House Study Bill 593 SENATE/HOUSE FILE BY (PROPOSED DEPARTMENT OF REVENUE BILL) Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act updating the Code references to the Internal Revenue Code 2 and including retroactive applicability and effective date 3 provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5382DP 81 6 sc/je/5 PAG LIN 1 1 Section 1. Section 15.335, subsection 4, unnumbered 1 2 paragraph 2, Code Supplement 2005, is amended to read as 1 3 follows: 1 4 For purposes of this section, "Internal Revenue Code" means 1 5 the Internal Revenue Code in effect on January311,20051 6 2006. 1 7 Sec. 2. Section 15A.9, subsection 8, paragraph e, 1 8 unnumbered paragraph 2, Code Supplement 2005, is amended to 1 9 read as follows: 1 10 For purposes of this subsection, "Internal Revenue Code" 1 11 means the Internal Revenue Code in effect on January311, 1 1220052006. 1 13 Sec. 3. Section 422.3, subsection 5, Code Supplement 2005, 1 14 is amended to read as follows: 1 15 5. "Internal Revenue Code" means the Internal Revenue Code 1 16 of 1954, prior to the date of its redesignation as the 1 17 Internal Revenue Code of 1986 by the Tax Reform Act of 1986, 1 18 or means the Internal Revenue Code of 1986 as amended to and 1 19 including January311,20052006. 1 20 Sec. 4. Section 422.10, subsection 3, unnumbered paragraph 1 21 2, Code Supplement 2005, is amended to read as follows: 1 22 For purposes of this section, "Internal Revenue Code" means 1 23 the Internal Revenue Code in effect on January311,20051 24 2006. 1 25 Sec. 5. Section 422.32, subsection 7, Code Supplement 1 26 2005, is amended to read as follows: 1 27 7. "Internal Revenue Code" means the Internal Revenue Code 1 28 of 1954, prior to the date of its redesignation as the 1 29 Internal Revenue Code of 1986 by the Tax Reform Act of 1986, 1 30 or means the Internal Revenue Code of 1986 as amended to and 1 31 including January311,20052006. 1 32 Sec. 6. Section 422.33, subsection 5, paragraph d, 1 33 unnumbered paragraph 2, Code Supplement 2005, is amended to 1 34 read as follows: 1 35 For purposes of this subsection, "Internal Revenue Code" 2 1 means the Internal Revenue Code in effect on January311, 2 220052006. 2 3 Sec. 7. Section 504B.5, Code 2005, is amended to read as 2 4 follows: 2 5 504B.5 INTERNAL REVENUE CODE UPDATED. 2 6 All references to sections of the Internal Revenue Code 2 7 shall mean the Code asamended to and including January 1, 2 8 1971defined in section 422.3. 2 9 Sec. 8. Section 633.266, Code 2005, is amended to read as 2 10 follows: 2 11 633.266 ADJUSTED GROSS ESTATE. 2 12 Unless otherwise defined, "adjusted gross estate" in a will 2 13 means the entire value of the gross estate as determined under 2 14 the federal estate tax less the aggregate amount of the 2 15 deductions allowed by sections 2053 and 2054 of the Internal 2 16 Revenue Code asamended to and including January 1, 19822 17 defined in section 422.3. 2 18 Sec. 9. RETROACTIVE APPLICABILITY. This Act applies 2 19 retroactively to January 1, 2005, for tax years beginning on 2 20 or after that date. 2 21 Sec. 10. EFFECTIVE DATE. This Act, being deemed of 2 22 immediate importance, takes effect upon enactment. 2 23 EXPLANATION 2 24 This bill updates the references to the Internal Revenue 2 25 Code to make the federal income tax revisions enacted by 2 26 Congress in 2005 applicable for Iowa income tax purposes. 2 27 Code sections 422.3 and 422.32, general definitions sections 2 28 in the income tax chapter of the Code, are amended to update 2 29 the reference to the Internal Revenue Code. 2 30 Code sections 15.335, 15A.9, 422.10, and 422.33 are amended 2 31 to update the Code references to the state research activities 2 32 credit for individuals, corporations, corporations in economic 2 33 development areas, and corporations in quality jobs enterprise 2 34 zones to include the 2005 federal changes in the research 2 35 activities credit. 3 1 Code section 504B.5, relating to nonprofit corporations and 3 2 federal tax liability, and Code section 633.266, relating to 3 3 the probate code, are amended to reference the Internal 3 4 Revenue Code as defined in the definitions section of the 3 5 income tax chapter of the Code. 3 6 The bill takes effect upon enactment and applies 3 7 retroactively to January 1, 2005, for tax years beginning on 3 8 or after that date. 3 9 LSB 5382DP 81 3 10 sc:rj/je/5