2008 Legislation
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HOUSE BILL NO. 533<br /> – Income tax, credit balances

HOUSE BILL NO. 533

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Bill Status



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

Bill Text




                                                                       
  ]]]]              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

                                       2

  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
 34    adjustments.
 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 / Fiscal Impact



                       STATEMENT OF PURPOSE

                             RS 17643

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.    


                           FISCAL NOTE

According to the Tax Commission, the cost of this legislation 
will be $325,000 annually.






Contact
Name: Rep. Harwood 
Phone: 208.332.1000


STATEMENT OF PURPOSE/FISCAL NOTE                         H 533