Idaho Bills

Repeals, adds to and amends existing law to repeal the grocery tax credit and related informational statutes, enact a sales tax exemption for food, reduce individual and corporate income tax rates, revise the sales tax distribution formula and repeal the income tax credit for capital investment.

Repeals, adds and amends existing law to provide for applicability of the Internal Revenue Code to different tax years; to allow to a taxpayer a carryforward for certain amounts disallowed in the calculation of next taxable income; to revise the calculation of net taxable income for corporations; to reduce the individual and corporate income tax rate.

Amends existing law to revise the taxation of a corporation's foreign income, to increase the deduction from Idaho taxable income for foreign dividends, and to remove language regarding certain conditional water's-edge corporate reporting requirements.

This trailer bill to H 463 creates better consistency in policy between worldwide and "water's edge" filing methodologies. Historically, the U.S. federal tax system has partially double-taxed foreign earnings, and Idaho also partially double-taxed foreign earnings using a more simplified methodology (for water's edge filers)soIdahowouldconformtofederallaw. Thefederalsysteminnolongerdoubletaxingforeignearnings in order for U.S. multinational companies to be competitive with non-U.S. companies. This bill creates conformity to the new federal law to keep Idaho multinational companies competitive. Additionally, the majority of states historically do not double-tax foreign dividends, and currently Idaho is notcompetitivewiththoseotherstates. LegislativehistoryinIdahofrom2004allowedareducedleveloftax on foreign dividends. The 2004 repatriation act allowed companies the option to repatriate with a federal double-tax burden. The new law requires federal tax on all unremitted earnings, with a similar reduced federal double-tax burden. This bill follows Idaho's own legislative historical precedent and provides for discounteddouble-taxonhistoricalearnings. IfIdaho'staxlawmaintainsthestatusquo, itwillbepenalizing these companies with incremental double-tax liabilities compared to historical levels, so this bill resolves that double-tax issue. Finally, thenewFederalForeignDerivedIntangibleIncome(FDII)provisionsprovidea"booster"deduction to incentivize U.S. companies to manufacture domestically, rather than manufacture offshore. This bill includes an adoption of this policy by Idaho as well.