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House File 608 - IntroducedA Bill ForAn Act 1relating to the technical administration of the tax
2laws by the department of revenue, including administration
3of the research activities credit, income taxes, and the
4flood mitigation program, and including effective date and
5retroactive applicability provisions.
6BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 15.335, subsection 7, paragraph b, Code
22017, is amended to read as follows:
3b. For purposes of this section, “Internal Revenue Code”
4means the Internal Revenue Code of 1954, prior to the date of
5its redesignation as the Internal Revenue Code of 1986 by the
6Tax Reform Act of 1986, or means the Internal Revenue Code of
71986 as amended and in effect on January 1, 2015 2016. This
8definition shall not be construed to include any amendment to
9the Internal Revenue Code enacted after the date specified
10in the preceding sentence, including any amendment with
11retroactive applicability or effectiveness.
12 Sec. 2. Section 418.15, subsection 1, paragraph a, Code
132017, is amended to read as follows:
14a. A governmental entity shall not receive remittances of
15sales tax revenue under this chapter after twenty years from
16the date the governmental entity’s project was approved by the
17board or after expiration of the additional period of years if
18approved under paragraph “b” unless the remittance amount is
19calculated under section 418.11 based on sales subject to the
20tax under section 432.2 423.2 occurring before the expiration
21of the twenty-year period or expiration of the additional
22period of years if approved under paragraph “b”.
23 Sec. 3. Section 422.3, subsection 5, Code 2017, is amended
24to read as follows:
255. “Internal Revenue Code” means the Internal Revenue Code
26of 1954, prior to the date of its redesignation as the Internal
27Revenue Code of 1986 by the Tax Reform Act of 1986, or means
28the Internal Revenue Code of 1986 as amended to and including
29 and in effect on January 1, 2015. This definition shall not be
30construed to include any amendment to the Internal Revenue Code
31enacted after the date specified in the preceding sentence,
32including any amendment with retroactive applicability or
33effectiveness.
34 Sec. 4. Section 422.5, subsection 2, paragraph a, Code 2017,
35is amended to read as follows:
-1- 1a. There is imposed upon every resident and nonresident of
2this state, including estates and trusts, the greater of the
3tax determined in subsection 1, paragraphs “a” through “j”, or
4the state alternative minimum tax equal to seventy-five percent
5of the maximum state individual income tax rate for the tax
6year, rounded to the nearest one-tenth of one percent, of times
7 the state alternative minimum taxable income of the taxpayer as
8computed under this subsection.
9 Sec. 5. Section 422.10, subsection 3, paragraph b, Code
102017, is amended to read as follows:
11b. For purposes of this section, “Internal Revenue Code”
12means the Internal Revenue Code of 1954, prior to the date of
13its redesignation as the Internal Revenue Code of 1986 by the
14Tax Reform Act of 1986, or means the Internal Revenue Code of
151986 as amended and in effect on January 1, 2015 2016. This
16definition shall not be construed to include any amendment to
17the Internal Revenue Code enacted after the date specified
18in the preceding sentence, including any amendment with
19retroactive applicability or effectiveness.
20 Sec. 6. Section 422.11L, subsection 6, Code 2017, is amended
21to read as follows:
226. For purposes of this section, “Internal Revenue Code”
23means the Internal Revenue Code of 1954, prior to the date of
24its redesignation as the Internal Revenue Code of 1986 by the
25Tax Reform Act of 1986, or means the Internal Revenue Code of
261986 as amended to and including and in effect on January 1,
272016. This definition shall not be construed to include any
28amendment to the Internal Revenue Code enacted after the date
29specified in the preceding sentence, including any amendment
30with retroactive applicability or effectiveness.
31 Sec. 7. Section 422.13, subsection 1, paragraph d, Code
322017, is amended to read as follows:
33d. The total net income, as determined under section 422.5,
34subsection 3 or 3B, of a resident or nonresident of this state
35is more than the appropriate dollar amount listed in section
-2-1422.5, subsection 3 or 3B, upon which tax is not imposed.
2 Sec. 8. Section 422.32, subsection 1, paragraph h, Code
32017, is amended to read as follows:
4h. “Internal Revenue Code” means the Internal Revenue Code
5of 1954, prior to the date of its redesignation as the Internal
6Revenue Code of 1986 by the Tax Reform Act of 1986, or means
7the Internal Revenue Code of 1986 as amended to and including
8 and in effect on January 1, 2015. This definition shall not be
9construed to include any amendment to the Internal Revenue Code
10enacted after the date specified in the preceding sentence,
11including any amendment with retroactive applicability or
12effectiveness.
13 Sec. 9. Section 422.33, subsection 2, paragraph a,
14subparagraph (1), subparagraph division (c), Code 2017, is
15amended to read as follows:
16(c) Nonbusiness rents and royalties received from tangible
17personal property are allocable to this state to the extent
18that the property is utilized in this state; or in their
19entirety if the taxpayer’s commercial domicile is in this state
20and the taxpayer is not taxable in the state in which the
21property is utilized. The extent of utilization of tangible
22personal property in a state is determined by multiplying the
23rents and royalties by a fraction, the numerator of which is
24the number of days of physical location of the property in the
25state during the rental or royalty period in the taxable year
26and the denominator of which is the number of days of physical
27location of the property everywhere during all rental or
28royalty periods in the taxable year. If the physical location
29of the property during the rental or royalty period is unknown,
30 or unascertainable by the taxpayer, tangible personal property
31is utilized in the state in which the property was located at
32the time the rental or royalty payor obtained possession.
33 Sec. 10. Section 422.33, subsection 5, paragraph e,
34subparagraph (2), Code 2017, is amended to read as follows:
35(2) For purposes of this subsection, “Internal Revenue
-3-1Code” means the Internal Revenue Code of 1954, prior to the
2date of its redesignation as the Internal Revenue Code of 1986
3by the Tax Reform Act of 1986, or means the Internal Revenue
4Code of 1986 as amended and in effect on January 1, 2015
5 2016. This definition shall not be construed to include any
6amendment to the Internal Revenue Code enacted after the date
7specified in the preceding sentence, including any amendment
8with retroactive applicability or effectiveness.
9 Sec. 11. 2016 Iowa Acts, chapter 1007, section 3, subsection
101, is amended to read as follows:
111. Notwithstanding section 1 of this Act, or any other
12provision of law to the contrary, the additional first-year
13depreciation allowance authorized in section 168(k) of the
14Internal Revenue Code, as enacted by Pub.L. No.114-113, §143,
15does not apply in computing net income for state tax purposes
16for tax years ending on or after January 1, 2015, but before
17January 1, 2016. If the taxpayer has taken the additional
18first-year depreciation allowance for purposes of computing
19federal adjusted gross income or federal taxable income, as
20the case may be, then the taxpayer, when computing net income
21for purposes of the individual income tax under section 422.7
22or the corporation income tax or franchise tax under section
23422.35, shall make the adjustments described in section 422.7,
24subsection 39A, paragraphs “a” through “c”, Code 2016, or
25described in section 422.35, subsection 19A, paragraphs “a”
26through “c”, Code 2016, as applicable.
27 Sec. 12. EFFECTIVE UPON ENACTMENT. The following
28provision or provisions of this Act, being deemed of immediate
29importance, take effect upon enactment:
301. The section of this Act amending 2016 Iowa Acts, chapter
311007, section 3, subsection 1.
322. The provisions amending the date reference from “January
331, 2015” to “January 1, 2016” in the sections of this Act
34amending section 15.335, subsection 7, paragraph “b”, section
35422.10, subsection 3, paragraph “b”, and section 422.33,
-4-1subsection 5, paragraph “e”, subparagraph (2), relating to the
2definition of “Internal Revenue Code” for purposes of the Iowa
3research activities credits.
4 Sec. 13. RETROACTIVE APPLICABILITY. The following
5provision or provisions of this division of this Act apply
6retroactively to January 1, 2015:
71. The section of this division of this Act amending 2016
8Iowa Acts, chapter 1007, section 3, subsection 1.
9 Sec. 14. RETROACTIVE APPLICABILITY. The following
10provision or provisions of this Act apply retroactively to
11January 1, 2016, for tax years beginning on or after that date:
121. The provisions amending the date reference from “January
131, 2015” to “January 1, 2016” in the sections of this Act
14amending section 15.335, subsection 7, paragraph “b”, section
15422.10, subsection 3, paragraph “b”, and section 422.33,
16subsection 5, paragraph “e”, subparagraph (2), relating to the
17definition of “Internal Revenue Code” for purposes of the Iowa
18research activities credits.
19EXPLANATION
20The inclusion of this explanation does not constitute agreement with
21the explanation’s substance by the members of the general assembly.
22This bill relates to the technical administration of the tax
23laws by the department of revenue, including the administration
24of the research activities credit, income taxes, and the flood
25mitigation program.
26Under current law, for purposes of the state research
27activities credit for individuals (Code section 422.10),
28corporations (Code section 422.33(5), and corporations
29participating in certain economic development programs (Code
30section 15.335), references to the Internal Revenue Code (IRC)
31are to the IRC in effect on January 1, 2015. The bill changes
32the date reference in these provisions to January 1, 2016, thus
33making federal changes, if any, enacted during 2015 to the IRC
34provisions referenced in those Code sections governing the
35state research activities credits applicable for purposes of
-5-1the state credits. These provisions take effect upon enactment
2and apply retroactively to January 1, 2016, for tax years
3beginning on or after that date.
4The bill also amends all the definitions of IRC in Code
5chapter 422 (individual income, corporate, and franchise
6taxes), and the definition of IRC in Code section 15.335 (state
7research activities credit for corporations participating
8in certain economic development programs) so that the
9language in those definitions is the same, excluding the
10IRC date references, and further adds language to specify
11that the definitions shall not be construed to include any
12amendment to the IRC enacted after the date specified in that
13particular definition, including any amendment with retroactive
14applicability or effectiveness.
15The bill amends Code section 418.15(1)(a), relating to the
16remittance of state sales tax revenues to local governments
17under the flood mitigation program, to properly cite to the
18state sales tax imposed under Code section 423.2.
19The bill strikes a comma and adds a comma in Code section
20422.33(2)(a)(1)(c), relating to the allocation between states
21of certain nonbusiness rents and royalties under the corporate
22income tax, to specify that when that provision references the
23location of certain property being unknown, it is referring to
24the taxpayer’s knowledge of the property’s location.
25The bill amends 2016 Iowa Acts, chapter 1007, section
263, subsection 1, relating to the disallowance of bonus
27depreciation under section 168(k) of the IRC for the 2015 tax
28year, to specify that the disallowance applies to tax years
29ending on or after January 1, 2015, not those ending on or
30after that date but before January 1, 2016. This provision
31takes effect upon enactment and applies retroactively to
32January 1, 2015.
33The bill amends Code section 422.5(2)(a), relating to the
34calculation of the individual alternative minimum tax, to
35specify that the tax calculation is accomplished by multiplying
-6-1the applicable tax rate times the state alternative minimum
2taxable income of the taxpayer.
3The bill strikes a reference to “nonresident” in Code
4section 422.13(1)(d), relating to the requirement to file
5an income tax return if a taxpayer’s total income exceeds
6the applicable dollar threshold set forth in Code section
7422.5, because pursuant to Code section 422.13(1)(b), a
8nonresident is only required to file an income tax return if
9the nonresident’s income allocated to Iowa is $1,000 or more
10and if the nonresident’s total income exceeds the applicable
11dollar threshold set forth in Code section 422.5.
-7-mm/rj
2laws by the department of revenue, including administration
3of the research activities credit, income taxes, and the
4flood mitigation program, and including effective date and
5retroactive applicability provisions.
6BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 15.335, subsection 7, paragraph b, Code
22017, is amended to read as follows:
3b. For purposes of this section, “Internal Revenue Code”
4means the Internal Revenue Code of 1954, prior to the date of
5its redesignation as the Internal Revenue Code of 1986 by the
6Tax Reform Act of 1986, or means the Internal Revenue Code of
71986 as amended and in effect on January 1, 2015 2016. This
8definition shall not be construed to include any amendment to
9the Internal Revenue Code enacted after the date specified
10in the preceding sentence, including any amendment with
11retroactive applicability or effectiveness.
12 Sec. 2. Section 418.15, subsection 1, paragraph a, Code
132017, is amended to read as follows:
14a. A governmental entity shall not receive remittances of
15sales tax revenue under this chapter after twenty years from
16the date the governmental entity’s project was approved by the
17board or after expiration of the additional period of years if
18approved under paragraph “b” unless the remittance amount is
19calculated under section 418.11 based on sales subject to the
20tax under section 432.2 423.2 occurring before the expiration
21of the twenty-year period or expiration of the additional
22period of years if approved under paragraph “b”.
23 Sec. 3. Section 422.3, subsection 5, Code 2017, is amended
24to read as follows:
255. “Internal Revenue Code” means the Internal Revenue Code
26of 1954, prior to the date of its redesignation as the Internal
27Revenue Code of 1986 by the Tax Reform Act of 1986, or means
28the Internal Revenue Code of 1986 as amended to and including
29 and in effect on January 1, 2015. This definition shall not be
30construed to include any amendment to the Internal Revenue Code
31enacted after the date specified in the preceding sentence,
32including any amendment with retroactive applicability or
33effectiveness.
34 Sec. 4. Section 422.5, subsection 2, paragraph a, Code 2017,
35is amended to read as follows:
-1- 1a. There is imposed upon every resident and nonresident of
2this state, including estates and trusts, the greater of the
3tax determined in subsection 1, paragraphs “a” through “j”, or
4the state alternative minimum tax equal to seventy-five percent
5of the maximum state individual income tax rate for the tax
6year, rounded to the nearest one-tenth of one percent, of times
7 the state alternative minimum taxable income of the taxpayer as
8computed under this subsection.
9 Sec. 5. Section 422.10, subsection 3, paragraph b, Code
102017, is amended to read as follows:
11b. For purposes of this section, “Internal Revenue Code”
12means the Internal Revenue Code of 1954, prior to the date of
13its redesignation as the Internal Revenue Code of 1986 by the
14Tax Reform Act of 1986, or means the Internal Revenue Code of
151986 as amended and in effect on January 1, 2015 2016. This
16definition shall not be construed to include any amendment to
17the Internal Revenue Code enacted after the date specified
18in the preceding sentence, including any amendment with
19retroactive applicability or effectiveness.
20 Sec. 6. Section 422.11L, subsection 6, Code 2017, is amended
21to read as follows:
226. For purposes of this section, “Internal Revenue Code”
23means the Internal Revenue Code of 1954, prior to the date of
24its redesignation as the Internal Revenue Code of 1986 by the
25Tax Reform Act of 1986, or means the Internal Revenue Code of
261986 as amended to and including and in effect on January 1,
272016. This definition shall not be construed to include any
28amendment to the Internal Revenue Code enacted after the date
29specified in the preceding sentence, including any amendment
30with retroactive applicability or effectiveness.
31 Sec. 7. Section 422.13, subsection 1, paragraph d, Code
322017, is amended to read as follows:
33d. The total net income, as determined under section 422.5,
34subsection 3 or 3B, of a resident or nonresident of this state
35is more than the appropriate dollar amount listed in section
-2-1422.5, subsection 3 or 3B, upon which tax is not imposed.
2 Sec. 8. Section 422.32, subsection 1, paragraph h, Code
32017, is amended to read as follows:
4h. “Internal Revenue Code” means the Internal Revenue Code
5of 1954, prior to the date of its redesignation as the Internal
6Revenue Code of 1986 by the Tax Reform Act of 1986, or means
7the Internal Revenue Code of 1986 as amended to and including
8 and in effect on January 1, 2015. This definition shall not be
9construed to include any amendment to the Internal Revenue Code
10enacted after the date specified in the preceding sentence,
11including any amendment with retroactive applicability or
12effectiveness.
13 Sec. 9. Section 422.33, subsection 2, paragraph a,
14subparagraph (1), subparagraph division (c), Code 2017, is
15amended to read as follows:
16(c) Nonbusiness rents and royalties received from tangible
17personal property are allocable to this state to the extent
18that the property is utilized in this state; or in their
19entirety if the taxpayer’s commercial domicile is in this state
20and the taxpayer is not taxable in the state in which the
21property is utilized. The extent of utilization of tangible
22personal property in a state is determined by multiplying the
23rents and royalties by a fraction, the numerator of which is
24the number of days of physical location of the property in the
25state during the rental or royalty period in the taxable year
26and the denominator of which is the number of days of physical
27location of the property everywhere during all rental or
28royalty periods in the taxable year. If the physical location
29of the property during the rental or royalty period is unknown,
30 or unascertainable by the taxpayer, tangible personal property
31is utilized in the state in which the property was located at
32the time the rental or royalty payor obtained possession.
33 Sec. 10. Section 422.33, subsection 5, paragraph e,
34subparagraph (2), Code 2017, is amended to read as follows:
35(2) For purposes of this subsection, “Internal Revenue
-3-1Code” means the Internal Revenue Code of 1954, prior to the
2date of its redesignation as the Internal Revenue Code of 1986
3by the Tax Reform Act of 1986, or means the Internal Revenue
4Code of 1986 as amended and in effect on January 1, 2015
5 2016. This definition shall not be construed to include any
6amendment to the Internal Revenue Code enacted after the date
7specified in the preceding sentence, including any amendment
8with retroactive applicability or effectiveness.
9 Sec. 11. 2016 Iowa Acts, chapter 1007, section 3, subsection
101, is amended to read as follows:
111. Notwithstanding section 1 of this Act, or any other
12provision of law to the contrary, the additional first-year
13depreciation allowance authorized in section 168(k) of the
14Internal Revenue Code, as enacted by Pub.L. No.114-113, §143,
15does not apply in computing net income for state tax purposes
16for tax years ending on or after January 1, 2015, but before
17January 1, 2016. If the taxpayer has taken the additional
18first-year depreciation allowance for purposes of computing
19federal adjusted gross income or federal taxable income, as
20the case may be, then the taxpayer, when computing net income
21for purposes of the individual income tax under section 422.7
22or the corporation income tax or franchise tax under section
23422.35, shall make the adjustments described in section 422.7,
24subsection 39A, paragraphs “a” through “c”, Code 2016, or
25described in section 422.35, subsection 19A, paragraphs “a”
26through “c”, Code 2016, as applicable.
27 Sec. 12. EFFECTIVE UPON ENACTMENT. The following
28provision or provisions of this Act, being deemed of immediate
29importance, take effect upon enactment:
301. The section of this Act amending 2016 Iowa Acts, chapter
311007, section 3, subsection 1.
322. The provisions amending the date reference from “January
331, 2015” to “January 1, 2016” in the sections of this Act
34amending section 15.335, subsection 7, paragraph “b”, section
35422.10, subsection 3, paragraph “b”, and section 422.33,
-4-1subsection 5, paragraph “e”, subparagraph (2), relating to the
2definition of “Internal Revenue Code” for purposes of the Iowa
3research activities credits.
4 Sec. 13. RETROACTIVE APPLICABILITY. The following
5provision or provisions of this division of this Act apply
6retroactively to January 1, 2015:
71. The section of this division of this Act amending 2016
8Iowa Acts, chapter 1007, section 3, subsection 1.
9 Sec. 14. RETROACTIVE APPLICABILITY. The following
10provision or provisions of this Act apply retroactively to
11January 1, 2016, for tax years beginning on or after that date:
121. The provisions amending the date reference from “January
131, 2015” to “January 1, 2016” in the sections of this Act
14amending section 15.335, subsection 7, paragraph “b”, section
15422.10, subsection 3, paragraph “b”, and section 422.33,
16subsection 5, paragraph “e”, subparagraph (2), relating to the
17definition of “Internal Revenue Code” for purposes of the Iowa
18research activities credits.
19EXPLANATION
20The inclusion of this explanation does not constitute agreement with
21the explanation’s substance by the members of the general assembly.
22This bill relates to the technical administration of the tax
23laws by the department of revenue, including the administration
24of the research activities credit, income taxes, and the flood
25mitigation program.
26Under current law, for purposes of the state research
27activities credit for individuals (Code section 422.10),
28corporations (Code section 422.33(5), and corporations
29participating in certain economic development programs (Code
30section 15.335), references to the Internal Revenue Code (IRC)
31are to the IRC in effect on January 1, 2015. The bill changes
32the date reference in these provisions to January 1, 2016, thus
33making federal changes, if any, enacted during 2015 to the IRC
34provisions referenced in those Code sections governing the
35state research activities credits applicable for purposes of
-5-1the state credits. These provisions take effect upon enactment
2and apply retroactively to January 1, 2016, for tax years
3beginning on or after that date.
4The bill also amends all the definitions of IRC in Code
5chapter 422 (individual income, corporate, and franchise
6taxes), and the definition of IRC in Code section 15.335 (state
7research activities credit for corporations participating
8in certain economic development programs) so that the
9language in those definitions is the same, excluding the
10IRC date references, and further adds language to specify
11that the definitions shall not be construed to include any
12amendment to the IRC enacted after the date specified in that
13particular definition, including any amendment with retroactive
14applicability or effectiveness.
15The bill amends Code section 418.15(1)(a), relating to the
16remittance of state sales tax revenues to local governments
17under the flood mitigation program, to properly cite to the
18state sales tax imposed under Code section 423.2.
19The bill strikes a comma and adds a comma in Code section
20422.33(2)(a)(1)(c), relating to the allocation between states
21of certain nonbusiness rents and royalties under the corporate
22income tax, to specify that when that provision references the
23location of certain property being unknown, it is referring to
24the taxpayer’s knowledge of the property’s location.
25The bill amends 2016 Iowa Acts, chapter 1007, section
263, subsection 1, relating to the disallowance of bonus
27depreciation under section 168(k) of the IRC for the 2015 tax
28year, to specify that the disallowance applies to tax years
29ending on or after January 1, 2015, not those ending on or
30after that date but before January 1, 2016. This provision
31takes effect upon enactment and applies retroactively to
32January 1, 2015.
33The bill amends Code section 422.5(2)(a), relating to the
34calculation of the individual alternative minimum tax, to
35specify that the tax calculation is accomplished by multiplying
-6-1the applicable tax rate times the state alternative minimum
2taxable income of the taxpayer.
3The bill strikes a reference to “nonresident” in Code
4section 422.13(1)(d), relating to the requirement to file
5an income tax return if a taxpayer’s total income exceeds
6the applicable dollar threshold set forth in Code section
7422.5, because pursuant to Code section 422.13(1)(b), a
8nonresident is only required to file an income tax return if
9the nonresident’s income allocated to Iowa is $1,000 or more
10and if the nonresident’s total income exceeds the applicable
11dollar threshold set forth in Code section 422.5.
-7-mm/rj