House File 324 - Introduced
HOUSE FILE
BY ALONS, RAYHONS, DRAKE,
TYMESON, DEYOE, WORTHAN,
DE BOEF, SCHULTZ, WINDSCHITL,
SANDS, STRUYK, KAUFMANN,
HEATON, WATTS, TJEPKES,
HELLAND, GRASSLEY, S. OLSON,
and SORENSON
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act providing to taxpayers taking the standard deduction a
2 deduction for property taxes paid when computing taxable
3 income and including effective and retroactive applicability
4 date provisions.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
6 TLSB 1682YH 83
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PAG LIN
1 1 Section 1. Section 422.9, subsections 1, 6, 7, and 8, Code
1 2 2009, are amended to read as follows:
1 3 1. a. An optional standard deduction, after deduction of
1 4 federal income tax, equal to one thousand two hundred thirty
1 5 dollars for a married person who files separately or a single
1 6 person or equal to three thousand thirty dollars for a husband
1 7 and wife who file a joint return, a surviving spouse, or a
1 8 head of household. The optional standard deduction shall not
1 9 exceed the amount remaining after deduction of the federal
1 10 income tax. The amount of federal income tax deducted shall
1 11 be computed as provided in subsection 2, paragraph "b".
1 12 b. An individual taking an optional standard deduction may
1 13 deduct, in addition to the deductions under paragraph "a", an
1 14 amount equal to the amount of property taxes paid on the
1 15 individual's primary residence. The additional deduction
1 16 shall not exceed five hundred dollars for a married person
1 17 filing separately or a single person and shall not exceed one
1 18 thousand dollars for a husband and wife who file a joint
1 19 return, a surviving spouse, or a head of household.
1 20 6. In determining the amount of deduction for federal
1 21 income tax under subsection 1, paragraph "a", or subsection 2,
1 22 paragraph "b", for tax years beginning in the 2001 calendar
1 23 year, the amount of the deduction shall not be adjusted by the
1 24 amount received during the tax year of the advanced refund of
1 25 the rate reduction tax credit provided pursuant to the federal
1 26 Economic Growth and Tax Relief Reconciliation Act of 2001,
1 27 Pub. L. No. 107=16, and the advanced refund of such credit
1 28 shall not be subject to taxation under this division.
1 29 7. In determining the amount of deduction for federal
1 30 income tax under subsection 1, paragraph "a", or subsection 2,
1 31 paragraph "b", for tax years beginning in the 2002 calendar
1 32 year, the amount of the deduction for the tax year shall not
1 33 be adjusted by the amount of the rate reduction credit
1 34 received in the tax year to the extent that the credit is
1 35 attributable to the rate reduction credit provided pursuant to
2 1 the federal Economic Growth and Tax Relief Reconciliation Act
2 2 of 2001, Pub. L. No. 107=16, and the amount of such credit
2 3 shall not be taxable under this division.
2 4 8. In determining the amount of deduction for federal
2 5 income tax under subsection 1, paragraph "a", or subsection 2,
2 6 paragraph "b", for tax years beginning in the 2008 calendar
2 7 year, the amount of the deduction for the tax year shall not
2 8 be adjusted by the amount received during the tax year of the
2 9 income tax rebate provided pursuant to the federal Recovery
2 10 Rebates and Economic Stimulus for the American People Act of
2 11 2008, Pub. L. No. 110=185, and the amount of such income tax
2 12 rebate shall not be subject to taxation under this division.
2 13 Sec. 2. Section 422.21, unnumbered paragraph 5, Code 2009,
2 14 is amended to read as follows:
2 15 The director shall determine for the 1989 and each
2 16 subsequent calendar year the annual and cumulative inflation
2 17 factors for each calendar year to be applied to tax years
2 18 beginning on or after January 1 of that calendar year. The
2 19 director shall compute the new dollar amounts as specified to
2 20 be adjusted in section 422.5 by the latest cumulative
2 21 inflation factor and round off the result to the nearest one
2 22 dollar. The annual and cumulative inflation factors
2 23 determined by the director are not rules as defined in section
2 24 17A.2, subsection 11. The director shall determine for the
2 25 1990 calendar year and each subsequent calendar year the
2 26 annual and cumulative standard deduction factors to be applied
2 27 to tax years beginning on or after January 1 of that calendar
2 28 year. The director shall compute the new dollar amounts of
2 29 the standard deductions specified in section 422.9, subsection
2 30 1, paragraph "a", by the latest cumulative standard deduction
2 31 factor and round off the result to the nearest ten dollars.
2 32 The annual and cumulative standard deduction factors
2 33 determined by the director are not rules as defined in section
2 34 17A.2, subsection 11.
2 35 Sec. 3. EFFECTIVE AND RETROACTIVE APPLICABILITY DATES.
3 1 This Act, being deemed of immediate importance, takes effect
3 2 upon enactment and applies retroactively to January 1, 2008,
3 3 for tax years beginning on or after that date.
3 4 EXPLANATION
3 5 Currently, federal law allows taxpayers to take a deduction
3 6 for residential property taxes paid even when they do not
3 7 itemize deductions, but Iowa law does not currently provide an
3 8 additional property tax deduction to taxpayers taking the Iowa
3 9 standard deduction.
3 10 This bill allows state individual income taxpayers taking
3 11 the standard deduction to take a deduction for residential
3 12 property taxes paid. The deduction is limited to $500 for
3 13 individuals and married persons filing separately, and is
3 14 limited to $1,000 for a husband and wife who file a joint
3 15 return, a surviving spouse, and a head of household.
3 16 The bill takes effect upon enactment and applies
3 17 retroactively to January 1, 2008, for tax years beginning on
3 18 or after that date.
3 19 LSB 1682YH 83
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