Bill Text: IA SF551 | 2023-2024 | 90th General Assembly | Introduced
Bill Title: A bill for an act relating to decoupling federal additional first-year depreciation for Iowa tax purposes, and including effective date and retroactive applicability provisions.(Formerly SSB 1127.)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2024-01-09 - Subcommittee: Dawson, Koelker, and Winckler. S.J. 60. [SF551 Detail]
Download: Iowa-2023-SF551-Introduced.html
Senate
File
551
-
Introduced
SENATE
FILE
551
BY
COMMITTEE
ON
WAYS
AND
MEANS
(SUCCESSOR
TO
SSB
1127)
A
BILL
FOR
An
Act
relating
to
decoupling
federal
additional
first-year
1
depreciation
for
Iowa
tax
purposes,
and
including
effective
2
date
and
retroactive
applicability
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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551
Section
1.
Section
422.7,
Code
2023,
is
amended
by
adding
1
the
following
new
subsection:
2
NEW
SUBSECTION
.
44.
For
qualified
property
placed
in
3
service
after
December
31,
2022,
a
taxpayer
may
elect
to
4
subtract
the
additional
first-year
depreciation
allowance
5
authorized
under
section
168
of
the
Internal
Revenue
Code,
in
6
the
taxable
year
in
which
the
property
is
placed
in
service,
7
subject
to
the
following
adjustments:
8
a.
Add
the
total
amount
of
depreciation
taken
on
all
9
property
for
which
the
election
under
section
168(k)
of
the
10
Internal
Revenue
Code
was
made
for
the
tax
year.
11
b.
Subtract
an
amount
equal
to
the
depreciation
allowed
on
12
such
property
under
section
168(k)
of
the
Internal
Revenue
Code
13
of
1986
as
amended
and
in
effect
on
December
31,
2022.
14
c.
Any
other
adjustments
to
gains
or
losses
to
reflect
the
15
adjustments
made
in
paragraph
“a”
or
“b”
pursuant
to
rules
16
adopted
by
the
director.
17
Sec.
2.
Section
422.35,
Code
2023,
is
amended
by
adding
the
18
following
new
subsection:
19
NEW
SUBSECTION
.
15.
For
qualified
property
placed
in
20
service
after
December
31,
2022,
a
taxpayer
may
elect
to
21
subtract
the
additional
first-year
depreciation
allowance
22
authorized
under
section
168
of
the
Internal
Revenue
Code,
in
23
the
taxable
year
in
which
the
property
is
placed
in
service,
24
subject
to
the
following
adjustments:
25
a.
Add
the
total
amount
of
depreciation
taken
on
all
26
property
for
which
the
election
under
section
168(k)
of
the
27
Internal
Revenue
Code
was
made
for
the
tax
year.
28
b.
Subtract
an
amount
equal
to
the
depreciation
allowed
on
29
such
property
under
section
168(k)
of
the
Internal
Revenue
Code
30
of
1986
as
amended
and
in
effect
on
December
31,
2022.
31
c.
Any
other
adjustments
to
gains
or
losses
to
reflect
the
32
adjustments
made
in
paragraph
“a”
or
“b”
pursuant
to
rules
33
adopted
by
the
director.
34
Sec.
3.
EFFECTIVE
DATE.
This
Act,
being
deemed
of
immediate
35
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551
importance,
takes
effect
upon
enactment.
1
Sec.
4.
RETROACTIVE
APPLICABILITY.
This
Act
applies
2
retroactively
to
January
1,
2022,
for
tax
years
beginning
on
3
or
after
that
date.
4
EXPLANATION
5
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
6
the
explanation’s
substance
by
the
members
of
the
general
assembly.
7
This
bill
relates
to
decoupling
for
Iowa
tax
purposes
8
with
federal
additional
first-year
depreciation
changes
9
under
section
168(k)
of
the
Internal
Revenue
Code
(bonus
10
depreciation).
11
BACKGROUND.
The
Tax
Cut
and
Jobs
Act
of
2017
(TCJA),
12
in
part,
made
substantial
changes
to
bonus
depreciation
by
13
increasing
the
deduction
amount
from
50
percent
of
qualified
14
property
to
100
percent
of
qualified
property.
Beginning
15
with
property
placed
in
service
after
December
31,
2022,
the
16
federal
bonus
depreciation
deduction
amount
begins
to
phase
17
down
by
20
percent
per
year
until
property
placed
in
service
18
after
December
31,
2026,
is
no
longer
eligible
for
bonus
19
depreciation.
20
BILL
CHANGES.
Under
current
law,
Iowa
completely
coupled
21
with
federal
tax
law
for
tax
years
beginning
on
or
after
22
January
1,
2020.
The
bill
decouples
Iowa
for
purposes
of
23
federal
bonus
depreciation,
and
permits
a
taxpayer
for
Iowa
24
individual
and
corporate
income
tax
purposes
to
continue
to
25
utilize
bonus
depreciation
by
allowing
a
taxpayer
to
deduct
100
26
percent
of
qualified
property
placed
in
service
after
December
27
31,
2022.
28
By
decoupling
from
federal
bonus
depreciation,
the
bill
also
29
preserves
any
other
changes
made
to
federal
bonus
depreciation
30
under
the
TCJA
for
Iowa
tax
purposes
including
expanding
the
31
types
of
property
that
are
considered
“qualified
property”.
32
The
bill
takes
effect
upon
enactment
and
applies
33
retroactively
to
tax
years
beginning
on
or
after
January
1,
34
2022.
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