Read the full stored bill text
LEGISLATURE
OF
THE
STATE
OF
IDAHO
Sixty-eighth
Legislature
Second
Regular
Session
-
2026
IN
THE
HOUSE
OF
REPRESENTATIVES
HOUSE
BILL
NO.
519
BY
REVENUE
AND
TAXATION
COMMITTEE
AN
ACT
1
RELATING
TO
TAXATION;
AMENDING
SECTION
63
-
3004,
IDAHO
CODE,
TO
REVISE
A
PRO
-
2
VISION
REGARDING
THE
APPLICATION
OF
THE
INTERNAL
REVENUE
CODE;
AMENDING
3
SECTION
63
-
3029B,
IDAHO
CODE,
TO
REVISE
PROVISIONS
REGARDING
THE
IN
-
4
COME
TAX
CREDIT
FOR
CAPITAL
INVESTMENT;
AMENDING
SECTION
63
-
3029G,
5
IDAHO
CODE,
TO
REVISE
PROVISIONS
REGARDING
CREDITS
FOR
RESEARCH
ACTIV
-
6
ITIES
CONDUCTED
IN
THIS
STATE
AND
CERTAIN
CARRYFORWARD
PROVISIONS;
AND
7
DECLARING
AN
EMERGENCY
AND
PROVIDING
RETROACTIVE
APPLICATION.
8
Be
It
Enacted
by
the
Legislature
of
the
State
of
Idaho:
9
SECTION
1.
That
Section
63
-
3004,
Idaho
Code,
be,
and
the
same
is
hereby
10
amended
to
read
as
follows:
1
1
63
-
3004.
INTERNAL
REVENUE
CODE.
The
term
"Internal
Revenue
Code"
12
means
the
Internal
Revenue
Code
as
amended
and
in
effect
on
the
first
day
of
13
January
2025
2026
,
except
that
Internal
Revenue
Code
section
85
is
applied
14
as
in
effect
on
January
1,
2020.
15
SECTION
2.
That
Section
63
-
3029B,
Idaho
Code,
be,
and
the
same
is
hereby
16
amended
to
read
as
follows:
17
63
-
3029B.
INCOME
TAX
CREDIT
FOR
CAPITAL
INVESTMENT.
(1)
At
the
elec
-
18
tion
of
the
taxpayer,
there
shall
be
allowed,
subject
to
the
applicable
limi
-
19
tations
provided
herein
as
a
credit
against
the
income
tax
imposed
by
chapter
20
30,
title
63,
Idaho
Code,
an
amount
equal
to
the
sum
of:
21
(a)
The
tax
credit
carryovers;
and
22
(b)
The
tax
credit
for
the
taxable
year.
23
(2)
The
maximum
allowable
amount
of
the
credit
for
the
current
taxable
24
year
shall
be
three
percent
(3%)
of
the
amount
of
qualified
investments
made
25
during
the
taxable
year.
26
(3)
As
used
in
this
section,
"qualified
investment"
means
certain
prop
-
27
erty
that:
28
(a)(i)
Is
eligible
for
the
federal
investment
tax
credit,
as
de
-
29
fined
in
sections
46(c)
and
48
of
the
Internal
Revenue
Code,
sub
-
30
ject
to
the
limitations
provided
for
certain
regulated
companies
31
in
section
46(f)
of
the
Internal
Revenue
Code,
and
is
not
a
motor
32
vehicle
under
eight
thousand
(8,000)
pounds
gross
weight;
or
33
(ii)
Is
qualified
broadband
equipment,
as
defined
in
section
34
63
-
3029I,
Idaho
Code;
35
(b)
Is
acquired,
constructed,
reconstructed,
erected
or
placed
into
36
service
after
December
31,
1981;
and
37
(c)
Has
a
situs
in
Idaho,
as
determined
pursuant
to
subsection
(9)
of
38
this
section.
39
2
(4)(a)
For
qualified
investments
placed
in
service
in
2003
and
there
-
1
after,
a
taxpayer,
other
than
a
person
whose
rate
of
charge
or
rate
of
2
return
or
both
is
regulated
or
limited
according
to
federal
or
state
3
law,
may
elect,
in
lieu
of
the
credit
provided
by
this
section,
a
two
4
(2)
year
exemption
from
all
taxes
on
personal
property
on
the
qualified
5
investment.
The
exemption
from
personal
property
tax
shall
apply
to
the
6
year
the
election
is
filed
as
provided
in
this
section
and
the
immedi
-
7
ately
following
year.
The
election
provided
by
this
paragraph
is
avail
-
8
able
only
to
a
taxpayer
whose
Idaho
taxable
income,
before
application
9
of
net
operating
losses
carried
back
or
forward,
in
the
second
preceding
10
taxable
year
in
which
the
investment
is
placed
in
service
is
negative.
1
1
(b)
The
election
shall
be
made
in
the
form
prescribed
by
the
state
tax
12
commission
and
shall
include
a
specific
description
and
location
of
13
all
qualified
investments
placed
into
service
and
located
in
the
ju
-
14
risdiction
of
the
assessing
authority,
a
designation
of
the
specific
15
assets
for
which
the
exemption
is
claimed,
and
such
other
information
16
as
the
state
tax
commission
may
require.
The
election
must
be
made
17
by
including
the
election
form
with
the
listing
of
personal
property
18
required
by
section
63
-
302,
Idaho
Code,
or,
in
the
case
of
operating
19
property
assessed
under
chapter
4,
title
63,
Idaho
Code,
with
the
op
-
20
erator's
statement
required
by
section
63
-
404,
Idaho
Code.
Once
made,
21
the
election
is
irrevocable.
If
no
election
is
made,
the
election
is
not
22
otherwise
available.
A
copy
of
the
election
form
must
also
be
attached
23
to
the
original
income
tax
return
due
for
the
taxable
year
in
which
the
24
claim
was
made.
25
(c)
The
state
tax
commission
and
the
various
county
assessors
are
au
-
26
thorized
to
exchange
information
as
necessary
to
properly
coordinate
27
the
exemption
provided
in
this
subsection.
Information
disclosed
to
28
county
officials
under
this
subsection
may
be
used
only
to
determine
the
29
validity
or
amount
of
a
taxpayer's
entitlement
to
the
exemption
pro
-
30
vided
in
this
section
and
is
not
otherwise
subject
to
public
disclosure
31
as
provided
in
section
74
-
107,
Idaho
Code.
32
(d)
In
the
event
that
an
investment
in
regard
to
which
the
election
un
-
33
der
this
subsection
was
made
is
determined
by
the
state
tax
commission:
34
(i)
To
not
be
a
qualified
investment;
35
(ii)
To
have
ceased
to
qualify
during
the
recapture
period;
or
36
(iii)
To
be
otherwise
not
qualified
for
the
election;
37
the
taxpayer
shall
be
subject
to
recapture
of
the
property
tax
benefit.
38
(e)
The
benefit
to
be
recaptured
in
paragraph
(d)
of
this
subsection
39
shall
be
computed
in
the
manner
required
in
subsection
(7)
of
this
sec
-
40
tion,
and
such
recapture
amount
shall
be
subject
to
assessment
in
the
41
same
manner
as
a
deficiency
in
tax
under
this
chapter.
For
purposes
of
42
calculating
the
recapture,
the
property
tax
benefit
shall
be:
43
(i)
In
the
case
of
locally
assessed
property
located
in
a
single
44
county
or
nonapportioned
centrally
assessed
property,
the
market
45
value
of
exempted
property
times
the
average
property
tax
levy
46
for
that
county
in
the
year
or
years
for
which
the
exemption
was
47
claimed;
or
48
(ii)
In
the
case
of
other
centrally
assessed
property
and
property
49
located
in
more
than
one
(1)
county,
the
market
value
of
exempted
50
3
property
times
the
average
urban
property
tax
levy
of
the
state
1
as
determined
by
the
state
tax
commission
in
each
of
the
years
for
2
which
the
exemption
was
claimed.
3
(f)
In
the
event
that
a
recapture
of
the
exemption
is
required
under
4
this
subsection,
the
person
claiming
the
exemption
shall
report
the
5
event
to
the
state
tax
commission
in
the
manner
the
state
tax
commission
6
may
by
rule
require.
The
report
shall
be
due
no
later
than
the
due
date
7
of
that
person's
income
tax
return
under
this
chapter
for
the
taxable
8
year
in
which
the
event
occurs.
The
recapture
amount
is
due
and
payable
9
with
the
report.
Any
amount
of
recapture
not
paid
is
a
deficiency
within
10
the
meaning
of
section
63
-
3044,
Idaho
Code.
1
1
(g)
All
moneys
collected
by
the
state
tax
commission
pursuant
to
this
12
subsection,
which
amounts
are
continuously
appropriated
for
this
pur
-
13
pose,
shall
be
deposited
with
the
state
treasurer
and
placed
in
the
14
state
refund
account,
as
provided
by
section
63
-
3067,
Idaho
Code,
to
be
15
remitted
to
the
county
within
which
the
property
was
located
that
was
16
not
a
qualified
investment
or
ceased
to
qualify
during
the
recapture
17
period.
The
county
shall
distribute
this
remittance
to
all
appropriate
18
taxing
districts
based
on
the
proportion
each
appropriate
taxing
dis
-
19
trict's
levy
is
to
the
total
of
all
the
levies
of
the
taxing
districts
20
for
the
tax
code
area
where
the
property
was
located
for
each
year
the
21
exemption
was
granted.
If
any
taxing
district
is
dissolved
or
disincor
-
22
porated,
the
proportionate
share
of
the
remittance
to
be
distributed
to
23
that
taxing
district
shall
be
deposited
in
the
county
current
expense
24
fund.
25
(h)
For
purposes
of
the
limitation
provided
by
section
63
-
802,
Idaho
26
Code,
moneys
received
pursuant
to
this
subsection
shall
be
treated
as
27
property
tax
revenue
by
taxing
districts.
28
(5)
Notwithstanding
the
provisions
of
subsections
(1)
and
(2)
of
this
29
section,
the
amount
of
the
credit
allowed
shall
not
exceed
fifty
percent
30
(50%)
of
the
tax
liability
of
the
taxpayer.
The
tax
liability
of
the
taxpayer
31
shall
be
the
tax
after
deducting
the
credit
allowed
by
section
63
-
3029,
Idaho
32
Code.
33
(6)
If
the
sum
of
credit
carryovers
from
the
credit
allowed
by
subsec
-
34
tion
(2)
of
this
section
and
the
amount
of
credit
for
the
taxable
year
from
35
the
credit
allowed
by
subsection
(2)
of
this
section
exceed
the
limitation
36
imposed
by
subsection
(5)
of
this
section
for
the
current
taxable
year,
the
37
excess
attributable
to
the
current
taxable
year's
credit
shall
be
an
invest
-
38
ment
credit
carryover
to
the
fourteen
(14)
succeeding
taxable
years
as
long
39
as
the
qualified
investment
property
for
which
the
unused
credit
was
granted
40
otherwise
remains
a
qualified
investment
as
determined
under
subsection
(3)
41
of
this
section
in
each
of
the
taxable
years
during
the
recapture
period.
42
In
the
case
of
a
group
of
corporations
filing
a
combined
report
under
sec
-
43
tion
63
-
3027,
Idaho
Code,
or
sections
63
-
3027B
through
63
-
3027E,
Idaho
Code,
44
credit
earned
by
one
(1)
member
of
the
group
but
not
used
by
that
member
may
45
be
used
by
another
member
of
the
group,
subject
to
the
provisions
of
subsec
-
46
tion
(5)
of
this
section,
instead
of
carried
over.
The
entire
amount
of
un
-
47
used
credit
shall
be
carried
forward
to
the
earliest
of
the
succeeding
years,
48
wherein
the
oldest
available
unused
credit
shall
be
used
first.
For
a
com
-
49
bined
group
of
corporations,
credit
carried
forward
may
be
claimed
by
any
50
4
member
of
the
group,
unless
the
member
who
earned
the
credit
is
no
longer
in
-
1
cluded
in
the
combined
group.
2
(7)
Any
recapture
of
the
credit
allowed
by
subsection
(2)
of
this
sec
-
3
tion
on
property
disposed
of
or
ceasing
to
qualify,
prior
to
the
close
of
4
the
recapture
period,
shall
be
determined
according
to
the
applicable
recap
-
5
ture
provisions
of
the
Internal
Revenue
Code.
In
the
case
of
a
unitary
group
6
of
corporations,
the
increase
in
tax
due
to
the
recapture
of
investment
tax
7
credit
must
be
reported
by
the
member
of
the
group
who
earned
the
credit
re
-
8
gardless
of
which
member
claimed
the
credit
against
tax.
9
(8)
For
the
purpose
of
determining
whether
property
placed
in
service
10
is
a
"qualified
investment"
as
defined
in
subsection
(3)
of
this
section,
the
1
1
provisions
of
section
49
of
the
Internal
Revenue
Code
shall
be
disregarded.
12
"Qualified
investment"
shall
not
include
any
amount
for
which
a
deduction
is
13
allowed
under
section
168(k)
or
section
179
of
the
Internal
Revenue
Code
in
14
computing
Idaho
taxable
income.
15
(9)
For
purposes
of
this
section,
property
has
a
situs
in
Idaho
during
a
16
taxable
year
if
it
is
used
in
Idaho
at
any
time
during
the
taxable
year.
Prop
-
17
erty
not
used
in
Idaho
during
a
taxable
year
does
not
have
a
situs
in
Idaho
18
in
the
taxable
year
during
which
the
property
is
not
used
in
Idaho
or
in
any
19
subsequent
taxable
year.
The
Idaho
situs
of
property
must
be
established
by
20
records
maintained
by
the
taxpayer
that
are
created
reasonably
contempora
-
21
neously
with
the
use
of
the
property.
22
(10)
In
the
case
of
property
used
both
in
and
outside
Idaho,
the
taxpayer
23
electing
to
claim
the
credit
provided
in
this
section
must
elect
to
compute
24
the
qualified
investment
in
property
with
a
situs
in
Idaho
for
all
such
in
-
25
vestments
first
qualifying
during
that
year
in
one
(1),
but
only
one
(1),
of
26
the
following
ways:
27
(a)
The
amount
of
each
qualified
investment
in
a
specific
asset
shall
28
be
separately
computed
based
on
the
percentage
of
the
actual
use
of
the
29
property
in
Idaho
by
using
a
measure
of
the
use,
such
as
total
miles
or
30
total
machine
hours,
that
most
accurately
reflects
the
beneficial
use
31
during
the
taxable
year
in
which
it
is
first
acquired,
constructed,
32
reconstructed,
erected,
or
placed
into
service;
provided
that
the
as
-
33
set
is
placed
in
service
more
than
ninety
(90)
days
before
the
end
of
34
the
taxable
year.
In
the
case
of
assets
acquired,
constructed,
recon
-
35
structed,
erected,
or
placed
into
service
within
ninety
(90)
days
prior
36
to
the
end
of
the
taxable
year
in
which
the
investment
first
qualifies,
37
the
measure
of
the
use
of
that
asset
within
Idaho
for
that
year
shall
be
38
based
on
the
percentage
of
use
in
Idaho
during
the
first
ninety
(90)
days
39
of
use
of
the
asset;
or
40
(b)
The
investment
in
qualified
property
used
both
inside
and
out
-
41
side
Idaho
during
the
taxable
year
in
which
it
is
first
acquired,
42
constructed,
reconstructed,
erected,
or
placed
into
service
shall
be
43
multiplied
by
the
percent
of
the
investment
that
would
be
included
in
44
the
numerator
of
the
Idaho
property
factor
determined
pursuant
to
sec
-
45
tion
63
-
3027,
Idaho
Code,
for
the
same
year;
provided
that
the
asset
is
46
placed
in
service
more
than
ninety
(90)
days
before
the
end
of
the
tax
-
47
able
year.
In
the
case
of
assets
acquired,
constructed,
reconstructed,
48
erected,
or
placed
into
service
within
ninety
(90)
days
prior
to
the
end
49
of
the
taxable
year
in
which
the
investment
first
qualifies,
the
invest
-
50
5
ment
in
qualified
property
used
both
inside
and
outside
Idaho
shall
be
1
multiplied
by
the
percent
of
the
investment
that
would
be
included
in
2
the
numerator
of
the
Idaho
property
factor
determined
pursuant
to
sec
-
3
tion
63
-
3027,
Idaho
Code,
during
the
first
ninety
(90)
days
of
use
of
the
4
asset.
5
(11)
Any
amounts
claimed
by
a
taxpayer
as
a
deduction
pursuant
to
sec
-
6
tion
174
of
the
Internal
Revenue
Code
that
constitute
qualified
investments,
7
as
defined
in
subsection
(3)
of
this
section,
shall
not
be
eligible
for
the
8
credit
provided
in
this
section.
9
(11)
(12)
References
to
sections
46,
48
and
49
of
the
Internal
Revenue
10
Code
mean
those
sections
as
they
existed
in
the
Internal
Revenue
Code
of
1986
1
1
prior
to
November
5,
1990.
12
SECTION
3.
That
Section
63
-
3029G,
Idaho
Code,
be,
and
the
same
is
hereby
13
amended
to
read
as
follows:
14
63
-
3029G.
CREDITS
FOR
RESEARCH
ACTIVITIES
CONDUCTED
IN
THIS
STATE
-
-
15
CARRYFORWARD.
16
(1)(a)
Subject
to
the
limitations
of
this
section,
there
shall
be
al
-
17
lowed
to
a
taxpayer
a
nonrefundable
credit
against
taxes
imposed
by
sec
-
18
tions
63
-
3024,
63
-
3025,
and
63
-
3025A,
Idaho
Code,
for
increasing
re
-
19
search
activities
in
Idaho.
20
(b)
The
credit
allowed
by
paragraph
(a)
of
this
subsection
shall
be
the
21
sum
of:
22
(i)
Five
percent
(5%)
of
the
excess
of
qualified
research
expenses
23
for
research
conducted
in
Idaho
over
the
base
amount;
and
24
(ii)
Five
percent
(5%)
basic
research
payments
allowable
under
25
section
41(e)
of
the
Internal
Revenue
Code
for
basic
research
con
-
26
ducted
in
Idaho.
27
(c)
The
credit
allowed
by
paragraph
(a)
of
this
subsection
shall
be
com
-
28
puted
without
regard
to
the
calculation
of
the
alternative
incremental
29
credit
provided
for
in
section
41(c)(4)
of
the
Internal
Revenue
Code
or
30
the
alternative
simplified
credit
provided
for
in
section
41(c)(5)
of
31
the
Internal
Revenue
Code.
32
(2)
As
used
in
this
section:
33
(a)
The
terms
"qualified
research
expenses,"
"qualified
research,"
34
"basic
research
payments"
and
"basic
research"
shall
be
as
defined
in
35
section
41
of
the
Internal
Revenue
Code,
except
that
the
research
must
36
be
conducted
in
Idaho.
37
(b)
The
term
"base
amount"
shall
mean
an
amount
calculated
as
provided
38
in
section
41(c)
and
(h)
of
the
Internal
Revenue
Code,
except
that:
39
(i)
A
taxpayer's
gross
receipts
include
only
those
gross
receipts
40
attributable
to
sources
within
this
state
as
provided
in
subsec
-
41
tions
(12)
and
(13)
of
section
63
-
3027,
Idaho
Code;
and
42
(ii)
Notwithstanding
section
41(c)
of
the
Internal
Revenue
Code,
43
for
purposes
of
calculating
the
base
amount,
a
taxpayer:
44
(A)
May
elect
to
be
treated
as
a
start
-
up
company
as
provided
45
in
section
41(c)(3)(B)
of
the
Internal
Revenue
Code,
regard
-
46
less
of
whether
the
taxpayer
meets
the
requirements
of
sec
-
47
tion
41(c)(3)(B)(i)(I)
or
(II)
of
the
Internal
Revenue
Code;
48
and
49
6
(B)
May
not
revoke
an
election
to
be
treated
as
a
start
-
up
1
company.
2
(3)
The
credit
allowed
by
subsection
(1)(a)
of
this
section
together
3
with
any
credits
carried
forward
under
subsection
(5)
of
this
section
4
shall
not
exceed
the
amount
of
tax
due
under
sections
63
-
3024,
63
-
3025,
and
5
63
-
3025A,
Idaho
Code,
after
allowance
for
all
other
credits
permitted
by
6
this
chapter.
When
credits
earned
in
more
than
one
(1)
taxable
year
are
7
available,
the
oldest
credits
shall
be
applied
first.
8
(4)
In
the
case
of
a
group
of
corporations
filing
a
combined
report
9
under
section
63
-
3027(22),
Idaho
Code,
credit
earned
by
one
(1)
member
of
10
the
group
but
not
used
by
that
member
may
be
used
by
another
member
of
the
1
1
group.
For
a
combined
group
of
corporations,
any
member
of
the
group
may
12
claim
credit
carried
forward
unless
the
member
who
earned
the
credit
is
no
13
longer
included
in
the
combined
group.
14
(5)
The
credit
allowed
by
subsection
(1)(a)
of
this
section
shall
be
15
claimed
for
the
taxable
year
during
which
the
taxpayer
qualifies
for
the
16
credit.
If
the
credit
exceeds
the
limitation
under
subsection
(3)
of
this
17
section,
the
excess
amount
may
be
carried
forward
for
a
period
that
does
18
not
exceed
the
next
fourteen
(14)
taxable
years.
Any
amounts
claimed
by
a
19
taxpayer
as
a
deduction
pursuant
to
section
174
of
the
Internal
Revenue
Code
20
that
constitute
qualified
research
expenses,
qualified
research,
basic
re
-
21
search
payments,
or
basic
research,
as
those
terms
are
defined
in
subsection
22
(2)
of
this
section,
shall
not
be
eligible
for
the
credit
provided
in
this
23
section.
24
(6)
In
addition
to
other
needed
rules,
the
state
tax
commission
may
25
promulgate
rules
prescribing,
in
the
case
of
S
corporations,
partnerships,
26
trusts,
or
estates,
a
method
of
attributing
the
credit
under
this
section
to
27
the
shareholders,
partners,
or
beneficiaries
in
proportion
to
their
share
of
28
the
income
from
the
S
corporation,
partnership,
trust,
or
estate.
29
SECTION
4.
An
emergency
existing
therefor,
which
emergency
is
hereby
30
declared
to
exist,
this
act
shall
be
in
full
force
and
effect
on
and
after
its
31
passage
and
approval,
and
retroactively
to
January
1,
2025.
32