Senate File 547 - Introduced



                                       SENATE FILE       
                                       BY  CONNOLLY


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

                                      A BILL FOR

  1 An Act relating to the taxation of deposits made into accounts of
  2    foreign trusts and shell corporations, requiring the reporting
  3    of the establishment of such accounts, and including effective
  4    and applicability date provisions.
  5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  6 TLSB 1733XS 82
  7 mg/je/5

PAG LIN



  1  1    Section 1.  NEW SECTION.  422.76  TAX HAVENS AND SHELL
  1  2 CORPORATIONS.
  1  3    In order to assist the department in collecting individual
  1  4 and corporate income taxes and overcome tax avoidance,
  1  5 financial institutions doing business in this state that open
  1  6 an account for a foreign trust or corporation on behalf of a
  1  7 resident of this state or business doing business within this
  1  8 state shall report, on forms approved by the department, the
  1  9 name and taxpayer identification number of any person involved
  1 10 with the account, moneys deposited into the account, and other
  1 11 information deemed necessary by the department.
  1 12    If the department determines that a foreign trust or
  1 13 corporation was created primarily for the avoidance of
  1 14 taxation within the United States, the department shall treat
  1 15 any moneys deposited into such account as income earned in
  1 16 this state and shall impose the appropriate income tax on such
  1 17 income to the extent the income is not taxable in another
  1 18 state or the trust or corporation establishes beyond a
  1 19 reasonable doubt that the moneys in the account are not income
  1 20 taxable in this state.
  1 21    This section is repealed upon the requirement for such
  1 22 reporting by the Internal Revenue Code or regulation of the
  1 23 treasurer of the United States, if such reports are made
  1 24 available to the department.
  1 25    Sec. 2.  EFFECTIVE AND APPLICABILITY DATES.  This Act takes
  1 26 effect January 1, 2008, and applies to tax years beginning on
  1 27 or after that date.
  1 28                           EXPLANATION
  1 29    This bill requires financial institutions that open
  1 30 accounts for foreign trusts or corporations on behalf of
  1 31 residents of the state or businesses doing business in the
  1 32 state to report to the department of revenue the name and
  1 33 taxpayer identification number of the persons involved with
  1 34 the account.  If the department determines that the foreign
  1 35 trust or corporation was created primarily for the avoidance
  2  1 of taxation within the United States, the moneys in the
  2  2 account shall be considered income earned in the state and
  2  3 subject to the appropriate income tax unless the moneys are
  2  4 taxable in another state or the trust or corporation
  2  5 establishes beyond a reasonable doubt that the moneys are not
  2  6 taxable income.
  2  7    This provision is repealed upon similar reporting required
  2  8 by the Internal Revenue Code or the treasurer of the United
  2  9 States if the reports are made available to the state.
  2 10    The bill takes effect January 1, 2008, for tax years
  2 11 beginning on or after that date.
  2 12 LSB 1733XS 82
  2 13 mg:rj/je/5