Senate File 2214

                                       SENATE FILE       
                                       BY  COMMITTEE ON ECONOMIC
                                           GROWTH

                                       (SUCCESSOR TO SSB 3116)


    Passed Senate, Date               Passed House,  Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act relating to the deduction for certain qualifying tangible
  2    depreciable property and including effective and retroactive
  3    applicability date provisions.
  4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  5 TLSB 6564SV 80
  6 sc/cf/24

PAG LIN

  1  1    Section 1.  Section 422.3, subsection 5, Code Supplement
  1  2 2003, is amended to read as follows:
  1  3    5.  "Internal Revenue Code" means the Internal Revenue Code
  1  4 of 1954, prior to the date of its redesignation as the
  1  5 Internal Revenue Code of 1986 by the Tax Reform Act of 1986,
  1  6 or means the Internal Revenue Code of 1986 as amended to and
  1  7 including January 1, 2003, and as amended by Pub. L. No. 108=
  1  8 173 } 202, amending section 179 of the Internal Revenue Code
  1  9 by increasing the amount of the cost of qualifying property
  1 10 that may be deducted in the first year the qualifying property
  1 11 is placed in service, whichever is applicable.
  1 12    Sec. 2.  EFFECTIVE AND APPLICABILITY DATES.  This Act,
  1 13 being deemed of immediate importance, takes effect upon
  1 14 enactment and applies retroactively to property placed in
  1 15 service after December 31, 2002, but before January 1, 2006.
  1 16                           EXPLANATION
  1 17    Internal Revenue Code section 179 allows taxpayers that
  1 18 purchase qualifying tangible depreciable property to deduct
  1 19 the purchase cost of the property, new or used, in the year
  1 20 that it is placed in service.  This deduction is in lieu of
  1 21 depreciating the property over a number of years.  The federal
  1 22 Jobs and Growth Tax Relief Reconciliation Act of 2003, Pub. L.
  1 23 No. 108=173, increased the maximum deduction from $25,000 to
  1 24 $100,000 for property placed in service after December 31,
  1 25 2002, but before January 1, 2006.  It also increased the
  1 26 maximum investment limitation of qualifying property from
  1 27 $200,000 to $400,000 for that time period.
  1 28    This bill conforms state income tax law with the provisions
  1 29 of the federal law that enacted these increases.
  1 30    The bill takes effect upon enactment and applies
  1 31 retroactively.
  1 32 LSB 6564SV 80
  1 33 sc/cf/24
  1 34
  1 35