2007 Legislation
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HOUSE BILL NO. 13 – Income tax, depreciatn, calculatn

HOUSE BILL NO. 13

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Bill Status



H0013...............................................by REVENUE AND TAXATION
INCOME TAX - Amends existing law to clarify how depreciation is calculated
for Idaho taxable income on the sale, exchange or other disposition of
depreciable property; and to provide the period of limitations.
                                                                        
01/16    House intro - 1st rdg - to printing
01/17    Rpt prt - to Rev/Tax
01/18    Rpt out - rec d/p - to 2nd rdg
01/19    2nd rdg - to 3rd rdg
01/23    3rd rdg - PASSED - 68-0-2
      AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
      Block, Bock, Boe, Bolz, Brackett, Bradford, Chadderdon, Chavez, Chew,
      Collins, Crane, Durst, Edmunson, Eskridge, Hagedorn, Hart, Harwood,
      Henbest(Wallace), Henderson, Jaquet, Killen, King, Kren, Labrador,
      Lake, LeFavour, Loertscher, Luker, Marriott, Mathews, McGeachin,
      Mortimer, Moyle, Nielsen, Nonini, Pasley-Stuart, Patrick, Pence,
      Raybould, Ring, Ringo, Roberts, Ruchti, Rusche, Sayler, Schaefer,
      Shepherd(2), Shepherd(8), Shirley, Shively, Smith(30), Smith(24),
      Snodgrass, Stevenson, Thayn, Trail, Vander Woude, Wills, Wood(27),
      Wood(35)
      NAYS -- None
      Absent and excused -- Clark, Mr. Speaker
    Floor Sponsor - Hart
    Title apvd - to Senate
01/24    Senate intro - 1st rdg - to Loc Gov
02/02    Rpt out - rec d/p - to 2nd rdg
02/05    2nd rdg - to 3rd rdg
02/06    3rd rdg - PASSED - 35-0-0
      AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
      Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Gannon, Geddes,
      Goedde, Hammond, Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst,
      Little, Lodge, Malepeai, McGee, McKague, McKenzie, Pearce,
      Richardson, Schroeder, Siddoway, Stegner, Stennett, Werk
      NAYS -- None
      Absent and excused -- None
    Floor Sponsor - Siddoway
    Title apvd - to House
02/07    To enrol
02/08    Rpt enrol - Sp signed
02/09    Pres signed
02/12    To Governor
02/14    Governor signed
         Session Law Chapter 11
         Effective: 01/01/07

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   First Regular Session - 2007
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 13
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO INCOME TAX; AMENDING SECTION 63-3022O, IDAHO CODE, TO CLARIFY  HOW
  3        DEPRECIATION  IS CALCULATED FOR IDAHO TAXABLE INCOME ON THE SALE, EXCHANGE
  4        OR OTHER DISPOSITION OF DEPRECIABLE PROPERTY AND TO PROVIDE THE PERIOD  OF
  5        LIMITATIONS;  DECLARING AN EMERGENCY AND PROVIDING A RETROACTIVE EFFECTIVE
  6        DATE.
                                                                        
  7    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  8        SECTION 1.  That Section 63-3022O, Idaho Code, be, and the same is  hereby
  9    amended to read as follows:
                                                                        
 10        63-3022O.  ADJUSTMENT  --  PROPERTY  ACQUIRED  AFTER SEPTEMBER 10, 2001 --
 11    EXPENSES OF ELEMENTARY AND SECONDARY TEACHERS -- SMALL  BUSINESS  EXPENSES  --
 12    LIMITATIONS  ON  ASSESSMENTS  AND REFUNDS. For taxable years commencing on and
 13    after January 1, 2001, in computing Idaho taxable income:
 14        (1)  The adjusted basis of depreciable property, depreciation and  capital
 15    gains and losses from sale, exchange or other disposition of depreciable prop-
 16    erty  shall be computed without regard to subsection (k) of section 168 of the
 17    Internal Revenue Code; and
 18        (2)  No deduction shall be allowed relating to expenses of elementary  and
 19    secondary teachers otherwise allowable under section 62(a)(2)(D) of the Inter-
 20    nal Revenue Code; and
 21        (3)  When,  in  regard  to  property subject to this section, the adjusted
 22    basis of depreciable property,  depreciation  and  capital  gains  and  losses
 23    resulting  from  the provisions of this section (as previously reported by the
 24    taxpayer or as adjusted by the state tax commission) are subject to change  or
 25    adjustment  by the taxpayer or by the state tax commission, a claim for refund
 26    or notice of deficiency determination for amounts resulting from  the  changes
 27    shall  be made within the greater of the time provided in sections 63-3068 and
 28    63-3072, Idaho Code, or the useful life of the property to which  the  adjust-
 29    ment relates Adjustments in computing Idaho taxable income required by subsec-
 30    tion  (1)  of  this  section  shall be made without regard to loss limitations
 31    imposed by sections 465, 469, 704(d) and 1366(d) of the Internal Revenue Code;
 32    and
 33        (4)  A taxpayer's basis in an interest in a pass-through entity, amount at
 34    risk, and passive activity loss carryover shall be the same  amount  for  pur-
 35    poses  of the Idaho income tax act as the amount determined under the Internal
 36    Revenue Code; and
 37        (5)  Each partner, shareholder, member or beneficiary,  shall  include  in
 38    Idaho  taxable income his share of the adjustments required by this section in
 39    computing Idaho taxable income of any pass-through entity; and
 40        (6)  Notwithstanding the provisions of sections 63-3068 and 63-3072, Idaho
 41    Code, the period of limitations for issuing a notice of deficiency  determina-
 42    tion  or  filing  a  claim  for refund for any year for which an adjustment is
 43    required by this section shall not expire before  three  (3)  years  from  the
                                                                        
                                       2
                                                                        
  1    later  of: (a) the due date of the return for the last taxable year an adjust-
  2    ment was required by this section, or (b) the date the return  was  filed  for
  3    the  last  taxable  year  an adjustment was required by this section. Upon the
  4    expiration of the period of limitations as provided in subsections (a) and (m)
  5    of section 63-3068, Idaho  Code,  and  subsections  (b)  and  (h)  of  section
  6    63-3072,  Idaho Code, only those specific items of basis, deductions, gains or
  7    losses that are computed, without regard to subsection (k) of section  168  of
  8    the  Internal  Revenue  Code,  as required by this section shall be subject to
  9    adjustment.
                                                                        
 10        SECTION 2.  An emergency existing  therefor,  which  emergency  is  hereby
 11    declared to exist, this act shall be in full force and effect on and after its
 12    passage and approval, and retroactively to January 1, 2007.

Statement of Purpose / Fiscal Impact


                    STATEMENT OF PURPOSE

                         RS 16527C1

This bill clarifies the calculations required to accomplish 
legislative intent that bonus depreciation not be deductible in 
computing Idaho taxable income.  It provides that bonus 
depreciation adjustments must be made regardless of Internal 
Revenue Code limitations on a taxpayer’s passive activity losses 
or other losses from pass-through entities.  Adjustments 
required by pass-through entities flow through to the owners who 
must report their share of the adjustments.  The bill also 
addresses items not affected by the bonus depreciation 
adjustments, such as passive activity loss carryovers, amounts 
at-risk, and bases in the interests in pass-through entities and 
clarifies these items must conform to federal amounts.  The 
statute of limitations relative to bonus depreciation 
adjustments is modified to a period that will be easier for 
taxpayers and the Tax Commission to determine and will result in 
consistent treatment of bonus depreciation additions and 
subtractions to Idaho taxable income.  The bill corrects a 
reference to capital gain or loss.


                         FISCAL NOTE

None in current or next fiscal year.




CONTACT
Name:	Dan John/Ted Spangler
Agency:	State Tax Commission
Phone:	(208) 334-7500


STATEMENT OF PURPOSE/FISCAL NOTE                        	H 13