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PAG LIN
1 1 Section 1. Section 422.73, Code 1995, is amended by adding
1 2 the following new subsection:
1 3 NEW SUBSECTION. 3. a. Notwithstanding subsection 2, a
1 4 claim for credit or refund of individual income tax paid for
1 5 any tax year beginning on or after January 1, 1985, and before
1 6 January 1, 1989, is considered timely if filed with the
1 7 department on or before April 30, 1996, if the taxpayer's
1 8 claim is the result of the unconstitutional taxation of
1 9 federal pension benefits based upon the decision in Davis v.
1 10 Michigan Department of Treasury, 489 U.S. 803, 109 S. Ct. 1500
1 11 (1989).
1 12 b. A taxpayer entitled to a credit or refund of tax paid
1 13 under this subsection shall receive an amount equal to ninety-
1 14 five percent of the credit or refund plus interest with
1 15 interest not accruing after January 12, 1994. The claim for
1 16 credit or refund may be made on the income tax return for the
1 17 tax years beginning in the 1995, 1996, and 1997 calendar years
1 18 with only one-third of the amount being taken in any tax year.
1 19 If the taxpayer does not owe tax or the credit is in excess of
1 20 the tax computed, the taxpayer may claim a refund of the
1 21 excess or carry forward the excess credit to the following tax
1 22 year. A credit carried forward may be used in addition to the
1 23 other one-third amount.
1 24 c. If the taxpayer does not wish to claim any amount of
1 25 credit for an income tax year, the taxpayer may apply to the
1 26 department for special tax payment certificates. These
1 27 certificates shall entitle the person named on the certificate
1 28 to use the certificate as payment for all or a portion of
1 29 state tax designated in paragraph "d" due to the state from
1 30 the person named on the certificate. The certificates shall
1 31 be made out in denominations of twenty dollars, fifty dollars,
1 32 and one hundred dollars and shall be dated to indicate when
1 33 the certificate becomes valid so that, as near as possible,
1 34 the taxpayer shall only receive one-third of the amount
1 35 allowed under this subsection in the 1995-1996, 1996-1997, and
2 1 1997-1998 fiscal years.
2 2 d. The taxes for which the special tax payment
2 3 certificates may be used are any of the following:
2 4 (1) State individual income tax.
2 5 (2) State sales and services tax.
2 6 (3) State use tax.
2 7 (4) Real estate transfer tax.
2 8 (5) Inheritance tax.
2 9 (6) Generation skipping transfer tax.
2 10 (7) Iowa estate tax.
2 11 The person collecting the tax listed in this paragraph,
2 12 after verifying the identity of the taxpayer, shall give the
2 13 taxpayer credit in the amount of the certificate received.
2 14 However, the certificate shall not exceed the amount of the
2 15 tax due. The collector of the tax who receives the
2 16 certificate shall submit it with other collections to the
2 17 department as required by law for that tax and it shall be
2 18 counted as if it was a regular tax payment.
2 19 EXPLANATION
2 20 A recent Iowa supreme court decision held that retired
2 21 federal employees could retroactively claim a refund on state
2 22 individual income taxes unlawfully imposed on their pensions
2 23 if the claim was timely filed. This bill provides that a
2 24 claim filed by April 30, 1996, is timely filed for taxes
2 25 imposed for the 1985, 1986, 1987, and 1988 tax years. The
2 26 taxpayer is entitled to 95 percent of the credit or refund
2 27 plus interest with no interest accruing after January 12,
2 28 1994.
2 29 The credit or refund may be used or received for the 1995,
2 30 1996, and 1997 income tax years but in an amount equal to no
2 31 more than one-third of the total credit or refund in each of
2 32 those tax years. However, if the taxpayer does not wish to
2 33 take the credit or refund through the income tax, the taxpayer
2 34 may receive special tax payment certificates from the
2 35 department of revenue and finance which would permit the
3 1 taxpayer to pay certain state taxes owed by means of these
3 2 certificates. One-third of the amount would be valid
3 3 beginning with the first three fiscal years beginning on and
3 4 after July 1, 1995. The taxpayer would offer these
3 5 certificates to the collector of the state tax when due and if
3 6 the amount of the certificate does not exceed the tax owed the
3 7 collector would accept the certificate as all or part payment
3 8 for the tax owed. The collector would get credit for the
3 9 certificate when submitting it with the other tax collections
3 10 to the department.
3 11 LSB 1206YH 76
3 12 mg/jj/8
Text: HF00212 Text: HF00214 Text: HF00200 - HF00299 Text: HF Index Bills and Amendments: General Index Bill History: General Index
Iowa General Assembly
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