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1 1 Section 1. Section 422.73, Code 1995, is amended by adding
1 2 the following new subsection:
1 3 NEW SUBSECTION. 3. Notwithstanding subsection 2, a claim
1 4 for refund of individual income tax paid for any tax year
1 5 beginning on or after January 1, 1985, and before January 1,
1 6 1989, is considered timely if filed with the department on or
1 7 before October 31, 1996, if the taxpayer's claim is the result
1 8 of the unconstitutional taxation of federal pension benefits
1 9 based upon the decision in Davis v. Michigan Department of
1 10 Treasury, 489 U.S. 803, 109 S. Ct. 1500 (1989).
1 11 A taxpayer entitled to a refund of tax paid under this
1 12 subsection shall receive an amount equal to one hundred
1 13 percent of the refund without interest. The claim for refund
1 14 shall be filed separate from any income tax return and shall
1 15 not be allowed as a credit for income taxes owed. A claim
1 16 shall be filed between the effective date of this subsection
1 17 and October 31, 1996. An extension for filing shall not be
1 18 allowed and claims disallowed on the basis of timeliness shall
1 19 not be allowed upon appeal to any other state agency
1 20 notwithstanding any other provision of law.
1 21 The claim for refund shall be made on claim forms to be
1 22 made available by the department. In order for a taxpayer to
1 23 have a valid refund claim, the taxpayer must supply legible
1 24 copies of documents the director deems necessary to show
1 25 entitlement to the refund, including but not limited to income
1 26 tax forms and W-2P forms, which will establish the state
1 27 income tax that was paid on the federal pension benefits for
1 28 the tax years in question. The burden of proof is on the
1 29 taxpayer to show that the claim for refund is valid. Estates
1 30 are not entitled to file a claim for refund under this
1 31 subsection. However, if a taxpayer has filed a claim under
1 32 this subsection and subsequently dies before receipt of the
1 33 refund, the taxpayer's estate is entitled to receipt of any
1 34 valid refund claim. A spouse of a deceased taxpayer who was
1 35 the spouse of the taxpayer when the unconstitutional tax was
2 1 imposed may file a claim for refund without reopening the
2 2 deceased taxpayer's estate.
2 3 The department shall make a reasonable attempt to notify
2 4 individuals who are entitled to a refund under this
2 5 subsection.
2 6 Sec. 2. DEPARTMENT OF REVENUE AND FINANCE – PROCESSING
2 7 REFUND CLAIMS. There is appropriated from the general fund of
2 8 the state to the department of revenue and finance for the
2 9 fiscal year beginning July 1, 1995, and ending June 30, 1996,
2 10 an amount up to $75,000 for processing refund claims timely
2 11 filed pursuant to section 422.73, subsection 3, as enacted in
2 12 section 1 of this Act.
2 13 Notwithstanding section 8.33, moneys appropriated in this
2 14 section which remain unexpended or unobligated at the close of
2 15 the fiscal year shall not revert to the general fund of the
2 16 state but shall remain available for expenditure in the
2 17 succeeding fiscal year for the purposes of processing refund
2 18 claims as provided in this section and the moneys are not
2 19 subject to transfer under section 8.39.
2 20 Sec. 3. This Act, being deemed of immediate importance,
2 21 takes effect upon enactment.
2 22 EXPLANATION
2 23 A recent Iowa supreme court decision held that retired
2 24 federal employees could retroactively claim a refund of state
2 25 individual income taxes unlawfully imposed on their pensions
2 26 if the claim was timely filed. This bill provides that a
2 27 claim filed by October 31, 1996, is timely filed for taxes
2 28 imposed for the 1985, 1986, 1987, and 1988 tax years. The
2 29 taxpayer is entitled to 100 percent of the refund without
2 30 interest. To claim a refund, the taxpayer must submit
2 31 adequate evidence, as designated by the director of revenue
2 32 and finance, showing the taxpayer's entitlement to the refund.
2 33 The claim is to be filed separate from any state income tax
2 34 return and no credit for income taxes owed is allowed. The
2 35 department shall attempt to notify individuals who are
3 1 entitled to a refund. The bill appropriates up to $75,000 to
3 2 the department of revenue and finance for the cost of
3 3 processing these claims.
3 4 The bill takes effect upon enactment.
3 5 LSB 4423SV 76
3 6 mg/sc/14
Text: SF02453 Text: SF02455 Text: SF02400 - SF02499 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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