Text: HSB00509 Text: HSB00511 Text: HSB00500 - HSB00599 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. REPEAL OF INDIVIDUAL INCOME TAX CREDITS AND
1 2 EXEMPTIONS. The following income tax credits and exemptions
1 3 shall not apply to the computation of individual income taxes
1 4 pursuant to chapter 422, division II, for tax years beginning
1 5 on or after January 1, 1999, and for subsequent tax years:
1 6 1. The adjustments to arrive at net income pursuant to
1 7 section 422.7, subsections 1 through 34.
1 8 2. The deductions from net income pursuant to section
1 9 422.9, subsections 1 through 5.
1 10 3. Research activities credit pursuant to section 422.10.
1 11 4. New jobs tax credit pursuant to section 422.11A.
1 12 5. Minimum tax credit pursuant to section 422.11B.
1 13 6. Seed capital credit pursuant to section 422.11C.
1 14 7. Personal exemption credit pursuant to section 422.12.
1 15 8. Tuition credit pursuant to section 422.12.
1 16 9. Earned income tax credit pursuant to section 422.12B.
1 17 10. Child and dependent care credit pursuant to section
1 18 422.12C.
1 19 11. Income tax checkoff for the Iowa election campaign
1 20 fund pursuant to section 56.18.
1 21 12. Income tax checkoff for the Iowa state fair foundation
1 22 pursuant to section 422.12D.
1 23 Sec. 2. REPEAL OF BUSINESS INCOME TAX CREDITS AND
1 24 EXEMPTIONS. The following business income tax credits and
1 25 exemptions shall not apply to the computation of the corporate
1 26 income taxes pursuant to chapter 422, division III, for tax
1 27 years beginning on or after January 1, 1999, and for
1 28 subsequent tax years:
1 29 1. State tax credit for increasing research activities in
1 30 this state pursuant to section 422.33, subsection 5.
1 31 2. New jobs tax credit pursuant to section 422.33,
1 32 subsection 6.
1 33 3. Minimum tax credit pursuant to section 422.33,
1 34 subsection 7.
1 35 4. Seed capital credit pursuant to section 422.33,
2 1 subsection 8.
2 2 5. Fifty percent of the federal income tax paid or accrued
2 3 pursuant to section 422.35, subsection 4.
2 4 6. Additional wage deduction for handicapped persons and
2 5 persons on probation and parole pursuant to section 422.35,
2 6 subsections 6 and 6A.
2 7 7. Deduction for amount of federal alcohol fuel credit
2 8 pursuant to section 422.35, subsection 7.
2 9 8. Adjustments for sale-leaseback agreements pursuant to
2 10 section 422.35, subsection 8.
2 11 9. Deduction for loss on the sale or exchange of a share
2 12 of a regulated investment company pursuant to section 422.35,
2 13 subsection 12.
2 14 10. Deduction for interest earned from bonds and notes
2 15 issued by the agricultural development authority pursuant to
2 16 section 422.35, subsection 13.
2 17 11. Deduction for annual registration fees paid for a
2 18 multipurpose vehicle pursuant to section 422.35, subsection
2 19 15.
2 20 12. Deduction for depreciation computed on a speculative
2 21 shell building pursuant to section 422.35, subsection 16.
2 22 Sec. 3. REPEAL OF SALES TAX EXEMPTIONS. The gross
2 23 receipts from the sales of the following property and services
2 24 shall not be exempt from taxation pursuant to chapter 422,
2 25 division IV, for the fiscal year beginning July 1, 1999, and
2 26 for each subsequent fiscal year:
2 27 1. Gross receipts from the sales of transportation
2 28 services pursuant to section 422.45, subsection 2.
2 29 2. Gross receipts from the sales of educational,
2 30 religious, or charitable purposes pursuant to section 422.45,
2 31 subsection 3.
2 32 3. Gross receipts from services rendered and sales of
2 33 goods used for public purposes pursuant to section 422.45,
2 34 subsection 5.
2 35 4. Gross receipts from casual sales pursuant to section
3 1 422.45, subsection 6.
3 2 5. Refunds of sales and use taxes paid by private
3 3 nonprofit organizations, tax certifying public agencies, state
3 4 agencies, and municipalities to contractors for goods and
3 5 services furnished to the private nonprofit and public
3 6 agencies pursuant to 422.45, subsection 7.
3 7 6. Gross receipts from sales of goods and services to
3 8 private nonprofit educational institutions pursuant to section
3 9 422.45, subsection 8.
3 10 7. Gross receipts from the sales of newspapers and
3 11 shoppers guides pursuant to section 422.45, subsection 9.
3 12 8. Gross receipts from the sales of tangible personal
3 13 property used as railroad rolling stock pursuant to section
3 14 422.45, subsection 10.
3 15 9. Gross receipts from the sales of motor fuel or special
3 16 fuel consumed for highway use or in watercraft or aircraft
3 17 where the fuel tax has been paid and no refund is allowed and
3 18 gross receipts from the sales of ethanol blended gasoline
3 19 pursuant to section 422.45, subsection 11.
3 20 10. Gross receipts from the sales of all foods for human
3 21 consumption pursuant to section 422.45, subsection 12.
3 22 11. Gross receipts from the sales or rental of
3 23 prescription drugs and medical devices intended for human use
3 24 or consumption pursuant to section 422.45, subsection 13.
3 25 12. Gross receipts from the sales of draft horses pursuant
3 26 to section 422.45, subsection 17.
3 27 13. Gross receipts from the sales of tangible personal
3 28 property, except a vehicle subject to registration, to a
3 29 person engaged in leasing pursuant to section 422.45,
3 30 subsection 18.
3 31 14. Gross receipts from the sales of property which is a
3 32 container, label, carton, packing, or similar material sold to
3 33 retailers or manufacturers for packaging purposes pursuant to
3 34 section 422.45, subsection 19.
3 35 15. Gross receipts from the sales or services provided by
4 1 a city or a county except those sales and services provided by
4 2 a city or county in its proprietary capacity, pursuant to
4 3 section 422.45, subsection 20.
4 4 16. Gross receipts from the sales by a trade shop to a
4 5 printer of lithographic-offset plates, photoengraved plates,
4 6 engravings, and other materials pursuant to section 422.45,
4 7 subsection 21.
4 8 17. Gross receipts from the sales or rental of goods or
4 9 services to a variety of nonprofit corporations such as
4 10 residential care facilities, rehabilitation facilities,
4 11 community mental health care facilities and community health
4 12 care facilities pursuant to section 422.45, subsection 22.
4 13 18. Gross receipts from the sales of special fuel for
4 14 diesel engines used in the operation of ships, barges, or
4 15 waterborne vessels for water transportation purposes pursuant
4 16 to section 422.45, subsection 23.
4 17 19. Gross receipts from the rental of motion picture
4 18 films, video and audio tapes, records, photos, or other media
4 19 pursuant to section 422.45, subsection 24.
4 20 20. Gross receipts from services rendered by specialized
4 21 flying implements of husbandry used for spraying and charter
4 22 transportation services pursuant to section 422.45, subsection
4 23 25.
4 24 21. Gross receipts from the sale or rental of farm
4 25 machinery and equipment pursuant to section 422.45, subsection
4 26 26.
4 27 22. Gross receipts from the sale or rental of industrial
4 28 machinery, equipment, and computers pursuant to section
4 29 422.45, subsection 27.
4 30 23. Gross receipts from the providing of a service to
4 31 design and install new machinery or equipment pursuant to
4 32 section 422.45, subsection 29.
4 33 24. Gross receipts from the sale of wood chips, hay,
4 34 straw, paper, and materials for bedding in the production of
4 35 livestock or fowl pursuant to section 422.45, subsection 30.
5 1 25. Gross receipts from the sale of raffle tickets
5 2 pursuant to section 422.45, subsection 32.
5 3 26. Gross receipts from the sale of automotive fluids to a
5 4 retailer to be used in a service which includes the
5 5 installation or application of the fluids to an automobile
5 6 pursuant to section 422.45, subsection 33.
5 7 27. Gross receipts from the sale, furnishing, or service
5 8 of gas, electricity, water, or heat to be used in implements
5 9 of husbandry engaged in agricultural production pursuant to
5 10 section 422.45, subsection 34.
5 11 28. Gross receipts from the sale of tangible personal
5 12 property which will be given as prizes to players in games of
5 13 skill, games of chance, raffles, and bingo games pursuant to
5 14 section 422.45, subsection 35.
5 15 29. Gross receipts from the sale of tangible personal
5 16 property to a nonprofit organization which was organized for
5 17 the purpose of lending the property to the general public for
5 18 use for nonprofit purposes pursuant to section 422.45,
5 19 subsection 36.
5 20 30. Gross receipts from the sale or rental of property or
5 21 services performed or furnished by a nonprofit legal aid
5 22 organization pursuant to section 422.45, subsection 37.
5 23 31. Gross receipts from the sale or rental of aircraft and
5 24 ancillary parts and services for use in a scheduled interstate
5 25 commercial air service pursuant to section 422.45, subsections
5 26 38 and 38A.
5 27 32. Gross receipts from the sale or rental of farm
5 28 machinery and equipment pursuant to section 422.45, subsection
5 29 39.
5 30 33. Gross receipts from the sale of a modular home
5 31 pursuant to section 422.45, subsection 40.
5 32 34. Gross receipts from the sale of motion picture films,
5 33 video and audio tapes, and other media to a person who is
5 34 regularly engaged in the business of leasing, renting, or
5 35 selling this property pursuant to section 422.45, subsection
6 1 41.
6 2 35. Gross receipts from the sale or rental of farm
6 3 irrigation equipment pursuant to section 422.45, subsection
6 4 42.
6 5 36. Gross receipts of all sales of goods, wares,
6 6 merchandise, or services used for educational, scientific,
6 7 historic preservation, or aesthetic purposes to a nonprofit
6 8 private museum pursuant to section 422.45, subsection 43.
6 9 37. Gross receipts from the sale of tangible personal
6 10 property or the sale, furnishing, or servicing of electrical
6 11 energy, gas, or communication service to another state or
6 12 political subdivision of another state if the other state
6 13 provides a reciprocal exemption pursuant to section 422.45,
6 14 subsection 44.
6 15 38. Gross receipts from the sale of tangible personal
6 16 property consisting of advertising material including paper to
6 17 a person in Iowa if the advertising material is subsequently
6 18 used exclusively outside of this state pursuant to section
6 19 422.45, subsection 45.
6 20 39. Gross receipts from the sale of property which the
6 21 seller transfers to a carrier for shipment outside of the
6 22 state pursuant to section 422.45, subsection 46.
6 23 40. Gross receipts from the sale of wind energy conversion
6 24 property used as an electric power source and the sale of
6 25 materials used to manufacture, install, or construct wind
6 26 energy conversion property pursuant to section 422.45,
6 27 subsection 48.
6 28 41. Gross receipts from services rendered, furnished, or
6 29 performed by the statewide notification center relating to
6 30 excavations affecting underground utilities pursuant to
6 31 section 422.45, subsection 49.
6 32 However, taxes paid on the gross receipts of accounts
6 33 receivable which are found to be worthless or uncollectible
6 34 may be credited against a subsequent payment of taxes due
6 35 pursuant to section 422.46 for the fiscal year beginning July
7 1 1, 1999, and for subsequent fiscal years.
7 2 Refunds authorized for relief agencies and purchasers of
7 3 industrial machinery, computers, farm machinery, and other
7 4 agricultural implements pursuant to sections 422.47 through
7 5 422.47C are repealed for the fiscal year beginning July 1,
7 6 1999, and for subsequent fiscal years.
7 7 Sec. 4. Section 422.42, subsection 6, Code Supplement
7 8 1995, is amended by striking the subsection and inserting in
7 9 lieu thereof the following:
7 10 6. "Gross taxable services" means the total amount
7 11 received in money, credits, property, or other consideration,
7 12 valued in money, from services rendered, furnished, or
7 13 performed in this state except where the service is performed
7 14 in tangible personal property delivered in to interstate
7 15 commerce. Taxes paid on gross taxable services represented by
7 16 accounts found to be worthless and actually charged off for
7 17 income tax purposes may be credited upon a subsequent payment
7 18 of the tax due, but if any accounts are collected by the
7 19 taxpayer, a tax shall be paid upon the amounts so collected.
7 20 Sec. 5. Section 422.42, subsection 14, Code Supplement
7 21 1995, is amended by striking the subsection and inserting in
7 22 lieu thereof the following:
7 23 14. "Retail sale" or "sale at retail" means the sale to a
7 24 consumer or to any person for any purpose, other than for
7 25 processing, for resale of tangible personal property or
7 26 taxable services, or for resale of tangible personal property
7 27 in connection with taxable services; and includes the sale of
7 28 gas, electricity, water, and communication service to retail
7 29 consumers or users.
7 30 Sec. 6. FINANCIAL INSTITUTIONS. The exemption of $40,000
7 31 and a minimum tax credit allowed in calculating the tax
7 32 liability of financial institutions pursuant to section 422.60
7 33 are repealed, effective for tax years beginning on or after
7 34 January 1, 1999, and for subsequent tax years.
7 35 Sec. 7. FUEL TAX CREDIT. The income tax credit in lieu of
8 1 the fuel tax refund which is authorized pursuant to sections
8 2 422.110 through 422.112 is repealed, effective for tax years
8 3 beginning on or after January 1, 1999, and for subsequent tax
8 4 years.
8 5 Sec. 8. REPEAL OF USE TAX EXEMPTIONS. The use in this
8 6 state of the following tangible personal property shall not be
8 7 exempt from taxation pursuant to chapter 423 for the fiscal
8 8 year beginning July 1, 1999, and for each subsequent fiscal
8 9 year:
8 10 1. All articles of personal property brought into this
8 11 state by a nonresident for the nonresident's use and enjoyment
8 12 while within the state pursuant to section 423.4, subsection
8 13 2.
8 14 2. Advertisement and promotional material stored in this
8 15 state pursuant to section 423.4, subsection 5.
8 16 3. Tangible personal property used as railroad rolling
8 17 stock for transportation purposes pursuant to section 423.4,
8 18 subsection 6.
8 19 4. Vehicles as defined in section 321.1, subsections 41,
8 20 65, 71, 85, and 88, except those subject to registration and
8 21 use pursuant to section 423.4, subsection 7.
8 22 5. Tangible personal property which by means of
8 23 fabrication or manufacturing becomes an integral part of
8 24 vehicles defined in section 321.1, subsections 41, 65, 71, 85,
8 25 and 88, pursuant to section 423.4, subsection 8.
8 26 6. Tangible personal property used or to be used as a
8 27 ship, barge, or waterborne vessel which is used to transport
8 28 goods for hire or as materials or parts of the ship, barge, or
8 29 waterborne vessel pursuant to section 423.4, subsection 13.
8 30 Sec. 9. PROPERTY TAX CREDITS AND EXEMPTIONS. The
8 31 following property tax credits and exemptions from value shall
8 32 not apply to the computation of property taxes pursuant to
8 33 chapters 425 through 449 for the fiscal year beginning July 1,
8 34 1998, which are payable in the fiscal year beginning July 1,
8 35 1999, and for subsequent fiscal years:
9 1 1. Urban revitalization exemption pursuant to chapter 404.
9 2 2. Homestead credit not to exceed the actual levy on the
9 3 first $4,850 of actual value of each eligible homestead
9 4 pursuant to sections 425.1 through 425.15.
9 5 3. Elderly, low-income, and disabled property tax credits
9 6 pursuant to sections 425.16 through 425.40.
9 7 4. Family farm tax credit pursuant to chapter 425A.
9 8 5. Agricultural land tax credit pursuant to chapter 426.
9 9 6. Military service and property tax credits and
9 10 exemptions pursuant to chapter 426A and sections 427.3 through
9 11 427.7.
9 12 7. Pollution control equipment and recycling exemption
9 13 pursuant to section 427.1, subsection 32.
9 14 8. Impoundment structures tax exemption pursuant to
9 15 section 427.1, subsection 33.
9 16 9. Low-rent housing tax credit pursuant to section 427.1,
9 17 subsection 34.
9 18 10. Wetland and prairies tax exemption pursuant to section
9 19 427.1, subsections 36 and 37.
9 20 11. Wildlife habitat exemption pursuant to section 427.1,
9 21 subsection 38.
9 22 12. Speculative shell building exemption pursuant to
9 23 section 427.1, subsection 41.
9 24 13. Methane gas conversion exemption pursuant to section
9 25 427.1, subsection 43.
9 26 14. Industrial property exemption pursuant to sections
9 27 427B.1 through 427B.6.
9 28 15. Cattle facilities exemption pursuant to section
9 29 427B.7.
9 30 16. Machinery and equipment exemption pursuant to sections
9 31 427B.17 through 427B.19B.
9 32 17. Wind energy property exemption pursuant to section
9 33 427B.26.
9 34 18. Forest and fruit-tree reservation exemptions pursuant
9 35 to chapter 427C.
10 1 Sec. 10. INHERITANCE TAX. The following tax exemptions
10 2 shall not apply to the computation of the inheritance tax
10 3 pursuant to chapter 450 for estates of decedents dying on or
10 4 after July 1, 1999.
10 5 1. The first $10,000 after deducting liabilities pursuant
10 6 to section 450.4.
10 7 2. The property that passes for charitable, educational,
10 8 or religious purposes pursuant to section 450.4.
10 9 3. The property that passes to public libraries, art
10 10 galleries, hospitals, or cities pursuant to section 450.4.
10 11 4. Bequests for care and maintenance of cemeteries or
10 12 burial lots pursuant to section 450.4.
10 13 5. The portion of an annuity to be received by a
10 14 beneficiary pursuant to an employee retirement or pension plan
10 15 as provided in section 450.4.
10 16 6. On property of an individual development account
10 17 pursuant to section 450.4.
10 18 7. The individual exemptions allowed pursuant to section
10 19 459.9, subsections 1 through 4.
10 20 Sec. 11. EFFECTIVE DATE. Sections 4 and 5 of this Act
10 21 take effect July 1, 1999.
10 22 Sec. 12. IMPLEMENTATION OF STATE MANDATE. Section 25B.2,
10 23 subsection 3, does not apply to this Act.
10 24 EXPLANATION
10 25 The bill repeals in three years the tax credits,
10 26 exemptions, and deductions that presently apply to the state
10 27 individual and corporate income taxes, franchise taxes,
10 28 inheritance taxes, sales and use taxes, and property taxes.
10 29 Tax exemptions for motor fuel taxes and special fuel taxes
10 30 which apply to sales out-of-state, to the federal government,
10 31 to other political subdivisions, and to other public agencies
10 32 such as urban transit entities are not repealed.
10 33 This bill does not include the corresponding amendments and
10 34 repealers to finally implement the elimination of the tax
10 35 exemptions and credits.
11 1 The state is excluded from any potential costs of a state
11 2 mandate.
11 3 LSB 3235YC 76
11 4 tj/jw/5
Text: HSB00509 Text: HSB00511 Text: HSB00500 - HSB00599 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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