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House Journal: Page 561: Monday, February 27, 1995

 3   items, adjustments, and losses under subparagraph (1)
 4   of both spouses.
 5     Sec. 12.  Section 422.7, Code 1995, is amended by
 6   adding the following new subsection:
 7     NEW SUBSECTION.  32.  Resident shareholders of a
 8   corporation which has in effect an election under
 9   subchapter S of the Internal Revenue Code shall add
10   their proportionate share of a deemed distribution of
11   current year income, upon which Iowa income tax has
12   not been paid as determined under rules of the
13   director, to the extent that the salaries, wages, or
14   other compensation for services performed by all
15   shareholders does not equal ten percent of net income
16   of the corporation computed in accordance with section
17   422.35 and considering items of income and expense
18   which pass directly to the shareholders under
19   provisions of the Internal Revenue Code before
20   deduction of shareholders' salaries, wages, or other
21   compensation for services performed.  In addition
22   there shall be added any cash or the value of any
23   property distributions made to the extent they are
24   made from income upon which Iowa income tax has not
25   been paid as determined under rules of the director.
26     Sec. 13.  Section 422.8, subsection 2, Code 1995,
27   is amended to read as follows:
28     2.  a.  Nonresident's net income allocated to Iowa
29   is the net income, or portion thereof, which is
30   derived from a business, trade, profession, or
31   occupation carried on within this state or income from
32   any property, trust, estate, or other source within
33   Iowa.  However, income derived from a business, trade,
34   profession, or occupation carried on within this state
35   and income from any property, trust, estate, or other
36   source within Iowa shall not include distributions
37   from pensions, including defined benefit or defined
38   contribution plans, annuities, individual retirement
39   accounts, and deferred compensation plans or any
40   earnings attributable thereto so long as the
41   distribution is directly related to an individual's
42   documented retirement and received while the
43   individual is a nonresident of this state.  If a
44   business, trade, profession, or occupation is carried
45   on partly within and partly without the state, only
46   the portion of the net income which is fairly and
47   equitably attributable to that part of the business,
48   trade, profession, or occupation carried on within the
49   state is allocated to Iowa for purposes of section
50   422.5, subsection 1, paragraph "j", and section 422.13
Page   7
 1   and income from any property, trust, estate, or other
 2   source partly within and partly without the state is
 3   allocated to Iowa in the same manner, except that

Iowa General Assembly

Index: House Journal (76th General Assembly: Session 1)

© 1995 Cornell College and League of Women Voters of Iowa

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