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HOUSE BILL NO. 720
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H0720...............................................by REVENUE AND TAXATION
INTERNAL REVENUE CODE - Amends existing law to update references to the
Internal Revenue Code; and to provide that the adjusted basis of
depreciable property, depreciation and capital gains and losses shall be
computed without regard to subsection (k) of Section 168 of the Internal
Revenue Code; to provide that no deduction shall be allowed relating to
expenses of elementary and secondary teachers otherwise allowable under
Section 62(a)(2)(D) of the Internal Revenue Code; and to extend the statute
of limitations on assessments and refunds in regard to the adjusted basis
of certain property subject to Section 63-3022O, Idaho Code.
02/18 House intro - 1st rdg - to printing
02/19 Rpt prt - to 2nd rdg
02/20 2nd rdg - to 3rd rdg
02/23 3rd rdg - PASSED - 67-2-1
AYES -- Barraclough, Barrett, Bauer, Bayer, Bedke, Bell, Black,
Block, Boe, Bolz, Bradford, Campbell, Cannon, Clark, Collins, Crow,
Cuddy, Deal, Denney, Douglas, Eberle, Edmunson, Ellsworth, Eskridge,
Field(18), Field(23), Garrett, Harwood, Henbest, Jaquet, Jones,
Kellogg, Kulczyk, Lake, Langford, Langhorst, Martinez, McGeachin,
McKague, Meyer, Miller, Mitchell, Moyle, Naccarato, Nielsen,
Pasley-Stuart, Raybould, Ridinger, Ring, Ringo, Roberts, Robison,
Rydalch, Sali, Sayler, Schaefer, Shepherd, Shirley, Skippen,
Smith(24), Smylie, Snodgrass, Stevenson, Trail, Wills, Wood, Mr.
NAYS -- Andersen, Smith(30)
Absent and excused -- Gagner
Floor Sponsor - Raybould
Title apvd - to Senate
02/24 Senate intro - 1st rdg - to Loc Gov
03/02 Rpt out - rec d/p - to 2nd rdg
03/03 2nd rdg - to 3rd rdg
03/04 3rd rdg - PASSED - 23-11-1
AYES -- Bailey, Brandt, Bunderson, Burtenshaw, Cameron,
Compton(Duncan), Darrington, Davis, Gannon, Geddes, Hill, Ingram,
Little, Lodge, McKenzie, McWilliams, Noble, Pearce, Richardson,
Sorensen, Stegner, Sweet, Williams
NAYS -- Andreason, Calabretta, Goedde, Kennedy, Keough, Malepeai,
Marley, Noh, Schroeder, Stennett, Werk
Absent and excused -- Burkett
Floor Sponsor - McKenzie
Title apvd - to House
03/05 To enrol - Rpt enrol - Sp signed - Pres signed
03/05 To Governor
03/05 Governor signed
Session Law Chapter 20
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-seventh Legislature Second Regular Session - 2004
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 720
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO INCOME TAXES; AMENDING SECTION 63-3004, IDAHO CODE, TO UPDATE REF-
3 ERENCES TO THE INTERNAL REVENUE CODE; AMENDING SECTION 63-3022O, IDAHO
4 CODE, TO MAKE TECHNICAL CHANGES, TO PROVIDE THE ADJUSTED BASIS OF DEPRE-
5 CIABLE PROPERTY, DEPRECIATION AND CAPITAL GAINS AND LOSSES SHALL BE COM-
6 PUTED WITHOUT REGARD TO SUBSECTION (k) OF SECTION 168 OF THE INTERNAL REV-
7 ENUE CODE, TO PROVIDE THAT NO DEDUCTION SHALL BE ALLOWED RELATING TO
8 EXPENSES OF ELEMENTARY AND SECONDARY TEACHERS OTHERWISE ALLOWABLE UNDER
9 SECTION 62(a)(2)(D) OF THE INTERNAL REVENUE CODE AND TO EXTEND THE STATUTE
10 OF LIMITATIONS ON ASSESSMENTS AND REFUNDS IN REGARD TO THE ADJUSTED BASIS
11 OF CERTAIN PROPERTY SUBJECT TO SECTION 63-3022O, IDAHO CODE; DECLARING AN
12 EMERGENCY AND PROVIDING RETROACTIVE APPLICATION.
13 Be It Enacted by the Legislature of the State of Idaho:
14 SECTION 1. That Section 63-3004, Idaho Code, be, and the same is hereby
15 amended to read as follows:
16 63-3004. INTERNAL REVENUE CODE. (a) The term "Internal Revenue Code"
17 means the Internal Revenue Code of 1986 of the United States, as amended, and
18 in effect on the first day of January, 200 34.
19 (b) Provisions of the Internal Revenue Code amended, deleted, or added
20 prior to the effective date of the latest amendment to this section shall be
21 applicable for Idaho income tax purposes on the effective date provided for
22 such amendments, deletions, or additions, including retroactive provisions.
23 SECTION 2. That Section 63-3022O, Idaho Code, be, and the same is hereby
24 amended to read as follows:
25 63-3022O. ADJUSTMENT FOR -- PROPERTY ACQUIRED AFTER SEPTEMBER 10, 2001 --
26 EXPENSES OF ELEMENTARY AND SECONDARY TEACHERS -- SMALL BUSINESS EXPENSES --
27 LIMITATIONS ON ASSESSMENTS AND REFUNDS. For taxable years commencing on and
28 after January 1, 2001, in computing Idaho taxable income:
29 (1) The adjusted basis of depreciable property, depreciation and capital
30 gains and losses shall be computed without regard to subsection (k) of section
31 168 of the Internal Revenue Code , as amended by section 101 of the "Job Cre-
32 ation and Worker Assistance Act of 2002"; and
33 (2) No deduction shall be allowed relating to expenses of elementary and
34 secondary teachers otherwise allowable under section 62(a)(2)(D) of the Inter-
35 nal Revenue Code , as amended by section 406 of the "Job Creation and Worker
36 Assistance Act of 2002."; and
37 (3) When, in regard to property subject to this section, the adjusted
38 basis of depreciable property, depreciation and capital gains and losses
39 resulting from the provisions of this section (as previously reported by the
40 taxpayer or as adjusted by the state tax commission) are subject to change or
41 adjustment by the taxpayer or by the state tax commission, a claim for refund
1 or notice of deficiency determination for amounts resulting from the changes
2 shall be made within the greater of the time provided in sections 63-3068 and
3 63-3072, Idaho Code, or the useful life of the property to which the adjust-
4 ment relates.
5 SECTION 3. An emergency existing therefor, which emergency is hereby
6 declared to exist, this act shall be in full force and effect on and after its
7 passage and approval, and retroactively to January 1, 2004.
STATEMENT OF PURPOSE
This is the annual bill to update references to the Internal
Revenue Code (IRC). It conforms the Idaho income tax to changes
made to the IRC after January 1, 2003, including the federal "Jobs
and Growth Tax Relief Act of 2003" (JGTRA). However, no Idaho
deduction will be allowed relating to the increased (from 30% to
50%) special allowance for first year "bonus depreciation"
permitted by subsection (k) of section 168 of the IRC. For
computing Idaho taxable income, the adjusted basis of depreciable
property and capital gains or losses will be modified to reflect
the disallowance of the federal bonus depreciation. Any necessary
adjustments to basis due to nonconformity with the bonus
depreciation may be made during the lifetime of the property.
The General Fund impact for FY 2004 is a reduction of $1.5 million
in the revenue stream.
There is a General Fund reduction in the revenue stream of $1.8
million for FY 2005 and FY 2006.
The General Fund fiscal impact diminishes starting in FY 2007 and
this reversal will continue in future years to the point that the
net fiscal impact to the state over the life of the asset is zero.
Name: Dan John / Ted Spangler
Agency: State Tax Commission
STATEMENT OF PURPOSE/FISCAL NOTE H 720