Senate File 260 - Introduced SENATE FILE 260 BY CHELGREN , WHITVER , ZAUN , ROZENBOOM , GUTH , KAPUCIAN , SORENSON , SEGEBART , ZUMBACH , BREITBACH , CHAPMAN , BEHN , FEENSTRA , and ANDERSON A BILL FOR An Act relating to the corporate income tax rates imposed 1 on corporations and including retroactive applicability 2 provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1780SS (2) 85 mm/sc

S.F. 260 Section 1. Section 422.33, subsection 1, Code 2013, is 1 amended by striking the subsection and inserting in lieu 2 thereof the following: 3 1. a. A tax is imposed annually upon each corporation doing 4 business in this state, or deriving income from sources within 5 this state, at the rate of six percent of the taxable income 6 received by the corporation during the income year. 7 b. For purposes of this section: 8 (1) “Income from sources within this state” means income 9 from real, tangible, or intangible property located or having 10 a situs in this state. 11 (2) “Taxable income” means the net income as calculated in 12 section 422.35 and determined to be reasonably attributable to 13 Iowa pursuant to subsections 2 and 3. 14 Sec. 2. Section 422.33, subsection 1A, Code 2013, is amended 15 to read as follows: 16 1A. There is imposed upon each corporation exempt from 17 the general business tax on corporations by section 422.34, 18 subsection 2 , a tax at the rates rate specified in subsection 1 19 upon the state’s apportioned share computed in accordance with 20 subsections 2 and 3 of the unrelated business income computed 21 in accordance with the Internal Revenue Code and with the 22 adjustments set forth in section 422.35 . 23 Sec. 3. Section 422.33, subsection 4, unnumbered paragraph 24 1, Code 2013, is amended to read as follows: 25 In addition to all taxes imposed under this division , 26 there is imposed upon each corporation doing business within 27 the state the greater of the tax determined in subsection 1 , 28 paragraphs “a” through “d” or the state alternative minimum tax 29 equal to sixty percent of the maximum state corporate income 30 tax rate, rounded to the nearest one-tenth of one percent, of 31 the state alternative minimum taxable income of the taxpayer 32 computed under this subsection . 33 Sec. 4. RETROACTIVE APPLICABILITY. This Act applies 34 retroactively to January 1, 2013, for tax years beginning on 35 -1- LSB 1780SS (2) 85 mm/sc 1/ 2

S.F. 260 or after that date. 1 EXPLANATION 2 This bill relates to the tax rates applied to corporations. 3 Currently, the corporate income tax is imposed in a 4 progressive manner using four income brackets with increasing 5 rates: on the first $25,000 of income, the rate is 6 percent; 6 on income between $25,000 and $100,000, the rate is 8 percent; 7 on income between $100,000 and $250,000, the rate is 10 8 percent; on income of $250,000 or more, the rate is 12 percent. 9 The bill eliminates this tiered bracket and rate structure and 10 imposes the tax at the rate of 6 percent on the corporation’s 11 taxable income. 12 The bill applies retroactively to tax years beginning on or 13 after January 1, 2013. 14 -2- LSB 1780SS (2) 85 mm/sc 2/ 2