House
Study
Bill
648
-
Introduced
SENATE/HOUSE
FILE
_____
BY
(PROPOSED
DEPARTMENT
OF
REVENUE
BILL)
A
BILL
FOR
An
Act
relating
to
the
administration
of
the
tax
and
related
1
laws
of
the
department
of
revenue,
including
powers
and
2
duties
of
the
director
and
administration
of
the
individual
3
income
tax,
inheritance
tax,
motor
fuel
and
special
fuel
4
taxes,
and
including
retroactive
applicability
provisions.
5
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
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DIVISION
I
1
POWER
AND
DUTIES
OF
THE
DIRECTOR
2
Section
1.
Section
421.17,
Code
2014,
is
amended
by
adding
3
the
following
new
subsection:
4
NEW
SUBSECTION
.
33.
At
the
director’s
discretion,
to
5
receive
and
retain
in
an
electronic
format
any
record,
6
application,
tax
return,
deposit,
report,
or
any
other
7
information
or
document
required
to
be
submitted
to
the
8
department.
9
DIVISION
II
10
INDIVIDUAL
INCOME
TAX
11
Sec.
2.
Section
422.5,
subsection
3,
paragraph
a,
Code
2014,
12
is
amended
to
read
as
follows:
13
a.
The
tax
shall
not
be
imposed
on
a
resident
or
nonresident
14
whose
net
income,
as
defined
in
section
422.7
,
is
thirteen
15
thousand
five
hundred
dollars
or
less
in
the
case
of
married
16
persons
filing
jointly
or
filing
separately
on
a
combined
17
return,
heads
of
household,
and
surviving
spouses
or
nine
18
thousand
dollars
or
less
in
the
case
of
all
other
persons;
19
but
in
the
event
that
the
payment
of
tax
under
this
division
20
would
reduce
the
net
income
to
less
than
thirteen
thousand
five
21
hundred
dollars
or
nine
thousand
dollars
as
applicable,
then
22
the
tax
shall
be
reduced
to
that
amount
which
would
result
23
in
allowing
the
taxpayer
to
retain
a
net
income
of
thirteen
24
thousand
five
hundred
dollars
or
nine
thousand
dollars
as
25
applicable.
The
preceding
sentence
does
not
apply
to
estates
26
or
trusts.
For
the
purpose
of
this
subsection
,
the
entire
net
27
income,
including
any
part
of
the
net
income
not
allocated
28
to
Iowa,
shall
be
taken
into
account.
For
purposes
of
this
29
subsection
,
net
income
includes
all
amounts
of
pensions
or
30
other
retirement
income
,
except
social
security
benefits
31
excluded
under
section
422.7,
subsection
13,
paragraph
“d”
,
32
received
from
any
source
which
is
not
taxable
under
this
33
division
as
a
result
of
the
government
pension
exclusions
in
34
section
422.7
,
or
any
other
state
law.
If
the
combined
net
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income
of
a
husband
and
wife
exceeds
thirteen
thousand
five
1
hundred
dollars,
neither
of
them
shall
receive
the
benefit
2
of
this
subsection
,
and
it
is
immaterial
whether
they
file
a
3
joint
return
or
separate
returns.
However,
if
a
husband
and
4
wife
file
separate
returns
and
have
a
combined
net
income
of
5
thirteen
thousand
five
hundred
dollars
or
less,
neither
spouse
6
shall
receive
the
benefit
of
this
paragraph,
if
one
spouse
has
7
a
net
operating
loss
and
elects
to
carry
back
or
carry
forward
8
the
loss
as
provided
in
section
422.9,
subsection
3
.
A
person
9
who
is
claimed
as
a
dependent
by
another
person
as
defined
in
10
section
422.12
shall
not
receive
the
benefit
of
this
subsection
11
if
the
person
claiming
the
dependent
has
net
income
exceeding
12
thirteen
thousand
five
hundred
dollars
or
nine
thousand
dollars
13
as
applicable
or
the
person
claiming
the
dependent
and
the
14
person’s
spouse
have
combined
net
income
exceeding
thirteen
15
thousand
five
hundred
dollars
or
nine
thousand
dollars
as
16
applicable.
17
Sec.
3.
Section
422.5,
subsection
3B,
paragraph
a,
Code
18
2014,
is
amended
to
read
as
follows:
19
a.
The
tax
shall
not
be
imposed
on
a
resident
or
nonresident
20
who
is
at
least
sixty-five
years
old
on
December
31
of
21
the
tax
year
and
whose
net
income,
as
defined
in
section
22
422.7
,
is
thirty-two
thousand
dollars
or
less
in
the
case
23
of
married
persons
filing
jointly
or
filing
separately
on
a
24
combined
return,
heads
of
household,
and
surviving
spouses
or
25
twenty-four
thousand
dollars
or
less
in
the
case
of
all
other
26
persons;
but
in
the
event
that
the
payment
of
tax
under
this
27
division
would
reduce
the
net
income
to
less
than
thirty-two
28
thousand
dollars
or
twenty-four
thousand
dollars
as
applicable,
29
then
the
tax
shall
be
reduced
to
that
amount
which
would
result
30
in
allowing
the
taxpayer
to
retain
a
net
income
of
thirty-two
31
thousand
dollars
or
twenty-four
thousand
dollars
as
applicable.
32
The
preceding
sentence
does
not
apply
to
estates
or
trusts.
33
For
the
purpose
of
this
subsection
,
the
entire
net
income,
34
including
any
part
of
the
net
income
not
allocated
to
Iowa,
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shall
be
taken
into
account.
For
purposes
of
this
subsection
,
1
net
income
includes
all
amounts
of
pensions
or
other
retirement
2
income
,
except
social
security
benefits
excluded
under
section
3
422.7,
subsection
13,
paragraph
“d”
,
received
from
any
source
4
which
is
not
taxable
under
this
division
as
a
result
of
the
5
government
pension
exclusions
in
section
422.7
,
or
any
other
6
state
law.
If
the
combined
net
income
of
a
husband
and
wife
7
exceeds
thirty-two
thousand
dollars,
neither
of
them
shall
8
receive
the
benefit
of
this
subsection
,
and
it
is
immaterial
9
whether
they
file
a
joint
return
or
separate
returns.
However,
10
if
a
husband
and
wife
file
separate
returns
and
have
a
combined
11
net
income
of
thirty-two
thousand
dollars
or
less,
neither
12
spouse
shall
receive
the
benefit
of
this
paragraph,
if
one
13
spouse
has
a
net
operating
loss
and
elects
to
carry
back
or
14
carry
forward
the
loss
as
provided
in
section
422.9,
subsection
15
3
.
A
person
who
is
claimed
as
a
dependent
by
another
person
as
16
defined
in
section
422.12
shall
not
receive
the
benefit
of
this
17
subsection
if
the
person
claiming
the
dependent
has
net
income
18
exceeding
thirty-two
thousand
dollars
or
twenty-four
thousand
19
dollars
as
applicable
or
the
person
claiming
the
dependent
20
and
the
person’s
spouse
have
combined
net
income
exceeding
21
thirty-two
thousand
dollars
or
twenty-four
thousand
dollars
as
22
applicable.
23
Sec.
4.
RETROACTIVE
APPLICABILITY.
This
division
of
this
24
Act
applies
retroactively
to
January
1,
2014,
for
tax
years
25
beginning
on
or
after
that
date.
26
DIVISION
III
27
INHERITANCE
TAX
28
Sec.
5.
Section
450.94,
subsection
2,
Code
2014,
is
amended
29
to
read
as
follows:
30
2.
Unless
a
return
is
not
required
to
be
filed
pursuant
to
31
section
450.22,
subsection
3
,
or
section
450.53,
subsection
32
1
,
paragraph
“b”
,
the
taxpayer
shall
file
an
inheritance
tax
33
return
on
forms
to
be
prescribed
by
the
director
of
revenue
on
34
or
before
the
last
day
of
the
ninth
month
after
the
death
of
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the
decedent.
When
an
inheritance
tax
return
is
filed,
the
1
department
shall
examine
it
and
determine
the
correct
amount
of
2
tax.
If
the
amount
paid
is
less
than
the
correct
amount
due,
3
the
department
shall
notify
the
taxpayer
of
the
total
amount
4
due
together
with
any
penalty
and
interest
which
shall
be
5
computed
as
a
sum
certain
if
paid
on
or
before
,
with
interest
6
computed
to
the
last
day
of
the
month
in
which
the
notice
is
7
dated
,
or
on
or
before
the
last
day
of
the
following
month
if
8
the
notice
is
dated
after
the
twentieth
day
of
a
month
and
9
before
the
first
day
of
the
following
month
.
10
DIVISION
IV
11
MOTOR
FUEL
AND
SPECIAL
FUEL
TAXES
12
Sec.
6.
Section
452A.64,
Code
2014,
is
amended
to
read
as
13
follows:
14
452A.64
Failure
to
file
return
——
incorrect
return.
15
If
a
return
required
by
this
chapter
is
not
filed,
or
if
a
16
return
when
filed
is
incorrect
or
insufficient
and
the
filer
17
fails
to
file
a
corrected
or
sufficient
return
within
twenty
18
days
after
the
same
is
required
by
notice
from
the
appropriate
19
state
agency
,
the
appropriate
state
agency
shall
determine
the
20
amount
of
tax
due.
The
determination
shall
be
made
from
all
21
information
that
the
appropriate
state
agency
may
be
able
to
22
obtain
and,
if
necessary,
the
agency
may
estimate
the
tax
on
23
the
basis
of
external
indices.
The
appropriate
state
agency
24
shall
give
notice
of
the
determination
to
the
person
liable
25
for
the
tax.
The
determination
shall
fix
the
tax
unless
the
26
person
against
whom
it
is
assessed
shall,
within
sixty
days
27
after
the
giving
of
notice
of
the
determination,
apply
to
28
the
director
of
the
appropriate
state
agency
for
a
hearing
29
or
unless
the
taxpayer
contests
the
determination
by
paying
30
the
tax,
interest,
and
penalty
and
timely
filing
a
claim
for
31
refund.
At
the
hearing,
evidence
may
be
offered
to
support
32
the
determination
or
to
prove
that
it
is
incorrect.
After
the
33
hearing,
the
director
shall
give
notice
of
the
decision
to
the
34
person
liable
for
the
tax.
The
findings
of
the
appropriate
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state
agency
as
to
the
amount
of
fuel
taxes,
penalties
,
and
1
interest
due
from
any
person
shall
be
presumed
to
be
the
2
correct
amount
and
in
any
litigation
which
may
follow,
the
3
certificate
of
the
agency
shall
be
admitted
in
evidence,
shall
4
constitute
a
prima
facie
case
and
shall
impose
upon
the
other
5
party
the
burden
of
showing
any
error
in
the
findings
and
the
6
extent
thereof
or
that
the
finding
was
contrary
to
law.
7
EXPLANATION
8
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
9
the
explanation’s
substance
by
the
members
of
the
general
assembly.
10
This
bill
relates
to
the
administration
of
the
tax
and
11
related
laws
by
the
department
of
revenue.
12
DIVISION
I
——
POWERS
AND
DUTIES
OF
THE
DIRECTOR.
Division
13
I
amends
the
powers
and
duties
of
the
director
of
revenue
to
14
allow
the
director,
at
the
director’s
discretion,
to
receive
15
and
retain
in
an
electronic
format
any
record,
application,
tax
16
return,
deposit,
report,
or
any
other
information
or
document
17
required
to
be
submitted
to
the
department.
18
DIVISION
II
——
INDIVIDUAL
INCOME
TAX.
Division
II
relates
19
to
the
individual
income
tax.
The
division
amends
the
20
calculation
of
net
income
for
purposes
of
determining
whether
21
or
not
a
taxpayer’s
net
income
exceeds
the
amount
at
which
22
the
individual
income
tax
will
not
be
imposed
pursuant
to
23
Code
section
422.5(3)
or
Code
section
422.5(3B)
and
for
which
24
an
individual
income
tax
return
is
not
required
to
be
filed,
25
and
for
purposes
of
calculating
the
alternate
tax
in
those
26
same
Code
sections.
Under
current
law,
all
pension
or
other
27
retirement
income
from
any
source
is
required
to
be
included
in
28
the
calculations,
regardless
of
whether
the
income
is
otherwise
29
excluded
from
the
individual
income
tax
under
Iowa
law.
The
30
division
excludes
from
the
calculations
all
social
security
31
benefits
excluded
from
the
individual
income
tax
under
Iowa
32
law.
33
The
division
applies
retroactively
to
January
1,
2014,
for
34
tax
years
beginning
on
or
after
that
date.
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DIVISION
III
——
INHERITANCE
TAX.
Division
III
relates
to
the
1
inheritance
tax.
The
division
eliminates
the
requirement
that
2
notices
of
assessment
issued
after
the
twentieth
day
of
a
month
3
include
interest
calculated
for
the
next
month.
4
DIVISION
IV
——
MOTOR
FUEL
AND
SPECIAL
FUEL
TAXES.
Division
5
IV
relates
to
motor
fuel
and
special
fuel
taxes.
Current
6
law
requires
that
the
department
of
revenue
or
the
state
7
department
of
transportation,
as
applicable,
send
a
notice
to
8
filers
of
fuel
tax
returns
if
the
return
is
either
incorrect
9
or
insufficient,
giving
the
taxpayer
20
days
to
file
a
10
corrected
return.
If
a
correct
or
sufficient
return
is
not
11
filed,
the
department
of
revenue
or
the
state
department
of
12
transportation,
as
applicable,
is
authorized
to
determine
the
13
amount
of
tax
due
and
send
a
notice
of
assessment
to
the
person
14
liable
for
the
tax.
The
division
strikes
the
20-day
notice
15
requirement.
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