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H0013...............................................by REVENUE AND TAXATION
INCOME TAX - Amends existing law to clarify how depreciation is calculated
for Idaho taxable income on the sale, exchange or other disposition of
depreciable property; and to provide the period of limitations.
01/16 House intro - 1st rdg - to printing
01/17 Rpt prt - to Rev/Tax
01/18 Rpt out - rec d/p - to 2nd rdg
01/19 2nd rdg - to 3rd rdg
01/23 3rd rdg - PASSED - 68-0-2
AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
Block, Bock, Boe, Bolz, Brackett, Bradford, Chadderdon, Chavez, Chew,
Collins, Crane, Durst, Edmunson, Eskridge, Hagedorn, Hart, Harwood,
Henbest(Wallace), Henderson, Jaquet, Killen, King, Kren, Labrador,
Lake, LeFavour, Loertscher, Luker, Marriott, Mathews, McGeachin,
Mortimer, Moyle, Nielsen, Nonini, Pasley-Stuart, Patrick, Pence,
Raybould, Ring, Ringo, Roberts, Ruchti, Rusche, Sayler, Schaefer,
Shepherd(2), Shepherd(8), Shirley, Shively, Smith(30), Smith(24),
Snodgrass, Stevenson, Thayn, Trail, Vander Woude, Wills, Wood(27),
Wood(35)
NAYS -- None
Absent and excused -- Clark, Mr. Speaker
Floor Sponsor - Hart
Title apvd - to Senate
01/24 Senate intro - 1st rdg - to Loc Gov
02/02 Rpt out - rec d/p - to 2nd rdg
02/05 2nd rdg - to 3rd rdg
02/06 3rd rdg - PASSED - 35-0-0
AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Gannon, Geddes,
Goedde, Hammond, Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst,
Little, Lodge, Malepeai, McGee, McKague, McKenzie, Pearce,
Richardson, Schroeder, Siddoway, Stegner, Stennett, Werk
NAYS -- None
Absent and excused -- None
Floor Sponsor - Siddoway
Title apvd - to House
02/07 To enrol
02/08 Rpt enrol - Sp signed
02/09 Pres signed
02/12 To Governor
02/14 Governor signed
Session Law Chapter 11
Effective: 01/01/07
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature First Regular Session - 2007
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 13
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO INCOME TAX; AMENDING SECTION 63-3022O, IDAHO CODE, TO CLARIFY HOW
3 DEPRECIATION IS CALCULATED FOR IDAHO TAXABLE INCOME ON THE SALE, EXCHANGE
4 OR OTHER DISPOSITION OF DEPRECIABLE PROPERTY AND TO PROVIDE THE PERIOD OF
5 LIMITATIONS; DECLARING AN EMERGENCY AND PROVIDING A RETROACTIVE EFFECTIVE
6 DATE.
7 Be It Enacted by the Legislature of the State of Idaho:
8 SECTION 1. That Section 63-3022O, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 63-3022O. ADJUSTMENT -- PROPERTY ACQUIRED AFTER SEPTEMBER 10, 2001 --
11 EXPENSES OF ELEMENTARY AND SECONDARY TEACHERS -- SMALL BUSINESS EXPENSES --
12 LIMITATIONS ON ASSESSMENTS AND REFUNDS. For taxable years commencing on and
13 after January 1, 2001, in computing Idaho taxable income:
14 (1) The adjusted basis of depreciable property, depreciation and capital
15 gains and losses from sale, exchange or other disposition of depreciable prop-
16 erty shall be computed without regard to subsection (k) of section 168 of the
17 Internal Revenue Code; and
18 (2) No deduction shall be allowed relating to expenses of elementary and
19 secondary teachers otherwise allowable under section 62(a)(2)(D) of the Inter-
20 nal Revenue Code; and
21 (3) When, in regard to property subject to this section, the adjusted
22 basis of depreciable property, depreciation and capital gains and losses
23 resulting from the provisions of this section (as previously reported by the
24 taxpayer or as adjusted by the state tax commission) are subject to change or
25 adjustment by the taxpayer or by the state tax commission, a claim for refund
26 or notice of deficiency determination for amounts resulting from the changes
27 shall be made within the greater of the time provided in sections 63-3068 and
28 63-3072, Idaho Code, or the useful life of the property to which the adjust-
29 ment relates Adjustments in computing Idaho taxable income required by subsec-
30 tion (1) of this section shall be made without regard to loss limitations
31 imposed by sections 465, 469, 704(d) and 1366(d) of the Internal Revenue Code;
32 and
33 (4) A taxpayer's basis in an interest in a pass-through entity, amount at
34 risk, and passive activity loss carryover shall be the same amount for pur-
35 poses of the Idaho income tax act as the amount determined under the Internal
36 Revenue Code; and
37 (5) Each partner, shareholder, member or beneficiary, shall include in
38 Idaho taxable income his share of the adjustments required by this section in
39 computing Idaho taxable income of any pass-through entity; and
40 (6) Notwithstanding the provisions of sections 63-3068 and 63-3072, Idaho
41 Code, the period of limitations for issuing a notice of deficiency determina-
42 tion or filing a claim for refund for any year for which an adjustment is
43 required by this section shall not expire before three (3) years from the
2
1 later of: (a) the due date of the return for the last taxable year an adjust-
2 ment was required by this section, or (b) the date the return was filed for
3 the last taxable year an adjustment was required by this section. Upon the
4 expiration of the period of limitations as provided in subsections (a) and (m)
5 of section 63-3068, Idaho Code, and subsections (b) and (h) of section
6 63-3072, Idaho Code, only those specific items of basis, deductions, gains or
7 losses that are computed, without regard to subsection (k) of section 168 of
8 the Internal Revenue Code, as required by this section shall be subject to
9 adjustment.
10 SECTION 2. An emergency existing therefor, which emergency is hereby
11 declared to exist, this act shall be in full force and effect on and after its
12 passage and approval, and retroactively to January 1, 2007.
STATEMENT OF PURPOSE
RS 16527C1
This bill clarifies the calculations required to accomplish
legislative intent that bonus depreciation not be deductible in
computing Idaho taxable income. It provides that bonus
depreciation adjustments must be made regardless of Internal
Revenue Code limitations on a taxpayer’s passive activity losses
or other losses from pass-through entities. Adjustments
required by pass-through entities flow through to the owners who
must report their share of the adjustments. The bill also
addresses items not affected by the bonus depreciation
adjustments, such as passive activity loss carryovers, amounts
at-risk, and bases in the interests in pass-through entities and
clarifies these items must conform to federal amounts. The
statute of limitations relative to bonus depreciation
adjustments is modified to a period that will be easier for
taxpayers and the Tax Commission to determine and will result in
consistent treatment of bonus depreciation additions and
subtractions to Idaho taxable income. The bill corrects a
reference to capital gain or loss.
FISCAL NOTE
None in current or next fiscal year.
CONTACT
Name: Dan John/Ted Spangler
Agency: State Tax Commission
Phone: (208) 334-7500
STATEMENT OF PURPOSE/FISCAL NOTE H 13