2007 Legislation
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HOUSE BILL NO. 12 – Income tax, technical changes

HOUSE BILL NO. 12

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Bill Status



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

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   First Regular Session - 2007
                                                                        
                                                                        
                              IN 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 national engineering and environmen-
 28    tal laboratory 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 in Aarticle 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  national engineering laboratory 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) below of 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 employment required level for which the credit
  5    allowed in section 63-4402(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 and  63-3070  63-3075,  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 and 63-3070 63-3075, 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  considered  as  a
 39    taxable period.

Statement of Purpose / Fiscal Impact


                    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