SENATE FILE 529

BY  CHELGREN

A BILL FOR

An Act excluding from the computation of net income for state tax purposes the net capital gain from sales or exchanges of assets and including retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 422.7, subsection 21, Code 2011, is amended by striking the subsection and inserting in lieu thereof the following:
   21.  Subtract, to the extent not otherwise excluded, the taxpayer’s net capital gain as defined in section 1222 of the Internal Revenue Code.
   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, 2011, for tax years beginning on or after that date.
EXPLANATION
   This bill eliminates the taxation of an individual’s net capital gain under the individual income tax. An individual’s net capital gain equals the excess of the gains from the sales or exchanges of long-term capital assets over the losses from such sales or exchanges minus the excess of losses from the sales or exchanges of short-term capital assets over the gains from such sales or exchanges.
   The bill takes effect upon enactment and applies retroactively to January 1, 2011, for tax years beginning on or after that date.