section,  "insurance  which  constitutes
 33    medical care" includes any hospital or medical policy or certificate, any sub-
 34    scriber  contract, policies or certificates of insurance for specific disease,
 35    hospital confinement indemnity, accident-only, credit, dental, vision,  single
 36    employer  self-funded coverage, meaning that portion of health insurance which
 37    is the retained risk of the employer, student health benefits only or coverage
 38    for medical care or treatment issued as a supplement to  liability  insurance.
 39    Employers  shall  provide  to  the  employee  a  statement  as  to  whether an
 40    employee's contribution for health insurance has been  excluded  from  taxable
 41    income.
                                                                        
 42        SECTION  3.  That  Section 63-3024, Idaho Code, be, and the same is hereby
 43    amended to read as follows:
                                                                        
 44        63-3024.  INDIVIDUALS' TAX AND TAX ON ESTATES AND TRUSTS. For taxable year
 45    2001, and each taxable year thereafter, a tax measured by Idaho taxable income
 46    as defined in this chapter is hereby imposed upon every individual, trust,  or
 47    estate required by this chapter to file a return.
 48        (a)  The  tax  imposed  upon individuals, trusts and estates shall be com-
 49    puted at the following rates:
                                                                        
                                           4
                                                                        
  1    When Idaho taxable income is:    The rate is:
  2    Less than $1,000                 One and  six-tenths percent (1.6%)
  3    $1,000 but less than $2,000      $16, plus  three and  six-tenths
  4                                     percent (3.6%) of the amount over $1,000
  5    $2,000 but less than $3,000      $52, plus four and   one-tenth
  6                                     percent (4.1%) of the amount over $2,000
  7    $3,000 but less than $4,000      $93, plus five and   one-tenth
  8                                     percent (5.1%) of the amount over $3,000
  9    $4,000 but less than $5,000      $144, plus six and   one-tenth
 10                                     percent (6.1%) of the amount over $4,000
 11    $5,000 but less than $7,500      $205, plus seven and   one-tenth
 12                                     percent (7.1%) of the amount over $5,000
 13    $7,500 but less than $20,000     $383, plus seven and  four-tenths
 14                                     percent (7.4%) of the amount over $7,500
 15    Over $20,000                     $1,308, plus  seven
 16                                     and eight-tenths percent
 17                                     (7.8%) of the amount over $20,000
 18        For taxable year 2000 and each year thereafter, the state  tax  commission
 19    shall  prescribe  a factor which shall be used to compute the Idaho income tax
 20    brackets provided in  subsection (a) of this section. The factor shall provide
 21    an adjustment to the Idaho tax brackets so that inflation will not result in a
 22    tax increase. The Idaho tax brackets shall be adjusted  as  follows:  multiply
 23    the bracket amounts by the percentage (the consumer price index for the calen-
 24    dar  year immediately preceding the calendar year to which the adjusted brack-
 25    ets will apply divided by the consumer price index for  calendar  year  1998).
 26    For the purpose of this computation, the consumer price index for any calendar
 27    year  is the average of the consumer price index as of the close of the twelve
 28    (12) month period for the immediately preceding calendar year  as  adopted  by
 29    the state tax commission. This adoption shall be exempt from the provisions of
 30    chapter 52, title 67, Idaho Code. The consumer price index shall mean the con-
 31    sumer  price index for all U.S. urban consumers published by the United States
 32    department of labor. The state tax commission shall annually include the  fac-
 33    tor as provided in this subsection to multiply against Idaho taxable income in
 34    the  brackets  above  to  arrive  at  that year's Idaho taxable income for tax
 35    bracket purposes.
 36        (b)  In case a joint return is filed by husband and wife pursuant  to  the
 37    provisions  of  section  63-3031,  Idaho Code, the tax imposed by this section
 38    shall be twice the tax which would be imposed on one-half (1/2) of the  aggre-
 39    gate  Idaho  taxable  income.  For the purposes of this section, a return of a
 40    surviving spouse, as defined in section 2(a) of the Internal Revenue Code, and
 41    a head of household, as defined in section 2(b) of the Internal Revenue  Code,
 42    shall  be treated as a joint return and the tax imposed shall be twice the tax
 43    which would be imposed on one-half (1/2) of the Idaho taxable income.
 44        (c)  In the case of a trust that is an electing small  business  trust  as
 45    defined  in  section  1361 of the Internal Revenue Code, the special rules for
 46    taxation of such trusts contained in section 641 of the Internal Revenue  Code
 47    shall  apply  except that the maximum individual rate provided in this section
 48    shall apply in computing tax due under this chapter.
 49        (d)  The state tax commission shall compute and publish Idaho  income  tax
 50    liability  for  taxpayers  at  the  midpoint  of each bracket of Idaho taxable
 51    income in fifty dollar ($50.00) steps to  fifty  thousand  dollars  ($50,000),
 52    rounding  such  calculations  to  the  nearest dollar. Taxpayers having income
 53    within such brackets shall file returns based upon and pay taxes according  to
 54    the schedule thus established. The state tax commission shall promulgate rules
 55    defining the conditions upon which such returns shall be filed.
                                                                        
                                           5
                                                                        
  1        SECTION  4.  That Section 63-3029E, Idaho Code, be, and the same is hereby
  2    amended to read as follows:
                                                                        
  3        63-3029E.  DEFINITIONS -- CONSTRUCTION OF TERMS. As used in  this  section
  4    and in section 63-3029F, Idaho Code:
  5        (1)  (a) "New  employee"  means a person from whom subject to Idaho income
  6        tax has been withholding whether or not any amounts  are  required  to  be
  7        withheld, employed by the taxpayer, and covered for unemployment insurance
  8        purposes  under  chapter 13, title 72, Idaho Code, during the taxable year
  9        for which the credit allowed by section 63-3029F, Idaho Code, is  claimed.
 10        A  person  shall be deemed to be so engaged if such person performs duties
 11        on:
 12             (i)   A regular full-time basis; or
 13             (ii)  A part-time basis if such person is customarily performing such
 14             duties at least twenty (20) hours per week.
 15        No credit shall be earned unless the new  employee  shall  have  performed
 16        such  duties  for the taxpayer for a minimum of nine (9) months during the
 17        taxable year for which the credit is claimed.
 18        (b)  The provisions of paragraph (a) of this  subsection  notwithstanding,
 19        no  credit  shall  be  allowed for employment of persons by a taxpayer who
 20        acquires a business from another taxpayer or who operates in  a  place  of
 21        business  the  same  or  a substantially identical business as operated by
 22        another taxpayer within the prior twelve (12) months, except as the  prior
 23        taxpayer  would  have  qualified  under the provisions of paragraph (c) of
 24        this subsection. Employees transferred from a related taxpayer  shall  not
 25        be included in the computation of the credit.
 26        (c)  The  number  of  employees  during  any taxable year for any taxpayer
 27        shall be the mathematical average of the number of employees  reported  to
 28        the  Idaho department of labor for employment security purposes during the
 29        twelve (12) months of the taxable year which qualified under paragraph (a)
 30        of this subsection. In the event the business is  in  operation  for  less
 31        than  the entire taxable year, the number of employees of the business for
 32        the year shall be the average number actually employed during  the  months
 33        of  operation,  providing that the qualifications of paragraph (a) of this
 34        subsection are met.
 35        (2)  "Same or a substantially identical  business"  means  a  business  in
 36    which  the products produced or sold, or the activities conducted are the same
 37    in character and  use and are produced, sold or conducted in the  same  manner
 38    as,  or  for  the  same types of customers as, the products or activities pro-
 39    duced, sold or conducted in another business.
                                                                        
 40        SECTION 5.  That Section 63-3029F, Idaho Code, be, and the same is  hereby
 41    amended to read as follows:
                                                                        
 42        63-3029F.  SPECIAL  CREDIT  AVAILABLE  --  NEW EMPLOYEES. (1) Any taxpayer
 43    shall be allowed a credit, in an amount determined  under  subsection  (2)  of
 44    this  section,  against  the  tax  imposed by this chapter, other than the tax
 45    imposed by section 63-3082, Idaho Code, for any taxable year during which  the
 46    taxpayer's  employment of new employees, as defined under section 63-3029E(1),
 47    Idaho Code, increases above the taxpayer's average employment for either:  (a)
 48    the  prior  taxable year, or (b) the average of three (3) prior taxable years,
 49    whichever is higher. No credit shall be allowed under this section unless  the
 50    number of new employees equals or exceeds one (1) person.
 51        (2)  The credit authorized in subsection (1) of this section shall be five
 52    hundred  dollars  ($500)  per new employee, but the total credit allowed shall
                                                                        
                                           6
                                                                        
  1    not exceed three and one-quarter  percent  (3.25%)  of  net  income  from  the
  2    taxpayer's  corporate, proprietorship, partnership, small business corporation
  3    or limited liability company revenue-producing enterprise in which the employ-
  4    ment occurred. Additionally, the total amount of this and  all  other  credits
  5    allowed  under  this  chapter  except  for  the credits allowed under sections
  6    63-3024A, 63-3025D and 63-3029, Idaho Code,  taken  during  any  taxable  year
  7    shall  not exceed forty-five fifty percent (450%) of the tax otherwise imposed
  8    on liability of the taxpayer. for the taxable year for which such The tax lia-
  9    bility of the taxpayer shall be the tax after deducting the credit is  allowed
 10    by section 63-3029, Idaho Code.
 11        (3)  If  the  sum of the credit carryovers from the credit allowed by sub-
 12    section (2) of this section and the amount of credit for the taxable year from
 13    the credit allowed by subsection (2) of this  section  exceed  the  limitation
 14    imposed  by  subsection  (2) of this section for the current taxable year, the
 15    excess attributable to the current taxable year's credit  shall  be  a  credit
 16    carryover  to  the  three  (3)  succeeding taxable years. The entire amount of
 17    unused credit shall be carried forward  to  the  earliest  of  the  succeeding
 18    years, wherein the oldest available unused credit shall be used first, so long
 19    as the employment level for which the credit was granted is still maintained.
                                                                        
 20        SECTION  6.  That  Section 63-3042, Idaho Code, be, and the same is hereby
 21    amended to read as follows:
                                                                        
 22        63-3042.  EXAMINATION OF BOOKS AND WITNESSES. For the  purpose  of  ascer-
 23    taining  the  correctness  of  any return, making a return where none has been
 24    made, determining the liability of any person for any tax payable  under  this
 25    act  or  the liability at law or in equity of any person in respect to any tax
 26    provided in this act or collecting any such liability, the state  tax  commis-
 27    sion or its duly authorized deputy is authorized--
 28        (a)  To  examine  any  books,  papers, records, or other data which may be
 29    relevant or material to such inquiry;
 30        (b)  To summon the person liable for tax or required to perform  the  act,
 31    or  any  officer  or employee of such person, or any person having possession,
 32    custody or care of books of account containing entries relating to  the  busi-
 33    ness  of  the  person  liable  for tax or  required to perform the act, or any
 34    other person the commission or its deputy may deem proper,  to  appear  before
 35    the commission or its delegate at a time and place named in the summons and to
 36    produce  such books, papers, records or other data and/or give such testimony,
 37    under oath, as may be relevant or material  to  such  inquiry;  and  taxpayers
 38    whose  pertinent records are kept outside of the state must bring such records
 39    to Idaho for examination by the state tax commission upon request by it  or  a
 40    deputy, or, by agreement with the state tax commission, permit an auditor des-
 41    ignated  by  the state tax commission to visit the place where the records are
 42    kept and there audit such records; and
 43        (c)  To take such testimony of the person  concerned  or  summoned,  under
 44    oath, as may be relevant or material to such inquiry.
 45        A summons issued under the provisions of this section may be served by the
 46    state  tax commission or its deputy or by any other person authorized to serve
 47    process under the laws of this state by an attested a copy delivered in and to
 48    a person to whom it is directed; and the certificate of service signed by  the
 49    person  serving  the  summons  shall be evidence of the facts it states on the
 50    hearing of an application for the enforcement of the summons. When the summons
 51    requires the production of books, papers, records, or other data, it shall  be
 52    sufficient  if  such  books, papers, records, or other data are described with
 53    reasonable certainty.
                                                                        
                                           7
                                                                        
  1        The time and place of examination pursuant to the provisions of this  sec-
  2    tion  shall be such time and place as may be fixed by the state tax commission
  3    or its deputy and as are reasonable under the circumstances, provided that  in
  4    the  case of a summons the date fixed for appearance before the state tax com-
  5    mission or its deputy shall not be less than twenty (20) days from the time of
  6    service of the summons.
  7        No taxpayer shall be subjected to unreasonable or unnecessary examinations
  8    or investigations.
                                                                        
  9        SECTION 7.  An emergency existing  therefor,  which  emergency  is  hereby
 10    declared to exist, this act shall be in full force and effect on and after its
 11    passage and approval, and retroactively to January 1, 2003.

Statement of Purpose / Fiscal Impact


                     STATEMENT OF PURPOSE

                             RS 12397

This bill makes the following corrections and updates to the Idaho
Income Tax Act: 

Updates a cross-reference in the section providing Idaho
adjustments to federal taxable income.  

Deletes an extraneous word in the section relating to the Idaho
deduction for health insurance costs. 

Conforms the Idaho income tax as it relates to electing small
business trusts to the Internal Revenue Code except to provide that
the maximum Idaho rate for individuals shall apply to such trusts. 


Makes two changes to the provisions relating to special credit
available for new employees.  The first is to provide that a new
employee includes an employee subject to Idaho income tax
withholding whether or not any amounts are required to be withheld.
The second is to restore amendments inadvertently omitted in prior
legislation to increase the limitation on the credit and to
coordinate the credit with other credits. 



                         FISCAL IMPACT

Reduces General Fund revenue by $50,000. 


CONTACT
Name:        Dan John / Ted Spangler
Agency:      State Tax Commission
Phone:       334-7530

Statement of Purpose/Fiscal Impact                        H79