Text: S03194                            Text: S03196
Text: S03100 - S03199                   Text: S Index
Bills and Amendments: General Index     Bill History: General Index

Senate Amendment 3195

Amendment Text

PAG LIN
  1  1    Amend House File 388, as passed by the House, as
  1  2 follows:
  1  3    #1.  By striking everything after the enacting
  1  4 clause and inserting the following:  
  1  5   "DIVISION I – PERCENTAGE OF FEDERAL TAX LIABILITY
  1  6    Section 1.  Section 422.4, subsection 1, Code 1997,
  1  7 is amended by striking the subsection and inserting in
  1  8 lieu thereof the following:
  1  9    1.  "Adjusted federal income tax liability" means
  1 10 the amount of federal income tax liability, as
  1 11 determined under the Internal Revenue Code, subtitle
  1 12 A, chapter 1, subchapter A, parts I (regular tax) and
  1 13 VI (alternative minimum tax), and subchapter D, part I
  1 14 (lump sum distribution tax), for which the taxpayer
  1 15 would have been liable, reduced by any federal income
  1 16 tax credits that may apply, if the taxpayer had paid
  1 17 federal income tax based on federal taxable income
  1 18 adjusted as provided in section 422.7, subsections 1
  1 19 and 2.
  1 20    Sec. 2.  Section 422.4, subsection 2, Code 1997, is
  1 21 amended by striking the subsection.
  1 22    Sec. 3.  Section 422.4, Code 1997, is amended by
  1 23 adding the following new subsection:
  1 24    NEW SUBSECTION.  9A.  "Net income" means the
  1 25 federal taxable income as properly computed for
  1 26 federal income tax purposes under the Internal Revenue
  1 27 Code with the adjustments made in section 422.7,
  1 28 subsections 1 and 2.
  1 29    Sec. 4.  Section 422.4, subsection 16, Code 1997,
  1 30 is amended by striking the subsection.
  1 31    Sec. 5.  Section 422.5, subsection 1, Code 1997, is
  1 32 amended by striking the subsection and inserting in
  1 33 lieu thereof the following:
  1 34    1.  a.  A tax is imposed upon every resident and
  1 35 nonresident individual or estate and trust, which tax
  1 36 is levied and shall be collected and paid annually
  1 37 upon and with respect to net income at the rate of
  1 38 twenty-eight and six-tenths percent of the taxpayer's
  1 39 adjusted federal income tax liability.
  1 40    b.  However, the tax imposed upon the income of a
  1 41 nonresident shall be computed by multiplying the
  1 42 amount of tax determined under paragraph "a" by a
  1 43 fraction of which the nonresident's net income
  1 44 allocated to Iowa, as determined in section 422.8,
  1 45 subsection 2, is the numerator and the nonresident's
  1 46 total net income is the denominator.  This provision
  1 47 also applies to individuals who are residents of Iowa
  1 48 for less than the entire tax year.
  1 49    c.  (1)  The tax imposed upon the net income of a
  1 50 resident shareholder in a value-added corporation
  2  1 which has in effect for the tax year an election under
  2  2 subchapter S of the Internal Revenue Code and carries
  2  3 on business within and without the state may be
  2  4 computed by reducing the amount determined pursuant to
  2  5 paragraph "a" by multiplying the amount by a fraction
  2  6 of which the resident's net income allocated to Iowa,
  2  7 as determined in section 422.8, subsection 2,
  2  8 paragraph "b", is the numerator and the resident's
  2  9 total net income is the denominator.  This provision
  2 10 also applies to individuals who are residents of Iowa
  2 11 for less than the entire tax year.
  2 12    (2)  In order for a resident shareholder in a
  2 13 value-added corporation which has in effect for the
  2 14 tax year an election under subchapter S of the
  2 15 Internal Revenue Code and carries on business within
  2 16 and without the state, to claim the benefits of
  2 17 apportionment of income of the value-added
  2 18 corporation, the taxpayer must completely fill out the
  2 19 return, determine the taxpayer's income tax liability
  2 20 without the benefit of apportionment of the value-
  2 21 added corporation's income, and pay the amount of tax
  2 22 owed.  The taxpayer shall recompute the taxpayer's
  2 23 income tax liability, by applying the provisions of
  2 24 this lettered paragraph on a special return.  This
  2 25 special return shall be filed under rules of the
  2 26 director and constitutes a claim for refund of the
  2 27 difference between the amount of tax the taxpayer paid
  2 28 as determined without the provisions of this lettered
  2 29 paragraph and the amount of tax determined with the
  2 30 provisions of this lettered paragraph.
  2 31    (3)  This lettered paragraph shall not affect the
  2 32 amount of the taxpayer's checkoff to the Iowa election
  2 33 campaign fund under section 56.18, and the checkoff
  2 34 for the fish and game fund in section 456A.16.
  2 35    (4)  For any tax year, the aggregate amount of
  2 36 refund claims that shall be paid pursuant to this
  2 37 lettered paragraph shall not exceed five million
  2 38 dollars.  If, for a tax year, the aggregate amount of
  2 39 refund claims filed pursuant to this lettered
  2 40 paragraph exceeds five million dollars, each claim for
  2 41 refund shall be paid on a pro rata basis so that the
  2 42 aggregate amount of refund claims does not exceed five
  2 43 million dollars.  In the case where refund claims are
  2 44 not paid in full, the amount of the refund to which
  2 45 the taxpayer is entitled under this lettered paragraph
  2 46 is the pro rata amount that was paid and the taxpayer
  2 47 is not entitled to a refund of the unpaid portion and
  2 48 is not entitled to carry that amount forward or
  2 49 backward to another tax year.  Taxpayers shall not use
  2 50 refunds as estimated payments for the succeeding tax
  3  1 year.  Taxpayers whose tax years begin on January 1
  3  2 must file their refund claims by October 31 of the
  3  3 calendar year following the end of their tax year to
  3  4 be eligible for refunds.  Taxpayers whose tax years
  3  5 begin on a date other than January 1 must file their
  3  6 refund claims by the end of the tenth month following
  3  7 the end of their tax years to be eligible.  The
  3  8 department shall determine on February 1 of the second
  3  9 succeeding calendar year if the total amount of claims
  3 10 for refund exceeds five million dollars for the tax
  3 11 year.  Notwithstanding any other provision, interest
  3 12 shall not be due on any refund claims that are paid by
  3 13 the last day of February of the second succeeding
  3 14 calendar year.  If the claim is not payable on
  3 15 February 1 of the second succeeding calendar year,
  3 16 because the taxpayer is a fiscal year filer, then the
  3 17 amount of the claim allowed shall be in the same ratio
  3 18 as the refund claims available on February 1 of the
  3 19 second succeeding calendar year.  These claims shall
  3 20 be funded by moneys appropriated for payment of
  3 21 individual income tax refunds.
  3 22    Sec. 6.  Section 422.5, subsection 2, unnumbered
  3 23 paragraph 1, Code 1997, is amended to read as follows:
  3 24    However, the tax shall not be imposed on a resident
  3 25 or nonresident whose net income, as defined in section
  3 26 422.7, is thirteen thousand five hundred dollars or
  3 27 less in the case of married persons filing jointly or
  3 28 filing separately on a combined return, unmarried
  3 29 heads of household, and surviving spouses or nine
  3 30 thousand dollars or less in the case of all other
  3 31 persons; but in the event that.  If the payment of tax
  3 32 under this division would reduce the net income of a
  3 33 resident or nonresident to less than thirteen thousand
  3 34 five hundred dollars or nine thousand dollars as
  3 35 applicable, then the tax shall be reduced to that
  3 36 amount which would result in allowing the taxpayer to
  3 37 retain a net income of thirteen thousand five hundred
  3 38 dollars or nine thousand dollars as applicable.  The
  3 39 preceding sentence does sentences do not apply to
  3 40 estates or trusts.  For the purpose of this
  3 41 subsection, the entire net income, including any part
  3 42 of the net income not allocated to Iowa, shall be
  3 43 taken into account.  For purposes of this subsection,
  3 44 net income "net income" includes all amounts of
  3 45 pensions or other retirement income received from any
  3 46 source which is not taxable under this division as a
  3 47 result of the government pension exclusions in section
  3 48 422.7, or any other state law.  If the combined net
  3 49 income of a husband and wife exceeds thirteen thousand
  3 50 five hundred dollars, neither of them shall receive
  4  1 the benefit of this subsection, and it is immaterial
  4  2 whether they file a joint return or separate returns.
  4  3 However, if a husband and wife file separate returns
  4  4 and have a combined net income of thirteen thousand
  4  5 five hundred dollars or less, neither spouse shall
  4  6 receive the benefit of this paragraph, if one spouse
  4  7 has a net operating loss and elects to carry back or
  4  8 carry forward the loss as provided in section 422.9,
  4  9 subsection 3 the Internal Revenue Code.  A person who
  4 10 is claimed as a dependent, as defined in the Internal
  4 11 Revenue Code, by another person as defined in section
  4 12 422.12 shall not receive the benefit of this
  4 13 subsection if the person claiming the dependent has
  4 14 net income exceeding thirteen thousand five hundred
  4 15 dollars or nine thousand dollars as applicable or the
  4 16 person claiming the dependent and the person's spouse
  4 17 have combined net income exceeding thirteen thousand
  4 18 five hundred dollars or nine thousand dollars as
  4 19 applicable.
  4 20    Sec. 7.  Section 422.5, subsection 2, unnumbered
  4 21 paragraph 2, Code 1997, is amended by striking the
  4 22 unnumbered paragraph.
  4 23    Sec. 8.  Section 422.5, subsections 3 through 12,
  4 24 Code 1997, are amended by striking the subsections.
  4 25    Sec. 9.  Section 422.6, Code 1997, is amended by
  4 26 striking the section and inserting in lieu thereof the
  4 27 following:
  4 28    422.6  INCOME FROM ESTATES OR TRUSTS.
  4 29    The tax imposed by section 422.5 applies to and is
  4 30 a charge against estates and trusts with respect to
  4 31 their net income, and the rate is the same as that
  4 32 applicable to individuals.  The fiduciary shall make
  4 33 the return of income for the estate or trust for which
  4 34 the fiduciary acts, whether the income is taxable to
  4 35 the estate or trust or to the beneficiaries.
  4 36    Sec. 10.  Section 422.7, Code 1997, is amended by
  4 37 striking the section and inserting in lieu thereof the
  4 38 following:
  4 39    422.7  ADJUSTMENTS TO FEDERAL TAXABLE INCOME.
  4 40    In determining the taxpayer's adjusted federal
  4 41 income tax liability, the taxpayer's federal taxable
  4 42 income shall be adjusted as provided in subsections 1
  4 43 and 2.
  4 44    1.  Federal taxable income is increased by the
  4 45 following:
  4 46    a.  Interest and dividends from foreign securities
  4 47 and from securities of states and other political
  4 48 subdivisions exempt from federal income tax under the
  4 49 Internal Revenue Code to the extent not otherwise
  4 50 exempted by this state.
  5  1    b.  Interest and dividends from regulated
  5  2 investment companies exempt from federal income tax
  5  3 under the Internal Revenue Code.
  5  4    2.  Federal taxable income is decreased by the
  5  5 following:
  5  6    a.  Interest and dividends from federal securities.
  5  7 The amount decreased shall be reduced by any interest
  5  8 on indebtedness incurred to carry the federal
  5  9 securities and by any expenses incurred in the
  5 10 production of interest and dividends from the federal
  5 11 securities to the extent deductible in determining
  5 12 federal taxable income.
  5 13    b.  The loss on the sale or exchange of a share of
  5 14 a regulated investment company held for six months or
  5 15 less to the extent the loss was disallowed under
  5 16 section 852(b)(4)(B) of the Internal Revenue Code.
  5 17    Sec. 11.  Section 422.8, subsections 2, 3, and 4,
  5 18 Code 1997, are amended to read as follows:
  5 19    2.  a.  Nonresident's net income allocated to Iowa
  5 20 is the net income, or portion of net income, which is
  5 21 derived from a business, trade, profession, or
  5 22 occupation carried on within this state or income from
  5 23 any property, trust, estate, or other source within
  5 24 Iowa.  However, income derived from a business, trade,
  5 25 profession, or occupation carried on within this state
  5 26 and income from any property, trust, estate, or other
  5 27 source within Iowa shall not include distributions
  5 28 from pensions, including defined benefit or defined
  5 29 contribution plans, annuities, individual retirement
  5 30 accounts, and deferred compensation plans or any
  5 31 earnings attributable thereto so long as the
  5 32 distribution is directly related to an individual's
  5 33 documented retirement and received while the
  5 34 individual is a nonresident of this state.  If a
  5 35 business, trade, profession, or occupation is carried
  5 36 on partly within and partly without the state, only
  5 37 the portion of the net income which is fairly and
  5 38 equitably attributable to that part of the business,
  5 39 trade, profession, or occupation carried on within the
  5 40 state is allocated to Iowa for purposes of section
  5 41 422.5, subsection 1, paragraph "j" "a", and section
  5 42 422.13 and income from any property, trust, estate, or
  5 43 other source partly within and partly without the
  5 44 state is allocated to Iowa in the same manner, except
  5 45 that annuities, interest on bank deposits and
  5 46 interest-bearing obligations, and dividends are
  5 47 allocated to Iowa only to the extent to which they are
  5 48 derived from a business, trade, profession, or
  5 49 occupation carried on within the state.
  5 50    b.  A resident's income allocable to Iowa is the
  6  1 net income determined under section 422.7 reduced by
  6  2 items of income and expenses from a subchapter S
  6  3 corporation which is a value-added corporation that
  6  4 carries on business within and without the state when
  6  5 those items of income and expenses pass directly to
  6  6 the shareholders under provisions of the Internal
  6  7 Revenue Code.  These items of income and expenses are
  6  8 increased by the greater of the following:
  6  9    (1)  The net income or loss of the corporation
  6 10 which is fairly and equitably attributable to this
  6 11 state under section 422.33, subsections 2 and 3.
  6 12    (2)  Any cash or the value of property
  6 13 distributions which are made only to the extent that
  6 14 they are paid from income upon which Iowa income tax
  6 15 has not been paid, as determined under rules of the
  6 16 director, reduced by fifty percent of the amount of
  6 17 any of these distributions that are made to enable the
  6 18 shareholder to pay federal income tax on items of
  6 19 income, loss, and expenses from the corporation.
  6 20    3.  Taxable Net income of resident and nonresident
  6 21 estates and trusts shall be allocated in the same
  6 22 manner as individuals.
  6 23    4.  The amount of minimum tax paid to another state
  6 24 or foreign country by a resident taxpayer of this
  6 25 state from preference items derived from sources
  6 26 outside of Iowa shall be allowed as a credit against
  6 27 the tax computed under this division except that the
  6 28 credit shall not exceed what the product of the state
  6 29 tax rate times the amount of state the federal
  6 30 alternative minimum tax would have been on the same
  6 31 preference items which were taxed by the other state
  6 32 or foreign country.  The limitation on this credit
  6 33 shall be computed according to the following formula:
  6 34 The total of preference items earned outside of Iowa
  6 35 and taxed by another state or foreign country shall be
  6 36 divided by the total of preference items of the
  6 37 resident taxpayer of Iowa.  In computing this
  6 38 quotient, those items excludable under section 422.5,
  6 39 subsection 1, paragraph "k", subparagraph (1) shall
  6 40 not be used in computing the preference items.  This
  6 41 quotient multiplied times by the net state federal
  6 42 alternative minimum tax as determined in section
  6 43 422.5, subsection 1, paragraph "k" on the total of
  6 44 preference items as if entirely earned in Iowa
  6 45 multiplied by the state tax rate shall be the maximum
  6 46 tax credit against the Iowa alternative minimum tax.
  6 47 However, the maximum tax credit will shall not be
  6 48 allowed to the extent that the minimum tax imposed by
  6 49 the other state or foreign country is less than the
  6 50 maximum tax credit otherwise computed above.
  7  1    Sec. 12.  Section 422.13, subsection 1, unnumbered
  7  2 paragraph 1, Code 1997, is amended to read as follows:
  7  3    Except as provided in subsection 1A, a A resident
  7  4 or nonresident of this state shall make a return,
  7  5 signed in accordance with forms and rules prescribed
  7  6 by the director, if any of the following are
  7  7 applicable:
  7  8    Sec. 13.  Section 422.13, subsection 1A, Code 1997,
  7  9 is amended by striking the subsection.
  7 10    Sec. 14.  Section 422.14, subsection 1, Code 1997,
  7 11 is amended to read as follows:
  7 12    1.  A fiduciary subject to taxation under this
  7 13 division, as provided in section 422.6, shall make a
  7 14 return, signed in accordance with forms and rules
  7 15 prescribed by the director, for the individual,
  7 16 estate, or trust for whom or for which the fiduciary
  7 17 acts, if the taxable net income thereof amounts to six
  7 18 hundred dollars or more.  A nonresident fiduciary
  7 19 shall file a copy of the federal income tax return for
  7 20 the current tax year with the return required by this
  7 21 section.
  7 22    Sec. 15.  Section 422.16, subsection 1, unnumbered
  7 23 paragraph 1, Code 1997, is amended to read as follows:
  7 24    Every withholding agent and every employer as
  7 25 defined in this chapter and further defined in the
  7 26 Internal Revenue Code, with respect to income tax
  7 27 collected at source, making payment of wages to a
  7 28 nonresident employee working in Iowa, or to a resident
  7 29 employee, shall deduct and withhold from the wages an
  7 30 amount which will approximate the employee's annual
  7 31 tax liability on a calendar year basis, calculated on
  7 32 the basis of tables to be prepared by the department
  7 33 and schedules or percentage rates, based on the wages,
  7 34 to be prescribed by the department.  Every employee or
  7 35 other person shall declare to the employer or
  7 36 withholding agent the number of the employee's or
  7 37 other person's personal exemptions and dependency
  7 38 exemptions or credits to be used in applying the
  7 39 tables and schedules or percentage rates.  However, no
  7 40 greater number of personal or dependency exemptions or
  7 41 credits may be declared by the employee or other
  7 42 person than the number to which the employee or other
  7 43 person is entitled except as allowed under section
  7 44 3402(m)(1) of the Internal Revenue Code and as allowed
  7 45 for the child and dependent care credit provided in
  7 46 section 422.12C.  The claiming of exemptions or
  7 47 credits in excess of entitlement is a serious
  7 48 misdemeanor.
  7 49    Sec. 16.  Section 422.21, unnumbered paragraphs 5
  7 50 and 6, Code 1997, are amended by striking the
  8  1 unnumbered paragraphs.
  8  2    Sec. 17.  Section 422.21, unnumbered paragraph 7,
  8  3 Code 1997, is amended to read as follows:
  8  4    If married taxpayers file a joint return or file
  8  5 separately on a combined return in accordance with
  8  6 rules prescribed by the director, both spouses are
  8  7 jointly and severally liable for the total tax due on
  8  8 the return, except when one spouse is considered to be
  8  9 an innocent spouse under criteria established pursuant
  8 10 to section 6013(e) of the Internal Revenue Code.
  8 11    Sec. 18.  Sections 422.9, 422.10, 422.11A, 422.11B,
  8 12 422.12, 422.12B, and 422.12C, Code 1997, are repealed.  
  8 13         DIVISION II – COORDINATING AMENDMENTS
  8 14    Sec. 19.  Section 56.2, subsection 19, Code 1997,
  8 15 is amended to read as follows:
  8 16    19.  "State income tax liability" means the state
  8 17 individual income tax imposed under section 422.5
  8 18 reduced by the sum of the deductions from the computed
  8 19 tax as provided under section 422.12.
  8 20    Sec. 20.  Section 96.3, subsection 4, Code 1997, is
  8 21 amended to read as follows:
  8 22    4.  DETERMINATION OF BENEFITS.  With respect to
  8 23 benefit years beginning on or after July 1, 1983, an
  8 24 eligible individual's weekly benefit amount for a week
  8 25 of total unemployment shall be an amount equal to the
  8 26 following fractions of the individual's total wages in
  8 27 insured work paid during that quarter of the
  8 28 individual's base period in which such total wages
  8 29 were highest; the director shall determine annually a
  8 30 maximum weekly benefit amount equal to the following
  8 31 percentages, to vary with the number of dependents, of
  8 32 the statewide average weekly wage paid to employees in
  8 33 insured work which shall be effective the first day of
  8 34 the first full week in July:  
  8 35 If the        The weekly        Subject to the
  8 36 number of     benefit amount    following maxi-
  8 37 dependents    shall equal the   mum percentage
  8 38 is:           following frac-   of the statewide
  8 39               tion of high      average weekly
  8 40               quarter wages:    wage:
  8 41 0             1/23              53%
  8 42 1             1/22              55%
  8 43 2             1/21              57%
  8 44 3             1/20              60%
  8 45 4 or more     1/19              65%
  8 46 The maximum weekly benefit amount, if not a multiple
  8 47 of one dollar shall be rounded to the lower multiple
  8 48 of one dollar.  However, until such time as sixty-five
  8 49 percent of the statewide average weekly wage exceeds
  8 50 one hundred ninety dollars, the maximum weekly benefit
  9  1 amounts shall be determined using the statewide
  9  2 average weekly wage computed on the basis of wages
  9  3 reported for calendar year 1981.  As used in this
  9  4 section "dependent" means dependent as defined in
  9  5 section 422.12, subsection 1, paragraph "c" for state
  9  6 individual income tax purposes, as if the individual
  9  7 claimant was a taxpayer, except that an individual
  9  8 claimant's nonworking spouse shall be deemed to be a
  9  9 dependent under this section.  "Nonworking spouse"
  9 10 means a spouse who does not earn more than one hundred
  9 11 twenty dollars in gross wages in one week.
  9 12    Sec. 21.  Section 216B.3, subsection 15, Code 1997,
  9 13 is amended to read as follows:
  9 14    15.  Develop a plan to provide telephone yellow
  9 15 pages information without charge to persons declared
  9 16 to be blind under the standards in section 422.12,
  9 17 subsection 1, paragraph "e".  The department may apply
  9 18 for federal funds to support the service.  The program
  9 19 shall be limited in scope by the availability of
  9 20 funds.  For the purposes of this subsection, an
  9 21 individual is blind only if the individual's central
  9 22 visual acuity does not exceed twenty-two hundredths in
  9 23 the better eye with correcting lenses, or if the
  9 24 individual's visual acuity is greater than twenty-two
  9 25 hundredths but is accompanied by a limitation in the
  9 26 fields of vision such that the widest diameter of the
  9 27 visual field subtends an angle no greater than twenty
  9 28 degrees.
  9 29    Sec. 22.  Section 257.21, unnumbered paragraph 2,
  9 30 Code 1997, is amended to read as follows:
  9 31    The instructional support income surtax shall be
  9 32 imposed on the state individual income tax for the
  9 33 calendar year during which the school's budget year
  9 34 begins, or for a taxpayer's fiscal year ending during
  9 35 the second half of that calendar year and after the
  9 36 date the board adopts a resolution to participate in
  9 37 the program or the first half of the succeeding
  9 38 calendar year, and shall be imposed on all individuals
  9 39 residing in the school district on the last day of the
  9 40 applicable tax year.  As used in this section, "state
  9 41 individual income tax" means the taxes computed under
  9 42 section 422.5, less the credits allowed in sections
  9 43 422.11A, 422.11B, 422.11C, 422.12, and 422.12B.
  9 44    Sec. 23.  Section 421.17, subsection 21, paragraph
  9 45 b, subparagraph (6), Code 1997, is amended to read as
  9 46 follows:
  9 47    (6)  Upon the request of a debtor or a debtor's
  9 48 spouse to the child support recovery unit, the foster
  9 49 care recovery unit, or the investigations division of
  9 50 the department of inspections and appeals, filed
 10  1 within fifteen days from the mailing of the notice of
 10  2 entitlement to a refund or rebate, and upon receipt of
 10  3 the full name and social security number of the
 10  4 debtor's spouse, the unit or division shall notify the
 10  5 department of revenue and finance of the request to
 10  6 divide a joint income tax refund or rebate.  The
 10  7 department of revenue and finance shall upon receipt
 10  8 of the notice divide a joint income tax refund or
 10  9 rebate between the debtor and the debtor's spouse in
 10 10 proportion to each spouse's net income as determined
 10 11 under section 422.7 defined in section 422.4.
 10 12    Sec. 24.  Section 421.17, subsection 23, paragraph
 10 13 f, Code 1997, is amended to read as follows:
 10 14    f.  Upon the timely request of a defaulter or a
 10 15 defaulter's spouse to the college student aid
 10 16 commission and upon receipt of the full name and
 10 17 social security number of the defaulter's spouse, the
 10 18 commission shall notify the department of revenue and
 10 19 finance of the request to divide a joint income tax
 10 20 refund or rebate.  The department of revenue and
 10 21 finance shall upon receipt of the notice divide a
 10 22 joint income tax refund or rebate between the
 10 23 defaulter and the defaulter's spouse in proportion to
 10 24 each spouse's net income as determined under section
 10 25 422.7 defined in section 422.4.
 10 26    Sec. 25.  Section 421.17, subsection 25, paragraph
 10 27 e, Code 1997, is amended to read as follows:
 10 28    e.  Upon the request of a debtor or a debtor's
 10 29 spouse to the department, filed within fifteen days
 10 30 from the mailing of the notice of entitlement to a
 10 31 refund or rebate, and upon receipt of the full name
 10 32 and social security number of the debtor's spouse, the
 10 33 department shall divide a joint income tax refund or
 10 34 rebate between the debtor and the debtor's spouse in
 10 35 proportion to each spouse's net income as determined
 10 36 under section 422.7 defined in section 422.4.
 10 37    Sec. 26.  Section 422.32, unnumbered paragraph 2,
 10 38 Code 1997, is amended to read as follows:
 10 39    The words, terms, and phrases defined in division
 10 40 II, section 422.4, subsections 4 to 6, 8, 9, 13, and
 10 41 15 to, and 17, when used in this division, shall have
 10 42 the meanings ascribed to them in said section except
 10 43 where the context clearly indicates a different
 10 44 meaning.
 10 45    Sec. 27.  Section 422D.2, Code 1997, is amended to
 10 46 read as follows:
 10 47    422D.2  LOCAL INCOME SURTAX.
 10 48    A county may impose by ordinance a local income
 10 49 surtax as provided in section 422D.1 at the rate set
 10 50 by the board of supervisors, of up to one percent, on
 11  1 the state individual income tax of each individual
 11  2 residing in the county at the end of the individual's
 11  3 applicable tax year.  However, the cumulative total of
 11  4 the percents of income surtax imposed on any taxpayer
 11  5 in the county shall not exceed twenty percent.  The
 11  6 reason for imposing the surtax and the amount needed
 11  7 shall be set out in the ordinance.  The surtax rate
 11  8 shall be set to raise only the amount needed.  For
 11  9 purposes of this section, "state individual income
 11 10 tax" means the tax computed under section 422.5, less
 11 11 the credits allowed in sections 422.11A, 422.11B,
 11 12 422.11C, 422.12, and 422.12B.
 11 13    Sec. 28.  Section 425.17, subsection 7, Code 1997,
 11 14 is amended to read as follows:
 11 15    7.  "Income" means the sum of Iowa net income as
 11 16 defined in section 422.7 422.4, plus all of the
 11 17 following to the extent not already included in Iowa
 11 18 net income:  capital gains, alimony, child support
 11 19 money, cash public assistance and relief, except
 11 20 property tax relief granted under this division,
 11 21 amount of in-kind assistance for housing expenses, the
 11 22 gross amount of any pension or annuity, including but
 11 23 not limited to railroad retirement benefits, payments
 11 24 received under the federal Social Security Act, except
 11 25 child insurance benefits received by a member of the
 11 26 claimant's household, and all military retirement and
 11 27 veterans' disability pensions, interest received from
 11 28 the state or federal government or any of its
 11 29 instrumentalities, workers' compensation and the gross
 11 30 amount of disability income or "loss of time"
 11 31 insurance.  "Income" does not include gifts from
 11 32 nongovernmental sources, or surplus foods or other
 11 33 relief in kind supplied by a governmental agency.  In
 11 34 determining income, net operating losses and net
 11 35 capital losses shall not be considered.
 11 36    Sec. 29.  Section 450.4, subsection 5, Code 1997,
 11 37 is amended to read as follows:
 11 38    5.  On the value of that portion of installment
 11 39 payments which will be includable as net income as
 11 40 defined in section 422.7 422.4 as received by a
 11 41 beneficiary under an annuity which was purchased under
 11 42 an employees pension or retirement plan.
 11 43    Sec. 30.  Section 476.6, subsection 1, unnumbered
 11 44 paragraph 2, Code 1997, is amended to read as follows:
 11 45    A subscriber of a telephone exchange or service,
 11 46 who is declared to be legally blind under section
 11 47 422.12, subsection 1, paragraph "e", is exempt from
 11 48 any charges for telephone directory assistance that
 11 49 may be approved by the board.  For the purposes of
 11 50 this paragraph, an individual is legally blind only if
 12  1 the individual's central visual acuity does not exceed
 12  2 twenty-two hundredths in the better eye with
 12  3 correcting lenses, or if the individual's visual
 12  4 acuity is greater than twenty-two hundredths but is
 12  5 accompanied by a limitation in the fields of vision
 12  6 such that the widest diameter of the visual field
 12  7 subtends an angle no greater than twenty degrees.
 12  8    Sec. 31.  Section 541A.2, subsection 7, unnumbered
 12  9 paragraph 1, Code 1997, is amended to read as follows:
 12 10    An individual development account closed in
 12 11 accordance with this subsection is not subject to the
 12 12 limitations and benefits provided by this chapter but
 12 13 is subject to state tax in accordance with the
 12 14 provisions of section 422.7, subsection 28, and
 12 15 section 450.4, subsection 6.  An individual
 12 16 development account may be closed for any of the
 12 17 following reasons:
 12 18    Sec. 32.  Section 514A.3, subsection 2, Code 1997,
 12 19 is amended by striking the subsection.  
 12 20    DIVISION III – EFFECTIVE AND APPLICABILITY DATE
 12 21                       PROVISIONS
 12 22    Sec. 33.  This Act takes effect January 1, 1998,
 12 23 and applies to tax years beginning on or after January
 12 24 1, 1998."
 12 25    #2.  Title page, by striking lines 1 and 2 and
 12 26 inserting the following:  "An Act relating to making
 12 27 the state individual income tax a percent of the
 12 28 federal income tax liability with certain adjustments
 12 29 and including effective and applicability date
 12 30 provisions." 
 12 31 
 12 32 
 12 33                               
 12 34 MARY NEUHAUSER
 12 35 
 12 36                               
 12 37 ROBERT E. DVORSKY
 12 38 HF 388.506 77
 12 39 mg/jw/28
     

Text: S03194                            Text: S03196
Text: S03100 - S03199                   Text: S Index
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