SF 397 (LSB 2386XS (2) 87)

SENATE FILE 397

BY  EDLER

A BILL FOR

An Act coupling for Iowa tax purposes with certain federal changes made to the expensing of certain depreciable business assets under section 179 of the Internal Revenue Code, and including effective date and retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 422.7, Code 2017, is amended by adding the following new subsection:
   NEW SUBSECTION.  52.  Notwithstanding any provision of law to the contrary, a taxpayer is allowed to take the increased expensing allowance under section 179 of the Internal Revenue Code, as amended by Pub. L. No. 114-113, §124, in computing adjusted gross income for state tax purposes.
    Sec. 2.  Section 422.35, Code 2017, is amended by adding the following new subsection:
   NEW SUBSECTION.  26.  Notwithstanding any provision of law to the contrary, a taxpayer is allowed to take the increased expensing allowance under section 179 of the Internal Revenue Code, as amended by Pub. L. No. 114-113, §124, in computing taxable income for state tax purposes.
    Sec. 3.  EFFECTIVE UPON ENACTMENT.  This Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 4.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to January 1, 2016, for tax years beginning on or after that date.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill couples for the Iowa individual and corporate income tax and franchise tax with federal changes made to the expensing of certain depreciable business assets under section 179 of the Internal Revenue Code in the federal Protecting Americans from Tax Hikes Act of 2015 (PATH Act) for tax years beginning on or after January 1, 2016. The PATH Act, in part, increased the maximum section 179 deduction from $25,000 to $500,000, and increased the investment limitation at which the amount of the deduction begins to be reduced from $200,000 to $2 million, for tax years beginning in 2015 or later. The PATH Act also made these increases permanent and provided for adjustments to these amounts in the future for inflation.
   The bill takes effect upon enactment and applies retroactively to tax years beginning on or after January 1, 2016.