View Bill Status
View Bill Text
View Statement of Purpose / Fiscal Impact
H0012...............................................by REVENUE AND TAXATION INCOME TAX - Amends existing law to make various technical corrections to the income tax statutes. 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 - 66-0-4 AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black, Block, Bock, Boe, 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), Snodgrass, Stevenson, Thayn, Trail, Vander Woude, Wills, Wood(27), Wood(35) NAYS -- None Absent and excused -- Bolz, Clark, Smith(24), Mr. Speaker Floor Sponsor - Barrett 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 - Langhorst 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 10 Effective: 07/01/07
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature First Regular Session - 2007IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 12 BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO THE INCOME TAX; AMENDING SECTION 63-3025A, IDAHO CODE, TO PROVIDE 3 A CORRECT REFERENCE TO THE IDAHO NATIONAL LABORATORY; AMENDING SECTION 4 63-3027, IDAHO CODE, TO PROVIDE A CORRECT REFERENCE TO THE IDAHO NATIONAL 5 LABORATORY AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 63-3067A, 6 IDAHO CODE, TO DELETE THE REQUIREMENT THAT DONATIONS TO THE AMERICAN RED 7 CROSS MADE BY CHECKOFF MUST BE TEN DOLLARS AND TO MAKE TECHNICAL CORREC- 8 TIONS; AMENDING SECTION 63-3072, IDAHO CODE, TO CLARIFY THAT THE TIME FOR 9 CLAIMING A REFUND OR CREDIT OF INCOME TAX ATTRIBUTABLE TO CAPITAL LOSS 10 CARRYBACKS IS THE FIFTEENTH DAY OF THE FORTIETH MONTH FOLLOWING THE END OF 11 THE TAXABLE YEAR OF THE CAPITAL LOSS WHICH RESULTS IN THE CARRYBACK; 12 AMENDING SECTION 63-4407, IDAHO CODE, TO REVISE RECAPTURE PROVISIONS IN 13 THE SMALL EMPLOYER INCENTIVE ACT; AMENDING SECTION 63-3087, IDAHO CODE, TO 14 PROVIDE A CORRECT CODE REFERENCE; AMENDING SECTION 63-2516, IDAHO CODE, TO 15 DELETE A CODE REFERENCE; AMENDING SECTION 63-2563, IDAHO CODE, TO PROVIDE 16 A CORRECT CODE REFERENCE; AMENDING SECTION 23-1050A, IDAHO CODE, TO PRO- 17 VIDE A CORRECT CODE REFERENCE; AND AMENDING SECTION 23-1322A, IDAHO CODE, 18 TO PROVIDE A CORRECT CODE REFERENCE AND TO MAKE A TECHNICAL CORRECTION. 19 Be It Enacted by the Legislature of the State of Idaho: 20 SECTION 1. That Section 63-3025A, Idaho Code, be, and the same is hereby 21 amended to read as follows: 22 63-3025A. FRANCHISE TAX. For taxable years commencing on and after Janu- 23 ary 1, 2001, a franchise tax shall be imposed upon any corporation for the 24 privilege of exercising its corporate franchise within the state during such 25 taxable year including, but not limited to, corporations engaged in business 26 in Idaho for the exclusive purpose of performing contracts with the United 27 States department of energy at the Idaho nationalengineering and environmen-28tallaboratory or any successor organization, which tax shall be measured by 29 income which is attributable to this state under the provisions of this chap- 30 ter and which tax shall be at the rate provided in section 63-3025, Idaho 31 Code; provided, however, that the tax shall not be less than twenty dollars 32 ($20.00); provided further that the twenty dollar ($20.00) minimum payment 33 shall not be collected from nonproductive mining corporations; but the twenty 34 dollar ($20.00) minimum tax shall apply to corporations qualified to file 35 returns and actually filing returns under the provisions of subchapter "S" of 36 the Internal Revenue Code. 37 SECTION 2. That Section 63-3027, Idaho Code, be, and the same is hereby 38 amended to read as follows: 39 63-3027. COMPUTING IDAHO TAXABLE INCOME OF MULTISTATE OR UNITARY CORPORA- 40 TIONS. The Idaho taxable income of any multistate or unitary corporation 41 transacting business both within and without this state shall be computed in 2 1 accordance with the rules set forth in this section: 2 (a) As used in this section, unless the context otherwise requires: 3 (1) "Business income" means income arising from transactions and activity 4 in the regular course of the taxpayer's trade or business and includes 5 income from the acquisition, management, or disposition of tangible and 6 intangible property when such acquisition, management, or disposition con- 7 stitutes integral or necessary parts of the taxpayer's trade or business 8 operations. Gains or losses and dividend and interest income from stock 9 and securities of any foreign or domestic corporation shall be presumed to 10 be income from intangible property, the acquisition, management, or dispo- 11 sition of which constitutes an integral part of the taxpayer's trade or 12 business; such presumption may only be overcome by clear and convincing 13 evidence to the contrary. 14 (2) "Commercial domicile" means the principal place from which the trade 15 or business of the taxpayer is directed or managed. 16 (3) "Compensation" means wages, salaries, commissions and any other form 17 of remuneration paid to employees for personal services. 18 (4) "Nonbusiness income" means all income other than business income. 19 (5) "Sales" means all gross receipts of the taxpayer not allocated under 20 subsections (d) through (h) of this section. 21 (6) "State" means any state of the United States, the District of Colum- 22 bia, the Commonwealth of Puerto Rico, any territory or possession of the 23 United States, and any foreign country or political subdivision thereof. 24 (b) Any taxpayer having income from business activity which is taxable 25 both within and without this state shall allocate and apportion such net 26 income as provided in this section. 27 (c) For purposes of allocation and apportionment of income under this 28 section, a taxpayer is taxable in another state if: 29 (1) In that state he is subject to a net income tax, a franchise tax mea- 30 sured by net income, a franchise tax for the privilege of doing business, 31 or a corporate stock tax; or 32 (2) That state has jurisdiction to subject the taxpayer to a net income 33 tax regardless of whether, in fact, the state does or does not. 34 (d) Rents and royalties from real or tangible personal property, capital 35 gains interest, dividends, or patent or copyright royalties, to the extent 36 that they constitute nonbusiness income, shall be allocated as provided in 37 subsections (e) through (h) of this section. Allocable nonbusiness income 38 shall be limited to the total nonbusiness income received which is in excess 39 of any related expenses which have been allowed as a deduction during the tax- 40 able year. In the case of allocable nonbusiness interest or dividends, related 41 expenses include interest on indebtedness incurred or continued to purchase or 42 carry assets on which the interest or dividends are nonbusiness income. 43 (e) (1) Net rents and royalties from real property located in this state 44 are allocable to this state. 45 (2) Net rents and royalties from tangible personal property are allocable 46 to this state: 47 (i)iIf and to the extent that the property is utilized in this 48 state, or 49 (ii)iIn their entirety if the taxpayer's commercial domicile is in 50 this state and the taxpayer is not organized under the laws of or 51 taxable in the state in which the property is utilized. 52 (3) The extent of utilization of tangible personal property in a state is 53 determined by multiplying the rents and royalties by a fraction, the 54 numerator of which is the number of days of physical location of the prop- 55 erty in the state during the rental or royalty period in the taxable year 3 1 and the denominator of which is the number of days of physical location of 2 the property everywhere during all rental or royalty periods in the tax- 3 able year. If the physical location of the property during the rental or 4 royalty period is unknown or unascertainable by the taxpayer, tangible 5 personal property is utilized in the state in which the property was 6 located at the time the rental or royalty payer obtained possession. 7 (f) (1) Capital gains and losses from sales of real property located in 8 this state are allocable to this state. 9 (2) Capital gains and losses from sales of tangible personal property are 10 allocable to this state if: 11 (i)tThe property had a situs in this state at the time of the sale, 12 or 13 (ii)tThe taxpayer's commercial domicile is in this state and the 14 taxpayer is not taxable in the state in which the property had a 15 situs. 16 (3) Capital gains and losses from sales of intangible personal property 17 are allocable to this state if the taxpayer's commercial domicile is in 18 this state, unless such gains and losses constitute business income as 19 defined in this section. 20 (g) Interest and dividends are allocable to this state if the taxpayer's 21 commercial domicile is in this state unless such interest or dividends consti- 22 tute business income as defined in this section. 23 (h) (1) Patent and copyright royalties are allocable to this state: 24 (i)iIf and to the extent that the patent or copyright is utilized 25 by the payer in this state, or 26 (ii)iIf and to the extent that the patent or copyright is utilized 27 by the payer in a state in which the taxpayer is not taxable and the 28 taxpayer's commercial domicile is in this state. 29 (2) A patent is utilized in a state to the extent that it is employed in 30 production, fabrication, manufacturing, or other processing in the state 31 or to the extent that a patent product is produced in the state. If the 32 basis of receipts from patent royalties does not permit allocation to 33 states or if the accounting procedures do not reflect states of utiliza- 34 tion, the patent is utilized in the state in which the taxpayer's commer- 35 cial domicile is located. 36 (3) A copyright is utilized in a state to the extent that printing or 37 other publication originates in the state. If the basis of receipts from 38 copyright royalties does not permit allocation to states or if the 39 accounting procedures do not reflect states of utilization, the copyright 40 is utilized in the state in which the taxpayer's commercial domicile is 41 located. 42 (i) (1) Notwithstanding the election allowed inAarticle III.1 of the 43 multistate tax compact enacted as section 63-3701, Idaho Code, all busi- 44 ness income shall be apportioned to this state under subsection (j) of 45 this section by multiplying the income by a fraction, the numerator of 46 which is the property factor plus the payroll factor plus two (2) times 47 the sales factor, and the denominator of which is four (4), except as pro- 48 vided in paragraph (2) of this subsection. 49 (2) If a corporation, or a parent corporation of a combined group filing 50 a combined report under sections 63-3027 and 63-3701, Idaho Code, is an 51 electrical corporation as defined in section 61-119, Idaho Code, or is a 52 telephone corporation as defined in section 62-603, Idaho Code, all busi- 53 ness income of the corporation shall be apportioned to this state by mul- 54 tiplying the income by a fraction, the numerator of which is the property 55 factor plus the payroll factor plus the sales factor, and the denominator 4 1 of which is three (3). 2 (j) (1) In the case of a corporation or group of corporations combined 3 under subsection (t) of this section, Idaho taxable income or loss of the 4 corporation or combined group shall be determined as follows: 5 (i)fFrom the income or loss of the corporation or combined group 6 of corporations, subtract any nonbusiness income, and add any 7 nonbusiness loss, included in the total, 8 (ii)mMultiply the amounts determined under paragraph (1)(i) of this 9 subsection by the Idaho apportionment percentage defined in subsec- 10 tion (i) of this section, taking into account, where applicable, the 11 property, payroll and sales of all corporations, wherever incorpo- 12 rated, which are included in the combined group. The resulting prod- 13 uct shall be the amount of business income or loss apportioned to 14 Idaho. 15 (2) To the amount determined as apportioned business income or loss under 16 paragraph (1)(ii) of this subsection, add nonbusiness income allocable 17 entirely to Idaho under the provisions of this section or subtract 18 nonbusiness loss allocable entirely to Idaho under this section. The 19 resulting sum is the Idaho taxable income or loss of the corporation. 20 (3) In the case of a corporation not subject to subsection (t) of this 21 section, the income or loss referred to in paragraph (1)(i) of this sub- 22 section, shall be the taxable income of the corporation after making 23 appropriate adjustments under the provisions of section 63-3022, Idaho 24 Code. 25 (k) The property factor is a fraction, the numerator of which is the 26 average value of the taxpayer's real and tangible personal property owned or 27 rented and used in this state during the tax period and the denominator of 28 which is the average value of all the taxpayer's real and tangible personal 29 property owned or rented and used during the tax period. 30 (l) Property owned by the taxpayer is valued at its original cost. Prop- 31 erty rented by the taxpayer is valued at eight (8) times the net annual rental 32 rate. Net annual rental rate is the annual rental rate paid by the taxpayer 33 less any annual rental rate received by the taxpayer from subrentals. 34 (m) The average value of property shall be determined by averaging the 35 values at the beginning and ending of the tax period, but the state tax com- 36 mission may require the averaging of monthly values during the tax period if 37 reasonably required to reflect properly the average value of the taxpayer's 38 property. 39 (n) The payroll factor is a fraction, the numerator of which is the total 40 amount paid in this state during the tax period by the taxpayer for compensa- 41 tion, and the denominator of which is the total compensation paid everywhere 42 during the tax period. 43 (o) Compensation is paid in this state if: 44 (1) The individual's service is performed entirely within the state; or 45 (2) The individual's service is performed both within and without the 46 state, but the service performed without the state is incidental to the 47 individual's service within the state; or 48 (3) Some of the service is performed in the state and: 49 (i)tThe base of operations or, if there is no base of operations, 50 the place from which the service is directed or controlled is in the 51 state, or 52 (ii)tThe base of operations or the place from which the service is 53 directed or controlled is not in any state in which some part of the 54 service is performed, but the individual's residence is in this 55 state. 5 1 (p) The sales factor is a fraction, the numerator of which is the total 2 sales of the taxpayer in this state during the tax period, and the denominator 3 of which is the total sales of the taxpayer everywhere during the tax period. 4 (q) Sales of tangible personal property are in this state if: 5 (1) The property is delivered or shipped to a purchaser, other than the 6 United States government, within this state regardless of the f.o.b. point 7 or other conditions of the sale, or 8 (2) The property is shipped from an office, store, warehouse, factory, or 9 other place of storage in this state and: 10 (i)tThe purchaser is the United States government, or 11 (ii)tThe taxpayer is not taxable in the state of the purchaser. 12 (r) Sales, other than sales of tangible property, are in this state, if: 13 (1) The income-producing activity is performed in this state; or 14 (2) The income-producing activity is performed both in and outside this 15 state and a greater proportion of the income-producing activity is per- 16 formed in this state than in any other state, based on costs of perfor- 17 mance. 18 (s) If the allocation and apportionment provisions of this section do not 19 fairly represent the extent of the taxpayer's business activity in this state, 20 the taxpayer may petition for or the state tax commission may require, in 21 respect to all or any part of the taxpayer's business activity, if reasonable: 22 (1) Separate accounting, provided that only that portion of general 23 expenses clearly identifiable with Idaho business operations shall be 24 allowed as a deduction; 25 (2) The exclusion of any one (1) or more of the factors; 26 (3) The inclusion of one (1) or more additional factors which will fairly 27 represent the taxpayer's business activity in this state; or 28 (4) The employment of any other method to effectuate an equitable alloca- 29 tion and apportionment of the taxpayer's income. 30 (t) For purposes of this section and sections 63-3027B through 63-3027E, 31 Idaho Code, the income of two (2) or more corporations, wherever incorporated, 32 the voting stock of which is more than fifty percent (50%) owned directly or 33 indirectly by a common owner or owners, when necessary to accurately reflect 34 income, shall be allocated or apportioned as if the group of corporations were 35 a single corporation, in which event: 36 (1) The Idaho taxable income of any corporation subject to taxation in 37 this state shall be determined by use of a combined report which includes 38 the income, determined under subparagraph (2) of this subsection, of all 39 corporations which are members of a unitary business, allocated and appor- 40 tioned using apportionment factors for all corporations included in the 41 combined report and methods set out in this section. The use of a combined 42 report does not disregard the separate corporate identities of the members 43 of the unitary group. Each corporation which is transacting business in 44 this state is responsible for its apportioned share of the combined busi- 45 ness income plus its nonbusiness income or loss allocated to Idaho, minus 46 its net operating loss carryover or carryback. 47 (2) The income of a corporation to be included in a combined report shall 48 be determined as follows: 49 (i)fFor a corporation incorporated in the United States or 50 included in a consolidated federal corporation income tax return, the 51 income to be included in the combined report shall be the taxable 52 income for the corporation after making appropriate adjustments under 53 the provisions of section 63-3022, Idaho Code; 54 (ii)fFor a corporation incorporated outside the United States, but 55 not included in subsection (t)(2)(i) of this section, the income to 6 1 be included in the combined report shall be the net income before 2 income taxes of such corporation stated on the profit and loss state- 3 ments of such corporation which are included within the consolidated 4 profit and loss statement prepared for the group of related corpora- 5 tions of which the corporation is a member, which statement is pre- 6 pared for filing with the United States securities and exchange com- 7 mission. If the group of related companies is not required to file 8 such profit and loss statement with the United States securities and 9 exchange commission, the profit and loss statement prepared for 10 reporting to shareholders and subject to review by an independent 11 auditor may be used to obtain net income before income taxes. In the 12 alternative, and subject to reasonable substantiation and consistent 13 application by the group of related companies, adjustments may be 14 made to the profit and loss statements of the corporation incorpo- 15 rated outside the United States, if necessary, to conform such state- 16 ments to tax accounting standards as required by the Internal Revenue 17 Code as if such corporation were incorporated in the United States 18 and required to file a federal income tax return, subject to appro- 19 priate adjustments under the provisions of section 63-3022, Idaho 20 Code; and 21 (iii)iIf the income computation for a group under paragraphs (i) and 22 (ii) of this subsection results in a loss, such loss shall be taken 23 into account in other years, subject to the provisions of subsections 24 (b) and (c) of section 63-3022, Idaho Code. 25 (u) If compensation is paid in the form of a reasonable cash fee for the 26 performance of management services directly for the United States government 27 at the Idaho nationalengineeringlaboratory or any successor organization, 28 separate accounting for that part of the business activity without regard to 29 other activity of the taxpayer in the state of Idaho or elsewhere shall be 30 required; provided that only that portion of general expenses clearly identi- 31 fiable with Idaho business operations of that activity shall be allowed as a 32 deduction. 33 SECTION 3. That Section 63-3067A, Idaho Code, be, and the same is hereby 34 amended to read as follows: 35 63-3067A. DESIGNATION BY INDIVIDUALS -- TRUST ACCOUNTS. (a) Every indi- 36 vidual who: 37 (i) Has a refund due and payable for overpayment of taxes under this act 38 may designate all or any portion thereof to be deposited in a trust 39 account specified in subsection (c)belowof this section; or 40 (ii) Has an income tax liability may, in addition to his tax obligation, 41 include a donation to be deposited in a trust account specified in subsec- 42 tion (c) of this section. 43 (b) A designation under subsection (a) of this section may be made in any 44 taxable year in such manner and form as prescribed by the state tax commis- 45 sion. The manner and form so prescribed shall be a conspicuous portion of the 46 principal form provided for the purpose of individual taxation. 47 (c) The trust accounts authorized to receive moneys designated under sub- 48 section (a) of this section are: 49 (i) The fish and game set-aside account created by section 36-111, Idaho 50 Code; 51 (ii) The Idaho ag in the classroom account created by section 57-815, 52 Idaho Code; 53 (iii) The drug enforcement donation account created by section 57-816, 7 1 Idaho Code; 2 (iv) The children's trust fund created by section 39-6007, Idaho Code; 3 (v) The United States olympic account created by section 57-817, Idaho 4 Code, but no donation shall exceed five dollars ($5.00); 5 (vi) The Idaho guard and reserve family support fund created by section 6 57-820, Idaho Code; and 7 (vii) The American red cross of greater Idaho fund created in section 8 57-821, Idaho Code, which donation shall be ten dollars ($10.00) if made. 9 (d) Prior to the distribution of funds into any of the trust accounts 10 specified in subsection (c) of this section from the refund account, the 11 state tax commission shall retain funds for the commission's costs for col- 12 lecting and administering the moneys in the accounts as follows: three thou- 13 sand dollars ($3,000) from each account for start-up costs during the first 14 year of collections, and three thousand dollars ($3,000) or twenty percent 15 (20%) of the moneys remitted to each account during the fiscal year, whichever 16 is less, from each account during each fiscal year thereafter, which amounts 17 are hereby appropriated to the tax commission. 18 SECTION 4. That Section 63-3072, Idaho Code, be, and the same is hereby 19 amended to read as follows: 20 63-3072. CREDITS AND REFUNDS. (a) Subject to the provisions of subsec- 21 tions (b), (c) and (h) of this section, where there has been an overpayment of 22 the tax imposed by the provisions of this chapter, the amount of such overpay- 23 ment shall be credited against any tax administered by the state tax commis- 24 sion which tax is then due from the taxpayer, and any balance of such excess 25 shall be refunded to the taxpayer. 26 (b) Except in regard to amounts withheld as provided in section 63-3035, 27 63-3035A or 63-3036, Idaho Code, or amounts paid as estimated payments under 28 section 63-3036A, Idaho Code, a claim for credit or refund of tax, penalties, 29 or interest paid shall be made within the later of three (3) years of the due 30 date of the return, without regard to extensions, or three (3) years from the 31 date the return was filed. However, with regard to remittances received with 32 an extension of time to file, or a tentative return, a claim for credit or 33 refund of such remittances shall be made within three (3) years from the due 34 date of the return without regard to extensions. 35 (c) With regard to amounts withheld as provided in section 63-3035, 36 63-3035A or 63-3036, Idaho Code, or amounts paid as estimated payments under 37 section 63-3036A, Idaho Code, a claim for credit or refund shall be made 38 within three (3) years from the due date of the return, without regard to 39 extensions, for the taxable year in respect to which the tax was withheld or 40 paid. 41 (d) Notwithstanding any other provisions of this section, when Idaho tax- 42 able income and/or tax credits for any taxable year have been adjusted as a 43 result of a final federal determination, the period of limitations for claim- 44 ing a refund or credit of tax, penalties, or interest shall be reopened and 45 shall not expire until the later of one (1) year from the date of delivery of 46 the final federal determination to the taxpayer by the internal revenue ser- 47 vice, three (3) years from the due date of the return, without regard to 48 extensions, or three (3) years from the date the return was filed. For pur- 49 poses of this subsection, the term "final federal determination" shall mean 50 the final resolution of all issues which were adjusted by the internal revenue 51 service. When the final federal determination is submitted, the taxpayer shall 52 also submit copies of all schedules and written explanations provided by the 53 internal revenue service. Upon the expiration of the period of limitations as 8 1 provided in subsections (b) and (h) of this section, only those specific items 2 of income, deductions, gains, losses or credits which were adjusted in the 3 final federal determination shall be subject to adjustment for purposes of 4 recomputing Idaho income, deductions, gains, losses, credits, and the effect 5 of such adjustments on Idaho allocations and apportionments. 6 (e) If a claim for credit or refund relates to an overpayment attribut- 7 able to a net operating loss carryback or a capital loss carryback, in lieu of 8 the period of limitations prescribed in subsection (b) of this section, the 9 period shall be that period which ends with the expiration of the fifteenth 10 day of the fortieth month following the end of the taxable year of the net 11 operating loss or capital loss which results in such carryback. 12 (f) If an adjustment, which was made within the period of limitations as 13 provided in this section, affects the amount of tax credit, net operating 14 loss, or capital loss, claimed in a taxable year other than the tax year in 15 which the adjustment is made, then adjustments to the credit, net operating 16 loss, or capital loss, claimed in such other tax year may be made and a claim 17 for credit or refund of tax, penalties or interest may be made even though 18 such claim would otherwise be barred under the provisions of this section. 19 (g) In the case of a duplicate return filed under section 63-217(1)(b), 20 Idaho Code, the limitations under this section shall be the later of one (1) 21 year from the filing of the duplicate return or the date otherwise applicable 22 under this section. 23 (h) Prior to the expiration of the time prescribed in this section for 24 credit or refund of any tax imposed by the provisions of this chapter, both 25 the state tax commission or its delegate or deputy and the taxpayer may con- 26 sent in writing to extend such period of time. The period so agreed upon may 27 be extended by subsequent agreements in writing made before the expiration of 28 the period previously agreed upon. When a pass-through entity extends the 29 period of limitations in accordance with the provisions of this subsection the 30 period of limitations for the other taxpayers is automatically extended for 31 the same period for the purpose of claiming a credit or refund of tax, penal- 32 ties or interest by the other taxpayers reflecting the pass-through entity 33 adjustments. 34 (i) The expiration of the period of limitations as provided in this sec- 35 tion shall be suspended for the time period between the issuance by the state 36 tax commission of a notice under either section 63-3045 or 63-3065, Idaho 37 Code, and the final resolution of any proceeding resulting from the notice. 38 (j) Appeal of a state tax commission decision denying in whole or in part 39 a claim for credit or refund shall be made in accordance with and within the 40 time limits prescribed in section 63-3049, Idaho Code. 41 (k) For purposes of this section, "return" includes a notice of defi- 42 ciency determination issued by the state tax commission when no return was 43 filed by the taxpayer. Such a return is deemed filed on the date the taxes 44 determined by the state tax commission are assessed. 45 SECTION 5. That Section 63-4407, Idaho Code, be, and the same is hereby 46 amended to read as follows: 47 63-4407. RECAPTURE. (1) In the event that any person to whom a tax credit 48 allowed by section 63-4403, 63-4404 or 63-4405, Idaho Code, fails to meet the 49 tax incentive criteria, the full amount of the credit shall be subject to 50 recapture by the commission. 51 (2) If, during any taxable year, an investment in new plant is disposed 52 of, or otherwise ceases to qualify with respect to the taxpayer, prior to the 53 close of the recapture period, recapture of the credit allowed by sections 9 1 63-4403 and 63-4404, Idaho Code, shall be determined for such taxable year in 2 the same proportion and subject to the same provisions as an amount of credit 3 required to be recaptured under section 63-3029B, Idaho Code. 4 (3) In the event that the employmentrequiredlevel for which the credit 5 allowed in section63-4402(2)(j)63-4405, Idaho Code, is not maintained for 6 the entire recapture period, recapture of the credit allowed in section 7 63-4405, Idaho Code, shall be determined for such taxable year in the same 8 proportion as an amount of credit required to be recaptured under section 9 63-3029B, Idaho Code. This subsection shall not be construed to require that 10 the required level of employment must be met by the same individual employees. 11 (4) Any amount subject to recapture is a deficiency in tax for the amount 12 of the credit in the taxable year in which the disqualification first occurs 13 and may be enforced and collected in the manner provided by the Idaho income 14 tax act, provided however, that in lieu of the provisions of section 15 63-3068(a), Idaho Code, the period of time within which the commission may 16 issue a notice under section 63-3045, Idaho Code, in regard to an amount sub- 17 ject to recapture shall be the later of five (5) years after the end of the 18 taxable year in which the project period ends or three (3) years after the end 19 of the taxable year in which any amounts carried forward under section 20 63-4406, Idaho Code, expire. 21 SECTION 6. That Section 63-3087, Idaho Code, be, and the same is hereby 22 amended to read as follows: 23 63-3087. COLLECTION AND ENFORCEMENT. The collection and enforcement pro- 24 cedures provided by the Idaho Income Tax Act, sections 63-3038 through 25 63-3040, 63-3042 through 63-3065A,63-3070,63-3071, 63-3075 and 63-3078, 26 Idaho Code, shall apply and be available to the state tax commission for 27 enforcement of the provisions of this act and collection of any amounts due 28 under this act, and said sections shall, for this purpose, be considered part 29 of this act and wherever liens or any other proceedings are defined as income 30 tax liens or proceedings, they shall, when applied in enforcement or collec- 31 tion under this act, be described as permanent building fund tax liens and 32 proceedings. 33 SECTION 7. That Section 63-2516, Idaho Code, be, and the same is hereby 34 amended to read as follows: 35 63-2516. COLLECTION AND ENFORCEMENT -- ACTIONS AGAINST STATE OF IDAHO. In 36 addition to the enforcement and penalty provisions in this act otherwise pro- 37 vided, the deficiency in tax and notice of deficiency as well as the collec- 38 tion and enforcement procedures provided by the Idaho income tax act, sections 39 63-3030A, 63-3038, 63-3039, 63-3040, 63-3042, 63-3043, 63-3044, 63-3045, 40 63-3045A, 63-3046, 63-3047, 63-3048 through 63-3065, 63-3068,63-3070,41 63-3071, 63-3073, 63-3075 and 63-3078, Idaho Code, shall apply and be avail- 42 able to the state tax commission for enforcement of the provisions of this act 43 and the assessment and collection of any amounts due, and said sections shall 44 for this purpose be considered a part of this act and wherever liens or any 45 other proceedings are defined as income tax liens or proceedings they shall, 46 when applied in enforcement or collection under this act, be described as cig- 47 arette tax liens and proceedings. 48 The state tax commission may be made a party defendant in an action at law 49 or in equity by any person aggrieved by the unlawful seizure or sale of his 50 property, or in any suit for refund or to recover an overpayment, but only the 51 state of Idaho shall be responsible for any final judgment secured against the 10 1 state tax commission, and said judgment shall be paid as provided for payment 2 of cigarette tax refunds. 3 SECTION 8. That Section 63-2563, Idaho Code, be, and the same is hereby 4 amended to read as follows: 5 63-2563. COLLECTION AND ENFORCEMENT. The collection and enforcement pro- 6 cedures provided by the Idaho income tax act, sections 63-3038, 63-3039, 7 63-3042 through 63-3045A, 63-3047 through 63-3065A, 63-3068,63-3070,63-3071, 8 63-3075 and 63-3078, Idaho Code, shall apply and be available to the commis- 9 sion for the enforcement of this act and collection of any amounts due under 10 this act and said sections shall, for this purpose, be considered part of this 11 act and wherever liens or any other proceedings are defined as income tax 12 liens or proceedings, they shall, when applied in enforcement or collection 13 under this act, be described as tobacco products tax liens and proceedings. 14 The state tax commission may be made a party defendant in an action at law 15 or in equity by any person aggrieved by the unlawful seizure or sale of his 16 property, or in any suit for refund or to recover an overpayment, but only the 17 state of Idaho shall be responsible for any final judgment secured against the 18 state tax commission, and said judgment shall be paid or satisfied out of the 19 tobacco products tax refund fund. 20 SECTION 9. That Section 23-1050A, Idaho Code, be, and the same is hereby 21 amended to read as follows: 22 23-1050A. COLLECTION AND ENFORCEMENT. The collection and enforcement pro- 23 cedures provided by the Idaho income tax act, sections 63-3042 through 24 63-3065A, inclusive, and sections 63-3068 and63-307063-3075, Idaho Code, 25 shall apply and be available to the state tax commission for enforcement and 26 collection of the tax imposed by this chapter, and said sections shall, for 27 this purpose, be considered part of this act. Any reference to taxable year in 28 the income tax act shall be, for the purposes of this act, considered a tax- 29 able period. 30 SECTION 10. That Section 23-1322A, Idaho Code, be, and the same is hereby 31 amended to read as follows: 32 23-1322A. COLLECTION AND ENFORCEMENT. The collection and enforcement pro- 33 cedures provided by the Idaho income tax act, sections 63-3042 through 34 63-3065A, inclusive, and sections 63-3068 and63-307063-3075, Idaho Code, 35 shall apply and be available to the state tax commission for enforcement and 36 collection of the tax imposed by this chapter, and said sections shall, for 37 this purpose, be considered part of this act. Any reference to taxable year in 38 the income tax act shall, for the purposes of this act, be consideredasa 39 taxable period.
STATEMENT OF PURPOSE RS 16525C1 This bill makes several updates and technical corrections to the Idaho Income Tax Act. Sections 1 and 2 correct references to the Idaho engineering laboratory. Section 3 strikes the requirement that donations to the American Red Cross by “check-off” on the Idaho income tax return must equal ten dollars. Section 4 clarifies that time for claiming refund or credit of income tax attributable to capital loss carrybacks is the same as that for refunds from carrybacks of net operating losses. Section 5 corrects the level of employment required for recapture of the new jobs credit under the Small Employer Incentive Act. Sections 6 through 10 correct cross references to reflect the previous repeal of section 63-3070, Idaho Code, which was a section of the Income Tax Act incorporated into other statutes imposing state level taxes. FISCAL NOTE None. CONTACT Name: Dan John/Ted Spangler Agency: State Tax Commission Phone: (208) 334-7500 STATEMENT OF PURPOSE/FISCAL NOTE H 12