Text: HF00700 Text: HF00702 Text: HF00700 - HF00799 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 422.5, subsection 1, paragraphs a 1 2 through i, Code 2003, are amended by striking the paragraphs 1 3 and inserting in lieu thereof the following: 1 4 a. On all taxable income from zero through eight thousand 1 5 dollars, one and nine-tenths percent. 1 6 b. On all taxable income exceeding eight thousand dollars 1 7 but not exceeding one hundred thousand dollars, four and one- 1 8 half percent. 1 9 c. On all taxable income exceeding one hundred thousand 1 10 dollars, four and eight-tenths percent. 1 11 Sec. 2. Section 422.5, subsection 1, paragraph j, Code 1 12 2003, is amended to read as follows: 1 13 j. (1) The tax imposed upon the taxable income of a 1 14 nonresident shall be computed by reducing the amount 1 15 determined pursuant to paragraphs "a" through"i""c" by the 1 16 amounts of nonrefundable credits under this division and by 1 17 multiplying this resulting amount by a fraction of which the 1 18 nonresident's net income allocated to Iowa, as determined in 1 19 section 422.8, subsection 2, paragraph "a", is the numerator 1 20 and the nonresident's total net income computed under section 1 21 422.7 is the denominator. This provision also applies to 1 22 individuals who are residents of Iowa for less than the entire 1 23 tax year. 1 24 (2) The tax imposed upon the taxable income of a resident 1 25 shareholder in an S corporation which has in effect for the 1 26 tax year an election under subchapter S of the Internal 1 27 Revenue Code and carries on business within and without the 1 28 state may be computed by reducing the amount determined 1 29 pursuant to paragraphs "a" through"i""c" by the amounts of 1 30 nonrefundable credits under this division and by multiplying 1 31 this resulting amount by a fraction of which the resident's 1 32 net income allocated to Iowa, as determined in section 422.8, 1 33 subsection 2, paragraph "b", is the numerator and the 1 34 resident's total net income computed under section 422.7 is 1 35 the denominator. If a resident shareholder has elected to 2 1 take advantage of this subparagraph, and for the next tax year 2 2 elects not to take advantage of this subparagraph, the 2 3 resident shareholder shall not reelect to take advantage of 2 4 this subparagraph for the three tax years immediately 2 5 following the first tax year for which the shareholder elected 2 6 not to take advantage of this subparagraph, unless the 2 7 director consents to the reelection. This subparagraph also 2 8 applies to individuals who are residents of Iowa for less than 2 9 the entire tax year. 2 10 This subparagraph shall not affect the amount of the 2 11 taxpayer's checkoff to the Iowa election campaign fund under 2 12 section 56.18, the checkoff for the fish and game fund in 2 13 section 456A.16, the credits from tax provided in sections 2 14 422.10, 422.11A, and 422.12 and the allocation of these 2 15 credits between spouses if the taxpayers filed separate 2 16 returns or separately on combined returns. 2 17 Sec. 3. Section 422.5, subsection 1, paragraph k, 2 18 unnumbered paragraph 1, Code 2003, is amended to read as 2 19 follows: 2 20 There is imposed upon every resident and nonresident of 2 21 this state, including estates and trusts, the greater of the 2 22 tax determined in paragraphs "a" through "c" and "j" or the 2 23 state alternative minimum tax equal to seventy-five percent of 2 24 the maximum state individual income tax rate for the tax year, 2 25 rounded to the nearest one-tenth of one percent, of the state 2 26 alternative minimum taxable income of the taxpayer as computed 2 27 under this paragraph. 2 28 Sec. 4. Section 422.5, subsection 2, Code 2003, is amended 2 29 to read as follows: 2 30 2. However, the tax shall not be imposed on a resident or 2 31 nonresident whose net income, as defined in section 422.7, is 2 32thirteenfifteen thousandfive hundreddollars or less in the 2 33 case of married persons filing jointly or filing separately on 2 34 a combined return, unmarried heads of household, and surviving 2 35 spouses ornineeleven thousand dollars or less in the case of 3 1 all other persons; but in the event that the payment of tax 3 2 under this division would reduce the net income to less than 3 3thirteenfifteen thousandfive hundreddollars ornineeleven 3 4 thousand dollars as applicable, then the tax shall be reduced 3 5 to that amount which would result in allowing the taxpayer to 3 6 retain a net income ofthirteenfifteen thousandfive hundred3 7 dollars ornineeleven thousand dollars as applicable. The 3 8 preceding sentence does not apply to estates or trusts. For 3 9 the purpose of this subsection, the entire net income, 3 10 including any part of the net income not allocated to Iowa, 3 11 shall be 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 not 3 14 taxable under this division as a result of the government 3 15 pension exclusions in section 422.7, or any other state law. 3 16 If the combined net income of a husband and wife exceeds 3 17thirteenfifteen thousandfive hundreddollars, neither of 3 18 them shall receive the benefit of this subsection, and it is 3 19 immaterial whether they file a joint return or separate 3 20 returns. However, if a husband and wife file separate returns 3 21 and have a combined net income ofthirteenfifteen thousand 3 22five hundreddollars or less, neither spouse shall receive the 3 23 benefit of this paragraph, if one spouse has a net operating 3 24 loss and elects to carry back or carry forward the loss as 3 25 provided in section 422.9, subsection 3. A person who is 3 26 claimed as a dependent by another person as defined in section 3 27 422.12 shall not receive the benefit of this subsection if the 3 28 person claiming the dependent has net income exceeding 3 29thirteenfifteen thousandfive hundreddollars ornineeleven 3 30 thousand dollars as applicable or the person claiming the 3 31 dependent and the person's spouse have combined net income 3 32 exceedingthirteenfifteen thousandfive hundreddollars or 3 33nineeleven thousand dollars as applicable. 3 34 In addition, if the married persons', filing jointly or 3 35 filing separately on a combined return, unmarried head of 4 1 household's, or surviving spouse's net income exceedsthirteen4 2 fifteen thousandfive hundreddollars, the regular tax imposed 4 3 under this division shall be the lesser of themaximum state4 4individual income tax rateproduct of eight percent times the 4 5 portion of the net income in excess ofthirteenfifteen 4 6 thousandfive hundreddollars or the regular tax liability 4 7 computed without regard to this sentence. Taxpayers electing 4 8 to file separately shall compute the alternate tax described 4 9 in this paragraph using the total net income of the husband 4 10 and wife. The alternate tax described in this paragraph does 4 11 not apply if one spouse elects to carry back or carry forward 4 12 the loss as provided in section 422.9, subsection 3. 4 13 Sec. 5. Section 422.5, subsection 5, Code 2003, is amended 4 14 to read as follows: 4 15 5. Upon determination of the latest cumulative inflation 4 16 factor, the director shall multiply each dollar amount set 4 17 forth in subsection 1, paragraphs "a" through"i""c" of this 4 18 section by this cumulative inflation factor, shall round off 4 19 the resulting product to the nearest one dollar, and shall 4 20 incorporate the result into the income tax forms and 4 21 instructions for each tax year. 4 22 Sec. 6. Section 422.11B, Code 2003, is amended to read as 4 23 follows: 4 24 422.11B MINIMUM TAX CREDIT. 4 25 1. There is allowed as a credit against the tax determined 4 26 in section 422.5, subsection 1, paragraphs "a" through "c" and 4 27 "j" for a tax year an amount equal to the minimum tax credit 4 28 for that tax year. 4 29 The minimum tax credit for a tax year is the excess, if 4 30 any, of the adjusted net minimum tax imposed for all prior tax 4 31 years beginning on or after January 1, 1987, over the amount 4 32 allowable as a credit under this section for those prior tax 4 33 years. 4 34 2. The allowable credit under subsection 1 for a tax year 4 35 shall not exceed the excess, if any, of the tax determined in 5 1 section 422.5, subsection 1, paragraphs "a" through "c" and 5 2 "j" over the state alternative minimum tax as determined in 5 3 section 422.5, subsection 1, paragraph "k". 5 4 The net minimum tax for a tax year is the excess, if any, 5 5 of the tax determined in section 422.5, subsection 1, 5 6 paragraph "k" for the tax year over the tax determined in 5 7 section 422.5, subsection 1, paragraphs "a" through "c" and 5 8 "j" for the tax year. 5 9 The adjusted net minimum tax for a tax year is the net 5 10 minimum tax for the tax year reduced by the amount which would 5 11 be the net minimum tax if the only item of tax preference 5 12 taken into account was that described in paragraph (6) of 5 13 section 57(a) of the Internal Revenue Code. 5 14 Sec. 7. INCOME TAX IMPLEMENTATION COMMITTEE. 5 15 1. On or before July 1, 2003, the department of revenue 5 16 and finance, in consultation with the department of 5 17 management, shall initiate and coordinate the establishment of 5 18 an income tax implementation committee and provide staffing 5 19 assistance by the committee. The income tax implementation 5 20 committee shall include representatives of the general 5 21 assembly, the department of revenue and finance, the 5 22 department of management, business tax groups, businesses in 5 23 Iowa, groups representing Iowa taxpayers, certified public 5 24 accountants, members of the general public, and other 5 25 appropriate stakeholders. 5 26 2. The committee shall study and make recommendations 5 27 relating to the imposition of new income tax rates, filing 5 28 threshold, alternative minimum tax, treatment of current 5 29 exemptions, credits, and deductions. The committee shall also 5 30 consider alternate sources of revenue for the general fund of 5 31 the state to replace revenue as a result from general tax 5 32 relief as provided for in this bill, including but not limited 5 33 to, sales and use taxes. 5 34 3. The committee shall submit to the general assembly by 5 35 January 1, 2004, and January 1, 2005, a report for each of 6 1 those years resolving issues in subsection 2, and other 6 2 related issues for implementation of the other provisions in 6 3 this Act. 6 4 Sec. 8. CONTINGENT EFFECTIVE AND APPLICABILITY DATE. 6 5 1. Except as provided in subsection 3, this Act takes 6 6 effect upon ratification of an amendment to the Constitution 6 7 of the State of Iowa requiring a three-fifths majority vote of 6 8 each house of the general assembly in order to pass a bill 6 9 that amends the state income tax or the state sales and use 6 10 taxes by raising the rate or rates of the income tax or sales 6 11 and use taxes. 6 12 2. If this Act takes effect as provided in subsection 1, 6 13 this Act applies to tax years beginning on or after January 1 6 14 following the effective date of this Act. 6 15 3. The section of this Act relating to the establishment 6 16 of the income tax implementation committee, being deemed of 6 17 immediate importance, takes effect up enactment. 6 18 HF 701 6 19 mg/es/25
Text: HF00700 Text: HF00702 Text: HF00700 - HF00799 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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