Text: S03591 Text: S03593 Text: S03500 - S03599 Text: S Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Amend the amendment, S-3591, to the House 1 2 amendment, S-3082, to Senate File 69, as passed by the 1 3 Senate, as follows: 1 4 #1. Page 25, by inserting after line 11 the 1 5 following: 1 6 "DIVISION ___ 1 7 SUBCHAPTER S CORPORATIONS 1 8 Sec. . Section 422.5, subsection 1, paragraph 1 9 j, Code 1995, is amended by adding the following new 1 10 unnumbered paragraph: 1 11 NEW UNNUMBERED PARAGRAPH. The tax imposed upon the 1 12 taxable income of a resident shareholder in a 1 13 corporation which has in effect for the tax year an 1 14 election under subchapter S of the Internal Revenue 1 15 Code and carries on business within and without the 1 16 state shall be computed by reducing the amount 1 17 determined pursuant to paragraphs "a" through "i" by 1 18 the amounts of nonrefundable credits under this 1 19 division and by multiplying this resulting amount by a 1 20 fraction of which the resident's net income allocated 1 21 to Iowa, as determined in section 422.8, subsection 2, 1 22 paragraph "b", is the numerator and the resident's 1 23 total net income computed under section 422.7 is the 1 24 denominator. This paragraph also applies to 1 25 individuals who are residents of Iowa for less than 1 26 the entire tax year. 1 27 Sec. . Section 422.5, subsection 1, paragraph 1 28 k, unnumbered paragraph 4, Code 1995, is amended to 1 29 read as follows: 1 30 In the case of a resident, including a resident 1 31 estate or trust, the state's apportioned share of the 1 32 state alternative minimum tax is one hundred percent 1 33 of the state alternative minimum tax computed in this 1 34 subsection. In the case of a resident or part year 1 35 resident shareholder in a corporation which has in 1 36 effect for the tax year an election under subchapter S 1 37 of the Internal Revenue Code and carries on business 1 38 within and without the state, a nonresident, including 1 39 a nonresident estate or trust, or an individual, 1 40 estate, or trust that is domiciled in the state for 1 41 less than the entire tax year, the state's apportioned 1 42 share of the state alternative minimum tax is the 1 43 amount of tax computed under this subsection, reduced 1 44 by the applicable credits in sections 422.10 through 1 45 422.12 and this result multiplied by a fraction with a 1 46 numerator of the sum of state net income allocated to 1 47 Iowa as determined in section 422.8, subsection 2, 1 48 paragraph "a" or "b" as applicable, plus tax 1 49 preference items, adjustments, and losses under 1 50 subparagraph (1) attributable to Iowa and with a 2 1 denominator of the sum of total net income computed 2 2 under section 422.7 plus all tax preference items, 2 3 adjustments, and losses under subparagraph (1). In 2 4 computing this fraction, those items excludable under 2 5 subparagraph (1) shall not be used in computing the 2 6 tax preference items. Married taxpayers electing to 2 7 file separate returns or separately on a combined 2 8 return must allocate the minimum tax computed in this 2 9 subsection in the proportion that each spouse's 2 10 respective preference items, adjustments, and losses 2 11 under subparagraph (1) bear to the combined preference 2 12 items, adjustments, and losses under subparagraph (1) 2 13 of both spouses. 2 14 Sec. . Section 422.8, subsection 2, Code 1995, 2 15 is amended to read as follows: 2 16 2. a. Nonresident's net income allocated to Iowa 2 17 is the net income, or portion thereof, which is 2 18 derived from a business, trade, profession, or 2 19 occupation carried on within this state or income from 2 20 any property, trust, estate, or other source within 2 21 Iowa. However, income derived from a business, trade, 2 22 profession, or occupation carried on within this state 2 23 and income from any property, trust, estate, or other 2 24 source within Iowa shall not include distributions 2 25 from pensions, including defined benefit or defined 2 26 contribution plans, annuities, individual retirement 2 27 accounts, and deferred compensation plans or any 2 28 earnings attributable thereto so long as the 2 29 distribution is directly related to an individual's 2 30 documented retirement and received while the 2 31 individual is a nonresident of this state. If a 2 32 business, trade, profession, or occupation is carried 2 33 on partly within and partly without the state, only 2 34 the portion of the net income which is fairly and 2 35 equitably attributable to that part of the business, 2 36 trade, profession, or occupation carried on within the 2 37 state is allocated to Iowa for purposes of section 2 38 422.5, subsection 1, paragraph "j", and section 422.13 2 39 and income from any property, trust, estate, or other 2 40 source partly within and partly without the state is 2 41 allocated to Iowa in the same manner, except that 2 42 annuities, interest on bank deposits and interest- 2 43 bearing obligations, and dividends are allocated to 2 44 Iowa only to the extent to which they are derived from 2 45 a business, trade, profession, or occupation carried 2 46 on within the state. 2 47 b. A resident's income allocable to Iowa is the 2 48 income determined under section 422.7 reduced by items 2 49 of income and expenses from a subchapter S corporation 2 50 which pass directly to the shareholders under 3 1 provisions of the Internal Revenue Code and increased 3 2 by the greater of the following: 3 3 (1) The net income or loss of the corporation 3 4 which is fairly and equitably attributable to this 3 5 state under section 422.33, subsections 2 and 3. 3 6 (2) The taxpayer's pro rata share of an amount 3 7 deemed distributed to shareholders which when added to 3 8 the salaries, wages, or other compensation for 3 9 services performed by all shareholders will equal ten 3 10 percent of the net income of the corporation computed 3 11 in accordance with section 422.35 and considering 3 12 items of income and expense which pass directly to the 3 13 shareholders under provisions of the Internal Revenue 3 14 Code before deduction of shareholder's salaries, 3 15 wages, or other compensation for services performed. 3 16 (3) Any cash or the value of any property 3 17 distributions made to the extent they are paid from 3 18 income upon which Iowa income tax has not been paid as 3 19 determined under rules of the director. 3 20 Sec. . Section 422.8, Code 1995, is amended by 3 21 adding the following new subsection: 3 22 NEW SUBSECTION. 6. If the resident or part year 3 23 resident is a shareholder of a corporation which has 3 24 in effect an election under subchapter S of the 3 25 Internal Revenue Code, subsections 1 and 3 do not 3 26 apply to any income taxes paid to another state or 3 27 foreign country on the income from the corporation 3 28 which has in effect an election under subchapter S of 3 29 the Internal Revenue Code. 3 30 Sec. . This division of this Act, being deemed 3 31 of immediate importance, takes effect upon enactment 3 32 and applies retroactively to January 1, 1995, for tax 3 33 years beginning on or after that date." 3 34 #2. Page 25, line 30, by inserting after the word 3 35 "computers," the following: "and the treatment of 3 36 income from subchapter S corporations,". 3 37 #3. By renumbering as necessary. 3 38 3 39 3 40 3 41 WAYNE BENNETT 3 42 MARY A. LUNDBY 3 43 ANDY McKEAN 3 44 O. GENE MADDOX 3 45 LYLE E. ZIEMAN 3 46 JOANN DOUGLAS 3 47 NANCY BOETTGER 3 48 H. KAY HEDGE 3 49 DONALD B. REDFERN 3 50 WILMER RENSINK 4 1 JIM LIND 4 2 MARY KRAMER 4 3 MAGGIE TINSMAN 4 4 MERLIN E. BARTZ 4 5 SHELDON RITTMER 4 6 JACK RIFE 4 7 STEWART IVERSON, JR. 4 8 RICHARD F. DRAKE 4 9 MARY LOU FREEMAN 4 10 BRAD BANKS 4 11 DERRYL McLAREN 4 12 JOHN W. JENSEN 4 13 ALLEN BORLAUG 4 14 SF 69.530 76 4 15 SC/JW
Text: S03591 Text: S03593 Text: S03500 - S03599 Text: S Index Bills and Amendments: General Index Bill History: General Index
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