House File 742 - Introduced
HOUSE FILE
BY HELLAND
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to state taxation and regulation by coupling with
2 certain bonus depreciation provisions in the Internal Revenue
3 Code, increasing the amount of certain casualty loss
4 deductions, providing for a disaster recovery wages tax
5 credit, providing a sales tax exemption, and providing for
6 certain gubernatorial powers and including effective and
7 retroactive applicability date provisions.
8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 DIVISION I
1 2 BONUS DEPRECIATION
1 3 Section 1. Section 422.7, Code 2009, is amended by adding
1 4 the following new subsection:
1 5 NEW SUBSECTION. 54. A taxpayer is allowed to take the
1 6 additional first=year depreciation allowance under section
1 7 168(k)(4) of the Internal Revenue Code, as amended by Pub. L.
1 8 No. 110=185, in computing net income for state tax purposes.
1 9 Sec. 2. Section 422.35, Code 2009, is amended by adding
1 10 the following new subsection:
1 11 NEW SUBSECTION. 25. A taxpayer is allowed to take the
1 12 additional first=year depreciation allowance under section
1 13 168(k)(4) of the Internal Revenue Code, as amended by Pub. L.
1 14 No. 110=185, in computing net income for state tax purposes.
1 15 Sec. 3. EFFECTIVE AND RETROACTIVE APPLICABILITY DATES.
1 16 This division of this Act, being deemed of immediate
1 17 importance, takes effect upon enactment and applies
1 18 retroactively to January 1, 2008, for tax years beginning on
1 19 or after that date.
1 20 DIVISION II
1 21 CASUALTY LOSS DEDUCTIONS
1 22 Sec. 4. Section 422.7, Code 2009, is amended by adding the
1 23 following new subsection:
1 24 NEW SUBSECTION. 18. Notwithstanding certain limitations
1 25 on the deduction of personal casualty losses in section 165(h)
1 26 of the Internal Revenue Code, a taxpayer may subtract the full
1 27 amount of a personal casualty loss to the extent the loss
1 28 exceeds personal casualty gains for the taxable year.
1 29 Sec. 5. EFFECTIVE AND RETROACTIVE APPLICABILITY DATES.
1 30 This division of this Act, being deemed of immediate
1 31 importance, takes effect upon enactment and applies
1 32 retroactively to January 1, 2008, for tax years beginning on
1 33 or after that date.
1 34 DIVISION III
1 35 DISASTER RECOVERY WAGES TAX CREDIT
2 1 Sec. 6. NEW SECTION. 422.11X DISASTER RECOVERY WAGES TAX
2 2 CREDIT.
2 3 1. The taxes imposed under this division, less the credits
2 4 allowed under section 422.12, shall be reduced by a disaster
2 5 recovery wages tax credit for the amount of wages paid to
2 6 employees by an employer in certain areas affected by natural
2 7 disasters during calendar year 2008.
2 8 2. To be eligible for the tax credit, an employer shall be
2 9 located in a county declared a disaster area during calendar
2 10 year 2008 by the governor or by a federal official and shall
2 11 have sustained physical damage as a result of a natural
2 12 disaster occurring in calendar year 2008.
2 13 3. An individual may claim a tax credit under this section
2 14 of a partnership, limited liability company, S corporation,
2 15 estate, or trust electing to have income taxed directly to the
2 16 individual. The amount claimed by the individual shall be
2 17 based upon the pro rata share of the individual's earnings
2 18 from the partnership, limited liability company, S
2 19 corporation, estate, or trust.
2 20 4. Any tax credit in excess of the taxpayer's liability
2 21 for the tax year is not refundable, but the taxpayer may elect
2 22 to have the excess credited to the tax liability for the
2 23 following two years or until depleted, whichever is earlier.
2 24 A tax credit shall not be carried back to a tax year prior to
2 25 the tax year in which the taxpayer first receives the tax
2 26 credit.
2 27 5. A taxpayer eligible for the tax credit shall include
2 28 with the taxpayer's return an affidavit verifying that the
2 29 taxpayer sustained physical damage as a result of a natural
2 30 disaster occurring during calendar year 2008 and shall include
2 31 information establishing the total amount of wages paid to
2 32 employees during the taxable year.
2 33 6. A taxpayer taking a deduction for wages paid to
2 34 employees in a taxable year cannot claim a tax credit under
2 35 this section.
3 1 7. This section is repealed June 30, 2011. This repeal
3 2 does not affect the ability to carry forward tax credits
3 3 pursuant to subsection 4.
3 4 Sec. 7. Section 422.33, Code 2009, is amended by adding
3 5 the following new subsection:
3 6 NEW SUBSECTION. 27. The taxes imposed under this division
3 7 shall be reduced by a disaster recovery wages tax credit in
3 8 the same manner, for the same amount, and under the same
3 9 conditions as provided in section 422.11X.
3 10 Sec. 8. Section 422.60, Code 2009, is amended by adding
3 11 the following new subsection:
3 12 NEW SUBSECTION. 15. The taxes imposed under this division
3 13 shall be reduced by a disaster recovery wages tax credit in
3 14 the same manner, for the same amount, and under the same
3 15 conditions as provided in section 422.11X.
3 16 Sec. 9. NEW SECTION. 432.12M DISASTER RECOVERY WAGES TAX
3 17 CREDIT.
3 18 The taxes imposed under this chapter shall be reduced by a
3 19 disaster recovery wages tax credit in the same manner, for the
3 20 same amount, and under the same conditions as provided in
3 21 section 422.11X.
3 22 Sec. 10. Section 533.329, subsection 2, Code 2009, is
3 23 amended by adding the following new paragraph:
3 24 NEW PARAGRAPH. n. The moneys and credits tax imposed
3 25 under this section shall be reduced by a disaster recovery
3 26 wages tax credit in the same manner, for the same amount, and
3 27 under the same conditions as provided in section 422.11X.
3 28 Sec. 11. EFFECTIVE AND RETROACTIVE APPLICABILITY DATES.
3 29 This division of this Act, being deemed of immediate
3 30 importance, takes effect upon enactment and applies
3 31 retroactively to January 1, 2008, for tax years beginning on
3 32 or after that date.
3 33 DIVISION IV
3 34 SALES TAX
3 35 Sec. 12. Section 423.3, Code 2009, is amended by adding
4 1 the following new subsection:
4 2 NEW SUBSECTION. 95. The sales price of equipment used in
4 3 disaster recovery efforts following a disaster emergency
4 4 proclamation by the governor pursuant to section 29C.6 if the
4 5 equipment is purchased following the proclamation.
4 6 DIVISION V
4 7 GUBERNATORIAL DISASTER POWERS
4 8 Sec. 13. Section 29C.6, subsection 6, Code 2009, is
4 9 amended to read as follows:
4 10 6. a. Suspend the provisions of any regulatory statute
4 11 prescribing the procedures for conduct of state business, or
4 12 the orders or rules, of any state agency, if strict compliance
4 13 with the provisions of any statute, order, or rule would in
4 14 any way prevent, hinder, or delay necessary action in coping
4 15 with the emergency by stating in a proclamation such reasons.
4 16 Upon the request of a local governing body, the governor may
4 17 also suspend statutes limiting local governments in their
4 18 ability to provide services to aid disaster victims.
4 19 b. When a disaster emergency has been proclaimed pursuant
4 20 to subsection 1, suspend all inspections conducted by all
4 21 state agencies. The governor shall identify in a proclamation
4 22 the inspections to be suspended and the suspension time
4 23 period.
4 24 c. When a disaster emergency has been proclaimed pursuant
4 25 to subsection 1, limit regulatory action that may be exercised
4 26 by the department of workforce development and the department
4 27 of natural resources. Under such limits, the departments
4 28 shall only issue warnings for violations of applicable laws
4 29 and rules if the violations are willful, repeated, or highly
4 30 egregious violations. The governor shall identify in a
4 31 proclamation the time period during which the provisions of
4 32 this paragraph shall apply.
4 33 EXPLANATION
4 34 This bill makes certain changes to the tax laws and other
4 35 related changes to assist in the recovery from natural
5 1 disasters occurring in calendar year 2008.
5 2 DIVISION I. This division allows taxpayers to avail
5 3 themselves of the additional first=year depreciation in
5 4 section 168(k)(4) of the Internal Revenue Code passed by
5 5 Congress as part of the Economic Stimulus Act of 2008 (Pub. L.
5 6 No. 110=185).
5 7 This division of the bill takes effect upon enactment and
5 8 applies retroactively to January 1, 2008, for tax years
5 9 beginning on or after that date.
5 10 DIVISION II. This division provides that, notwithstanding
5 11 certain limitations on the deduction of personal casualty
5 12 losses in Internal Revenue Code section 165(h), a taxpayer may
5 13 subtract the full amount of a personal casualty loss to the
5 14 extent the loss exceeds personal casualty gains for the
5 15 taxable year.
5 16 This division of the bill takes effect upon enactment and
5 17 applies retroactively to January 1, 2008, for tax years
5 18 beginning on or after that date.
5 19 DIVISION III. This division provides a tax credit to
5 20 employers in disaster affected areas who have sustained
5 21 physical damage as a result of the natural disasters of 2008.
5 22 The credit is available in an amount equal to the wages paid
5 23 to employees. Taxpayers taking a deduction for wages paid to
5 24 employees cannot also claim the tax credit. The tax credit is
5 25 not refundable and expires June 30, 2011.
5 26 This division of the bill takes effect upon enactment and
5 27 applies retroactively to January 1, 2008, for tax years
5 28 beginning on or after that date.
5 29 DIVISION IV. This division creates a sales tax exemption
5 30 for the purchase of equipment used in disaster recovery
5 31 efforts following a disaster emergency proclamation by the
5 32 governor if the equipment is purchased following the
5 33 proclamation.
5 34 DIVISION V. This division provides that when the governor
5 35 makes a disaster emergency proclamation, the governor may
6 1 temporarily suspend all inspections conducted by all state
6 2 agencies. The governor shall identify the inspections to be
6 3 suspended and the suspension time period in a proclamation.
6 4 The division provides that when the governor makes a
6 5 disaster emergency proclamation, the governor may temporarily
6 6 limit regulatory action that may be exercised by the
6 7 department of workforce development and the department of
6 8 natural resources. Under such limits, the departments shall
6 9 only issue warnings for violations of applicable laws and
6 10 rules unless the violations are willful, repeated, or highly
6 11 egregious violations. The division requires the governor to
6 12 identify in a proclamation the time period during which the
6 13 limits will apply.
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