House File 2092 - Reprinted HOUSE FILE 2092 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HSB 535) (As Amended and Passed by the House January 28, 2016 ) A BILL FOR An Act temporarily updating the Code references to the Internal 1 Revenue Code and decoupling from certain federal bonus 2 depreciation provisions, and including effective date and 3 retroactive applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 HF 2092 (2) 86 mm/sc/md

H.F. 2092 Section 1. INTERNAL REVENUE CODE REFERENCES FOR 1 2015. Notwithstanding the definition of “Internal Revenue 2 Code” in section 15.335, subsection 7, section 422.3, 3 subsection 5, section 422.10, subsection 3, section 422.32, 4 subsection 1, and section 422.33, subsection 5, Code 2016, 5 the following shall apply for the period beginning January 1, 6 2015, and ending December 31, 2015, and for tax years beginning 7 during the 2015 calendar year: 8 1. The definition of “Internal Revenue Code” for purposes 9 of section 15.335, subsection 7, section 422.10, subsection 3, 10 and section 422.33, subsection 5, Code 2016, and for purposes 11 of references in the 2016 Iowa Code and 2016 Iowa Acts to the 12 definition of “Internal Revenue Code” in those sections, shall 13 mean the Internal Revenue Code in effect on January 1, 2016. 14 2. The definition of “Internal Revenue Code” for purposes 15 of sections 422.3 and 422.32, Code 2016, and for purposes of 16 references in the 2016 Iowa Code and 2016 Iowa Acts to the 17 definition of “Internal Revenue Code” in those sections, shall 18 mean the Internal Revenue Code of 1954, prior to the date of 19 its redesignation as the Internal Revenue Code of 1986 by the 20 Tax Reform Act of 1986, or means the Internal Revenue Code of 21 1986 as amended to and including January 1, 2016. 22 Sec. 2. DEDUCTION FOR STATE SALES AND USE TAX FOR 23 2015. Notwithstanding section 422.9, subsection 2, paragraph 24 “i”, Code 2016, the deduction for state sales and use taxes is 25 allowable under section 422.9 for tax years beginning during 26 the 2015 calendar year, but only if the taxpayer elected to 27 deduct the state sales and use taxes in lieu of state income 28 taxes under section 164 of the Internal Revenue Code. The 29 deduction for state sales and use taxes is not allowed if the 30 taxpayer has taken the deduction for state income taxes or 31 claimed the standard deduction under section 63 of the Internal 32 Revenue Code. 33 Sec. 3. BONUS DEPRECIATION FOR 2015. 34 1. Notwithstanding section 1 of this Act, or any other 35 -1- HF 2092 (2) 86 mm/sc/md 1/ 3

H.F. 2092 provision of law to the contrary, the additional first-year 1 depreciation allowance authorized in section 168(k) of the 2 Internal Revenue Code, as enacted by Pub. L. No. 114-113, §143, 3 does not apply in computing net income for state tax purposes 4 for tax years ending on or after January 1, 2015, but before 5 January 1, 2016. If the taxpayer has taken the additional 6 first-year depreciation allowance for purposes of computing 7 federal adjusted gross income or federal taxable income, as 8 the case may be, then the taxpayer, when computing net income 9 for purposes of the individual income tax under section 422.7 10 or the corporation income tax or franchise tax under section 11 422.35, shall make the adjustments described in section 422.7, 12 subsection 39A, paragraphs “a” through “c”, Code 2016, or 13 described in section 422.35, subsection 19A, paragraphs “a” 14 through “c”, Code 2016, as applicable. 15 2. In addition to the requirements of section 422.5, 16 subsection 2, paragraph “b”, subparagraph (1), Code 2016, 17 for purposes of the state alternative minimum taxable income 18 calculation in section 422.5, subsection 2, paragraph “b”, 19 subparagraph (1), to the extent that any preference or 20 adjustment is determined by an individual’s federal adjusted 21 gross income, the individual’s federal adjusted gross income is 22 computed in accordance with subsection 1 of this section for 23 tax years beginning during the 2015 calendar year. 24 3. In addition to the requirements of section 422.9, 25 subsection 2, paragraph “h”, Code 2016, for purposes of 26 calculating the deductions in section 422.9 that are authorized 27 under the Internal Revenue Code, and to the extent that 28 any such deduction is determined by an individual’s federal 29 adjusted gross income, the individual’s federal adjusted gross 30 income is computed in accordance with subsection 1 of this 31 section for tax years beginning during the 2015 calendar year. 32 Sec. 4. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 33 immediate importance, takes effect upon enactment. 34 Sec. 5. RETROACTIVE APPLICABILITY. This Act applies 35 -2- HF 2092 (2) 86 mm/sc/md 2/ 3