View Bill Status
View Bill Text
View Statement of Purpose / Fiscal Impact
H0782...............................................by REVENUE AND TAXATION
INVESTMENT TAX CREDIT - Amends existing law to provide that all moneys
collected by the State Tax Commission for an erroneously taken investment
tax credit shall be remitted to the county where the property was located
that was not a qualified investment or ceased to qualify during the
recapture period; to provide for distribution of moneys to taxing districts
within the county; and to provide application of these moneys to the three
percent property tax cap.
02/26 House intro - 1st rdg - to printing
02/27 Rpt prt - to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-seventh Legislature Second Regular Session - 2004
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 782
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO TAXATION; AMENDING SECTION 63-3029B, IDAHO CODE, TO PROVIDE THAT
3 ALL MONEYS COLLECTED BY THE STATE TAX COMMISSION FOR AN ERRONEOUSLY TAKEN
4 INVESTMENT TAX CREDIT SHALL BE REMITTED TO THE COUNTY WHERE THE PROPERTY
5 WAS LOCATED THAT WAS NOT A QUALIFIED INVESTMENT OR CEASED TO QUALIFY DUR-
6 ING THE RECAPTURE PERIOD, TO PROVIDE FOR DISTRIBUTION OF MONEYS TO TAXING
7 DISTRICTS WITHIN THE COUNTY AND TO PROVIDE APPLICATION OF THESE MONEYS TO
8 THE THREE PERCENT PROPERTY TAX CAP.
9 Be It Enacted by the Legislature of the State of Idaho:
10 SECTION 1. That Section 63-3029B, Idaho Code, be, and the same is hereby
11 amended to read as follows:
12 63-3029B. INCOME TAX CREDIT FOR CAPITAL INVESTMENT. (1) At the election
13 of the taxpayer there shall be allowed, subject to the applicable limitations
14 provided herein as a credit against the income tax imposed by chapter 30,
15 title 63, Idaho Code, an amount equal to the sum of:
16 (a) The tax credit carryovers; and
17 (b) The tax credit for the taxable year.
18 (2) The maximum allowable amount of the credit for the current taxable
19 year shall be three percent (3%) of the amount of qualified investments made
20 during the taxable year.
21 (3) As used in this section "qualified investment" means certain depre-
22 ciable property which:
23 (a) (i) Is eligible for the federal investment tax credit, as defined in
24 sections 46(c) and 48 of the Internal Revenue Code subject to the
25 limitations provided for certain regulated companies in section 46(f)
26 of the Internal Revenue Code and is not a motor vehicle under eight
27 thousand (8,000) pounds gross weight; or
28 (ii) Is qualified broadband equipment as defined in section 63-3029I,
29 Idaho Code; and
30 (b) Is acquired, constructed, reconstructed, erected or placed into ser-
31 vice after December 31, 1981; and
32 (c) Has a situs in Idaho.
33 (4) (a) For qualified investments placed in service in taxable years
34 beginning in 2003 and thereafter, the taxpayer may elect, in lieu of the
35 credit provided by this section, a two (2) year exemption from all taxes
36 on personal property on the qualified investment. The exemption from per-
37 sonal property tax shall apply to the year the election is filed as pro-
38 vided in this section and the immediately following year. The election
39 provided by this paragraph is available only to a taxpayer whose Idaho
40 taxable income in the second preceding taxable year in which the invest-
41 ment is placed in service is negative.
42 (b) The election shall be made in the form prescribed by the state tax
43 commission and shall include a specific description and location of all
2
1 qualified investments placed into service and located in the jurisdiction
2 of the assessing authority, a designation of the specific assets for which
3 the exemption is claimed, and such other information as the state tax com-
4 mission may require. The election must be made by including the election
5 form with the listing of personal property required by section 63-302,
6 Idaho Code, or, in the case of operating property assessed under chapter
7 4, title 63, Idaho Code, with the operator's statement required by section
8 63-404, Idaho Code, for the calendar year immediately following the tax-
9 able year in which the property was placed in service. Once made the elec-
10 tion is irrevocable. If no election is made, the election is not otherwise
11 available. A copy of the election form must also be attached to the origi-
12 nal income tax return due for the taxable year in which the claim was
13 made.
14 (c) The state tax commission and the various county assessors are autho-
15 rized to exchange information as necessary to properly coordinate the
16 exemption provided in this subsection.
17 (d) In the event that an investment in regard to which the election under
18 this section was made is determined by the state tax commission to not be
19 a qualified investment or ceases to qualify during the recapture period,
20 the taxpayer shall be subject to a penalty equal to the amount of the
21 claimed investment times the average urban property tax levy of the state
22 as determined by the state tax commission times two (2).
23 (e) All moneys collected by the state tax commission pursuant to this
24 subsection, which amounts are continuously appropriated for this purpose,
25 shall be deposited with the state treasurer and placed in the state refund
26 account, as provided by section 63-3067, Idaho Code, to be remitted to the
27 county within which the property was located that was not a qualified
28 investment or ceased to qualify during the recapture period. The county
29 shall distribute this remittance to all appropriate taxing districts based
30 on the proportion each appropriate taxing district's levy is to the total
31 of all the levies of the taxing districts for the tax code area where the
32 property was located for each year the exemption was granted. If any tax-
33 ing district is dissolved or disincorporated, the proportionate share of
34 the remittance to be distributed to that taxing district shall be depos-
35 ited in the county current expense fund.
36 (f) For purposes of the limitation provided by section 63-802, Idaho
37 Code, moneys received pursuant to this subsection shall be treated as
38 property tax revenue by taxing districts.
39 (5) Notwithstanding the provisions of subsections (1) and (2) of this
40 section, the amount of the credit allowed shall not exceed fifty percent (50%)
41 of the tax liability of the taxpayer. The tax liability of the taxpayer shall
42 be the tax after deducting the credit allowed by section 63-3029, Idaho Code.
43 (6) If the sum of credit carryovers from the credit allowed by subsection
44 (2) of this section and the amount of credit for the taxable year from the
45 credit allowed by subsection (2) of this section exceed the limitation imposed
46 by subsection (5) of this section for the current taxable year, the excess
47 attributable to the current taxable year's credit shall be an investment
48 credit carryover to the fourteen (14) succeeding taxable years. In the case of
49 a group of corporations filing a combined report under section 63-3027, Idaho
50 Code, or sections 63-3027B through 63-3027E, Idaho Code, credit earned by one
51 (1) member of the group but not used by that member may be used by another
52 member of the group, subject to the provisions of subsection (5) of this sec-
53 tion, instead of carried over. The entire amount of unused credit shall be
54 carried forward to the earliest of the succeeding years, wherein the oldest
55 available unused credit shall be used first, so long as the qualified invest-
3
1 ment property for which the unused credit was granted still maintains Idaho
2 situs. For a combined group of corporations, credit carried forward may be
3 claimed by any member of the group unless the member who earned the credit is
4 no longer included in the combined group.
5 (7) Any recapture of the credit allowed by subsection (2) of this section
6 on property disposed of or ceasing to qualify, prior to the close of the
7 recapture period, shall be determined according to the applicable recapture
8 provisions of the Internal Revenue Code. In the case of a unitary group of
9 corporations, the increase in tax due to the recapture of investment tax
10 credit must be reported by the member of the group who earned the credit
11 regardless of which member claimed the credit against tax.
12 (8) For the purpose of determining whether property placed in service is
13 a "qualified investment" as defined in subsection (3) of this section, the
14 provisions of section 49 of the Internal Revenue Code shall be disregarded.
15 (9) For purposes of this section, property has a situs in Idaho during a
16 taxable year if it is used in Idaho at any time during the taxable year. Prop-
17 erty not used in Idaho during a taxable year does not have a situs in Idaho in
18 the taxable year during which the property is not used in Idaho or in any sub-
19 sequent taxable year. No credit or carryover of credit is permitted under this
20 section if the credit or carryover relates to property that does not have a
21 situs in Idaho during the taxable year for which the credit or carryover is
22 claimed. The Idaho situs of property must be established by records maintained
23 by the taxpayer which are created reasonably contemporaneously with the use of
24 the property.
25 (10) In the case of property used both in and outside Idaho, the taxpayer,
26 electing to claim the credit provided in this section, must elect to compute
27 the qualified investment in property with a situs in Idaho for all such
28 investments first qualifying during that year in one (1), but only one (1), of
29 the following ways:
30 (a) The amount of each qualified investment in a specific asset shall be
31 separately computed based on the percentage of the actual use of the prop-
32 erty in Idaho by using a measure of the use, such as total miles or total
33 machine hours, that most accurately reflects the beneficial use during the
34 taxable year in which it is first acquired, constructed, reconstructed,
35 erected or placed into service; provided, that the asset is placed in ser-
36 vice more than ninety (90) days before the end of the taxable year. In the
37 case of assets acquired, constructed, reconstructed, erected or placed
38 into service within ninety (90) days prior to the end of the taxable year
39 in which the investment first qualifies, the measure of the use of that
40 asset within Idaho for that year shall be based upon the percentage of use
41 in Idaho during the first ninety (90) days of use of the asset;
42 (b) The investment in qualified property used both inside and outside
43 Idaho during the taxable year in which it is first acquired, constructed,
44 reconstructed, erected or placed into service shall be multiplied by the
45 percent of the investment that would be included in the numerator of the
46 Idaho property factor determined pursuant to section 63-3027, Idaho Code,
47 for the same year.
48 (11) Only for the purposes of subsections (3)(a) and (8) of this section,
49 references to sections of the "Internal Revenue Code" mean the sections
50 referred to as they existed in the Internal Revenue Code of 1986 prior to
51 November 5, 1990.
STATEMENT OF PURPOSE
RS 13609
The purpose of this bill is to amend Section 63-3029B, Idaho
Code, to provide that all moneys collected by the State Tax
Commission as a result of certain property ceasing to qualify for
the investment tax credit and where the owner has elected a
personal property tax credit in lieu of investment tax credit be
remitted to the county within which the property was located when
the property tax exemption was claimed.
FISCAL IMPACT
Contact
Name: Rep. Ken Roberts
Phone: (208) 332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 782