2004 Legislation
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HOUSE BILL NO. 582 – Income tax, individual, credit

HOUSE BILL NO. 582

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Bill Status



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

Bill Text


                                                                        
                                                                        
  ]]]]              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    20014,  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 / Fiscal Impact



                       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