H0317aaS............................................by REVENUE AND TAXATION INCOME TAX CREDIT - CAPITAL INVESTMENT - Amends existing law to provide that for qualified investments placed into service in taxable years beginning in 2003 and thereafter, the taxpayer may elect, in lieu of the credit provided by this section, a two year exemption from all taxes on personal property on the qualified investment; to provide procedures; to provide for cooperation between the State Tax Commission and the county assessors; and to provide penalties. 03/03 House intro - 1st rdg - to printing 03/04 Rpt prt - to Rev/Tax 03/13 Rpt out - rec d/p - to 2nd rdg 03/14 2nd rdg - to 3rd rdg 03/17 3rd rdg - PASSED - 54-16-0 AYES -- Andersen, Barraclough, Barrett, Bauer, Bedke, Bell, Black, Block, Boe, Bolz, Bradford, Campbell, Cannon, Clark, Collins, Crow, Cuddy, Deal, Eberle, Edmunson, Ellsworth, Eskridge, Field(18), Field(23), Gagner, Garrett, Harwood, Jaquet, Jones, Kellogg, Lake, Langford, McKague, Meyer, Miller, Moyle, Nielsen, Raybould, Ring, Rydalch, Sali, Schaefer, Shepherd, Shirley, Skippen, Smylie, Snodgrass, Stevenson, Tilman, Trail, Wills, Wood, Mr. Speaker NAYS -- Bieter, Douglas, Henbest, Kulczyk, Langhorst, Martinez, McGeachin, Mitchell, Naccarato, Ridinger, Ringo, Roberts, Robison, Sayler, Smith(30), Smith(24) Absent and excused -- None Floor Sponsor - Mr. Speaker Title apvd - to Senate 03/19 Senate intro - 1st rdg - to Loc Gov 03/25 Rpt out - rec d/p - to 2nd rdg 03/26 2nd rdg - to 3rd rdg 04/22 To 14th Ord 04/25 Rpt out amen - to 1st rdg as amen 1st rdg - to 2nd rdg as amen Rls susp - PASSED - 23-11-1 AYES -- Andreason, Bailey, Brandt, Bunderson, Cameron, Compton, Darrington, Davis, Gannon, Geddes, Goedde, Hill, Ingram, Little, Lodge, McKenzie, Noh, Pearce, Richardson, Sorensen, Stegner, Sweet, Williams NAYS -- Burkett, Calabretta, Kennedy, Keough, Malepeai, Marley, McWilliams, Noble, Schroeder, Stennett, Werk Absent and excused -- Burtenshaw Floor Sponsor - McKenzie Title apvd - to House 04/28 House did not concur in Senate amens Filed w/Office of the Chief Clerk
|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-seventh Legislature First Regular Session - 2003 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 317 BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO THE INCOME TAX CREDIT FOR CAPITAL INVESTMENT; AMENDING SECTION 3 63-3029B, IDAHO CODE, TO PROVIDE THAT FOR QUALIFIED INVESTMENTS PLACED IN 4 SERVICE IN TAXABLE YEARS BEGINNING IN 2003 AND THEREAFTER, THE TAXPAYER 5 MAY ELECT, IN LIEU OF THE INCOME TAX CREDIT PROVIDED FOR CAPITAL INVEST- 6 MENT, A TWO YEAR EXEMPTION FROM ALL TAXES ON PERSONAL PROPERTY ON THE 7 QUALIFIED INVESTMENT, TO PROVIDE PROCEDURES, TO PROVIDE FOR COOPERATION 8 BETWEEN THE STATE TAX COMMISSION AND COUNTY ASSESSORS AND TO PROVIDE PEN- 9 ALTIES; DECLARING AN EMERGENCY AND PROVIDING RETROACTIVE APPLICATION. 10 Be It Enacted by the Legislature of the State of Idaho: 11 SECTION 1. That Section 63-3029B, Idaho Code, be, and the same is hereby 12 amended to read as follows: 13 63-3029B. INCOME TAX CREDIT FOR CAPITAL INVESTMENT. (1) At the election 14 of the taxpayer there shall be allowed, subject to the applicable limitations 15 provided herein as a credit against the income tax imposed by chapter 30, 16 title 63, Idaho Code, an amount equal to the sum of: 17 (a) The tax credit carryovers; and 18 (b) The tax credit for the taxable year. 19 (2) The maximum allowable amount of the credit for the current taxable 20 year shall be three percent (3%) of the amount of qualified investments made 21 during the taxable year. 22 (3) As used in this section "qualified investment" means certain depre- 23 ciable property which: 24 (a) (i) Is eligible for the federal investment tax credit, as defined in 25 sections 46(c) and 48 of the Internal Revenue Code subject to the 26 limitations provided for certain regulated companies in section 46(f) 27 of the Internal Revenue Code and is not a motor vehicle under eight 28 thousand (8,000) pounds gross weight; or 29 (ii) Is qualified broadband equipment as defined in section 63-3029I, 30 Idaho Code; and 31 (b) Is acquired, constructed, reconstructed, erected or placed into ser- 32 vice after December 31, 1981; and 33 (c) Has a situs in Idaho. 34 (4) (a) For qualified investments placed in service in taxable years 35 beginning in 2003 and thereafter, the taxpayer may elect, in lieu of the 36 credit provided by this section, a two (2) year exemption from all taxes 37 on personal property on the qualified investment. The exemption from per- 38 sonal property tax shall apply to the year the election is filed as pro- 39 vided in this section and the immediately following year. The election 40 provided by this paragraph is available only to a taxpayer whose Idaho 41 taxable income in the second preceding taxable year in which the invest- 42 ment is placed in service is negative. 43 (b) The election shall be made in the form prescribed by the state tax 2 1 commission and shall include a specific description and location of all 2 qualified investments placed into service and located in the jurisdiction 3 of the assessing authority, a designation of the specific assets for which 4 the exemption is claimed, and such other information as the state tax com- 5 mission may require. The election must be made by including the election 6 form with the listing of personal property required by section 63-302, 7 Idaho Code, or, in the case of operating property assessed under chapter 8 4, title 63, Idaho Code, with the operator's statement required by section 9 63-404, Idaho Code, for the calendar year immediately following the tax- 10 able year in which the property was placed in service. Once made the 11 election is irrevocable. If no election is made, the election is not 12 otherwise available. A copy of the election form must also be attached to 13 the original income tax return due for the taxable year in which the claim 14 was made. 15 (c) The state tax commission and the various county assessors are autho- 16 rized to exchange information as necessary to properly coordinate the 17 exemption provided in this subsection. 18 (d) In the event that an investment in regard to which the election under 19 this section was made is determined by the state tax commission to not be 20 a qualified investment or ceases to qualify during the recapture period, 21 the taxpayer shall be subject to a penalty equal to the amount of the 22 claimed investment times the average urban property tax levy of the state 23 as determined by the state tax commission times two (2). 24 (5) Notwithstanding the provisions of subsections (1) and (2) of this 25 section, the amount of the credit allowed shall not exceed fifty percent (50%) 26 of the tax liability of the taxpayer. The tax liability of the taxpayer shall 27 be the tax after deducting the credit allowed by section 63-3029, Idaho Code. 28 ( 56) If the sum of credit carryovers from the credit allowed by subsec- 29 tion (2) of this section and the amount of credit for the taxable year from 30 the credit allowed by subsection (2) of this section exceed the limitation 31 imposed by subsection ( 45) of this section for the current taxable year, the 32 excess attributable to the current taxable year's credit shall be an invest- 33 ment credit carryover to the fourteen (14) succeeding taxable years. In the 34 case of a group of corporations filing a combined report under section 35 63-3027, Idaho Code, or sections 63-3027B through 63-3027E, Idaho Code, credit 36 earned by one (1) member of the group but not used by that member may be used 37 by another member of the group, subject to the provisions of subsection ( 45) 38 of this section, instead of carried over. The entire amount of unused credit 39 shall be carried forward to the earliest of the succeeding years, wherein the 40 oldest available unused credit shall be used first, so long as the qualified 41 investment property for which the unused credit was granted still maintains 42 Idaho situs. For a combined group of corporations, credit carried forward may 43 be claimed by any member of the group unless the member who earned the credit 44 is no longer included in the combined group. 45 ( 67) Any recapture of the credit allowed by subsection (2) of this sec- 46 tion on property disposed of or ceasing to qualify, prior to the close of the 47 recapture period, shall be determined according to the applicable recapture 48 provisions of the Internal Revenue Code. In the case of a unitary group of 49 corporations, the increase in tax due to the recapture of investment tax 50 credit must be reported by the member of the group who earned the credit 51 regardless of which member claimed the credit against tax. 52 ( 78) For the purpose of determining whether property placed in service is 53 a "qualified investment" as defined in subsection (3) of this section, the 54 provisions of section 49 of the Internal Revenue Code shall be disregarded. 55 ( 89) For purposes of this section, property has a situs in Idaho during a 3 1 taxable year if it is used in Idaho at any time during the taxable year. Prop- 2 erty not used in Idaho during a taxable year does not have a situs in Idaho in 3 the taxable year during which the property is not used in Idaho or in any sub- 4 sequent taxable year. No credit or carryover of credit is permitted under this 5 section if the credit or carryover relates to property that does not have a 6 situs in Idaho during the taxable year for which the credit or carryover is 7 claimed. The Idaho situs of property must be established by records maintained 8 by the taxpayer which are created reasonably contemporaneously with the use of 9 the property. 10 ( 910) In the case of property used both in and outside Idaho, the tax- 11 payer, electing to claim the credit provided in this section, must elect to 12 compute the qualified investment in property with a situs in Idaho for all 13 such investments first qualifying during that year in one (1), but only one 14 (1), of the following ways: 15 (a) The amount of each qualified investment in a specific asset shall be 16 separately computed based on the percentage of the actual use of the prop- 17 erty in Idaho by using a measure of the use, such as total miles or total 18 machine hours, that most accurately reflects the beneficial use during the 19 taxable year in which it is first acquired, constructed, reconstructed, 20 erected or placed into service; provided, that the asset is placed in ser- 21 vice more than ninety (90) days before the end of the taxable year. In the 22 case of assets acquired, constructed, reconstructed, erected or placed 23 into service within ninety (90) days prior to the end of the taxable year 24 in which the investment first qualifies, the measure of the use of that 25 asset within Idaho for that year shall be based upon the percentage of use 26 in Idaho during the first ninety (90) days of use of the asset; 27 (b) The investment in qualified property used both inside and outside 28 Idaho during the taxable year in which it is first acquired, constructed, 29 reconstructed, erected or placed into service shall be multiplied by the 30 percent of the investment that would be included in the numerator of the 31 Idaho property factor determined pursuant to section 63-3027, Idaho Code, 32 for the same year. 33 (1 01) Only for the purposes of subsections (3)(a) and ( 78) of this sec- 34 tion, references to sections of the "Internal Revenue Code" mean the sections 35 referred to as they existed in the Internal Revenue Code of 1986 prior to 36 November 5, 1990. 37 SECTION 2. An emergency existing therefor, which emergency is hereby 38 declared to exist, this act shall be in full force and effect on and after its 39 passage and approval, and retroactively to January 1, 2003.
|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-seventh Legislature First Regular Session - 2003 Moved by Bunderson Seconded by Davis IN THE SENATE SENATE AMENDMENT TO H.B. NO. 317 1 AMENDMENT TO THE BILL 2 On page 3 of the printed bill, delete lines 37 through 39 and insert: 3 "SECTION 2. That Section 63-2501, Idaho Code, be, and the same is hereby 4 amended to read as follows: 5 63-2501. PURPOSE. It is the intent and purpose of this actchapter to 6 levy a tax on all cigarettes sold,used ,or consumed, handled or distributed7 within this state, other than certain cigarettes sold on Indian reservations 8 for consumption by tribal members, and to precollect the tax from the person 9 who first sells, uses, consumesreceives, handles, or distributes the ciga- 10 rettes. It is also the intent of this chapter to eliminate unfair competitive 11 business advantages now enjoyed by Indian tobacco retailers in direct competi- 12 tion with non-Indian businesses. This advantage arises because the legislature 13 of the state of Idaho in the past has not exercised its full constitutional 14 authority to require that Indian enterprises collect and remit state cigarette 15 taxes in regard to sales made to non-Indian customers. The legislature hereby 16 intends to exercise the full extent of the state's constitutional power to 17 require that cigarettes sold to non-Indian purchasers on an Indian reservation 18 must have an Idaho cigarette tax stamp affixed, even if sold by an Indian or 19 an Indian enterprise. 20 SECTION 3. That Section 63-2506, Idaho Code, be, and the same is hereby 21 amended to read as follows: 22 63-2506. IMPOSITION OF TAX. (1) A tax upon the purchase, storage,ciga- 23 rettes purchased at retail for use ,or consumption , handling, distribution or24 wholesale sale of cigarettesis hereby imposed at the rate of one and four-25 tenths cent (1.4) for each cigarette ortwenty-eight cents (28) per package 26 of twenty (20) cigarettes, which tax shall be precollected and paid by the 27 wholesaler, and collected byremitted to the state tax commission. Five cents 28 (5) of the tax collected per package of twenty (20) cigarettes shall be sub- 29 ject to appropriation to the public school income fund to be utilized to 30 facilitate and provide substance abuse programs in the public school system. 31 Five cents (5) of the tax collected per package of twenty (20) cigarettes 32 shall be subject to appropriation to the department of juvenile corrections 33 for distribution to the counties to be utilized for county juvenile probation 34 services. Appropriated funds shall be distributed quarterly to the counties 35 based upon the percentage the population of the county bears to the population 36 of the state as a whole. The remaining moneys collected and those moneys not 37 appropriated under the provisions of this section shall be distributed as 38 specified in section 63-2520, Idaho Code. 39 (2) The tax imposed by this section shall not apply to cigarettes sold by 40 a wholesaler pursuant to an authorization by the commission as provided by 2 1 this section to an Indian retailer solely for resale within the boundaries of 2 an Indian reservation located in Idaho to members of the reservation's govern- 3 ing tribe. Any cigarettes that are nontaxable under this subsection are 4 required to have affixed the cigarette stamps required by this chapter. 5 (3) Wholesalers making sales of cigarettes to Indian retailers located on 6 an Indian reservation located in Idaho may apply to the commission for an 7 authorization to deduct on its cigarette tax return cigarettes sold by the 8 Indian retailers to members of the reservation's governing tribe. The claim 9 for any such deduction must be made by the wholesaler and approved by the com- 10 mission before the wholesaler sells the cigarettes to a retailer. If not so 11 claimed, the deduction shall be lost. 12 (4) The total number of deductible cigarettes allowed by the commission 13 to wholesalers claiming a deduction under subsection (3) of this section for 14 any reporting period shall not exceed the allocated number of cigarettes for 15 the federally recognized Indian reservation in Idaho to which the cigarettes 16 are destined. The allocated number of cigarettes for each federally recognized 17 Indian reservation in Idaho shall be determined by the commission by multiply- 18 ing the tribal service area population as determined by the bureau of Indian 19 affairs of the United States department of interior by the greater of: 20 (a) The national cigarette consumption per capita average, as compiled 21 for the most recently completed calendar or fiscal year by the U.S. 22 department of health and human services or other reliable source of data 23 as determined by the state tax commission; or 24 (b) The cigarette consumption per capita average for that tribe as com- 25 piled for the most recently completed calendar year. 26 (5) A wholesaler may seek, and the commission may allow, a larger number 27 of deductible cigarettes upon documentary proof satisfactory to the commission 28 that actual sales to members of a reservation's governing tribe exceeded the 29 amounts computed in accordance with subsection (4) of this section, provided 30 that the deduction may not exceed the amount of the documented actual sales. 31 (6) No deduction shall be allowed to a wholesaler, unless the wholesaler 32 certifies to the commission that the economic benefit of the deduction has 33 been passed on to the retailers to whom the sales were made. The economic ben- 34 efit of the deduction shall be presumed to have been passed on to the Indian 35 retailer when the average price of cigarettes sold by the wholesaler to all 36 retailers other than Indian retailers during the reporting period exceeds, by 37 an amount equal to the tax imposed in this chapter, the average price of ciga- 38 rettes sold to Indian retailers during the same reporting period. 39 (7) The following definitions apply to terms used in this section: 40 (a) "Indian reservation" means lands in the state of Idaho lawfully 41 reserved, as of the date of the cigarette sale, for a federally recognized 42 Indian tribe by treaty with the United States, by federal statute, execu- 43 tive order or regulation. 44 (b) "Indian retailer" means only a business or enterprise which is wholly 45 owned and operated by an Idaho Indian tribe identified in section 67-4001, 46 Idaho Code, or a business or enterprise which is wholly owned and operated 47 by one (1) or more members of that tribe. 48 (c) "Reporting period" means the period for which a cigarette tax return 49 is due under section 63-2510, Idaho Code. 50 SECTION 4. SEVERABILITY. The provisions of this act are hereby declared 51 to be severable and if any provision of this act or the application of such 52 provision to any person or circumstance is declared invalid for any reason, 53 such declaration shall not affect the validity of the remaining portions of 54 this act. 3 1 SECTION 5. An emergency existing therefor, which emergency is hereby 2 declared to exist, Sections 1 and 4 of this act shall be in full force and 3 effect on and after passage and approval, and retroactively to January 1, 4 2003; Sections 2 and 3 of this act shall be in full force and effect on and 5 after July 1, 2003.". 6 CORRECTIONS TO TITLE 7 On page 1, delete line 2, and insert: "RELATING TO TAXATION; AMENDING SEC- 8 TION"; and delete line 9 and insert: "ALTIES; AMENDING SECTION 63-2501, IDAHO 9 CODE, TO APPLY THE CIGARETTE TAX TO USE OR CONSUMPTION OTHER THAN CIGARETTES 10 SOLD ON INDIAN RESERVATIONS FOR CONSUMPTION BY TRIBAL MEMBERS; AMENDING SEC- 11 TION 63-2506, IDAHO CODE, TO APPLY THE CIGARETTE TAX TO ALL SALES EXCEPT TO 12 MEMBERS OF THE RESERVATION'S GOVERNING TRIBE ON AN INDIAN RESERVATION, TO 13 ESTABLISH A DEDUCTION METHOD AGAINST CIGARETTE TAXES FOR THE EXEMPTION AND TO 14 MAKE A TECHNICAL CORRECTION; PROVIDING FOR SEVERABILITY; DECLARING AN EMER- 15 GENCY, PROVIDING RETROACTIVE APPLICATION AND PROVIDING AN EFFECTIVE DATE.".
REPRINT REPRINT REPRINT REPRINT STATEMENT OF PURPOSE RS 13084 This bill allows taxpayers who make new personal property investments in Idaho, on and after January 1, 2003, the opportunity to forego the income tax investment tax credit (ITC) by electing an exemption from personal tax on the property for two years. Taxpayers who are in a loss situation are not able to claim the ITC because they have no tax liability to offset. This bill will allow taxpayers who have suffered losses to elect to be exempt from property tax on personal property on new personal property acquisitions/investments for two years in lieu of the ITC. The average rural property tax rate is 1.2%. The average urban property tax rate is 1.7%. Two years of property tax exemption closely approximates the amount of ITC that would have been earned. FISCAL IMPACT No fiscal cost to the General Fund. The cost to the counties in Idaho is zero, as a tax shift occurs. It is estimated that the tax shift will be in the $6 - $8 million range in the first year, which equates to about 5% of total property tax on personal property paid last year. The cost to schools is also zero in the first year and about $1.8 million in year two. Contact: Name: Speaker Bruce Newcomb Rep. Lawerence Denney Rep. Mike Moyle Rep. Julie Ellsworth Phone: (208) 332-1000 STATEMENT OF PURPOSE/FISCAL NOTE Bill No. 317