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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 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
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