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H0344...............................................by REVENUE AND TAXATION
INCOME TAX WITHHOLDING - Amends existing law to revise the date for filing
employer returns for state income tax purposes; to require the return to
show the amount of any deficiency or refund due; and to require copies of
the declaration of withholding provided to employees to be filed with the
return.
01/16 House intro - 1st rdg - to printing
01/17 Rpt prt - to Rev/Tax
01/21 Rpt out - rec d/p - to 2nd rdg
01/22 2nd rdg - to 3rd rdg
01/24 3rd rdg - PASSED - 70-0-0
AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
Block, Bock, Boe, Bolz, Bowers, Brackett, Bradford, Chadderdon,
Chavez, Chew, Clark, Collins, Crane, Durst, Eskridge, Hagedorn, Hart,
Harwood, Henbest, Henderson, Jaquet, Killen, King, Kren, Labrador,
Lake, LeFavour, Loertscher, Luker, Marriott, Mathews, McGeachin,
Mortimer, Moyle, Nielsen, Nonini, Pasley-Stuart, Patrick, Pence,
Raybould, Ringo, Roberts, Ruchti, Rusche, Sayler, Schaefer,
Shepherd(02), Shepherd(08), Shirley, Shively, Smith(30), Smith(24),
Snodgrass, Stevenson, Thayn, Thomas, Trail, Vander Woude, Wills,
Wood(27), Wood(35), Mr. Speaker
NAYS -- None
Absent and excused -- None
Floor Sponsor - Barrett
Title apvd - to Senate
01/25 Senate intro - 1st rdg - to Loc Gov
01/31 Rpt out - rec d/p - to 2nd rdg
02/01 2nd rdg - to 3rd rdg
02/05 3rd rdg - PASSED - 34-0-1
AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Geddes, Goedde,
Hammond, Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst, Little,
Lodge, Malepeai(Sagness), McGee, McKague, McKenzie, Pearce,
Richardson, Schroeder, Siddoway, Stegner, Stennett(Thorson), Werk
NAYS -- None
Absent and excused -- Gannon
Floor Sponsor - Corder
Title apvd - to House
02/06 To enrol
02/07 Rpt enrol - Sp signed
02/08 Pres signed
02/11 To Governor
02/13 Governor signed
Session Law Chapter 9
Effective: 01/01/09
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 344 BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO INCOME TAX WITHHOLDING; AMENDING SECTION 63-3035, IDAHO CODE, TO 3 REVISE THE DATE FOR FILING EMPLOYER RETURNS, TO REQUIRE THAT THE RETURN 4 SHOW THE AMOUNT OF ANY DEFICIENCY OR REFUND DUE, TO PROVIDE THAT A COPY 5 OF THE DECLARATION OF WITHHOLDING PROVIDED TO EMPLOYEES BE INCLUDED WITH 6 THE RETURN AND TO MAKE TECHNICAL CORRECTIONS; AND PROVIDING AN EFFECTIVE 7 DATE. 8 Be It Enacted by the Legislature of the State of Idaho: 9 SECTION 1. That Section 63-3035, Idaho Code, be, and the same is hereby 10 amended to read as follows: 11 63-3035. STATE WITHHOLDING TAX ON PERCENTAGE BASIS -- WITHHOLDING, COL- 12 LECTION AND PAYMENT OF TAX. (a) Every employer who is required under the pro- 13 visions of the Internal Revenue Code to withhold, collect and pay income tax 14 on wages or salaries paid by such employer to any employee (other than employ- 15 ees specified in Internal Revenue Code section 3401(a)(2)) shall, at the time 16 of such payment of wages, salary, bonus or other emolument to such employee, 17 deduct and retain therefrom an amount substantially equivalent to the tax rea- 18 sonably calculated by the state tax commission to be due from the employee 19 under this chapter. The state tax commission shall prepare tables showing 20 amounts to be withheld, and shall supply same to each employer subject to this 21 section. In the event that an employer can demonstrate administrative inconve- 22 nience in complying with the exact requirements set forth in these tables, he 23 may, with the consent of the state tax commission and upon application to it, 24 use a different method which will produce substantially the same amount of 25 taxes withheld. Every employer making payments of wages or salaries earned in 26 Idaho, regardless of the place where such payment is made: 27 (1)sShall be liable to the state of Idaho for the payment of the tax 28 required to be deducted and withheld under this section and shall not be 29 liable to any individual for the amount deducted from his wages and paid 30 over in compliance or intended compliance with this section; 31 (2)mMust pay to the state tax commission monthly on or before the 20th 32 day of the succeeding month, or at such other times as the state tax com- 33 mission may allow, an amount of tax which, under the provisions of this 34 chapter, he is required to deduct and withhold; 35 (3)sShall register with the state tax commission, in the manner pre- 36 scribed by it, to establish an employer's withholding account number. The 37 account number will be used to report all amounts withheld, for the annual 38 reconciliation required in this section, and for such other purposes 39 relating to withholding as the state tax commission may require; and 40 (4)mMust, notwithstanding the provisions of paragraphs (1) and (2) of 41 this subsection, if the amount of withholding of such employer for the 42 preceding twelve (12) month period equals or exceeds two hundred forty 43 thousand dollars ($240,000) per annum or an average of twenty thousand 2 1 dollars ($20,000) per month per annum, pay to the state tax commission on 2 the basis of withholding periods which begin on the 16th day of the month 3 and end on the 15th day of the following month, and payment shall be made 4 not later than five (5) days after the end of the withholding period. 5 (5) If a payment required pursuant to subsection (a)(2) or (a)(4) of this 6 section is not made or is made delinquently or if made is not equal to the 7 withholding required under this section the state tax commission may 8 treat the failure as a failure to file a return and may take administra- 9 tive and judicial actions as authorized by this chapter in the case of a 10 failure to file a return. Interest, at the rate provided by section 11 63-3045, Idaho Code, shall apply to any such underpayment. 12 (6) Commencing in 2006, the state tax commission shall determine whether 13 the threshold amounts established by subsection (a)(4) of this section 14 must be adjusted to reflect fluctuations in the cost of living. The com- 15 mission shall base its determination on the cumulative effect of the 16 annual cost-of-living percentage modifications determined by the United 17 States secretary of health and human services pursuant to 42 USC 415(i). 18 When the cumulative percentage applied to the monthly threshold amount 19 equals or exceeds five thousand dollars ($5,000), the commission shall 20 promulgate a rule adjusting the monthly threshold amount by five thousand 21 dollars ($5,000) and making the necessary proportional adjustment to the 22 annual threshold amount. The rule shall be effective for the next succeed- 23 ing calendar year and each year thereafter until again adjusted by the 24 commission. The tax commission shall determine subsequent adjustments in 25 the same manner, in each case using the year of the last adjustment as the 26 base year. 27 (b) (1) In addition to the payments required pursuant to subsections 28 (a)(2) and (a)(4) of this section, every employer shall file a return upon 29 such form as shall be prescribed by the state tax commission, but not more 30 frequently than annually, or as required pursuant to any agreement between 31 the state tax commission and the department of labor under section 32 63-3035B, Idaho Code, unless a shorter filing period and due date is pre- 33 scribed by the state tax commission. The return shall be due on the last 34 day of the second month following the end of the period to which the 35 return relates. The return shall: 36 (i) Sshow, for the period to which it relates, the total amount of 37 wages, salary, bonus or other emolument paid to his employees, the 38 amount deducted therefrom in accordance with the provisions of the 39 Internal Revenue Code, the amount deducted therefrom in accordance 40 with the provisions of this section, the amount of any previous pay- 41 ments made pursuant to this section, the amount of any deficiency due 42 from the employer or refund payable by the state tax commission and 43 such pertinent and necessary information as the state tax commission 44 may require. 45 (ii) Include a copy of the declaration of withholding provided to 46 employees pursuant to subsection (b)(2) of this section. 47 (2) Every employer making a declaration of withholding as provided herein 48 shall furnish to the employees annually, but not later than thirty (30) 49 days after the end of the calendar year, a record of the amount of tax 50 withheld from such employee on forms to be prescribed, prepared and fur- 51 nished by the state tax commission.and on or before the last day of Feb-52ruary every employer shall file a copy thereof with the state tax commis-53sion.54 (3) Every employer who is required, under Internal Revenue Code section 55 6011, to file returns on magnetic media, machine readable form or elec- 3 1 tronic means, as defined in the Idaho uniform electronic transaction act, 2 may be required by rules of the state tax commission to file corresponding 3 state returns on similar magnetic media, machine readable form or elec- 4 tronic means. Such rules may provide a different due date for such returns 5 which shall be no later than the date employers are required to file such 6 returns with the internal revenue service or the social security adminis- 7 tration. 8 (c) All moneys deducted and withheld by every employer shall immediately 9 upon such deduction be state money and every employer who deducts and retains 10 any amount of money under the provisions of this chapter shall hold the same 11 in trust for the state of Idaho and for the payment thereof to the state tax 12 commission in the manner and at the times in this chapter provided. Any 13 employer who does not possess real property situated within the state of 14 Idaho, which, in the opinion of the state tax commission, is of sufficient 15 value to cover his probable tax liability, may be required to post a surety 16 bond in such sum as the state tax commission shall deem adequate to protect 17 the state. 18 (d) The provisions of this chapter relating to additions to tax in case 19 of delinquency, and penalties, shall apply to employers subject to the provi- 20 sions of this section and for these purposes any amount deducted, or required 21 to be deducted and remitted to the state tax commission under this section, 22 shall be considered to be the tax of the employer and with respect to such 23 amount he shall be considered the taxpayer. 24 (e) Amounts deducted from wages of an employee during any calendar year 25 in accordance with the provisions of this section shall be considered to be in 26 part payment of the tax imposed on such employee for his tax year which begins 27 within such calendar year and the return made by the employer under this sub- 28 section (e) shall be accepted by the state tax commission as evidence in favor 29 of the employee of the amount so deducted from his wages. Where the total 30 amount so deducted exceeds the amount of tax on the employee, based on his 31 Idaho taxable income, or where his income is not taxable under this chapter, 32 the state tax commission shall, after examining the annual return filed by the 33 employee in accordance with this chapter, but not later than sixty (60) days 34 after the filing of each return, refund the amount of the excess deducted. 35 (f) This section shall in no way relieve any taxpayer from his obligation 36 of filing a return at the time required under this chapter, and, should the 37 amount withheld under the provisions of this section be insufficient to pay 38 the total tax of such taxpayer, such unpaid tax shall be paid at the time pre- 39 scribed by section 63-3034, Idaho Code. 40 (g) An employee receiving wages shall on any day be entitled to not more 41 than, but may claim fewer than, the number of withholding exemptions to which 42 he is entitled under the Internal Revenue Code for federal income tax with- 43 holding purposes. 44 (h) An employer shall use the exemption certificate filed by the employee 45 with the employer under the withholding exemption provisions of the Internal 46 Revenue Code in determining the amount of tax to be withheld from the 47 employee's wages or salary under this chapter. The tax commission may redeter- 48 mine the number of withholding exemptions to which an employee is entitled 49 under subsection (g) of this section, and the state tax commission may require 50 such exemption certificate to be filed on a form prescribed by the commission 51 in any circumstance where the commission finds that the exemption certificate 52 filed for Internal Revenue Code purposes does not properly reflect the number 53 of withholding exemptions to which the employee is entitled under this chap- 54 ter. In no event shall any employee give an exemption certificate which claims 55 a higher number of withholding exemptions than the number to which the 4 1 employee is entitled by subsection (g) of this section. 2 SECTION 2. This act shall be in full force and effect on and after Janu- 3 ary 1, 2009.
STATEMENT OF PURPOSE
RS 17343
This bill simplifies the year-end income tax withholding reports
employers now must file with the State Tax Commission. Current
law requires employers to transmit to the Tax Commission copies
of the wage and tax statements (Form W-2) provided to employees.
This transmittal must be filed by January 31st of each year.
Employers must then file an annual reconciliation of the amounts
of Idaho withholding reported on the W-2s and the amount
remitted on monthly or quarterly withholding returns filed
during the year. This second report is due by the last day of
February. This bill combines the two filings into a single
return which will be due on the last day of February.
The change will be effective for filings in 2009 and later.
FISCAL NOTE
No fiscal impact.
CONTACT
Name: Ted Spangler
Agency: State Tax Commission
Phone: (208) 334-7530
STATEMENT OF PURPOSE/FISCAL NOTE H 344