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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