Senate
File
2137
-
Introduced
SENATE
FILE
2137
BY
FEENSTRA
,
ROZENBOOM
,
SINCLAIR
,
SCHULTZ
,
SEGEBART
,
GARRETT
,
KRAAYENBRINK
,
SHIPLEY
,
ANDERSON
,
JOHNSON
,
ZUMBACH
,
CHAPMAN
,
SCHNEIDER
,
WHITVER
,
GUTH
,
COSTELLO
,
BREITBACH
,
KAPUCIAN
,
CHELGREN
,
BEHN
,
DIX
,
BERTRAND
,
SMITH
,
and
ZAUN
A
BILL
FOR
An
Act
temporarily
updating
the
Code
references
to
the
Internal
1
Revenue
Code
and
decoupling
from
certain
federal
bonus
2
depreciation
provisions,
and
including
effective
date
and
3
retroactive
applicability
provisions.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
5
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2137
Section
1.
INTERNAL
REVENUE
CODE
REFERENCES
FOR
1
2015.
Notwithstanding
the
definition
of
“Internal
Revenue
2
Code”
in
section
15.335,
subsection
7,
section
422.3,
3
subsection
5,
section
422.10,
subsection
3,
section
422.32,
4
subsection
1,
and
section
422.33,
subsection
5,
Code
2016,
5
the
following
shall
apply
for
the
period
beginning
January
1,
6
2015,
and
ending
December
31,
2015,
and
for
tax
years
beginning
7
during
the
2015
calendar
year:
8
1.
The
definition
of
“Internal
Revenue
Code”
for
purposes
9
of
section
15.335,
subsection
7,
section
422.10,
subsection
3,
10
and
section
422.33,
subsection
5,
Code
2016,
and
for
purposes
11
of
references
in
the
2016
Iowa
Code
and
2016
Iowa
Acts
to
the
12
definition
of
“Internal
Revenue
Code”
in
those
sections,
shall
13
mean
the
Internal
Revenue
Code
in
effect
on
January
1,
2016.
14
2.
The
definition
of
“Internal
Revenue
Code”
for
purposes
15
of
sections
422.3
and
422.32,
Code
2016,
and
for
purposes
of
16
references
in
the
2016
Iowa
Code
and
2016
Iowa
Acts
to
the
17
definition
of
“Internal
Revenue
Code”
in
those
sections,
shall
18
mean
the
Internal
Revenue
Code
of
1954,
prior
to
the
date
of
19
its
redesignation
as
the
Internal
Revenue
Code
of
1986
by
the
20
Tax
Reform
Act
of
1986,
or
means
the
Internal
Revenue
Code
of
21
1986
as
amended
to
and
including
January
1,
2016.
22
Sec.
2.
DEDUCTION
FOR
STATE
SALES
AND
USE
TAX
FOR
23
2015.
Notwithstanding
section
422.9,
subsection
2,
paragraph
24
“i”,
Code
2016,
the
deduction
for
state
sales
and
use
taxes
is
25
allowable
under
section
422.9
for
tax
years
beginning
during
26
the
2015
calendar
year,
but
only
if
the
taxpayer
elected
to
27
deduct
the
state
sales
and
use
taxes
in
lieu
of
state
income
28
taxes
under
section
164
of
the
Internal
Revenue
Code.
The
29
deduction
for
state
sales
and
use
taxes
is
not
allowed
if
the
30
taxpayer
has
taken
the
deduction
for
state
income
taxes
or
31
claimed
the
standard
deduction
under
section
63
of
the
Internal
32
Revenue
Code.
33
Sec.
3.
BONUS
DEPRECIATION
FOR
2015.
34
1.
Notwithstanding
section
1
of
this
Act,
or
any
other
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provision
of
law
to
the
contrary,
the
additional
first-year
1
depreciation
allowance
authorized
in
section
168(k)
of
the
2
Internal
Revenue
Code,
as
enacted
by
Pub.
L.
No.
114-113,
§143,
3
does
not
apply
in
computing
net
income
for
state
tax
purposes
4
for
tax
years
ending
on
or
after
January
1,
2015,
but
before
5
January
1,
2016.
If
the
taxpayer
has
taken
the
additional
6
first-year
depreciation
allowance
for
purposes
of
computing
7
federal
adjusted
gross
income
or
federal
taxable
income,
as
8
the
case
may
be,
then
the
taxpayer,
when
computing
net
income
9
for
purposes
of
the
individual
income
tax
under
section
422.7
10
or
the
corporation
income
tax
or
franchise
tax
under
section
11
422.35,
shall
make
the
adjustments
described
in
section
422.7,
12
subsection
39A,
paragraphs
“a”
through
“c”,
Code
2016,
or
13
described
in
section
422.35,
subsection
19A,
paragraphs
“a”
14
through
“c”,
Code
2016,
as
applicable.
15
2.
In
addition
to
the
requirements
of
section
422.5,
16
subsection
2,
paragraph
“b”,
subparagraph
(1),
Code
2016,
17
for
purposes
of
the
state
alternative
minimum
taxable
income
18
calculation
in
section
422.5,
subsection
2,
paragraph
“b”,
19
subparagraph
(1),
to
the
extent
that
any
preference
or
20
adjustment
is
determined
by
an
individual’s
federal
adjusted
21
gross
income,
the
individual’s
federal
adjusted
gross
income
is
22
computed
in
accordance
with
subsection
1
of
this
section
for
23
tax
years
beginning
during
the
2015
calendar
year.
24
3.
In
addition
to
the
requirements
of
section
422.9,
25
subsection
2,
paragraph
“h”,
Code
2016,
for
purposes
of
26
calculating
the
deductions
in
section
422.9
that
are
authorized
27
under
the
Internal
Revenue
Code,
and
to
the
extent
that
28
any
such
deduction
is
determined
by
an
individual’s
federal
29
adjusted
gross
income,
the
individual’s
federal
adjusted
gross
30
income
is
computed
in
accordance
with
subsection
1
of
this
31
section
for
tax
years
beginning
during
the
2015
calendar
year.
32
Sec.
4.
EFFECTIVE
UPON
ENACTMENT.
This
Act,
being
deemed
of
33
immediate
importance,
takes
effect
upon
enactment.
34
Sec.
5.
RETROACTIVE
APPLICABILITY.
This
Act
applies
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retroactively
to
January
1,
2015.
1
EXPLANATION
2
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
3
the
explanation’s
substance
by
the
members
of
the
general
assembly.
4
This
bill
updates
for
2015
the
Iowa
Code
references
to
the
5
Internal
Revenue
Code
to
make
federal
income
tax
revisions
6
enacted
by
Congress
in
2015
applicable
for
a
certain
period
of
7
time,
to
allow
the
deduction
for
state
sales
and
use
tax,
and
8
to
decouple
with
certain
bonus
depreciation
provisions.
9
INTERNAL
REVENUE
CODE
REFERENCES.
The
bill
provides
that
10
notwithstanding
several
Code
provisions
as
specified
in
the
11
bill,
the
definitions
of
“Internal
Revenue
Code”
in
those
Code
12
provisions
and,
by
internal
reference,
in
other
sections
of
the
13
Iowa
Code
and
Iowa
Acts
shall
mean
the
Internal
Revenue
Code
14
in
effect
on,
or
as
amended
to
and
including,
January
1,
2016.
15
This
definition
change
applies
only
to
the
period
beginning
16
January
1,
2015,
and
ending
December
31,
2015,
and
for
tax
17
years
beginning
during
the
2015
calendar
year.
18
The
affected
Code
provisions
include
Code
sections
422.3
19
and
422.32,
general
definition
sections
in
the
chapter
of
the
20
Code
that
governs
corporate
and
individual
income
tax
and
the
21
franchise
tax,
and
Code
sections
15.335,
422.10,
and
422.33,
22
which
contain
references
to
the
Internal
Revenue
Code
for
the
23
state
research
activities
credit
for
individuals,
corporations,
24
and
corporations
in
economic
development
areas.
25
Code
section
422.9
provides
individuals
a
deduction
from
26
net
income
for
state
sales
and
use
taxes
if
the
individual
27
chose
to
deduct
sales
and
use
tax
in
lieu
of
state
income
taxes
28
or
the
standard
deduction
for
federal
income
tax
purposes.
29
This
deduction
was
set
to
expire
under
both
federal
and
Iowa
30
law
for
tax
years
beginning
on
or
after
January
1,
2015.
The
31
federal
Protecting
Americans
from
Tax
Hikes
Act
of
2015
made
32
the
federal
deduction
permanent.
The
bill
allows
the
Iowa
33
deduction
for
tax
years
beginning
during
the
2015
calendar
34
year.
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2137
BONUS
DEPRECIATION.
The
bill
decouples,
for
Iowa
income
tax
1
purposes
for
tax
years
ending
on
or
after
January
1,
2015,
but
2
before
January
1,
2016,
from
the
federal
additional
first-year
3
depreciation
allowance
in
section
168(k)
of
the
Internal
4
Revenue
Code
(bonus
depreciation)
which
was
modified
and
5
extended
through
2019
by
the
federal
Protecting
Americans
from
6
Tax
Hikes
Act
of
2015.
Taxpayers
who
claim
bonus
depreciation
7
for
federal
tax
purposes
are,
for
the
applicable
tax
year,
8
required
to
add
such
depreciation
amounts
back
to
Iowa
net
9
income,
but
are
then
allowed
under
existing
state
law
to
deduct
10
the
amount
of
depreciation
that
would
otherwise
be
allowable
11
under
federal
law,
without
regard
to
the
bonus
depreciation
12
allowance.
13
Under
current
law,
taxpayers
are
in
some
instances
required,
14
when
calculating
alternative
minimum
tax
under
Code
section
15
422.5(2)
and
itemized
deductions
under
Code
section
422.9(2),
16
to
recompute
their
federal
adjusted
gross
income
to
take
17
into
account
the
fact
that
Iowa
has
decoupled
from
bonus
18
depreciation.
The
bill
provides
that
taxpayers
must
make
those
19
same
adjustments
to
federal
adjusted
gross
income
for
tax
year
20
2015
to
account
for
the
fact
that
Iowa
has
decoupled
from
bonus
21
depreciation
as
described
above.
22
The
bill
takes
effect
upon
enactment
and
applies
23
retroactively
to
January
1,
2015.
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