Bill Text: IA HF2433 | 2015-2016 | 86th General Assembly | Enrolled
Bill Title: A bill for an act relating to state taxation by temporarily updating the Code references to the Internal Revenue Code, decoupling from certain federal bonus depreciation provisions, rescinding certain administrative rules and rule amendments and modifying the sales tax exemptions related to the purchase of items used in manufacturing and other activities, and including effective date and retroactive applicability provisions. Effective 3-21-16.
Spectrum: Committee Bill
Status: (Passed) 2016-03-21 - Signed by Governor. H.J. 522. [HF2433 Detail]
Download: Iowa-2015-HF2433-Enrolled.html
House File 2433 - Enrolled
HOUSE FILE
BY COMMITTEE ON WAYS AND
MEANS
(SUCCESSOR TO HSB 642)
(COMPANION TO LSB
6046SV BY COMMITTEE ON
WAYS AND MEANS)
\5
A BILL FOR
\1
House File 2433
AN ACT
RELATING TO STATE TAXATION BY TEMPORARILY UPDATING THE CODE
REFERENCES TO THE INTERNAL REVENUE CODE, DECOUPLING FROM
CERTAIN FEDERAL BONUS DEPRECIATION PROVISIONS, RESCINDING
CERTAIN ADMINISTRATIVE RULES AND RULE AMENDMENTS AND
MODIFYING THE SALES TAX EXEMPTIONS RELATED TO THE PURCHASE
OF ITEMS USED IN MANUFACTURING AND OTHER ACTIVITIES, AND
INCLUDING EFFECTIVE DATE AND RETROACTIVE APPLICABILITY
PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
DIVISION I
INTERNAL REVENUE CODE REFERENCES
Section 1. INTERNAL REVENUE CODE REFERENCES FOR
2015. Notwithstanding the definition of "Internal Revenue
Code" in section 15.335, subsection 7, section 422.3,
subsection 5, section 422.10, subsection 3, section 422.32,
subsection 1, and section 422.33, subsection 5, Code 2016,
the following shall apply for the period beginning January 1,
2015, and ending December 31, 2015, and for tax years beginning
during the 2015 calendar year:
1. The definition of "Internal Revenue Code" for purposes
of section 15.335, subsection 7, section 422.10, subsection 3,
and section 422.33, subsection 5, Code 2016, and for purposes
of references in the 2016 Iowa Code and 2016 Iowa Acts to the
definition of "Internal Revenue Code" in those sections, shall
mean the Internal Revenue Code in effect on January 1, 2016.
2. The definition of "Internal Revenue Code" for purposes
of sections 422.3 and 422.32, Code 2016, and for purposes of
references in the 2016 Iowa Code and 2016 Iowa Acts to the
definition of "Internal Revenue Code" in those sections, shall
mean the Internal Revenue Code of 1954, prior to the date of
its redesignation as the Internal Revenue Code of 1986 by the
Tax Reform Act of 1986, or means the Internal Revenue Code of
1986 as amended to and including January 1, 2016.
Sec. 2. DEDUCTION FOR STATE SALES AND USE TAX FOR
2015. Notwithstanding section 422.9, subsection 2, paragraph
"i", Code 2016, the deduction for state sales and use taxes is
allowable under section 422.9 for tax years beginning during
the 2015 calendar year, but only if the taxpayer elected to
deduct the state sales and use taxes in lieu of state income
taxes under section 164 of the Internal Revenue Code. The
deduction for state sales and use taxes is not allowed if the
taxpayer has taken the deduction for state income taxes or
claimed the standard deduction under section 63 of the Internal
Revenue Code.
Sec. 3. BONUS DEPRECIATION FOR 2015.
1. Notwithstanding section 1 of this Act, or any other
provision of law to the contrary, the additional first=year
depreciation allowance authorized in section 168(k) of the
Internal Revenue Code, as enacted by Pub. L. No. 114=113, {143,
does not apply in computing net income for state tax purposes
for tax years ending on or after January 1, 2015, but before
January 1, 2016. If the taxpayer has taken the additional
first=year depreciation allowance for purposes of computing
federal adjusted gross income or federal taxable income, as
the case may be, then the taxpayer, when computing net income
for purposes of the individual income tax under section 422.7
or the corporation income tax or franchise tax under section
422.35, shall make the adjustments described in section 422.7,
subsection 39A, paragraphs "a" through "c", Code 2016, or
described in section 422.35, subsection 19A, paragraphs "a"
through "c", Code 2016, as applicable.
2. In addition to the requirements of section 422.5,
subsection 2, paragraph "b", subparagraph (1), Code 2016,
for purposes of the state alternative minimum taxable income
calculation in section 422.5, subsection 2, paragraph "b",
subparagraph (1), to the extent that any preference or
adjustment is determined by an individual's federal adjusted
gross income, the individual's federal adjusted gross income is
computed in accordance with subsection 1 of this section for
tax years beginning during the 2015 calendar year.
3. In addition to the requirements of section 422.9,
subsection 2, paragraph "h", Code 2016, for purposes of
calculating the deductions in section 422.9 that are authorized
under the Internal Revenue Code, and to the extent that
any such deduction is determined by an individual's federal
adjusted gross income, the individual's federal adjusted gross
income is computed in accordance with subsection 1 of this
section for tax years beginning during the 2015 calendar year.
Sec. 4. EFFECTIVE UPON ENACTMENT. This division of this
Act, being deemed of immediate importance, takes effect upon
enactment.
Sec. 5. RETROACTIVE APPLICABILITY. This division of this
Act applies retroactively to January 1, 2015.
DIVISION II
SALES AND USE TAXES
Sec. 6. RESCISSION OF AMENDMENTS TO ADMINISTRATIVE RULES.
1. The amendments to 701 Iowa administrative code, rule
15.3, subrule 3; rule 18.29, subrule 7; rules 18.58, 219.11,
and 219.12; rule 219.13, subrule 3; and rule 230.5, as
appearing in ARC 2349C, as published in the Iowa administrative
bulletin, volume XXXVIII, number 14, dated January 6, 2016, pp.
1359=1364, are rescinded.
2. As soon as practicable, the Iowa administrative code
editor shall restore the language of the Iowa administrative
code rules and subrules referenced in subsection 1 of this
section to the language that existed on January 5, 2016.
Sec. 7. RESCISSION OF ADMINISTRATIVE RULES.
1. 701 Iowa administrative code, rules 230.14 through
230.22, are rescinded.
2. As soon as practicable, the Iowa administrative code
editor shall remove the language of the Iowa administrative
code rules referenced in subsection 1 of this section from the
Iowa administrative code.
Sec. 8. Section 423.3, subsection 47, paragraph a,
unnumbered paragraph 1, Code 2016, is amended to read as
follows:
The sales price from the sale or rental of computers,
machinery, and equipment, including replacement parts,
supplies, and materials used to construct or self=construct
computers, machinery, and equipment, replacement parts, and
supplies, if such items are any of the following:
Sec. 9. Section 423.3, subsection 47, paragraph d, Code
2016, is amended by adding the following new subparagraphs:
NEW SUBPARAGRAPH. (7) "Replacement part" means tangible
personal property other than computers, machinery, equipment,
or supplies, regardless of the cost or useful life of the
tangible personal property, that meets all of the following
conditions:
(a) The tangible personal property replaces a component of
a computer, machinery, or equipment, which component is capable
of being separated from the computer, machinery, or equipment.
(b) The tangible personal property performs the same or
similar function as the component it replaced.
(c) The tangible personal property restores the computer,
machinery, or equipment to an operational condition, or
upgrades or improves the efficiency of the computer, machinery,
or equipment.
NEW SUBPARAGRAPH. (8) "Supplies" means tangible personal
property, other than computers, machinery, equipment, or
replacement parts, that meets one of the following conditions:
(a) The tangible personal property is to be connected
to a computer, machinery, or equipment and requires regular
replacement because the property is consumed or deteriorates
during use, including but not limited to saw blades, drill
bits, filters, and other similar items with a short useful
life.
(b) The tangible personal property is used in conjunction
with a computer, machinery, or equipment and is specially
designed for use in manufacturing specific products and may
be used interchangeably and intermittently on a particular
computer, machine, or piece of equipment, including but not
limited to jigs, dies, tools, and other similar items.
(c) The tangible personal property comes into physical
contact with other tangible personal property used in
processing and is used to assist with or maintain conditions
necessary for processing, including but not limited to cutting
fluids, oils, coolants, lubricants, and other similar items
with a short useful life.
(d) The tangible personal property is directly and
primarily used in an activity described in paragraph "a",
subparagraphs (1) through (6), including but not limited to
prototype materials and testing materials.
Sec. 10. EFFECTIVE UPON ENACTMENT. The sections of this
division of this Act rescinding Iowa administrative code rules
and amendments to Iowa administrative code rules, being deemed
of immediate importance, take effect upon enactment.
LINDA UPMEYER
Speaker of the House
PAM JOCHUM
President of the Senate
I hereby certify that this bill originated in the House and
is known as House File 2433, Eighty=sixth General Assembly.
CARMINE BOAL
Chief Clerk of the House
Approved , 2016
TERRY E. BRANSTAD
Governor
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