Print Friendly HOUSE BILL NO. 239 – College saving prog, withdrawals
HOUSE BILL NO. 239
View Bill Status
View Bill Text
View Statement of Purpose / Fiscal Impact
Text to be added within a bill has been marked with Bold and
Underline. Text to be removed has been marked with
Strikethrough and Italic. How these codes are actually displayed will
vary based on the browser software you are using.
This sentence is marked with bold and underline to show added text.
This sentence is marked with strikethrough and italic, indicating
text to be removed.
H0239...............................................by REVENUE AND TAXATION
COLLEGE SAVINGS PROGRAM - Amends existing law relating to income tax to
provide that withdrawals from the Idaho College Savings Program that are
transferred to a qualified program operated by another state shall be
included as taxable income in Idaho.
02/26 House intro - 1st rdg - to printing
02/27 Rpt prt - to Rev/Tax
02/28 Rpt out - rec d/p - to 2nd rdg
03/01 2nd rdg - to 3rd rdg
03/02 3rd rdg - PASSED - 64-1-5
AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
Block, Bock, Boe, Bolz, Brackett, Bradford, Chadderdon, Chavez, Chew,
Clark, Collins, Crane, Durst, Eskridge, Hagedorn, Hart, Henbest,
Jaquet, Killen, King, Kren, Labrador, Lake, LeFavour, Loertscher,
Luker, Marriott, Mathews, McGeachin, Mortimer, Moyle, Nielsen,
Pasley-Stuart, Patrick, Pence, Raybould, Ring, Ringo, Ruchti, Rusche,
Sayler, Schaefer, Shepherd(2), Shepherd(8), Shirley, Shively,
Smith(30), Smith(24), Snodgrass, Stevenson, Thayn, Trail, Vander
Woude, Wills, Wood(35), Mr. Speaker
NAYS -- Wood(27)
Absent and excused -- Edmunson, Harwood, Henderson, Nonini, Roberts
Floor Sponsor - Wood(35)
Title apvd - to Senate
03/05 Senate intro - 1st rdg - to Loc Gov
03/09 Rpt out - rec d/p - to 2nd rdg
03/12 2nd rdg - to 3rd rdg
03/16 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 - Heinrich
Title apvd - to House
03/19 To enrol - Rpt enrol - Sp signed
03/20 Pres signed - To Governor
03/26 Governor signed
Session Law Chapter 190
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature First Regular Session - 2007
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 239
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO INCOME TAX; AMENDING SECTION 63-3022, IDAHO CODE, TO PROVIDE THAT
3 WITHDRAWALS FROM THE IDAHO COLLEGE SAVINGS PROGRAM THAT ARE TRANSFERRED TO
4 A QUALIFIED PROGRAM OPERATED BY ANOTHER STATE SHALL BE INCLUDED AS TAXABLE
5 INCOME IN IDAHO.
6 Be It Enacted by the Legislature of the State of Idaho:
7 SECTION 1. That Section 63-3022, Idaho Code, be, and the same is hereby
8 amended to read as follows:
9 63-3022. ADJUSTMENTS TO TAXABLE INCOME. The additions and subtractions
10 set forth in this section, and in sections 63-3022A through 63-3022Q, Idaho
11 Code, are to be applied to the extent allowed in computing Idaho taxable
13 (a) Add any state and local taxes, as defined in section 164 of the
14 Internal Revenue Code and, measured by net income, paid or accrued during the
15 taxable year adjusted for state or local tax refunds used in arriving at tax-
16 able income.
17 (b) Add the net operating loss deduction used in arriving at taxable
19 (c) (1) A net operating loss for any taxable year commencing on and after
20 January 1, 2000, shall be a net operating loss carryback not to exceed a
21 total of one hundred thousand dollars ($100,000) to the two (2) immedi-
22 ately preceding taxable years. Any portion of the net operating loss not
23 subtracted in the two (2) preceding years may be subtracted in the next
24 twenty (20) years succeeding the taxable year in which the loss arises in
25 order until exhausted. The sum of the deductions may not exceed the amount
26 of the net operating loss deduction incurred. At the election of the tax-
27 payer, the two (2) year carryback may be foregone and the loss subtracted
28 from income received in taxable years arising in the next twenty (20)
29 years succeeding the taxable year in which the loss arises in order until
30 exhausted. The election shall be made as under section 172(b)(3) of the
31 Internal Revenue Code. An election under this subsection must be in the
32 manner prescribed in the rules of the state tax commission and once made
33 is irrevocable for the year in which it is made. The term "income" as used
34 in this subsection (c) means Idaho taxable income as defined in this chap-
35 ter as modified by section 63-3021(b)(2), (3) and (4), Idaho Code.
36 (2) Net operating losses incurred by a corporation during a year in which
37 such corporation did not transact business in Idaho or was not included in
38 a group of corporations combined under subsection (t) of section 63-3027,
39 Idaho Code, may not be subtracted. However, if at least one (1) corpora-
40 tion within a group of corporations combined under subsection (t) of sec-
41 tion 63-3027, Idaho Code, was transacting business in Idaho during the
42 taxable year in which the loss was incurred, then the net operating loss
43 may be subtracted. Net operating losses incurred by a person, other than a
1 corporation, in activities not taxable by Idaho may not be subtracted.
2 (d) In the case of a corporation, add the amount deducted under the pro-
3 visions of sections 243(a) and (c), 244, 245 and 246A of the Internal Revenue
4 Code (relating to dividends received by corporations) as limited by section
5 246(b)(1) of said code.
6 (e) In the case of a corporation, subtract an amount determined under
7 section 78 of the Internal Revenue Code to be taxable as dividends.
8 (f) Subtract the amount of any income received or accrued during the tax-
9 able year which is exempt from taxation by this state, under the provisions of
10 any other law of this state or a law of the United States, if not previously
11 subtracted in arriving at taxable income.
12 (g) For the purpose of determining the Idaho taxable income of the bene-
13 ficiary of a trust or of an estate:
14 (1) Distributable net income as defined for federal tax purposes shall be
15 corrected for the other adjustments required by this section.
16 (2) Net operating losses attributable to a beneficiary of a trust or
17 estate under section 642 of the Internal Revenue Code shall be a deduction
18 for the beneficiary to the extent that income from the trust or estate
19 would be attributable to this state under the provisions of this chapter.
20 (h) In the case of an individual who is on active duty as a full-time
21 officer, enlistee or draftee, with the armed forces of the United States,
22 which full-time duty is or will be continuous and uninterrupted for one hun-
23 dred twenty (120) consecutive days or more, deduct compensation paid by the
24 armed forces of the United States for services performed outside this state.
25 The deduction is allowed only to the extent such income is included in taxable
27 (i) In the case of a corporation, including any corporation included in a
28 group of corporations combined under subsection (t) of section 63-3027, Idaho
29 Code, add any capital loss deducted which loss was incurred during any year in
30 which such corporation did not transact business in Idaho. However, do not add
31 any capital loss deducted if a corporation, including any corporation in a
32 group of corporations combined under subsection (t) of section 63-3027, Idaho
33 Code, was transacting business in Idaho during the taxable year in which the
34 loss was incurred. In the case of persons, other than corporations, add any
35 capital loss deducted which was incurred in activities not taxable by Idaho at
36 the time such loss was incurred. In computing the income taxable to an S cor-
37 poration or partnership under this section, deduction shall not be allowed for
38 a carryover or carryback of a net operating loss provided for in subsection
39 (c) of this section or a capital loss provided for in section 1212 of the
40 Internal Revenue Code.
41 (j) In the case of an individual, there shall be allowed as a deduction
42 from gross income either (1) or (2) at the option of the taxpayer:
43 (1) The standard deduction as defined in section 63, Internal Revenue
45 (2) Itemized deductions as defined in section 63 of the Internal Revenue
46 Code except state or local taxes measured by net income and general sales
47 taxes as either is defined in section 164 of the Internal Revenue Code.
48 (k) Add the taxable amount of any lump sum distribution excluded from
49 gross income for federal income tax purposes under the ten (10) year averaging
50 method. The taxable amount will include the ordinary income portion and the
51 amount eligible for the capital gain election.
52 (l) Deduct any amounts included in gross income under the provisions of
53 section 86 of the Internal Revenue Code relating to certain social security
54 and railroad benefits.
55 (m) In the case of a self-employed individual, deduct the actual cost of
1 premiums paid to secure worker's compensation insurance for coverage in Idaho,
2 if such cost has not been deducted in arriving at taxable income.
3 (n) In the case of an individual, deduct the amount contributed to a col-
4 lege savings program pursuant to chapter 54, title 33, Idaho Code, but not
5 more than four thousand dollars ($4,000) per tax year. If the contribution is
6 made on or before April 15, 2001, it may be deducted for tax year 2000 and an
7 individual can make another contribution and claim the deduction according to
8 the limits provided in this subsection during 2001 for tax year 2001, as long
9 as the contribution is made on or before December 31, 2001.
10 (o) In the case of an individual, add the amount of a nonqualified with-
11 drawal from an individual trust account or savings account established pursu-
12 ant to chapter 54, title 33, Idaho Code, less any amount of such nonqualified
13 withdrawal included in the individual's federal gross income pursuant to sec-
14 tion 529 of the Internal Revenue Code.
15 (p) In the case of an individual, add the amount of a withdrawal from an
16 individual trust account or savings account established pursuant to chapter
17 54, title 33, Idaho Code, transferred to a qualified tuition program, as
18 defined in section 529 of the Internal Revenue Code, that is operated by a
19 state other than Idaho.
STATEMENT OF PURPOSE
This legislation closes a loophole in the tax deduction allowed for accounts
opened under the Idaho College Savings Plan, where the funds are transferred
to another state's college savings program. Currently, Idaho taxpayers can
deposit funds into an Idaho College Savings Plan account, receive the tax
deduction and immediately transfer the funds to another program from another
state without penalty. Rollovers from the Idaho program to plans from other
states increased from 316 in 2005 to 877 in 2006. The intent of the tax
deduction is to encourage participation in the Idaho College Savings Plan.
This bill closes that unintended loophole.
There will be a positive impact on the general fund from the recapture of
funds using the loophole but hard to quantify.
Ron Crane, State Treasurer 334-3200
Liza Carberry, Investment Manager 332-2997 H 239