Text: HSB00318 Text: HSB00320 Text: HSB00300 - HSB00399 Text: HSB 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 5, Code 2003, is amended 2 29 to read as follows: 2 30 5. Upon determination of the latest cumulative inflation 2 31 factor, the director shall multiply each dollar amount set 2 32 forth in subsection 1, paragraphs "a" through"i""c" of this 2 33 section by this cumulative inflation factor, shall round off 2 34 the resulting product to the nearest one dollar, and shall 2 35 incorporate the result into the income tax forms and 3 1 instructions for each tax year. 3 2 Sec. 5. Section 422.11B, Code 2003, is amended to read as 3 3 follows: 3 4 422.11B MINIMUM TAX CREDIT. 3 5 1. There is allowed as a credit against the tax determined 3 6 in section 422.5, subsection 1, paragraphs "a" through "c" and 3 7 "j" for a tax year an amount equal to the minimum tax credit 3 8 for that tax year. 3 9 The minimum tax credit for a tax year is the excess, if 3 10 any, of the adjusted net minimum tax imposed for all prior tax 3 11 years beginning on or after January 1, 1987, over the amount 3 12 allowable as a credit under this section for those prior tax 3 13 years. 3 14 2. The allowable credit under subsection 1 for a tax year 3 15 shall not exceed the excess, if any, of the tax determined in 3 16 section 422.5, subsection 1, paragraphs "a" through "c" and 3 17 "j" over the state alternative minimum tax as determined in 3 18 section 422.5, subsection 1, paragraph "k". 3 19 The net minimum tax for a tax year is the excess, if any, 3 20 of the tax determined in section 422.5, subsection 1, 3 21 paragraph "k" for the tax year over the tax determined in 3 22 section 422.5, subsection 1, paragraphs "a" through "c" and 3 23 "j" for the tax year. 3 24 The adjusted net minimum tax for a tax year is the net 3 25 minimum tax for the tax year reduced by the amount which would 3 26 be the net minimum tax if the only item of tax preference 3 27 taken into account was that described in paragraph (6) of 3 28 section 57(a) of the Internal Revenue Code. 3 29 Sec. 6. CONTINGENT EFFECTIVE AND APPLICABILITY DATE. 3 30 1. This Act takes effect upon ratification of an amendment 3 31 to the Constitution of the State of Iowa requiring a three- 3 32 fifths majority vote of each house of the general assembly in 3 33 order to pass a bill that amends the state income tax or the 3 34 state sales and use taxes by raising the rate or rates of the 3 35 income tax or sales and use taxes. 4 1 2. If this Act takes effect as provided in subsection 1, 4 2 this Act applies to tax years ending after the effective date 4 3 of this Act. 4 4 EXPLANATION 4 5 This bill reduces the individual income tax rates from the 4 6 current range of .36 percent to 8.98 percent to a range of 1.9 4 7 percent to 4.8 percent. The number of brackets are reduced 4 8 from the current nine to three. 4 9 The effective date of the bill is contingent upon the 4 10 ratification of an amendment to the Iowa Constitution that 4 11 requires a 60 percent vote of each house of the general 4 12 assembly in order to amend the state income tax or state sales 4 13 and use taxes by raising the rate or rates of the state income 4 14 tax or sales and use taxes. If the bill takes effect, it 4 15 applies to tax years ending after the effective date of the 4 16 bill. 4 17 LSB 3536YC 80 4 18 mg/pj/5
Text: HSB00318 Text: HSB00320 Text: HSB00300 - HSB00399 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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