View Bill Status
View Bill Text
View Statement of Purpose / Fiscal Impact
H0582..............................................................by RINGO INCOME TAX CREDIT - Amends and adds to existing law to provide an income tax credit to a resident individual or part-year resident individual based on a percent of the amount of the federal earned income tax credit claimed on the individual's federal income tax return; to provide procedures; to provide an additional income bracket and an increase in the rate of taxation for that bracket for taxable year 2004 and each taxable year thereafter; to provide that a resident individual who has not reached his sixty-fifth birthday, is not required by law to file an Idaho income tax return, and who has received no credit or refund, shall be entitled to a refund of twenty dollars; and to provide that any refund shall be paid to such individual only upon his making application as may be prescribed by the State Tax Commission for carryover authority for unused grocery tax credits. 01/30 House intro - 1st rdg - to printing 02/02 Rpt prt - to W/M 02/18 Rpt out - ref'd to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-seventh Legislature Second Regular Session - 2004 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 582 BY RINGO 1 AN ACT 2 RELATING TO INCOME TAXATION; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE 3 ADDITION OF A NEW SECTION 63-3029K, IDAHO CODE, TO PROVIDE AN INCOME TAX 4 CREDIT TO A RESIDENT INDIVIDUAL OR PART-YEAR RESIDENT INDIVIDUAL BASED ON 5 A PERCENT OF THE AMOUNT OF THE FEDERAL EARNED INCOME TAX CREDIT CLAIMED ON 6 THE INDIVIDUAL'S FEDERAL INCOME TAX RETURN AND TO PROVIDE PROCEDURES; 7 AMENDING SECTION 63-3024, IDAHO CODE, TO PROVIDE, FOR TAXABLE YEAR 2004 8 AND EACH TAXABLE YEAR THEREAFTER, FOR ONE ADDITIONAL INCOME BRACKET AND AN 9 INCREASED RATE OF TAXATION FOR THAT BRACKET; AMENDING SECTION 63-3024A, 10 IDAHO CODE, TO PROVIDE THAT A RESIDENT INDIVIDUAL WHO HAS NOT REACHED HIS 11 SIXTY-FIFTH BIRTHDAY AND IS NOT REQUIRED BY LAW TO FILE AN IDAHO INCOME 12 TAX RETURN AND WHO HAS RECEIVED NO CREDIT OR REFUND UNDER ANY OTHER SUB- 13 SECTION OF THIS SECTION, SHALL BE ENTITLED TO A REFUND OF TWENTY DOLLARS 14 AND TO PROVIDE ANY REFUND SHALL BE PAID TO SUCH INDIVIDUAL ONLY UPON HIS 15 MAKING APPLICATION THEREFOR AT SUCH TIME AND IN SUCH MANNER AS MAY BE PRE- 16 SCRIBED BY THE STATE TAX COMMISSION FOR CARRYOVER AUTHORITY FOR UNUSED 17 GROCERY TAX CREDITS; DECLARING AN EMERGENCY AND PROVIDING RETROACTIVE 18 APPLICATION. 19 Be It Enacted by the Legislature of the State of Idaho: 20 SECTION 1. That Chapter 30, Title 63, Idaho Code, be, and the same is 21 hereby amended by the addition thereto of a NEW SECTION, to be known and des- 22 ignated as Section 63-3029K, Idaho Code, and to read as follows: 23 63-3029K. WORKING FAMILIES TAX CREDIT. (1) A resident individual or part- 24 year resident individual is allowed a credit against the tax imposed by this 25 chapter equal to ten percent (10%) of the amount of the federal earned income 26 tax claimed on the individual's federal income tax return or, in the case of a 27 part-year resident individual, such amount as shall reflect ten percent (10%) 28 of the federal earned income credit earned while a resident of Idaho. To 29 receive the credit, the taxpayer must be eligible for a credit under section 30 32 of the Internal Revenue Code. 31 (2) If taxes due are less than the total credit allowed, the taxpayer 32 shall be paid a refund equal to the balance of the unused credit. If the 33 credit or refund is not claimed for the year for which the individual income 34 tax return is filed, the right thereafter to claim such credit or refund shall 35 be forfeited. The credit shall not be carried forward as a tax credit against 36 the individual's subsequent years' income tax liability. The state tax commis- 37 sion shall prescribe the method by which the refund, if any, is to be made to 38 the taxpayer. 39 SECTION 2. That Section 63-3024, Idaho Code, be, and the same is hereby 40 amended to read as follows: 41 63-3024. INDIVIDUALS' TAX AND TAX ON ESTATES AND TRUSTS. For taxable year 2 1 200 14, and each taxable year thereafter, a tax measured by Idaho taxable 2 income as defined in this chapter is hereby imposed upon every individual, 3 trust, or estate required by this chapter to file a return. 4 (a) The tax imposed upon individuals, trusts and estates shall be com- 5 puted at the following rates: 6 When Idaho taxable income is: The rate is: 7 Less than $1,000 One and six-tenths percent (1.6%) 8 $1,000 but less than $2,000 $16, plus three and six-tenths 9 percent (3.6%) of the amount over $1,000 10 $2,000 but less than $3,000 $52, plus four and one-tenth 11 percent (4.1%) of the amount over $2,000 12 $3,000 but less than $4,000 $93, plus five and one-tenth 13 percent (5.1%) of the amount over $3,000 14 $4,000 but less than $5,000 $144, plus six and one-tenth 15 percent (6.1%) of the amount over $4,000 16 $5,000 but less than $7,500 $205, plus seven and one-tenth 17 percent (7.1%) of the amount over $5,000 18 $7,500 but less than $20,000 $383, plus seven and four-tenths 19 percent (7.4%) of the amount over $7,500 20 Over$20,000 but less than $1,308, plus seven 21 $50,000 and eight-tenths percent 22 (7.8%) of the amount over $20,000 23 $50,000 and over $3,648, plus eight and two-tenths percent 24 (8.2%) of the amount over $50,000 25 For taxable year 2000 and each year thereafter, the state tax commission 26 shall prescribe a factor which shall be used to compute the Idaho income tax 27 brackets provided in subsection (a) of this section. The factor shall provide 28 an adjustment to the Idaho tax brackets so that inflation will not result in a 29 tax increase. The Idaho tax brackets shall be adjusted as follows: multiply 30 the bracket amounts by the percentage (the consumer price index for the calen- 31 dar year immediately preceding the calendar year to which the adjusted brack- 32 ets will apply divided by the consumer price index for calendar year 1998). 33 For the purpose of this computation, the consumer price index for any calendar 34 year is the average of the consumer price index as of the close of the twelve 35 (12) month period for the immediately preceding calendar year as adopted by 36 the state tax commission. This adoption shall be exempt from the provisions of 37 chapter 52, title 67, Idaho Code. The consumer price index shall mean the con- 38 sumer price index for all U.S. urban consumers published by the United States 39 department of labor. The state tax commission shall annually include the fac- 40 tor as provided in this subsection to multiply against Idaho taxable income 41 in the brackets above to arrive at that year's Idaho taxable income for tax 42 bracket purposes. 43 (b) In case a joint return is filed by husband and wife pursuant to the 44 provisions of section 63-3031, Idaho Code, the tax imposed by this section 45 shall be twice the tax which would be imposed on one-half (1/2) of the aggre- 46 gate Idaho taxable income. For the purposes of this section, a return of a 47 surviving spouse, as defined in section 2(a) of the Internal Revenue Code, and 48 a head of household, as defined in section 2(b) of the Internal Revenue Code, 49 shall be treated as a joint return and the tax imposed shall be twice the tax 50 which would be imposed on one-half (1/2) of the Idaho taxable income. 51 (c) In the case of a trust that is an electing small business trust as 52 defined in section 1361 of the Internal Revenue Code, the special rules for 53 taxation of such trusts contained in section 641 of the Internal Revenue Code 54 shall apply except that the maximum individual rate provided in this section 55 shall apply in computing tax due under this chapter. 3 1 (d) The state tax commission shall compute and publish Idaho income tax 2 liability for taxpayers at the midpoint of each bracket of Idaho taxable 3 income in fifty dollar ($50.00) steps to fifty thousand dollars ($50,000), 4 rounding such calculations to the nearest dollar. Taxpayers having income 5 within such brackets shall file returns based upon and pay taxes according to 6 the schedule thus established. The state tax commission shall promulgate rules 7 defining the conditions upon which such returns shall be filed. 8 SECTION 3. That Section 63-3024A, Idaho Code, be, and the same is hereby 9 amended to read as follows: 10 63-3024A. CREDITS AND REFUNDS. (a) Any resident individual not entitled 11 to the credit allowed in subsection (b)(1), who is required to file by law and 12 who has filed an Idaho income tax return, shall be allowed a credit against 13 taxes due under the Idaho income tax act equal to the amount of twenty dollars 14 ($20.00) for each personal exemption for which a deduction is permitted by 15 section 151(b) and (c) of the Internal Revenue Code if such deduction is 16 claimed on the taxpayer's Idaho income tax return, and if the individual for 17 whom the deduction is claimed is a resident of the state of Idaho. If taxes 18 due are less than the total credit allowed, the taxpayer shall be paid a 19 refund equal to the balance of the unused credit. If the credit or refund is 20 not claimed for the year for which the individual income tax return is filed, 21 the right thereafter to claim such credit or refund shall be forfeited. The 22 state tax commission shall prescribe the method by which the refund, if any, 23 is to be made to the taxpayer. A resident individual who has not reached his 24 sixty-fifth birthday and is not required by law to file an Idaho income tax 25 return and who has received no credit or refund under any other subsection of 26 this section, shall be entitled to a refund of twenty dollars ($20.00). Any 27 refund shall be paid to such individual only upon his making application 28 therefor at such time and in such manner as may be prescribed by the state tax 29 commission. 30 (b) (1) A resident individual who has reached his sixty-fifth birthday 31 before the end of his taxable year, who is required to file by law and who 32 has filed an Idaho income tax return, shall be allowed a credit against 33 taxes due under the Idaho income tax act equal to the amount of thirty- 34 five dollars ($35.00) for each personal exemption representing himself, a 35 spouse over the age of sixty-five (65) years, or a dependent over the age 36 of sixty-five (65) years, but shall be allowed a credit against taxes due 37 under the Idaho income tax act equal to twenty dollars ($20.00) for each 38 personal exemption representing a spouse or dependent under the age of 39 sixty-five (65) years. If taxes due are less than the total credit 40 allowed, the taxpayer shall be paid a refund equal to the balance of the 41 unused credit. If the credit or refund is not claimed for the year for 42 which the individual income tax return is filed, the right thereafter to 43 claim such credit or refund shall be forfeited. The state tax commission 44 shall prescribe the method by which the refund, if any, is to be made to 45 the taxpayer. 46 (2) A resident individual who has reached his sixty-fifth birthday and 47 is not required by law to file an Idaho income tax return and who has 48 received no credit or refund under any other subsection of this section, 49 shall be entitled to a refund of thirty-five dollars ($35.00). Any refund 50 shall be paid to such individual only upon his making application therefor 51 at such time and in such manner as may be prescribed by the state tax com- 52 mission. 53 (c) A resident individual of the state of Idaho who is: 4 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 percent (10%) or more, or who is in receipt of a pen- 5 sion for nonservice connected disabilities, in accordance with laws and 6 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 twenty dollars ($20.00), or the balance of his unused 13 credit, whichever is less, upon making application therefor at such time 14 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 SECTION 4. An emergency existing therefor, which emergency is hereby 35 declared to exist, this act shall be in full force and effect on and after its 36 passage and approval, and retroactively to January 1, 2004.
STATEMENT OF PURPOSE RS 13832C1 The proposed changes provide an Idaho tax credit to individuals who qualify for the Federal Earned Income Credit; provide that the grocery tax credit be extended to citizens who are currently left out; and provide for one additional income tax bracket with an increased rate of taxation. FISCAL IMPACT The revenue realized as a result of adding the income tax bracket will be sufficient to fund the tax credits. Contact Name: Representative Shirley Ringo Phone: 332-1000 STATEMENT OF PURPOSE/FISCAL NOTE H 582