Bill Text: IA SSB1098 | 2019-2020 | 88th General Assembly | Introduced
Bill Title: A bill for an act relating to the increased expensing allowance deduction by corporations, financial institutions, and partnerships and limited liability companies taxed as corporations, and including effective date and retroactive applicability provisions.
Spectrum: Committee Bill
Status: (N/A - Dead) 2019-02-04 - Subcommittee Meeting: 02/05/2019 3:00PM Senate Lobbyist Lounge. [SSB1098 Detail]
Download: Iowa-2019-SSB1098-Introduced.html
Senate
Study
Bill
1098
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
WAYS
AND
MEANS
BILL
BY
CHAIRPERSON
FEENSTRA)
A
BILL
FOR
An
Act
relating
to
the
increased
expensing
allowance
deduction
1
by
corporations,
financial
institutions,
and
partnerships
2
and
limited
liability
companies
taxed
as
corporations,
and
3
including
effective
date
and
retroactive
applicability
4
provisions.
5
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
6
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Section
1.
Section
422.35,
subsections
14
and
15,
Code
2019,
1
are
amended
to
read
as
follows:
2
14.
a.
The
Notwithstanding
any
other
provision
of
the
3
law
to
the
contrary,
the
increased
expensing
allowance
under
4
section
179
of
the
Internal
Revenue
Code
,
as
amended
by
Pub.
L.
5
No.
115-97,
§13101,
applies
in
computing
net
income
for
state
6
tax
purposes
for
tax
years
beginning
on
or
after
January
1,
7
2019
2018
,
subject
to
the
limitations
in
this
subsection
for
8
tax
years
beginning
on
or
after
January
1,
2019,
but
before
9
prior
to
January
1,
2020.
10
b.
If
the
taxpayer
has
taken
the
increased
expensing
11
allowance
under
section
179
of
the
Internal
Revenue
Code
,
12
as
amended
by
Pub.
L.
No.
115-97,
§13101,
for
purposes
of
13
computing
federal
taxable
income
for
tax
years
beginning
on
or
14
after
January
1,
2019
2018
,
but
before
January
1,
2020,
then
15
the
taxpayer
shall
make
the
following
adjustments
to
federal
16
taxable
income
when
computing
net
income
for
state
tax
purposes
17
for
the
same
tax
year:
18
(1)
Add
the
total
amount
of
expense
deduction
taken
on
19
section
179
property
allowable
for
federal
tax
purposes
under
20
section
179
of
the
Internal
Revenue
Code
,
as
amended
by
Pub.
21
L.
No.
115-97,
§13101
.
22
(2)
(a)
Subtract
For
tax
years
beginning
on
or
after
23
January
1,
2018,
but
before
January
1,
2019,
subtract
the
24
amount
of
expense
deduction
on
section
179
property
allowable
25
for
federal
tax
purposes
under
section
179
of
the
Internal
26
Revenue
Code,
as
amended
by
Pub.
L.
No.
115-97,
§13101,
not
27
to
exceed
seventy
thousand
dollars.
The
subtraction
in
this
28
subparagraph
division
shall
be
reduced,
but
not
below
zero,
29
by
the
amount
by
which
the
total
cost
of
section
179
property
30
placed
in
service
by
the
taxpayer
during
the
tax
year
exceeds
31
two
hundred
eighty
thousand
dollars.
32
(b)
For
the
tax
years
beginning
on
or
after
January
1,
33
2019,
but
before
January
1,
2020,
subtract
the
amount
of
34
expense
deduction
on
section
179
property
allowable
for
federal
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tax
purposes
under
section
179
of
the
Internal
Revenue
Code,
1
as
amended
by
Pub.
L.
No.
115-97,
§13101,
not
to
exceed
one
2
hundred
thousand
dollars.
The
subtraction
in
this
subparagraph
3
shall
be
reduced,
but
not
below
zero,
by
the
amount
by
which
4
the
total
cost
of
section
179
property
placed
in
service
by
5
the
taxpayer
during
the
tax
year
exceeds
four
hundred
thousand
6
dollars.
7
(3)
Any
other
adjustments
to
gains
or
losses
necessary
to
8
reflect
adjustments
made
in
subparagraphs
(1)
and
(2).
9
c.
The
director
shall
adopt
rules
pursuant
to
chapter
17A
10
to
administer
this
subsection
.
11
15.
a.
For
tax
years
beginning
on
or
after
January
1,
12
2019
2018
,
but
before
January
1,
2020,
a
taxpayer
may
elect
to
13
take
advantage
of
this
subsection
in
lieu
of
subsection
14
,
14
but
only
if
the
taxpayer’s
total
expensing
allowance
deduction
15
for
federal
tax
purposes
under
section
179
of
the
Internal
16
Revenue
Code
,
as
amended
by
Pub.
L.
No.
115-97,
§13101,
that
17
is
allocated
to
the
taxpayer
from
one
or
more
partnerships
or
18
limited
liability
companies
electing
to
have
the
income
taxed
19
directly
to
the
owners
exceeds
seventy
thousand
dollars
for
a
20
tax
year
beginning
during
the
2018
calendar
year,
or
exceeds
21
one
hundred
thousand
dollars
for
the
tax
year
beginning
during
22
the
2019
calendar
year,
and
would,
except
as
provided
in
this
23
subsection
,
be
limited
for
purposes
of
computing
net
income
for
24
state
tax
purposes
pursuant
to
subsection
14
.
25
b.
A
taxpayer
who
elects
to
take
advantage
of
this
26
subsection
shall
make
the
following
adjustments
to
federal
27
taxable
income
when
computing
net
income
for
state
tax
28
purposes:
29
(1)
Add
the
total
amount
of
section
179
expense
deduction
30
allocated
to
the
taxpayer
from
all
partnerships
or
limited
31
liability
companies
electing
to
have
the
income
taxed
directly
32
to
the
owners,
to
the
extent
the
allocated
amount
was
allowed
33
as
a
deduction
to
the
taxpayer
for
federal
tax
purposes
for
the
34
tax
year
under
section
179
of
the
Internal
Revenue
Code
,
as
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amended
by
Pub.
L.
No.
115-97,
§13101
.
1
(2)
From
the
amount
added
in
subparagraph
(1),
do
the
2
following:
3
(a)
For
tax
years
beginning
on
or
after
January
1,
2018,
4
but
before
January
1,
2019,
subtract
the
first
seventy
thousand
5
dollars
of
expensing
allowance
deduction
on
section
179
6
property.
7
(b)
For
tax
years
beginning
on
or
after
January
1,
2019,
8
but
before
January
1,
2020,
subtract
the
first
one
hundred
9
thousand
dollars
of
expensing
allowance
deduction
on
section
10
179
property.
11
(3)
The
remaining
amount,
equal
to
the
difference
between
12
the
amount
added
in
subparagraph
(1),
and
the
amount
subtracted
13
in
subparagraph
(2),
may
be
deducted
by
the
taxpayer
but
such
14
deduction
shall
be
amortized
equally
over
five
tax
years
15
beginning
in
the
following
tax
year.
16
(4)
Any
other
adjustments
to
gains
or
losses
necessary
to
17
reflect
adjustments
made
in
subparagraphs
(1)
through
(3).
18
c.
A
taxpayer
who
elects
to
take
advantage
of
this
19
subsection
shall
not
take
the
increased
expensing
allowance
20
under
section
179
of
the
Internal
Revenue
Code
,
as
amended
21
by
Pub.
L.
No.
115-97,
§13101,
for
any
section
179
property
22
placed
in
service
by
the
taxpayer
in
computing
taxable
income
23
for
state
tax
purposes.
If
the
taxpayer
has
taken
any
such
24
deduction
for
purposes
of
computing
federal
taxable
income,
25
the
taxpayer
shall
make
the
following
adjustments
to
federal
26
taxable
income
when
computing
net
income
for
state
tax
27
purposes:
28
(1)
Add
the
total
amount
of
expense
deduction
for
federal
29
tax
purposes
taken
on
section
179
property
placed
in
service
by
30
the
taxpayer
under
section
179
of
the
Internal
Revenue
Code
,
as
31
amended
by
Pub.
L.
No.
115-97,
§13101
.
32
(2)
Subtract
the
amount
of
depreciation
allowable
on
such
33
property
under
the
modified
accelerated
cost
recovery
system
34
described
in
section
168
of
the
Internal
Revenue
Code,
without
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regard
to
section
168(k)
of
the
Internal
Revenue
Code.
The
1
taxpayer
shall
continue
to
take
depreciation
on
the
applicable
2
property
in
future
tax
years
to
the
extent
allowed
under
the
3
modified
accelerated
cost
recovery
system
described
in
section
4
168
of
the
Internal
Revenue
Code,
without
regard
to
section
5
168(k)
of
the
Internal
Revenue
Code.
6
(3)
Any
other
adjustments
to
gains
or
losses
necessary
to
7
reflect
the
adjustments
made
in
subparagraphs
(1)
and
(2).
8
d.
The
election
made
under
this
subsection
is
for
one
tax
9
year
and
the
taxpayer
may
elect
or
not
elect
to
take
advantage
10
of
this
subsection
in
any
subsequent
tax
year.
However,
not
11
electing
to
take
advantage
of
this
subsection
in
a
subsequent
12
tax
year
shall
not
affect
the
taxpayer’s
ability
to
claim
the
13
tax
deduction
under
paragraph
“b”
,
subparagraph
(3),
that
14
originated
from
a
previous
tax
year.
15
d.
e.
The
director
shall
adopt
rules
pursuant
to
chapter
16
17A
to
administer
this
subsection
.
17
Sec.
2.
EFFECTIVE
DATE.
This
Act,
being
deemed
of
immediate
18
importance,
takes
effect
upon
enactment.
19
Sec.
3.
RETROACTIVE
APPLICABILITY.
This
Act
applies
20
retroactively
to
January
1,
2018,
for
tax
years
beginning
on
21
or
after
that
date.
22
EXPLANATION
23
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
24
the
explanation’s
substance
by
the
members
of
the
general
assembly.
25
This
bill
relates
to
the
increased
expensing
allowance
26
deduction
(section
179
of
the
Internal
Revenue
Code)
when
27
computing
net
income
by
corporations,
financial
institutions,
28
and
partnerships
and
limited
liability
companies
taxed
as
29
corporations.
30
The
bill
expands
the
increased
expensing
allowance
deduction
31
on
section
179
property
available
for
individual
state
income
32
tax
purposes
to
include
corporations,
financial
institutions,
33
and
partnerships
and
limited
liability
companies
taxed
as
34
corporations.
The
bill
allows
such
a
corporation,
financial
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institution,
partnership,
and
limited
liability
company,
in
tax
1
year
2018,
to
qualify
for
the
increased
expensing
allowance
2
deduction
on
section
179
property
for
purposes
of
computing
3
net
income,
but
limits
the
maximum
deduction
and
investment
4
limitation
to
$70,000
and
$280,000,
respectively.
Currently,
5
for
tax
year
2018,
the
maximum
expensing
allowance
deduction
6
and
investment
limitations
on
section
179
property
for
such
7
entities
is
limited
to
$25,000
and
$200,000,
respectively.
8
The
bill
takes
effect
upon
enactment,
and
applies
9
retroactively
to
January
1,
2018,
for
tax
years
beginning
on
10
or
after
that
date.
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