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Senate Study Bill 1252

Bill Text

PAG LIN
  1  1    Section 1.  Section 422.8, subsection 2, paragraph b,
  1  2 subparagraph (2), Code 2001, is amended to read as follows:
  1  3    (2)  Any cash or the value of property distributions which
  1  4 are made only to the extent that they are paid from income
  1  5 upon which Iowa income tax has not been paid, as determined
  1  6 under rules of the director, reduced by fifty percent of the
  1  7 amount of any of these distributions that are made to enable
  1  8 the shareholder to pay federal income tax on items of income,
  1  9 loss, and expenses from the corporation.
  1 10    Sec. 2.  APPLICABILITY PROVISION.  This Act applies
  1 11 retroactively to January 1, 2001, for tax years beginning on
  1 12 or after that date.  
  1 13                           EXPLANATION
  1 14    Under the state individual income tax, resident
  1 15 shareholders of S corporations doing business within and
  1 16 without the state are allowed to allocate income between Iowa
  1 17 and other states in determining their state income tax.  As
  1 18 part of the allocation procedure, under current law, 50
  1 19 percent of the amount of an S corporation distribution
  1 20 received by a shareholder, which is used to pay federal income
  1 21 tax, is not allocated to Iowa.  The bill increases this
  1 22 percentage to 100 percent.
  1 23    The bill applies retroactively to January 1, 2001, for tax
  1 24 years beginning on or after that date.  
  1 25 LSB 3149SC 79
  1 26 mg/cls/14
     

Text: SSB01251                          Text: SSB01253
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