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Iowa
Tops in Percentage of e-filed State Taxes
Iowa
led the nation in the percentage of state income tax returns filed
electronically last year, according to a national association of
state tax officials.
The Federation of Tax
Administrators said 46 percent of the 1.4 million
Iowa
taxpayers filed their 2002 tax returns electronically, over the
Internet or by a phone filing system.
South Carolina
was second with 41 percent and
Georgia
was third with 39 percent.
LeAnn Boswell, manager
of the state’s electronic filing project, said 749,000 taxpayers
filed by paper last year, while 609,646 filed electronically.
DM Reg.
2-5-03
Governor’s
Budget Proposal Includes Tax Increases
Last week, Governor
Vilsack released his budget proposal and included several tax
provision changes, which he believes would impact state revenues
positively. The two
major tax changes are the streamlined sales tax agreement and the
combined corporate income tax reporter.
The state formalized its
involvement in Streamlined Sales Tax Project (SSTP) during 2002
through the enactment of Senate File 2321.
Initially introduced by the Iowa Department of Revenue and
Finance, this law established a delegation of Iowans to have a
voting seat in the SSTP. According
to the law, the delegates are comprised of one representative
appointed by the Speaker of the House (Rep. Jamie Van Fossen), one
senator appointed by Senate Majority Leader (Sen. McKibben), the
Dept. of Revenue and Finance Director, Don Cooper, and a
Governor’s appointee (Carl Castelda).
While Senate File 2321 was passed to include a four-member
delegation, due to state budgetary restrictions, Rep. Van Fossen
and Sen. McKibben did not attend SSTP meetings.
Under the agreement,
which would become operable as soon as 10 states enacted
legislation to comply with the agreement, participating states
would have to have only one tax rate for personal property or
services effective at the end of 2005.
Food and drugs would be exempt from the rule, as would
electricity, natural gas, and the transfer of motor vehicles,
planes, watercraft, modular, manufactured, or mobile homes.
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Now, the next step is
for each state to take legislative proposals before their respective
state legislatures to get statutory language approved to conform to
the provisions of the agreement.
Ten states with at least 20 percent of the population must
get conforming legislation before the provisions of the agreement
can be placed into effect.
The Dept. of Revenue and
Finance is currently in the process of developing a paper outlining
the major issues that must be addressed by the Legislature in order
to conform to the agreement. They
are also preparing a department bill draft to bring
Iowa
’s statutes into conformance, which should be completed in the
next month.
Currently, Iowa allows
either separate company filing, in which Iowa follows formal
corporate structures, or consolidating filing in which only those
corporations doing business in Iowa are included in an Iowa return.
The Governor’s proposal would amend the Iowa Code and
require combined reporting for affiliated groups of corporations to
better reflect
Iowa
corporation net income. Combined
reporting treats an affiliated group of unitary corporations as one
taxpayer for
Iowa
corporation income tax purposes.
Combined reporting would
include all members of an affiliated group in an
Iowa
corporation income tax return, but
Iowa
tax would be paid by those members doing business in
Iowa
. Currently 14 states,
including
Illinois
,
Nebraska
, and
Minnesota
, require combined reporting for affiliated groups of corporations.
Other states have discretionary authority to require combined
reports.
A study recently
completed by the Dept. of Revenue and Finance of just 50 large
corporations indicates that an additional $15 million of tax for
2000 and $40 million of tax for 2001 would have been due if combined
reporting was adopted for
Iowa
corporation income tax.
Ways
& Means Update
Bills passed out of Ways & Means this week:
No
bills passed out of committee this week.
Bill
Assignments:
No
bills where assigned in committee this week.
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