Iowa General Assembly Daily Bills, Amendments & Study Bills March 17, 2009



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HF 742

House File 742 - Introduced

HOUSE FILE

BY HELLAND

Passed House, Date Passed Senate, Date

Vote: Ayes Nays Vote: Ayes Nays

Approved


A BILL FOR
1 An Act relating to state taxation and regulation by coupling with

2 certain bonus depreciation provisions in the Internal Revenue

3 Code, increasing the amount of certain casualty loss

4 deductions, providing for a disaster recovery wages tax

5 credit, providing a sales tax exemption, and providing for

6 certain gubernatorial powers and including effective and

7 retroactive applicability date provisions.

8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

9 TLSB 2068YH 83

10 tm/sc/14

House File 742 - Introduced continued
PAG LIN

1 1 DIVISION I

1 2 BONUS DEPRECIATION

1 3 Section 1. Section 422.7, Code 2009, is amended by adding

1 4 the following new subsection:

1 5 NEW SUBSECTION. 54. A taxpayer is allowed to take the

1 6 additional first=year depreciation allowance under section

1 7 168(k)(4) of the Internal Revenue Code, as amended by Pub. L.

1 8 No. 110=185, in computing net income for state tax purposes.

1 9 Sec. 2. Section 422.35, Code 2009, is amended by adding

1 10 the following new subsection:

1 11 NEW SUBSECTION. 25. A taxpayer is allowed to take the

1 12 additional first=year depreciation allowance under section

1 13 168(k)(4) of the Internal Revenue Code, as amended by Pub. L.

1 14 No. 110=185, in computing net income for state tax purposes.

1 15 Sec. 3. EFFECTIVE AND RETROACTIVE APPLICABILITY DATES.

1 16 This division of this Act, being deemed of immediate

1 17 importance, takes effect upon enactment and applies

1 18 retroactively to January 1, 2008, for tax years beginning on

1 19 or after that date.

1 20 DIVISION II

1 21 CASUALTY LOSS DEDUCTIONS

1 22 Sec. 4. Section 422.7, Code 2009, is amended by adding the

1 23 following new subsection:

1 24 NEW SUBSECTION. 18. Notwithstanding certain limitations

1 25 on the deduction of personal casualty losses in section 165(h)

1 26 of the Internal Revenue Code, a taxpayer may subtract the full

1 27 amount of a personal casualty loss to the extent the loss

1 28 exceeds personal casualty gains for the taxable year.

1 29 Sec. 5. EFFECTIVE AND RETROACTIVE APPLICABILITY DATES.

1 30 This division of this Act, being deemed of immediate

1 31 importance, takes effect upon enactment and applies

1 32 retroactively to January 1, 2008, for tax years beginning on

1 33 or after that date.

1 34 DIVISION III

1 35 DISASTER RECOVERY WAGES TAX CREDIT


House File 742 - Introduced continued
2 1 Sec. 6. NEW SECTION. 422.11X DISASTER RECOVERY WAGES TAX

2 2 CREDIT.

2 3 1. The taxes imposed under this division, less the credits

2 4 allowed under section 422.12, shall be reduced by a disaster

2 5 recovery wages tax credit for the amount of wages paid to

2 6 employees by an employer in certain areas affected by natural

2 7 disasters during calendar year 2008.

2 8 2. To be eligible for the tax credit, an employer shall be

2 9 located in a county declared a disaster area during calendar

2 10 year 2008 by the governor or by a federal official and shall

2 11 have sustained physical damage as a result of a natural

2 12 disaster occurring in calendar year 2008.

2 13 3. An individual may claim a tax credit under this section

2 14 of a partnership, limited liability company, S corporation,

2 15 estate, or trust electing to have income taxed directly to the

2 16 individual. The amount claimed by the individual shall be

2 17 based upon the pro rata share of the individual's earnings

2 18 from the partnership, limited liability company, S

2 19 corporation, estate, or trust.

2 20 4. Any tax credit in excess of the taxpayer's liability

2 21 for the tax year is not refundable, but the taxpayer may elect

2 22 to have the excess credited to the tax liability for the

2 23 following two years or until depleted, whichever is earlier.

2 24 A tax credit shall not be carried back to a tax year prior to

2 25 the tax year in which the taxpayer first receives the tax

2 26 credit.

2 27 5. A taxpayer eligible for the tax credit shall include

2 28 with the taxpayer's return an affidavit verifying that the

2 29 taxpayer sustained physical damage as a result of a natural

2 30 disaster occurring during calendar year 2008 and shall include

2 31 information establishing the total amount of wages paid to

2 32 employees during the taxable year.

2 33 6. A taxpayer taking a deduction for wages paid to

2 34 employees in a taxable year cannot claim a tax credit under

2 35 this section.
House File 742 - Introduced continued
3 1 7. This section is repealed June 30, 2011. This repeal

3 2 does not affect the ability to carry forward tax credits

3 3 pursuant to subsection 4.

3 4 Sec. 7. Section 422.33, Code 2009, is amended by adding

3 5 the following new subsection:

3 6 NEW SUBSECTION. 27. The taxes imposed under this division

3 7 shall be reduced by a disaster recovery wages tax credit in

3 8 the same manner, for the same amount, and under the same

3 9 conditions as provided in section 422.11X.

3 10 Sec. 8. Section 422.60, Code 2009, is amended by adding

3 11 the following new subsection:

3 12 NEW SUBSECTION. 15. The taxes imposed under this division

3 13 shall be reduced by a disaster recovery wages tax credit in

3 14 the same manner, for the same amount, and under the same

3 15 conditions as provided in section 422.11X.

3 16 Sec. 9. NEW SECTION. 432.12M DISASTER RECOVERY WAGES TAX

3 17 CREDIT.

3 18 The taxes imposed under this chapter shall be reduced by a

3 19 disaster recovery wages tax credit in the same manner, for the

3 20 same amount, and under the same conditions as provided in

3 21 section 422.11X.

3 22 Sec. 10. Section 533.329, subsection 2, Code 2009, is

3 23 amended by adding the following new paragraph:

3 24 NEW PARAGRAPH. n. The moneys and credits tax imposed

3 25 under this section shall be reduced by a disaster recovery

3 26 wages tax credit in the same manner, for the same amount, and

3 27 under the same conditions as provided in section 422.11X.

3 28 Sec. 11. EFFECTIVE AND RETROACTIVE APPLICABILITY DATES.

3 29 This division of this Act, being deemed of immediate

3 30 importance, takes effect upon enactment and applies

3 31 retroactively to January 1, 2008, for tax years beginning on

3 32 or after that date.

3 33 DIVISION IV

3 34 SALES TAX

3 35 Sec. 12. Section 423.3, Code 2009, is amended by adding
House File 742 - Introduced continued

4 1 the following new subsection:

4 2 NEW SUBSECTION. 95. The sales price of equipment used in

4 3 disaster recovery efforts following a disaster emergency

4 4 proclamation by the governor pursuant to section 29C.6 if the

4 5 equipment is purchased following the proclamation.

4 6 DIVISION V

4 7 GUBERNATORIAL DISASTER POWERS

4 8 Sec. 13. Section 29C.6, subsection 6, Code 2009, is

4 9 amended to read as follows:

4 10 6. a. Suspend the provisions of any regulatory statute

4 11 prescribing the procedures for conduct of state business, or

4 12 the orders or rules, of any state agency, if strict compliance

4 13 with the provisions of any statute, order, or rule would in

4 14 any way prevent, hinder, or delay necessary action in coping

4 15 with the emergency by stating in a proclamation such reasons.

4 16 Upon the request of a local governing body, the governor may

4 17 also suspend statutes limiting local governments in their

4 18 ability to provide services to aid disaster victims.

4 19 b. When a disaster emergency has been proclaimed pursuant

4 20 to subsection 1, suspend all inspections conducted by all


4 21 state agencies. The governor shall identify in a proclamation

4 22 the inspections to be suspended and the suspension time

4 23 period.

4 24 c. When a disaster emergency has been proclaimed pursuant



4 25 to subsection 1, limit regulatory action that may be exercised

4 26 by the department of workforce development and the department

4 27 of natural resources. Under such limits, the departments

4 28 shall only issue warnings for violations of applicable laws

4 29 and rules if the violations are willful, repeated, or highly

4 30 egregious violations. The governor shall identify in a

4 31 proclamation the time period during which the provisions of

4 32 this paragraph shall apply.

4 33 EXPLANATION

4 34 This bill makes certain changes to the tax laws and other

4 35 related changes to assist in the recovery from natural


House File 742 - Introduced continued

5 1 disasters occurring in calendar year 2008.

5 2 DIVISION I. This division allows taxpayers to avail

5 3 themselves of the additional first=year depreciation in

5 4 section 168(k)(4) of the Internal Revenue Code passed by

5 5 Congress as part of the Economic Stimulus Act of 2008 (Pub. L.

5 6 No. 110=185).

5 7 This division of the bill takes effect upon enactment and

5 8 applies retroactively to January 1, 2008, for tax years

5 9 beginning on or after that date.

5 10 DIVISION II. This division provides that, notwithstanding

5 11 certain limitations on the deduction of personal casualty

5 12 losses in Internal Revenue Code section 165(h), a taxpayer may

5 13 subtract the full amount of a personal casualty loss to the

5 14 extent the loss exceeds personal casualty gains for the

5 15 taxable year.

5 16 This division of the bill takes effect upon enactment and

5 17 applies retroactively to January 1, 2008, for tax years

5 18 beginning on or after that date.

5 19 DIVISION III. This division provides a tax credit to

5 20 employers in disaster affected areas who have sustained

5 21 physical damage as a result of the natural disasters of 2008.

5 22 The credit is available in an amount equal to the wages paid

5 23 to employees. Taxpayers taking a deduction for wages paid to

5 24 employees cannot also claim the tax credit. The tax credit is

5 25 not refundable and expires June 30, 2011.

5 26 This division of the bill takes effect upon enactment and

5 27 applies retroactively to January 1, 2008, for tax years

5 28 beginning on or after that date.

5 29 DIVISION IV. This division creates a sales tax exemption

5 30 for the purchase of equipment used in disaster recovery

5 31 efforts following a disaster emergency proclamation by the

5 32 governor if the equipment is purchased following the

5 33 proclamation.

5 34 DIVISION V. This division provides that when the governor

5 35 makes a disaster emergency proclamation, the governor may

House File 742 - Introduced continued
6 1 temporarily suspend all inspections conducted by all state

6 2 agencies. The governor shall identify the inspections to be

6 3 suspended and the suspension time period in a proclamation.

6 4 The division provides that when the governor makes a

6 5 disaster emergency proclamation, the governor may temporarily

6 6 limit regulatory action that may be exercised by the

6 7 department of workforce development and the department of

6 8 natural resources. Under such limits, the departments shall

6 9 only issue warnings for violations of applicable laws and

6 10 rules unless the violations are willful, repeated, or highly

6 11 egregious violations. The division requires the governor to

6 12 identify in a proclamation the time period during which the

6 13 limits will apply.

6 14 LSB 2068YH 83

6 15 tm/sc/14




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