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House Journal: Page 915: Wednesday, March 22, 1995

21   bearing obligations, and dividends are allocated to
22   Iowa only to the extent to which they are derived from
23   a business, trade, profession, or occupation carried
24   on within the state.
25     b.  A resident's income allocable to Iowa is the
26   income determined under section 422.7 reduced by items
27   of income and expenses from a subchapter S corporation
28   which pass directly to the shareholders under
29   provisions of the Internal Revenue Code and increased
30   by the greater of the following:
31     (1)  The net income or loss of the corporation
32   which is fairly and equitably attributable to this
33   state under section 422.33, subsections 2 and 3.
34     (2)  The taxpayer's pro rata share of an amount
35   deemed distributed to shareholders which when added to
36   the salaries, wages, or other compensation for
37   services performed by all shareholders will equal ten
38   percent of the net income of the corporation computed
39   in accordance with section 422.35 and considering
40   items of income and expense which pass directly to the
41   shareholders under provisions of the Internal Revenue
42   Code before deduction of shareholder's salaries,
43   wages, or other compensation for services performed.
44     (3)  Any cash or the value of any property
45   distributions made to the extent they are paid from
46   income upon which Iowa income tax has not been paid as
47   determined under rules of the director.
48     Sec. ___.  Section 422.8, Code 1995, is amended by
49   adding the following new subsection:
50     NEW SUBSECTION.  6.  If the resident or part year

Page   4

 1   resident is a shareholder of a corporation which has
 2   in effect an election under subchapter S of the
 3   Internal Revenue Code, subsections 1 and 3 do not
 4   apply to any income taxes paid to another state or
 5   foreign country on the income from the corporation
 6   which has in effect an election under subchapter S of
 7   the Internal Revenue Code.
 8     Sec. ___.  This division of this Act, being deemed
 9   of immediate importance, takes effect upon enactment
10   and applies retroactively to January 1, 1995, for tax
11   years beginning on or after that date.
12                        DIVISION III
13                   MACHINERY AND EQUIPMENT
14               EXEMPTION AND REPLACEMENT FUNDS
15     Sec. ___.  Section 427B.17, Code 1995, is amended
16   by striking the section and inserting in lieu thereof
17   the following:
18     427B.17  PROPERTY SUBJECT TO SPECIAL VALUATION.
19     1.  Property defined in section 427A.1, subsection
20   1, paragraphs "e" and "j", shall be valued by the
21   local assessor as follows:

Iowa General Assembly

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

© 1995 Cornell College and League of Women Voters of Iowa

Comments? hjourn@legis.iowa.gov.

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URL: /DOCS/GA/76GA/Session.1/HJournal/00900/00915.html
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