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PAG LIN
1 1 Section 1. Section 422.73, Code 1997, is amended by adding
1 2 the following new subsection:
1 3 NEW SUBSECTION. 3. Notwithstanding subsection 2, a claim
1 4 for credit or refund of individual income tax paid for any tax
1 5 year beginning on or after January 1, 1985, and before January
1 6 1, 1989, is considered timely if filed with the department on
1 7 or before April 30, 1998, if the taxpayer's claim is the
1 8 result of the unconstitutional taxation of federal pension
1 9 benefits based upon the decision in Davis v. Michigan
1 10 Department of Treasury, 489 U.S. 803, 109 S. Ct. 1500 (1989).
1 11 A taxpayer entitled to a credit or refund of tax paid under
1 12 this subsection shall receive the credit or refund within four
1 13 tax years. The amount of credit or refund shall be equally
1 14 spread over those four tax years. Any claims for refund shall
1 15 be payable from the special refund account established in
1 16 section 422.105. The department shall state on the actual tax
1 17 form for the next four tax years a notice that federal
1 18 retirees may be entitled to a credit or refund under the
1 19 provisions of this subsection.
1 20 Sec. 2. NEW SECTION. 422.105 SPECIAL REFUND ACCOUNT.
1 21 The department shall establish a special refund account for
1 22 the purpose of paying the refund claims of federal retirees
1 23 pursuant to section 422.73, subsection 3. Beginning with the
1 24 fiscal year beginning July 1, 1997, there is appropriated
1 25 annually from the general fund of the state an amount
1 26 sufficient to pay the refund claims of these federal retirees.
1 27 Sec. 3. EFFECTIVE DATE. This Act, being deemed of
1 28 immediate importance, takes effect upon enactment.
1 29 EXPLANATION
1 30 A 1993 Iowa supreme court decision held that retired
1 31 federal employees could retroactively receive a refund of
1 32 state individual income taxes unlawfully imposed on their
1 33 pensions if the refund claim was timely filed. This bill
1 34 provides that a claim filed for credit or refund by April 30,
1 35 1998, is timely filed for taxes imposed for the 1985, 1986,
2 1 1987, and 1988 tax years. The taxpayer is entitled to a
2 2 credit or refund equal to the amount of tax illegally
2 3 collected to be paid over four tax years in equal amounts. A
2 4 special refund account is established into which is
2 5 appropriated each year an amount sufficient to pay any
2 6 refunds.
2 7 The bill takes effect upon enactment.
2 8 LSB 1865XS 77
2 9 mg/cf/24
Text: SF00080 Text: SF00082 Text: SF00000 - SF00099 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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