Print Friendly HOUSE BILL NO. 533
– Income tax, credit balances
HOUSE BILL NO. 533
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H0533...............................................by REVENUE AND TAXATION
INCOME TAX - Amends existing law relating to income tax to provide that
balances existing after three years, but within ten years of the due date
of the return, shall be credited only against state income tax, interest
and penalties due.
02/15 House intro - 1st rdg - to printing
02/18 Rpt prt - to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature Second Regular Session - 2008
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 533
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO INCOME TAX CREDITS AND REFUNDS; AMENDING SECTION 63-3072, IDAHO
3 CODE, TO PROVIDE THAT BALANCES EXISTING AFTER THREE YEARS BUT WITHIN TEN
4 YEARS OF THE DUE DATE OF THE RETURN SHALL BE CREDITED ONLY AGAINST TAX,
5 INTEREST AND PENALTIES DUE.
6 Be It Enacted by the Legislature of the State of Idaho:
7 SECTION 1. That Section 63-3072, Idaho Code, be, and the same is hereby
8 amended to read as follows:
9 63-3072. CREDITS AND REFUNDS. (a) Subject to the provisions of subsec-
10 tions (b), (c) and (h) of this section, where there has been an overpayment of
11 the tax imposed by the provisions of this chapter, the amount of such overpay-
12 ment shall be credited against any tax administered by the state tax commis-
13 sion which tax is then due from the taxpayer, and any balance of such excess
14 shall be refunded to the taxpayer.
15 (b) Except in regard to amounts withheld as provided in section 63-3035,
16 63-3035A or 63-3036, Idaho Code, or amounts paid as estimated payments under
17 section 63-3036A, Idaho Code, a claim for credit or refund of tax, penalties,
18 or interest paid shall be made within the later of three (3) years of the due
19 date of the return, without regard to extensions, or three (3) years from the
20 date the return was filed. However, with regard to remittances received with
21 an extension of time to file, or a tentative return, a claim for credit or
22 refund of such remittances shall be made within three (3) years from the due
23 date of the return without regard to extensions.
24 (c) With regard to amounts withheld as provided in section 63-3035,
25 63-3035A or 63-3036, Idaho Code, or amounts paid as estimated payments under
26 section 63-3036A, Idaho Code, a claim for credit or refund shall be made
27 within three (3) years from the due date of the return, without regard to
28 extensions, for the taxable year in respect to which the tax was withheld or
29 paid. Balances existing after three (3) years but within ten (10) years of the
30 due date of the return shall be credited only against tax, interest and penal-
31 ties due.
32 (d) Notwithstanding any other provisions of this section, when Idaho tax-
33 able income and/or tax credits for any taxable year have been adjusted as a
34 result of a final federal determination, the period of limitations for claim-
35 ing a refund or credit of tax, penalties, or interest shall be reopened and
36 shall not expire until the later of one (1) year from the date of delivery of
37 the final federal determination to the taxpayer by the internal revenue ser-
38 vice, three (3) years from the due date of the return, without regard to
39 extensions, or three (3) years from the date the return was filed. For pur-
40 poses of this subsection, the term "final federal determination" shall mean
41 the final resolution of all issues which were adjusted by the internal revenue
42 service. When the final federal determination is submitted, the taxpayer shall
43 also submit copies of all schedules and written explanations provided by the
1 internal revenue service. Upon the expiration of the period of limitations as
2 provided in subsections (b) and (h) of this section, only those specific items
3 of income, deductions, gains, losses or credits which were adjusted in the
4 final federal determination shall be subject to adjustment for purposes of
5 recomputing Idaho income, deductions, gains, losses, credits, and the effect
6 of such adjustments on Idaho allocations and apportionments.
7 (e) If a claim for credit or refund relates to an overpayment attribut-
8 able to a net operating loss carryback or a capital loss carryback, in lieu of
9 the period of limitations prescribed in subsection (b) of this section, the
10 period shall be that period which ends with the expiration of the fifteenth
11 day of the fortieth month following the end of the taxable year of the net
12 operating loss or capital loss which results in such carryback.
13 (f) If an adjustment, which was made within the period of limitations as
14 provided in this section, affects the amount of tax credit, net operating
15 loss, or capital loss, claimed in a taxable year other than the tax year in
16 which the adjustment is made, then adjustments to the credit, net operating
17 loss, or capital loss, claimed in such other tax year may be made and a claim
18 for credit or refund of tax, penalties or interest may be made even though
19 such claim would otherwise be barred under the provisions of this section.
20 (g) In the case of a duplicate return filed under section 63-217(1)(b),
21 Idaho Code, the limitations under this section shall be the later of one (1)
22 year from the filing of the duplicate return or the date otherwise applicable
23 under this section.
24 (h) Prior to the expiration of the time prescribed in this section for
25 credit or refund of any tax imposed by the provisions of this chapter, both
26 the state tax commission or its delegate or deputy and the taxpayer may con-
27 sent in writing to extend such period of time. The period so agreed upon may
28 be extended by subsequent agreements in writing made before the expiration of
29 the period previously agreed upon. When a pass-through entity extends the
30 period of limitations in accordance with the provisions of this subsection the
31 period of limitations for the other taxpayers is automatically extended for
32 the same period for the purpose of claiming a credit or refund of tax, penal-
33 ties or interest by the other taxpayers reflecting the pass-through entity
35 (i) The expiration of the period of limitations as provided in this sec-
36 tion shall be suspended for the time period between the issuance by the state
37 tax commission of a notice under either section 63-3045 or 63-3065, Idaho
38 Code, and the final resolution of any proceeding resulting from the notice.
39 (j) Appeal of a state tax commission decision denying in whole or in part
40 a claim for credit or refund shall be made in accordance with and within the
41 time limits prescribed in section 63-3049, Idaho Code.
42 (k) For purposes of this section, "return" includes a notice of defi-
43 ciency determination issued by the state tax commission when no return was
44 filed by the taxpayer. Such a return is deemed filed on the date the taxes
45 determined by the state tax commission are assessed.
STATEMENT OF PURPOSE
The purpose of this legislation would be to promote fairness
in government. Currently, income tax refunds expire after three
(3) years, while balances are due forever. Under this
legislation, if taxes are due back as far as 10 (ten) years, any
refunds should be available to pay those taxes.
This bill gives credit to older tax refunds only to the
extent of the balance due.
According to the Tax Commission, the cost of this legislation
will be $325,000 annually.
Name: Rep. Harwood
STATEMENT OF PURPOSE/FISCAL NOTE H 533