Bill Text: IA HF2366 | 2011-2012 | 84th General Assembly | Introduced
Bill Title: A bill for an act relating to state income taxes by authorizing taxpayers to elect to take an additional first-year depreciation allowance for purposes of the individual and corporate income tax and franchise tax, and including effective date and retroactive applicability provisions.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2012-02-29 - Subcommittee, Helland, Jacoby, and Sands. H.J. 398. [HF2366 Detail]
Download: Iowa-2011-HF2366-Introduced.html
House
File
2366
-
Introduced
HOUSE
FILE
2366
BY
LUKAN
A
BILL
FOR
An
Act
relating
to
state
income
taxes
by
authorizing
taxpayers
1
to
elect
to
take
an
additional
first-year
depreciation
2
allowance
for
purposes
of
the
individual
and
corporate
3
income
tax
and
franchise
tax,
and
including
effective
date
4
and
retroactive
applicability
provisions.
5
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
6
TLSB
5331YH
(1)
84
mm/sc
H.F.
2366
Section
1.
Section
422.5,
subsection
2,
paragraph
b,
1
subparagraph
(1),
Code
Supplement
2011,
is
amended
to
read
as
2
follows:
3
(1)
Add
items
of
tax
preference
included
in
federal
4
alternative
minimum
taxable
income
under
section
57,
except
5
subsections
(a)(1),
(a)(2),
and
(a)(5),
of
the
Internal
Revenue
6
Code,
make
the
adjustments
included
in
federal
alternative
7
minimum
taxable
income
under
section
56,
except
subsections
8
(a)(4),
(b)(1)(C)(iii),
and
(d),
of
the
Internal
Revenue
Code,
9
and
add
losses
as
required
by
section
58
of
the
Internal
10
Revenue
Code.
To
the
extent
that
any
preference
or
adjustment
11
is
determined
by
an
individual’s
federal
adjusted
gross
income,
12
the
individual’s
federal
adjusted
gross
income
is
computed
13
in
accordance
with
section
422.7,
subsections
39,
39A,
39B,
14
39C,
and
53
.
In
the
case
of
an
estate
or
trust,
the
items
of
15
tax
preference,
adjustments,
and
losses
shall
be
apportioned
16
between
the
estate
or
trust
and
the
beneficiaries
in
accordance
17
with
rules
prescribed
by
the
director.
18
Sec.
2.
Section
422.7,
subsection
39A,
unnumbered
paragraph
19
1,
Code
Supplement
2011,
is
amended
to
read
as
follows:
20
The
In
the
case
of
qualified
property
placed
in
service
21
before
January
1,
2012,
the
additional
first-year
depreciation
22
allowance
authorized
in
section
168(k)
of
the
Internal
Revenue
23
Code,
as
enacted
by
Pub.
L.
No.
110-185,
§
103,
Pub.
L.
No.
24
111-5,
§
1201,
Pub.
L.
No.
111-240,
§
2022,
and
Pub.
L.
No.
25
111-312,
§
401,
does
not
apply
in
computing
net
income
for
26
state
tax
purposes.
If
the
taxpayer
has
taken
the
additional
27
first-year
depreciation
allowance
for
purposes
of
computing
28
federal
adjusted
gross
income,
then
the
taxpayer
shall
make
the
29
following
adjustments
to
federal
adjusted
gross
income
when
30
computing
net
income
for
state
tax
purposes:
31
Sec.
3.
Section
422.7,
Code
Supplement
2011,
is
amended
by
32
adding
the
following
new
subsection:
33
NEW
SUBSECTION
.
39C.
a.
Notwithstanding
any
provision
34
of
law
to
the
contrary,
a
taxpayer
may
elect
to
apply
the
35
-1-
LSB
5331YH
(1)
84
mm/sc
1/
5
H.F.
2366
additional
first-year
depreciation
allowance
authorized
in
1
section
168(k),
excluding
subparagraph
(5),
of
the
Internal
2
Revenue
Code,
as
amended
by
Pub.
L.
No.
111-312,
§
401,
3
excluding
paragraph
(b),
for
qualified
property
placed
4
in
service
on
or
after
January
1,
2012.
The
additional
5
depreciation
allowance
shall
be
allowed
for
qualified
property
6
placed
in
service
any
time
on
or
after
January
1,
2012,
and
7
that
otherwise
meets
the
requirements
of
section
168(k)
of
8
the
Internal
Revenue
Code,
regardless
of
any
acquisition
9
or
placed-in-service
date
restriction
to
the
contrary
in
10
that
section.
If
the
taxpayer
elects
to
take
the
additional
11
first-year
depreciation
allowance
authorized
in
section
12
168(k)
of
the
Internal
Revenue
Code
for
state
tax
purposes,
13
the
deduction
may
be
taken
on
amended
state
tax
returns,
14
if
necessary.
If
the
taxpayer
does
not
elect
to
take
the
15
additional
first-year
depreciation
allowance
authorized
in
16
section
168(k)
of
the
Internal
Revenue
Code
for
state
tax
17
purposes,
the
following
adjustment
shall
be
made:
18
(1)
Add
the
total
amount
of
depreciation
taken
under
section
19
168(k)
of
the
Internal
Revenue
Code
for
the
tax
year.
20
(2)
Subtract
the
amount
of
depreciation
allowable
under
the
21
modified
accelerated
cost
recovery
system
described
in
section
22
168
of
the
Internal
Revenue
Code
and
calculated
without
regard
23
to
section
168(k).
24
(3)
Any
other
adjustments
to
gains
or
losses
necessary
25
to
reflect
the
adjustments
made
in
subparagraphs
(1)
or
(2).
26
The
director
shall
adopt
rules
for
the
administration
of
this
27
paragraph.
28
b.
For
purposes
of
this
subsection,
“Internal
Revenue
Code”
29
means
the
Internal
Revenue
Code
in
effect
on
January
1,
2012.
30
Sec.
4.
Section
422.9,
subsection
2,
paragraph
h,
Code
31
Supplement
2011,
is
amended
to
read
as
follows:
32
h.
For
purposes
of
calculating
the
deductions
in
this
33
subsection
that
are
authorized
under
the
Internal
Revenue
Code,
34
and
to
the
extent
that
any
of
such
deductions
is
determined
by
35
-2-
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(1)
84
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2/
5
H.F.
2366
an
individual’s
federal
adjusted
gross
income,
the
individual’s
1
federal
adjusted
gross
income
is
computed
in
accordance
with
2
section
422.7,
subsections
39,
39A,
39B,
39C,
and
53
.
3
Sec.
5.
Section
422.35,
subsection
19A,
unnumbered
4
paragraph
1,
Code
Supplement
2011,
is
amended
to
read
as
5
follows:
6
The
In
the
case
of
qualified
property
placed
in
service
7
before
January
1,
2012,
the
additional
first-year
depreciation
8
allowance
authorized
in
section
168(k)
of
the
Internal
Revenue
9
Code,
as
enacted
by
Pub.
L.
No.
110-185,
§
103,
Pub.
L.
No.
10
111-5,
§
1201,
Pub.
L.
No.
111-240,
§
2022,
and
Pub.
L.
No.
11
111-312,
§
401,
does
not
apply
in
computing
net
income
for
12
state
tax
purposes.
If
the
taxpayer
has
taken
the
additional
13
first-year
depreciation
allowance
for
purposes
of
computing
14
federal
taxable
income,
then
the
taxpayer
shall
make
the
15
following
adjustments
to
federal
taxable
income
when
computing
16
net
income
for
state
tax
purposes:
17
Sec.
6.
Section
422.35,
Code
Supplement
2011,
is
amended
by
18
adding
the
following
new
subsection:
19
NEW
SUBSECTION
.
19C.
a.
Notwithstanding
any
provision
20
of
law
to
the
contrary,
a
taxpayer
may
elect
to
apply
the
21
additional
first-year
depreciation
allowance
authorized
in
22
section
168(k),
excluding
subparagraph
(5),
of
the
Internal
23
Revenue
Code,
as
amended
by
Pub.
L.
No.
111-312,
§
401,
24
excluding
paragraph
(b),
for
qualified
property
placed
25
in
service
on
or
after
January
1,
2012.
The
additional
26
depreciation
allowance
shall
be
allowed
for
qualified
property
27
placed
in
service
any
time
on
or
after
January
1,
2012,
and
28
that
otherwise
meets
the
requirements
of
section
168(k)
of
29
the
Internal
Revenue
Code,
regardless
of
any
acquisition
30
or
placed-in-service
date
restriction
to
the
contrary
in
31
that
section.
If
the
taxpayer
elects
to
take
the
additional
32
first-year
depreciation
allowance
authorized
in
section
33
168(k)
of
the
Internal
Revenue
Code
for
state
tax
purposes,
34
the
deduction
may
be
taken
on
amended
state
tax
returns,
35
-3-
LSB
5331YH
(1)
84
mm/sc
3/
5
H.F.
2366
if
necessary.
If
the
taxpayer
does
not
elect
to
take
the
1
additional
first-year
depreciation
allowance
authorized
in
2
section
168(k)
of
the
Internal
Revenue
Code
for
state
tax
3
purposes,
the
following
adjustment
shall
be
made:
4
(1)
Add
the
total
amount
of
depreciation
taken
under
section
5
168(k)
of
the
Internal
Revenue
Code
for
the
tax
year.
6
(2)
Subtract
the
amount
of
depreciation
allowable
under
the
7
modified
accelerated
cost
recovery
system
described
in
section
8
168
of
the
Internal
Revenue
Code
and
calculated
without
regard
9
to
section
168(k).
10
(3)
Any
other
adjustments
to
gains
or
losses
necessary
11
to
reflect
the
adjustments
made
in
subparagraphs
(1)
or
(2).
12
The
director
shall
adopt
rules
for
the
administration
of
this
13
paragraph.
14
b.
For
purposes
of
this
subsection,
“Internal
Revenue
Code”
15
means
the
Internal
Revenue
Code
in
effect
on
January
1,
2012.
16
Sec.
7.
EFFECTIVE
UPON
ENACTMENT.
This
Act,
being
deemed
of
17
immediate
importance,
takes
effect
upon
enactment.
18
Sec.
8.
RETROACTIVE
APPLICABILITY.
This
Act
applies
19
retroactively
to
January
1,
2012,
for
tax
years
beginning
on
20
or
after
that
date.
21
EXPLANATION
22
This
bill
allows
a
taxpayer
to
elect
to
take
an
additional
23
first-year
depreciation
allowance
in
computing
the
individual,
24
corporate,
and
franchise
taxes
and
specifies
the
adjustments
25
to
be
made
in
determining
net
income
if
such
election
is
not
26
made.
The
additional
first-year
depreciation
allowance
is
27
permanent
and
available
for
any
qualified
property
placed
in
28
service
by
the
taxpayer
on
or
after
January
1,
2012,
and
that
29
otherwise
meets
the
requirements
of
section
168(k)
of
the
30
Internal
Revenue
Code
as
it
is
presently
enacted,
regardless
of
31
any
acquisition
or
placed-in-service
date
restriction
to
the
32
contrary
in
that
section.
The
additional
allowance
is
equal
to
33
50
percent
of
the
adjusted
basis
of
the
qualified
property.
34
The
bill
also
makes
conforming
amendments
to
Code
sections
35
-4-
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2366
422.5
and
422.9
to
include
the
additional
first-year
1
depreciation
allowance
in
the
computation
of
federal
adjusted
2
gross
income
for
purposes
of
calculating
alternative
minimum
3
taxable
income
and
certain
deductions
for
the
state
individual
4
income
tax.
5
The
bill
takes
effect
upon
enactment
and
applies
6
retroactively
to
January
1,
2012,
for
tax
years
beginning
on
7
or
after
that
date.
8
-5-
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5331YH
(1)
84
mm/sc
5/
5
