Bill Text: IA HSB67 | 2015-2016 | 86th General Assembly | Introduced

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Bill Title: A study bill for updating the Code references to the Internal Revenue Code and decoupling from certain federal bonus depreciation provisions, and including effective date and retroactive applicability provisions.

Spectrum: Unknown

Status: (Introduced - Dead) 2015-01-28 - Voted - Ways and Means. [HSB67 Detail]

Download: Iowa-2015-HSB67-Introduced.html

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House Study Bill 67 - Introduced
SENATE/HOUSE FILE _____
BY (PROPOSED DEPARTMENT OF
REVENUE BILL)
A BILL FOR
An Act updating the Code references to the Internal Revenue
Code and decoupling from certain federal bonus depreciation
provisions, and including effective date and retroactive
applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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DIVISION I
INTERNAL REVENUE CODE REFERENCES
Section 1. Section 15.335, subsection 7, paragraph b, Code
2015, is amended to read as follows:
b. For purposes of this section , “Internal Revenue Code”
means the Internal Revenue Code in effect on January 1, 2014
2015 .
Sec. 2. Section 422.3, subsection 5, Code 2015, is amended
to read as follows:
5. “Internal Revenue Code” means 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, 2014 2015 .
Sec. 3. Section 422.9, subsection 2, paragraph i, Code 2015,
is amended to read as follows:
i. The deduction for state sales and use taxes is allowable
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. A 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. This paragraph
applies to taxable years beginning after December 31, 2003, and
before January 1, 2008, and to taxable years beginning after
December 31, 2009, and before January 1, 2014 2015 .
Sec. 4. Section 422.10, subsection 3, paragraph b, Code
2015, is amended to read as follows:
b. For purposes of this section , “Internal Revenue Code”
means the Internal Revenue Code in effect on January 1, 2014
2015 .
Sec. 5. Section 422.32, subsection 1, paragraph h, Code
2015, is amended to read as follows:
h. “Internal Revenue Code” means the Internal Revenue Code
of 1954, prior to the date of its redesignation as the Internal
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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, 2014 2015 .
Sec. 6. Section 422.33, subsection 5, paragraph e,
subparagraph (2), Code 2015, is amended to read as follows:
(2) For purposes of this subsection , “Internal Revenue Code”
means the Internal Revenue Code in effect on January 1, 2014
2015 .
Sec. 7. EFFECTIVE UPON ENACTMENT. This division of this
Act, being deemed of immediate importance, takes effect upon
enactment.
Sec. 8. RETROACTIVE APPLICABILITY. This division of this
Act applies retroactively to January 1, 2014, for tax years
beginning on or after that date.
DIVISION II
BONUS DEPRECIATION
Sec. 9. Section 422.7, subsection 39A, unnumbered paragraph
1, Code 2015, is amended to read as follows:
The additional first-year depreciation allowance authorized
in section 168(k) of the Internal Revenue Code, as enacted by
Pub. L. No. 110-185, §103, Pub. L. No. 111-5, §1201, Pub. L.
No. 111-240, §2022, Pub. L. No. 111-312, §401, and Pub. L. No.
112-240, §331, and Pub. L. No. 113-295, §125, does not apply in
computing net income for state tax purposes. If the taxpayer
has taken the additional first-year depreciation allowance
for purposes of computing federal adjusted gross income, then
the taxpayer shall make the following adjustments to federal
adjusted gross income when computing net income for state tax
purposes:
Sec. 10. Section 422.35, subsection 19A, unnumbered
paragraph 1, Code 2015, is amended to read as follows:
The additional first-year depreciation allowance authorized
in section 168(k) of the Internal Revenue Code, as enacted by
Pub. L. No. 110-185, §103, Pub. L. No. 111-5, §1201, Pub. L.
No. 111-240, §2022, Pub. L. No. 111-312, §401, and Pub. L. No.
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112-240, §331, and Pub. L. No. 113-295, §125, does not apply in
computing net income for state tax purposes. If the taxpayer
has taken the additional first-year depreciation allowance for
purposes of computing federal taxable income, then the taxpayer
shall make the following adjustments to federal taxable income
when computing net income for state tax purposes:
Sec. 11. EFFECTIVE UPON ENACTMENT. This division of this
Act, being deemed of immediate importance, takes effect upon
enactment.
Sec. 12. RETROACTIVE APPLICABILITY. This division of this
Act applies retroactively to January 1, 2014, for tax years
ending on or after that date.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
This bill updates the Iowa Code references to the Internal
Revenue Code to make federal income tax revisions enacted by
Congress in 2014 applicable for Iowa income tax purposes, and
decouples with certain bonus depreciation provisions.
DIVISION I —— INTERNAL REVENUE CODE REFERENCES. The
division amends Code sections 422.3 and 422.32, general
definition sections in the chapter of the Code that governs
corporate and individual income tax and the franchise tax
on financial institutions, to update the references to the
Internal Revenue Code.
The division amends Code sections 15.335, 422.10, and 422.33
to update the references to the Internal Revenue Code for the
state research activities credit for individuals, corporations,
and corporations in economic development areas to include the
federal changes to the research activities credit and the
alternative simplified research activities credit.
Code section 422.9 provides individuals a deduction from net
income for state sales and use taxes if the individual chose
to deduct sales and use tax in lieu of state income taxes or
the standard deduction for federal income tax purposes. This
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deduction was set to expire under both federal and Iowa law for
tax years beginning on or after January 1, 2014. The federal
Tax Increase Prevention Act of 2014 extended the federal
deduction for the 2014 tax year. This division extends the
Iowa deduction for the 2014 tax year.
Division I takes effect upon enactment and applies
retroactively to January 1, 2014, for tax years beginning on
or after that date.
DIVISION II —— BONUS DEPRECIATION. The division decouples,
for Iowa income tax purposes, from the federal additional
first-year depreciation allowance in section 168(k) of the
Internal Revenue Code which was extended through 2014 by the
federal Tax Increase Prevention Act of 2014.
Division II takes effect upon enactment and applies
retroactively to January 1, 2014, for tax years ending on or
after that date.
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