Text: H01568 Text: H01570 Text: H01500 - H01599 Text: H Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Amend House File 701 as follows: 1 2 #1. By striking everything after the enacting 1 3 clause and inserting the following: 1 4 "Section 1. Section 422.4, subsection 1, 1 5 paragraphs b and c, Code 2003, are amended to read as 1 6 follows: 1 7 b. "Cumulative inflation factor" means the product 1 8 of the annual inflation factor for the19882003 1 9 calendar year and all annual inflation factors for 1 10 subsequent calendar years as determined pursuant to 1 11 this subsection. The cumulative inflation factor 1 12 applies to all tax years beginning on or after January 1 13 1 of the calendar year for which the latest annual 1 14 inflation factor has been determined. 1 15 c. The annual inflation factor for the19882003 1 16 calendar year is one hundred percent. 1 17 Sec. 2. Section 422.5, subsection 1, paragraphs a 1 18 through i, Code 2003, are amended by striking the 1 19 paragraphs and inserting in lieu thereof the 1 20 following: 1 21 a. On all taxable income from zero through eight 1 22 thousand dollars, one and eighty-five hundredths 1 23 percent. 1 24 b. On all taxable income exceeding eight thousand 1 25 dollars but not exceeding forty thousand dollars, five 1 26 and three-tenths percent. 1 27 c. On all taxable income exceeding forty thousand 1 28 dollars but not exceeding sixty thousand dollars, six 1 29 and thirty-five hundredths percent. 1 30 d. On all taxable income exceeding sixty thousand 1 31 dollars, six and four-tenths percent. 1 32 Sec. 3. Section 422.5, subsection 1, paragraph j, 1 33 Code 2003, is amended to read as follows: 1 34 j. (1) The tax imposed upon the taxable income of 1 35 a nonresident shall be computed by reducing the amount 1 36 determined pursuant to paragraphs "a" through"i""d" 1 37 by the amounts of nonrefundable credits under this 1 38 division and by multiplying this resulting amount by a 1 39 fraction of which the nonresident's net income 1 40 allocated to Iowa, as determined in section 422.8, 1 41 subsection 2, paragraph "a", is the numerator and the 1 42 nonresident's total net income computed under section 1 43 422.7 is the denominator. This provision also applies 1 44 to individuals who are residents of Iowa for less than 1 45 the entire tax year. 1 46 (2) The tax imposed upon the taxable income of a 1 47 resident shareholder in an S corporation which has in 1 48 effect for the tax year an election under subchapter S 1 49 of the Internal Revenue Code and carries on business 1 50 within and without the state may be computed by 2 1 reducing the amount determined pursuant to paragraphs 2 2 "a" through"i""d" by the amounts of nonrefundable 2 3 credits under this division and by multiplying this 2 4 resulting amount by a fraction of which the resident's 2 5 net income allocated to Iowa, as determined in section 2 6 422.8, subsection 2, paragraph "b", is the numerator 2 7 and the resident's total net income computed under 2 8 section 422.7 is the denominator. If a resident 2 9 shareholder has elected to take advantage of this 2 10 subparagraph, and for the next tax year elects not to 2 11 take advantage of this subparagraph, the resident 2 12 shareholder shall not reelect to take advantage of 2 13 this subparagraph for the three tax years immediately 2 14 following the first tax year for which the shareholder 2 15 elected not to take advantage of this subparagraph, 2 16 unless the director consents to the reelection. This 2 17 subparagraph also applies to individuals who are 2 18 residents of Iowa for less than the entire tax year. 2 19 This subparagraph shall not affect the amount of 2 20 the taxpayer's checkoff to the Iowa election campaign 2 21 fund under section 56.18, the checkoff for the fish 2 22 and game fund in section 456A.16, the credits from tax 2 23 provided in sections 422.10, 422.11A, and 422.12 and 2 24 the allocation of these credits between spouses if the 2 25 taxpayers filed separate returns or separately on 2 26 combined returns. 2 27 Sec. 4. Section 422.5, subsection 1, paragraph k, 2 28 unnumbered paragraph 1, Code 2003, is amended to read 2 29 as follows: 2 30 There is imposed upon every resident and 2 31 nonresident of this state, including estates and 2 32 trusts, the greater of the tax determined in 2 33 paragraphs "a" through "d" and "j" or the state 2 34 alternative minimum tax equal to seventy-five percent 2 35 of the maximum state individual income tax rate for 2 36 the tax year, rounded to the nearest one-tenth of one 2 37 percent, of the state alternative minimum taxable 2 38 income of the taxpayer as computed under this 2 39 paragraph. 2 40 Sec. 5. Section 422.5, subsection 2, Code 2003, is 2 41 amended to read as follows: 2 42 2. However, the tax shall not be imposed on a 2 43 resident or nonresident whose net income, as defined 2 44 in section 422.7, isthirteenfifteen thousandfive2 45hundreddollars or less in the case of married persons 2 46 filing jointly or filing separately on a combined 2 47 return, unmarried heads of household, and surviving 2 48 spouses ornineeleven thousand dollars or less in the 2 49 case of all other persons; but in the event that the 2 50 payment of tax under this division would reduce the 3 1 net income to less thanthirteenfifteen thousandfive3 2hundreddollars ornineeleven thousand dollars as 3 3 applicable, then the tax shall be reduced to that 3 4 amount which would result in allowing the taxpayer to 3 5 retain a net income ofthirteenfifteen thousandfive3 6hundreddollars ornineeleven thousand dollars as 3 7 applicable. The preceding sentence does not apply to 3 8 estates or trusts. For the purpose of this 3 9 subsection, the entire net income, including any part 3 10 of the net income not allocated to Iowa, shall be 3 11 taken into account. For purposes of this subsection, 3 12 net income includes all amounts of pensions or other 3 13 retirement income received from any source which is 3 14 not taxable under this division as a result of the 3 15 government pension exclusions in section 422.7, or any 3 16 other state law. If the combined net income of a 3 17 husband and wife exceeds thirteen fifteen thousand 3 18five hundreddollars, neither of them shall receive 3 19 the benefit of this subsection, and it is immaterial 3 20 whether they file a joint return or separate returns. 3 21 However, if a husband and wife file separate returns 3 22 and have a combined net income ofthirteenfifteen 3 23 thousandfive hundreddollars or less, neither spouse 3 24 shall receive the benefit of this paragraph, if one 3 25 spouse has a net operating loss and elects to carry 3 26 back or carry forward the loss as provided in section 3 27 422.9, subsection 3. A person who is claimed as a 3 28 dependent by another person as defined in section 3 29 422.12 shall not receive the benefit of this 3 30 subsection if the person claiming the dependent has 3 31 net income exceedingthirteenfifteen thousandfive3 32hundreddollars ornineeleven thousand dollars as 3 33 applicable or the person claiming the dependent and 3 34 the person's spouse have combined net income exceeding 3 35thirteenfifteen thousandfive hundreddollars ornine3 36 eleven thousand dollars as applicable. 3 37 In addition, if the married persons', filing 3 38 jointly or filing separately on a combined return, 3 39 unmarried head of household's, or surviving spouse's 3 40 net income exceedsthirteenfifteen thousandfive3 41hundreddollars, the regular tax imposed under this 3 42 division shall be the lesser of themaximum state3 43individual income tax rateproduct of eight percent 3 44 times the portion of the net income in excess of 3 45thirteenfifteen thousandfive hundreddollars or the 3 46 regular tax liability computed without regard to this 3 47 sentence. Taxpayers electing to file separately shall 3 48 compute the alternate tax described in this paragraph 3 49 using the total net income of the husband and wife. 3 50 The alternate tax described in this paragraph does not 4 1 apply if one spouse elects to carry back or carry 4 2 forward the loss as provided in section 422.9, 4 3 subsection 3. 4 4 Sec. 6. Section 422.5, subsection 5, Code 2003, is 4 5 amended to read as follows: 4 6 5. Upon determination of the latest cumulative 4 7 inflation factor, the director shall multiply each 4 8 dollar amount set forth in subsection 1, paragraphs 4 9 "a" through"i""d", of this section by this 4 10 cumulative inflation factor, shall round off the 4 11 resulting product to the nearest one dollar, and shall 4 12 incorporate the result into the income tax forms and 4 13 instructions for each tax year. 4 14 Sec. 7. Section 422.9, subsection 1, Code 2003, is 4 15 amended to read as follows: 4 16 1. An optional standard deduction, after deduction 4 17 of federal income tax, equal to one thousand two 4 18 hundred thirty dollars for a married person who files 4 19 separately or a single person or equal to three 4 20 thousand thirty dollars for a husband and wife who 4 21 file a joint return, a surviving spouse, or an 4 22 unmarried head of household. The optional standard 4 23 deduction shall not exceed the amount remaining after 4 24 deduction of the federal income tax. The amount of 4 25 federal income taxes deducted shall not exceed the 4 26 amount as computed under subsection 2, paragraph "b". 4 27 Sec. 8. Section 422.9, subsection 2, paragraph b, 4 28 Code 2003, is amended by striking the paragraph and 4 29 inserting in lieu thereof the following: 4 30 b. Add the amount of federal income taxes paid in 4 31 a tax year beginning on or after January 1, 2003, but 4 32 before January 1, 2006, to the extent the payment is 4 33 for a tax year beginning prior to January 1, 2003. 4 34 Subtract the amount of federal income tax refunds 4 35 received in a tax year beginning on or after January 4 36 1, 2003, but before January 1, 2006, to the extent 4 37 that the federal income tax was deducted on an Iowa 4 38 individual income tax return for a tax year beginning 4 39 prior to January 1, 2003. 4 40 Sec. 9. Section 422.11B, Code 2003, is amended to 4 41 read as follows: 4 42 422.11B MINIMUM TAX CREDIT. 4 43 1. There is allowed as a credit against the tax 4 44 determined in section 422.5, subsection 1, paragraphs 4 45 "a" through "d" and "j", for a tax year an amount 4 46 equal to the minimum tax credit for that tax year. 4 47 The minimum tax credit for a tax year is the 4 48 excess, if any, of the adjusted net minimum tax 4 49 imposed for all prior tax years beginning on or after 4 50 January 1, 1987, over the amount allowable as a credit 5 1 under this section for those prior tax years. 5 2 2. The allowable credit under subsection 1 for a 5 3 tax year shall not exceed the excess, if any, of the 5 4 tax determined in section 422.5, subsection 1, 5 5 paragraphs "a" through "d" and "j", over the state 5 6 alternative minimum tax as determined in section 5 7 422.5, subsection 1, paragraph "k". 5 8 The net minimum tax for a tax year is the excess, 5 9 if any, of the tax determined in section 422.5, 5 10 subsection 1, paragraph "k", for the tax year over the 5 11 tax determined in section 422.5, subsection 1, 5 12 paragraphs "a" through "d" and "j", for the tax year. 5 13 The adjusted net minimum tax for a tax year is the 5 14 net minimum tax for the tax year reduced by the amount 5 15 which would be the net minimum tax if the only item of 5 16 tax preference taken into account was that described 5 17 in paragraph (6) of section 57(a) of the Internal 5 18 Revenue Code. 5 19 Sec. 10. APPLICABILITY DATE. This Act applies 5 20 retroactively to January 1, 2003, for tax years 5 21 beginning on or after that date." 5 22 #2. Title page, by striking lines 1 through 3 and 5 23 inserting the following: "An Act relating to the 5 24 individual income tax by eliminating the deduction for 5 25 federal taxes paid and adjusting the income tax rates 5 26 and bracket amounts and including a retroactive 5 27 applicability date provision." 5 28 5 29 5 30 5 31 SHOULTZ of Black Hawk 5 32 HF 701.203 80 5 33 mg/sh
Text: H01568 Text: H01570 Text: H01500 - H01599 Text: H Index Bills and Amendments: General Index Bill History: General Index
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