Text: HSB00324 Text: HSB00326 Text: HSB00300 - HSB00399 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. Section 422.61, subsection 2, Code 1995, is
1 2 amended by adding the following new paragraph:
1 3 NEW PARAGRAPH. f. A deduction shall not be allowed for
1 4 that portion of the taxpayer's expenses computed under this
1 5 paragraph which is allocable to the investment in
1 6 subsidiaries. The portion of the taxpayer's expenses which is
1 7 allocable to the investment in subsidiaries is an amount which
1 8 bears the same ratio to the taxpayer's expenses as the
1 9 taxpayer's average adjusted bases, as computed pursuant to
1 10 section 1016 of the Internal Revenue Code, of investment in
1 11 subsidiaries bears to the average adjusted bases for all
1 12 assets of the taxpayer.
1 13 Sec. 2. This Act, being deemed of immediate importance,
1 14 takes effect upon enactment and applies retroactively to
1 15 January 1, 1995, for tax years beginning on or after that
1 16 date.
1 17 EXPLANATION
1 18 The bill amends the franchise tax to disallow the expenses
1 19 related to investments in subsidiaries of financial
1 20 institutions. To counteract the loss of franchise tax revenue
1 21 caused by financial institutions setting up subsidiaries and
1 22 transferring interest-producing assets to them, the bill
1 23 disallows the deduction of a pro rata portion of all expenses.
1 24 The expenses are disallowed in the ratio of the investment in
1 25 subsidiaries to total assets.
1 26 The bill is retroactive to January 1, 1995, for tax years
1 27 beginning on or after that date.
1 28 LSB 2628HC 76
1 29 mg/cf/24
Text: HSB00324 Text: HSB00326 Text: HSB00300 - HSB00399 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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