Bill Text: IA SSB3107 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A study bill for an act relating to administration of the tax and related laws by the department of revenue, including updating Code references to the Internal Revenue Code, decoupling from certain federal bonus depreciation provisions and the expensing of certain depreciable business assets, requiring background checks for job applicants and persons performing work for the department of revenue, and including effective date and retroactive applicability provisions.
Spectrum: Unknown
Status: (Introduced - Dead) 2016-02-22 - Ways and Means: Jochum Chair,Bolkcom, and Feenstra. [SSB3107 Detail]
Download: Iowa-2015-SSB3107-Introduced.html
Senate
Study
Bill
3107
-
Introduced
SENATE/HOUSE
FILE
_____
BY
(PROPOSED
DEPARTMENT
OF
REVENUE
BILL)
A
BILL
FOR
An
Act
relating
to
administration
of
the
tax
and
related
1
laws
by
the
department
of
revenue,
including
updating
2
Code
references
to
the
Internal
Revenue
Code,
decoupling
3
from
certain
federal
bonus
depreciation
provisions
and
the
4
expensing
of
certain
depreciable
business
assets,
requiring
5
background
checks
for
job
applicants
and
persons
performing
6
work
for
the
department
of
revenue,
and
including
effective
7
date
and
retroactive
applicability
provisions.
8
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
9
TLSB
5269XD
(8)
86
mm/sc
S.F.
_____
H.F.
_____
DIVISION
I
1
INTERNAL
REVENUE
CODE
REFERENCES
2
Section
1.
Section
15.335,
subsection
7,
paragraph
b,
Code
3
2016,
is
amended
to
read
as
follows:
4
b.
For
purposes
of
this
section
,
“Internal
Revenue
Code”
5
means
the
Internal
Revenue
Code
in
effect
on
January
1,
2015
6
2016
.
7
Sec.
2.
Section
422.3,
subsection
5,
Code
2016,
is
amended
8
to
read
as
follows:
9
5.
“Internal
Revenue
Code”
means
the
Internal
Revenue
Code
10
of
1954,
prior
to
the
date
of
its
redesignation
as
the
Internal
11
Revenue
Code
of
1986
by
the
Tax
Reform
Act
of
1986,
or
means
12
the
Internal
Revenue
Code
of
1986
as
amended
to
and
including
13
January
1,
2015
2016
.
14
Sec.
3.
Section
422.9,
subsection
2,
paragraph
i,
Code
2016,
15
is
amended
to
read
as
follows:
16
i.
The
deduction
for
state
sales
and
use
taxes
is
allowable
17
only
if
the
taxpayer
elected
to
deduct
the
state
sales
and
use
18
taxes
in
lieu
of
state
income
taxes
under
section
164
of
the
19
Internal
Revenue
Code.
A
deduction
for
state
sales
and
use
20
taxes
is
not
allowed
if
the
taxpayer
has
taken
the
deduction
21
for
state
income
taxes
or
claimed
the
standard
deduction
under
22
section
63
of
the
Internal
Revenue
Code.
This
paragraph
23
applies
to
taxable
years
beginning
after
December
31,
2003,
and
24
before
January
1,
2008,
and
to
taxable
years
beginning
after
25
December
31,
2009,
and
before
January
1,
2015
,
and
to
taxable
26
years
beginning
after
December
31,
2015
.
27
Sec.
4.
Section
422.10,
subsection
3,
paragraph
b,
Code
28
2016,
is
amended
to
read
as
follows:
29
b.
For
purposes
of
this
section
,
“Internal
Revenue
Code”
30
means
the
Internal
Revenue
Code
in
effect
on
January
1,
2015
31
2016
.
32
Sec.
5.
Section
422.32,
subsection
1,
paragraph
h,
Code
33
2016,
is
amended
to
read
as
follows:
34
h.
“Internal
Revenue
Code”
means
the
Internal
Revenue
Code
35
-1-
LSB
5269XD
(8)
86
mm/sc
1/
8
S.F.
_____
H.F.
_____
of
1954,
prior
to
the
date
of
its
redesignation
as
the
Internal
1
Revenue
Code
of
1986
by
the
Tax
Reform
Act
of
1986,
or
means
2
the
Internal
Revenue
Code
of
1986
as
amended
to
and
including
3
January
1,
2015
2016
.
4
Sec.
6.
Section
422.33,
subsection
5,
paragraph
e,
5
subparagraph
(2),
Code
2016,
is
amended
to
read
as
follows:
6
(2)
For
purposes
of
this
subsection
,
“Internal
Revenue
Code”
7
means
the
Internal
Revenue
Code
in
effect
on
January
1,
2015
8
2016
.
9
Sec.
7.
EFFECTIVE
UPON
ENACTMENT.
This
division
of
this
10
Act,
being
deemed
of
immediate
importance,
takes
effect
upon
11
enactment.
12
Sec.
8.
RETROACTIVE
APPLICABILITY.
The
sections
of
this
13
division
of
this
Act
amending
sections
15.335,
422.10,
and
14
422.33
apply
retroactively
to
January
1,
2015,
for
tax
years
15
beginning
on
or
after
that
date.
16
Sec.
9.
RETROACTIVE
APPLICABILITY.
The
sections
of
this
17
division
of
this
Act
amending
sections
422.3,
422.9,
and
422.32
18
apply
retroactively
to
January
1,
2016,
for
tax
years
beginning
19
on
or
after
that
date.
20
DIVISION
II
21
BONUS
DEPRECIATION
22
Sec.
10.
Section
422.7,
subsection
39A,
unnumbered
23
paragraph
1,
Code
2016,
is
amended
to
read
as
follows:
24
The
additional
first-year
depreciation
allowance
authorized
25
in
section
168(k)
of
the
Internal
Revenue
Code,
as
enacted
by
26
Pub.
L.
No.
110-185,
§103,
Pub.
L.
No.
111-5,
§1201,
Pub.
L.
27
No.
111-240,
§2022,
Pub.
L.
No.
111-312,
§401,
Pub.
L.
No.
28
112-240,
§331,
and
Pub.
L.
No.
113-295,
§125,
and
Pub.
L.
No.
29
114-113,
§143,
does
not
apply
in
computing
net
income
for
30
state
tax
purposes.
If
the
taxpayer
has
taken
the
additional
31
first-year
depreciation
allowance
for
purposes
of
computing
32
federal
adjusted
gross
income,
then
the
taxpayer
shall
make
the
33
following
adjustments
to
federal
adjusted
gross
income
when
34
computing
net
income
for
state
tax
purposes:
35
-2-
LSB
5269XD
(8)
86
mm/sc
2/
8
S.F.
_____
H.F.
_____
Sec.
11.
Section
422.35,
subsection
19A,
unnumbered
1
paragraph
1,
Code
2016,
is
amended
to
read
as
follows:
2
The
additional
first-year
depreciation
allowance
authorized
3
in
section
168(k)
of
the
Internal
Revenue
Code,
as
enacted
by
4
Pub.
L.
No.
110-185,
§103,
Pub.
L.
No.
111-5,
§1201,
Pub.
L.
5
No.
111-240,
§2022,
Pub.
L.
No.
111-312,
§401,
Pub.
L.
No.
6
112-240,
§331,
and
Pub.
L.
No.
113-295,
§125,
and
Pub.
L.
No.
7
114-113,
§143,
does
not
apply
in
computing
net
income
for
8
state
tax
purposes.
If
the
taxpayer
has
taken
the
additional
9
first-year
depreciation
allowance
for
purposes
of
computing
10
federal
taxable
income,
then
the
taxpayer
shall
make
the
11
following
adjustments
to
federal
taxable
income
when
computing
12
net
income
for
state
tax
purposes:
13
Sec.
12.
EFFECTIVE
UPON
ENACTMENT.
This
division
of
this
14
Act,
being
deemed
of
immediate
importance,
takes
effect
upon
15
enactment.
16
Sec.
13.
RETROACTIVE
APPLICABILITY.
This
division
of
this
17
Act
applies
retroactively
to
January
1,
2016,
for
tax
years
18
ending
on
or
after
that
date.
19
DIVISION
III
20
SECTION
179
EXPENSING
21
Sec.
14.
Section
422.7,
Code
2016,
is
amended
by
adding
the
22
following
new
subsection:
23
NEW
SUBSECTION
.
53A.
Notwithstanding
the
method
for
24
computing
the
increased
expensing
allowance
under
section
179
25
of
the
Internal
Revenue
Code,
as
defined
in
section
422.3,
26
the
method
to
be
used
in
computing
such
increased
expensing
27
allowance
for
tax
years
beginning
on
or
after
January
1,
2016,
28
shall
be
the
method
under
section
179
of
the
Internal
Revenue
29
Code,
as
amended
to
and
including
January
1,
2015.
A
taxpayer
30
affected
by
this
subsection
shall
make
adjustments
to
adjusted
31
gross
income
pursuant
to
rules
adopted
by
the
director.
32
Sec.
15.
Section
422.35,
Code
2016,
is
amended
by
adding
the
33
following
new
subsection:
34
NEW
SUBSECTION
.
24A.
Notwithstanding
the
method
for
35
-3-
LSB
5269XD
(8)
86
mm/sc
3/
8
S.F.
_____
H.F.
_____
computing
the
increased
expensing
allowance
under
section
179
1
of
the
Internal
Revenue
Code,
as
defined
in
section
422.32,
2
the
method
to
be
used
in
computing
such
increased
expensing
3
allowance
for
tax
years
beginning
on
or
after
January
1,
2016,
4
shall
be
the
method
under
section
179
of
the
Internal
Revenue
5
Code,
as
amended
to
and
including
January
1,
2015.
A
taxpayer
6
affected
by
this
subsection
shall
make
adjustments
to
taxable
7
income
pursuant
to
rules
adopted
by
the
director.
8
Sec.
16.
Section
422.5,
subsection
2,
paragraph
b,
9
subparagraph
(1),
Code
2016,
is
amended
to
read
as
follows:
10
(1)
Add
items
of
tax
preference
included
in
federal
11
alternative
minimum
taxable
income
under
section
57,
except
12
subsections
(a)(1),
(a)(2),
and
(a)(5),
of
the
Internal
Revenue
13
Code,
make
the
adjustments
included
in
federal
alternative
14
minimum
taxable
income
under
section
56,
except
subsections
15
(a)(4),
(b)(1)(C)(iii),
and
(d),
of
the
Internal
Revenue
Code,
16
and
add
losses
as
required
by
section
58
of
the
Internal
17
Revenue
Code.
To
the
extent
that
any
preference
or
adjustment
18
is
determined
by
an
individual’s
federal
adjusted
gross
income,
19
the
individual’s
federal
adjusted
gross
income
is
computed
in
20
accordance
with
section
422.7,
subsections
39,
39A,
39B,
and
21
53
,
and
53A
.
In
the
case
of
an
estate
or
trust,
the
items
of
22
tax
preference,
adjustments,
and
losses
shall
be
apportioned
23
between
the
estate
or
trust
and
the
beneficiaries
in
accordance
24
with
rules
prescribed
by
the
director.
25
Sec.
17.
Section
422.9,
subsection
2,
paragraph
h,
Code
26
2016,
is
amended
to
read
as
follows:
27
h.
For
purposes
of
calculating
the
deductions
in
this
28
subsection
that
are
authorized
under
the
Internal
Revenue
Code,
29
and
to
the
extent
that
any
of
such
deductions
is
determined
by
30
an
individual’s
federal
adjusted
gross
income,
the
individual’s
31
federal
adjusted
gross
income
is
computed
in
accordance
with
32
section
422.7,
subsections
39,
39A,
39B,
and
53
,
and
53A
.
33
Sec.
18.
EFFECTIVE
UPON
ENACTMENT.
This
division
of
this
34
Act,
being
deemed
of
immediate
importance,
takes
effect
upon
35
-4-
LSB
5269XD
(8)
86
mm/sc
4/
8
S.F.
_____
H.F.
_____
enactment.
1
Sec.
19.
RETROACTIVE
APPLICABILITY.
This
division
of
this
2
Act
applies
retroactively
to
January
1,
2016,
for
tax
years
3
beginning
on
or
after
that
date.
4
DIVISION
IV
5
BACKGROUND
CHECKS
6
Sec.
20.
NEW
SECTION
.
421.48
Background
checks.
7
An
applicant
for
employment
with
the
department
of
revenue
8
shall
be
subject
to
a
national
criminal
history
check
through
9
the
federal
bureau
of
investigation.
A
contractor,
vendor,
10
employee,
or
any
other
individual
performing
work
for
the
11
department
of
revenue,
shall
be
subject
to
a
national
criminal
12
history
check
through
the
federal
bureau
of
investigation
13
at
least
once
every
ten
years.
The
department
of
revenue
14
shall
request
the
national
criminal
history
check
and
shall
15
provide
the
individual’s
fingerprints
to
the
department
16
of
public
safety
for
submission
through
the
state
criminal
17
history
repository
to
the
federal
bureau
of
investigation.
18
The
individual
shall
authorize
release
of
the
results
of
the
19
national
criminal
history
check
to
the
department
of
revenue.
20
The
department
of
revenue
shall
pay
the
actual
cost
of
the
21
fingerprinting
and
national
criminal
history
check,
if
any.
22
The
results
of
a
criminal
history
check
conducted
pursuant
to
23
this
section
shall
not
be
considered
a
public
record
under
24
chapter
22.
25
Sec.
21.
EFFECTIVE
UPON
ENACTMENT.
This
division
of
this
26
Act,
being
deemed
of
immediate
importance,
takes
effect
upon
27
enactment.
28
EXPLANATION
29
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
30
the
explanation’s
substance
by
the
members
of
the
general
assembly.
31
This
bill
updates
the
Iowa
Code
references
to
the
Internal
32
Revenue
Code
to
make
federal
income
tax
revisions
enacted
33
by
Congress
in
2015
applicable
for
Iowa
income
tax
purposes
34
beginning
in
2015
and
2016,
decouples
with
certain
bonus
35
-5-
LSB
5269XD
(8)
86
mm/sc
5/
8
S.F.
_____
H.F.
_____
depreciation
provisions
and
section
179
expensing
provisions,
1
and
requires
background
checks
for
certain
people
performing
2
work
for
the
department
of
revenue.
3
DIVISION
I
——
INTERNAL
REVENUE
CODE
REFERENCES.
The
4
division
amends
Code
sections
422.3
and
422.32,
general
5
definition
sections
in
the
chapter
of
the
Code
that
governs
6
corporate
and
individual
income
tax
and
the
franchise
tax
7
on
financial
institutions,
to
update
the
references
to
the
8
Internal
Revenue
Code.
These
provisions
apply
retroactively
to
9
January
1,
2016,
for
tax
years
beginning
on
or
after
that
date.
10
The
division
amends
Code
sections
15.335,
422.10,
and
422.33
11
to
update
the
references
to
the
Internal
Revenue
Code
for
the
12
state
research
activities
credit
for
individuals,
corporations,
13
and
corporations
in
economic
development
areas
to
include
the
14
federal
changes
to
the
research
activities
credit
and
the
15
alternative
simplified
research
activities
credit.
These
16
provisions
apply
retroactively
to
January
1,
2015,
for
tax
17
years
beginning
on
or
after
that
date.
18
Code
section
422.9
provides
individuals
a
deduction
from
19
net
income
for
state
sales
and
use
taxes
if
the
individual
20
chose
to
deduct
sales
and
use
tax
in
lieu
of
state
income
taxes
21
or
the
standard
deduction
for
federal
income
tax
purposes.
22
This
deduction
was
set
to
expire
under
both
federal
and
Iowa
23
law
for
tax
years
beginning
on
or
after
January
1,
2015.
The
24
federal
Protecting
Americans
from
Tax
Hikes
Act
of
2015
made
25
the
federal
deduction
permanent.
This
division
allows
the
Iowa
26
deduction,
and
makes
it
permanent,
for
tax
years
beginning
27
on
or
after
January
1,
2016.
Division
I
takes
effect
upon
28
enactment.
29
DIVISION
II
——
BONUS
DEPRECIATION.
The
division
decouples,
30
for
Iowa
income
tax
purposes,
from
the
federal
additional
31
first-year
depreciation
allowance
in
section
168(k)
of
the
32
Internal
Revenue
Code
(bonus
depreciation)
which
was
modified
33
and
extended
through
2019
by
the
federal
Protecting
Americans
34
from
Tax
Hikes
Act
of
2015.
Taxpayers
who
claim
bonus
35
-6-
LSB
5269XD
(8)
86
mm/sc
6/
8
S.F.
_____
H.F.
_____
depreciation
for
federal
tax
purposes
are
required
to
add
1
such
depreciation
amounts
back
to
Iowa
net
income,
but
are
2
then
allowed
under
existing
state
law
to
deduct
the
amount
of
3
depreciation
that
would
otherwise
be
allowable
under
federal
4
law,
without
regard
to
the
bonus
depreciation
allowance.
5
Division
II
takes
effect
upon
enactment
and
applies
6
retroactively
to
January
1,
2016,
for
tax
years
ending
on
or
7
after
that
date.
8
DIVISION
III
——
SECTION
179
EXPENSING.
The
division
9
decouples,
for
Iowa
income
tax
purposes,
from
the
expensing
10
of
certain
depreciable
business
assets
in
section
179
of
the
11
Internal
Revenue
Code
which
was
modified
and
made
permanent
by
12
the
federal
Protecting
Americans
from
Tax
Hikes
Act
of
2015.
13
For
tax
years
beginning
on
or
after
January
1,
2016,
taxpayers
14
are
required
to
compute
their
section
179
increased
expensing
15
allowance
according
to
the
method
prescribed
under
section
179
16
of
the
Internal
Revenue
Code
in
effect
on
January
1,
2015,
17
which
provides
a
$25,000
limitation
on
expensing
for
taxable
18
years
beginning
after
2014.
19
Under
current
law,
individual
taxpayers
were
required,
when
20
calculating
alternative
minimum
tax
under
Code
section
422.5(2)
21
and
itemized
deductions
under
Code
section
422.9(2)
for
tax
22
year
2009,
to
recompute
their
federal
adjusted
gross
income
23
to
take
into
account
the
fact
that
Iowa
decoupled
from
the
24
2009
federal
changes
to
the
section
179
increased
expensing
25
allowance.
The
bill
provides
that
taxpayers
must
make
those
26
same
adjustments
to
federal
adjusted
gross
income
for
tax
27
years
beginning
on
after
January
1,
2016,
to
account
for
the
28
fact
that
Iowa
has
decoupled
from
changes
to
the
section
179
29
increased
expensing
allowance
as
described
above.
30
Division
III
takes
effect
upon
enactment
and
applies
31
retroactively
to
January
1,
2016,
for
tax
years
beginning
on
32
or
after
that
date.
33
DIVISION
IV
——
BACKGROUND
CHECKS.
The
division
requires
34
an
applicant
for
employment
with
the
department
of
revenue
35
-7-
LSB
5269XD
(8)
86
mm/sc
7/
8
S.F.
_____
H.F.
_____
(department)
at
the
time
of
application,
or
a
contractor,
1
vendor,
employee,
or
any
other
individual
performing
work
for
2
the
department
to
be
subject
to
a
national
criminal
history
3
check
through
the
federal
bureau
of
investigation
(FBI)
at
4
least
once
every
10
years.
The
bill
directs
the
department
to
5
provide
fingerprints
to
the
department
of
public
safety
for
6
submission
through
the
state
criminal
history
repository
to
7
the
FBI,
and
requires
individuals
to
authorize
release
of
the
8
results
to
the
department.
The
department
is
required
to
pay
9
the
actual
costs
of
the
fingerprinting
and
the
criminal
history
10
check.
The
bill
provides
that
the
results
of
a
criminal
11
history
check
are
not
considered
a
public
record
under
Code
12
chapter
22
(open
records).
Division
IV
takes
effect
upon
13
enactment.
14
-8-
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5269XD
(8)
86
mm/sc
8/
8
