HOUSE FILE 638

BY  STECKMAN, THEDE, HANSON, and RUNNING-MARQUARDT

A BILL FOR

An Act providing a deduction for certain casualty losses and including effective and retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  DISASTER-RELATED PERSONAL CASUALTY LOSS DEDUCTIONS.  A taxpayer is allowed to take the deduction for disaster-related casualty losses under section 165(h) of the Internal Revenue Code, as modified by the Heartland Disaster Relief Act of 2008, Pub. L. No. 110-343, in computing net income for state tax purposes.
   Sec. 2.  EFFECTIVE UPON ENACTMENT AND RETROACTIVE APPLICABILITY.  This Act, being deemed of immediate importance, takes effect upon enactment and applies retroactively to January 1, 2008, for tax years beginning on or after that date and before January 1, 2009.
   Sec. 3.  REFUNDS.  A claim for credit or refund of income taxes paid that arises under the provisions of this Act is considered timely if such a claim is filed with the department of revenue on or before October 1, 2011.
EXPLANATION
   This bill allows taxpayers to take deductions for certain disaster-related casualty losses.
   In 2008, the midwest suffered significant property casualty losses due to natural disasters. In response, the federal government passed the Heartland Disaster Relief Act which amended the casualty loss provisions of the Internal Revenue Code. In 2009 and 2010, the state of Iowa did not conform to the federal provisions related to the computation of net income.
   This bill allows Iowa taxpayers to take the deductions for the 2008 tax year.
   A claim for credit or refund of income taxes paid that arises under the provisions of the bill is considered timely if such a claim is filed with the department of revenue on or before October 1, 2011.
   The bill is effective upon enactment and applies retroactively for the 2008 tax year.