This bill amends the definition of "gross income" under the Income Tax Act of 1929 to exclude certain involuntary sales of livestock from gross income calculations. Specifically, it adopts provisions from Title 26 U.S.C. § 1033, which allows for the exclusion of gains from the involuntary conversion of property. The new language specifies that gains resulting from the involuntary conversion of livestock due to drought, flood, or other weather-related conditions will be excluded from gross income if the income is used to purchase replacement livestock within five years and if the taxpayer is located in a county where the Governor has declared a state of disaster emergency due to a natural disaster.

Additionally, the bill establishes an effective date for these changes, stating that the new provisions will apply to tax years beginning on or after January 1, 2022. This amendment aims to provide financial relief to livestock owners affected by natural disasters, allowing them to reinvest in their operations without the burden of increased tax liability from involuntary sales.

Statutes affected:
HB 1221: 26-51-404(b)