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House File 532 - IntroducedA Bill ForAn Act 1establishing a solar installation tax credit available
2against the individual and corporate income taxes, the
3moneys and credits tax, and the franchise tax, and including
4effective date and retroactive applicability provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 422.10C Solar installation tax
2credits.
31. For installations occurring on or after January 1, 2022,
4the taxes imposed under this subchapter, less the credits
5allowed under section 422.12, shall be reduced by a solar
6installation tax credit equal to the sum of the following:
7a. Fifty percent of the federal residential energy efficient
8property credit related to solar energy provided in section
925D(a)(1) and section 25D(a)(2) of the Internal Revenue Code,
10not to exceed five thousand dollars.
11b. Fifty percent of the federal energy credit related to
12solar energy systems provided in section 48(a)(2)(A)(i)(II) and
13section 48(a)(2)(A)(i)(III) of the Internal Revenue Code, not
14to exceed twenty thousand dollars.
152. Any credit in excess of the tax liability is not
16refundable but the excess for the tax year may be credited
17to the tax liability for the following ten years or until
18depleted, whichever is earlier. The director of revenue shall
19adopt rules to implement this section.
203. a. An individual may claim the tax credit allowed a
21partnership, limited liability company, S corporation, estate,
22or trust electing to have the income taxed directly to the
23individual. The amount claimed by the individual shall be
24based upon the pro rata share of the individual’s earnings of
25the partnership, limited liability company, S corporation,
26estate, or trust.
27b. (1) A taxpayer who is eligible to claim a credit under
28this section shall not be eligible to claim a renewable energy
29tax credit under chapter 476C.
30(2) A taxpayer shall not be eligible to claim both the tax
31credit under this section and the solar energy tax credit under
32section 422.11L for the same installation.
33c. A taxpayer may claim more than one credit under this
34section, but may claim only one credit per separate and
35distinct solar installation. The department shall establish
-1-1criteria, by rule, for determining what constitutes a separate
2and distinct installation.
3d. (1) A taxpayer must submit an application to the
4department for each separate and distinct solar installation.
5The application must be approved by the department in order to
6claim the tax credit. The application must be filed by May
71 following the year of the installation of the solar energy
8system.
9(2) The department shall accept and approve applications
10on a first-come, first-served basis until the maximum amount
11of tax credits that may be claimed pursuant to subsection 4
12is reached. If for a tax year the aggregate amount of tax
13credits applied for exceeds the amount specified in subsection
144, the department shall establish a wait list for tax credits.
15Valid applications filed by the taxpayer by May 1 following the
16year of the installation but not approved by the department
17shall be placed on a wait list in the order the applications
18were received and those applicants shall be given priority
19for having their applications approved in succeeding years.
20Placement on a wait list pursuant to this subparagraph shall
21not constitute a promise binding the state. The availability
22of a tax credit and approval of a tax credit application
23pursuant to this section in a future year is contingent upon
24the availability of tax credits in that particular year.
254. a. The cumulative value of tax credits claimed annually
26by applicants pursuant to this section shall not exceed five
27million dollars. Of this amount, at least one million dollars
28shall be reserved for claims associated with or resulting from
29residential solar energy system installations. In the event
30that the total amount of claims submitted for residential solar
31energy system installations in a tax year is an amount less
32than one million dollars, the remaining unclaimed reserved
33amount shall be made available for claims associated with or
34resulting from nonresidential solar energy system installations
35received for the tax year.
-2- 1b. If an amount of tax credits available for a tax year
2pursuant to paragraph “a” goes unclaimed, the amount of the
3unclaimed tax credits shall be made available for the following
4tax year in addition to, and cumulated with, the amount
5available pursuant to paragraph “a” for the following tax year.
65. On or before January 1, annually, the department shall
7submit a written report to the governor and the general
8assembly regarding the number and value of tax credits claimed
9under this section, and any other information the department
10may deem relevant and appropriate.
11 Sec. 2. Section 422.33, Code 2023, is amended by adding the
12following new subsection:
13 NEW SUBSECTION. 33. The taxes imposed under this subchapter
14shall be reduced by a solar installation tax credit allowed
15under section 422.10C.
16 Sec. 3. Section 422.60, Code 2023, is amended by adding the
17following new subsection:
18 NEW SUBSECTION. 16. The taxes imposed under this subchapter
19shall be reduced by a solar installation tax credit allowed
20under section 422.10C.
21 Sec. 4. Section 476C.2, subsection 3, Code 2023, is amended
22to read as follows:
233. A taxpayer who is eligible to claim a renewable energy
24tax credit under this chapter shall not be eligible to claim a
25solar installation tax credit under section 422.10C, 422.33,
26422.60, or 533.329, or the solar energy system tax credit under
27section 422.11L, or 422.33, 422.60, or 533.329.
28 Sec. 5. Section 533.329, subsection 2, Code 2023, is amended
29by adding the following new paragraph:
30 NEW PARAGRAPH. n. The moneys and credits tax imposed under
31this section shall be reduced by a solar installation tax
32credit allowed under section 422.10C.
33 Sec. 6. EFFECTIVE DATE. This Act, being deemed of immediate
34importance, takes effect upon enactment.
35 Sec. 7. RETROACTIVE APPLICABILITY. This Act applies
-3-1retroactively to January 1, 2022, for tax years beginning on
2or after that date.
3EXPLANATION
4The inclusion of this explanation does not constitute agreement with
5the explanation’s substance by the members of the general assembly.
6This bill establishes a solar installation tax credit
7available against the individual and corporate income taxes,
8the moneys and credits tax, and the franchise tax.
9The solar installation credit is similar to the solar energy
10systems tax credit in Code section 422.11L, except the solar
11installation credit established in the bill couples with
12current federal law.
13The credit is equal to 50 percent of the federal residential
14energy efficient property credit related to solar energy
15provided in section 25D of the Internal Revenue Code, not to
16exceed $5,000, and 50 percent of the federal energy credit
17related to solar energy systems provided in section 48 of the
18Internal Revenue Code, not to exceed $20,000. The credit is
19nonrefundable, but may be carried forward for 10 years, or
20until depleted.
21The bill provides that an individual may claim the tax
22credit allowed a partnership, limited liability company, S
23corporation, estate, or trust based upon the individual’s pro
24rata share of the earnings. A taxpayer who is eligible to
25claim a credit under the bill shall not be eligible to claim
26a renewable energy tax credit under Code chapter 476C. A
27taxpayer shall not be eligible to both claim the tax credit
28under the bill and the solar energy tax credit under Code
29section 422.11L for the same installation.
30Further, the bill restricts the cumulative total of solar
31energy systems tax credits issued for all taxpayers to an
32amount not exceeding $5 million annually. Of this amount,
33at least $1 million shall be reserved for claims associated
34with or resulting from residential solar installations. In
35the event that the total amount of claims submitted for
-4-1residential solar installations in a tax year is an amount
2less than $1 million, the remaining unclaimed reserved amount
3shall be made available for claims associated with or resulting
4from nonresidential solar installations received for the tax
5year. If an amount of tax credits available for a tax year
6goes unclaimed, the amount of the unclaimed tax credits shall
7be made available for the following tax year in addition to,
8and cumulated with, the $5 million amount available for the
9following tax year.
10The bill contains reporting requirements regarding the
11number and value of tax credits claimed, and any other
12information the department may deem relevant and appropriate.
13The bill takes effect upon enactment, and applies
14retroactively to tax years beginning on or after January 1,
152023.
-5-jm/jh
2against the individual and corporate income taxes, the
3moneys and credits tax, and the franchise tax, and including
4effective date and retroactive applicability provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 422.10C Solar installation tax
2credits.
31. For installations occurring on or after January 1, 2022,
4the taxes imposed under this subchapter, less the credits
5allowed under section 422.12, shall be reduced by a solar
6installation tax credit equal to the sum of the following:
7a. Fifty percent of the federal residential energy efficient
8property credit related to solar energy provided in section
925D(a)(1) and section 25D(a)(2) of the Internal Revenue Code,
10not to exceed five thousand dollars.
11b. Fifty percent of the federal energy credit related to
12solar energy systems provided in section 48(a)(2)(A)(i)(II) and
13section 48(a)(2)(A)(i)(III) of the Internal Revenue Code, not
14to exceed twenty thousand dollars.
152. Any credit in excess of the tax liability is not
16refundable but the excess for the tax year may be credited
17to the tax liability for the following ten years or until
18depleted, whichever is earlier. The director of revenue shall
19adopt rules to implement this section.
203. a. An individual may claim the tax credit allowed a
21partnership, limited liability company, S corporation, estate,
22or trust electing to have the income taxed directly to the
23individual. The amount claimed by the individual shall be
24based upon the pro rata share of the individual’s earnings of
25the partnership, limited liability company, S corporation,
26estate, or trust.
27b. (1) A taxpayer who is eligible to claim a credit under
28this section shall not be eligible to claim a renewable energy
29tax credit under chapter 476C.
30(2) A taxpayer shall not be eligible to claim both the tax
31credit under this section and the solar energy tax credit under
32section 422.11L for the same installation.
33c. A taxpayer may claim more than one credit under this
34section, but may claim only one credit per separate and
35distinct solar installation. The department shall establish
-1-1criteria, by rule, for determining what constitutes a separate
2and distinct installation.
3d. (1) A taxpayer must submit an application to the
4department for each separate and distinct solar installation.
5The application must be approved by the department in order to
6claim the tax credit. The application must be filed by May
71 following the year of the installation of the solar energy
8system.
9(2) The department shall accept and approve applications
10on a first-come, first-served basis until the maximum amount
11of tax credits that may be claimed pursuant to subsection 4
12is reached. If for a tax year the aggregate amount of tax
13credits applied for exceeds the amount specified in subsection
144, the department shall establish a wait list for tax credits.
15Valid applications filed by the taxpayer by May 1 following the
16year of the installation but not approved by the department
17shall be placed on a wait list in the order the applications
18were received and those applicants shall be given priority
19for having their applications approved in succeeding years.
20Placement on a wait list pursuant to this subparagraph shall
21not constitute a promise binding the state. The availability
22of a tax credit and approval of a tax credit application
23pursuant to this section in a future year is contingent upon
24the availability of tax credits in that particular year.
254. a. The cumulative value of tax credits claimed annually
26by applicants pursuant to this section shall not exceed five
27million dollars. Of this amount, at least one million dollars
28shall be reserved for claims associated with or resulting from
29residential solar energy system installations. In the event
30that the total amount of claims submitted for residential solar
31energy system installations in a tax year is an amount less
32than one million dollars, the remaining unclaimed reserved
33amount shall be made available for claims associated with or
34resulting from nonresidential solar energy system installations
35received for the tax year.
-2- 1b. If an amount of tax credits available for a tax year
2pursuant to paragraph “a” goes unclaimed, the amount of the
3unclaimed tax credits shall be made available for the following
4tax year in addition to, and cumulated with, the amount
5available pursuant to paragraph “a” for the following tax year.
65. On or before January 1, annually, the department shall
7submit a written report to the governor and the general
8assembly regarding the number and value of tax credits claimed
9under this section, and any other information the department
10may deem relevant and appropriate.
11 Sec. 2. Section 422.33, Code 2023, is amended by adding the
12following new subsection:
13 NEW SUBSECTION. 33. The taxes imposed under this subchapter
14shall be reduced by a solar installation tax credit allowed
15under section 422.10C.
16 Sec. 3. Section 422.60, Code 2023, is amended by adding the
17following new subsection:
18 NEW SUBSECTION. 16. The taxes imposed under this subchapter
19shall be reduced by a solar installation tax credit allowed
20under section 422.10C.
21 Sec. 4. Section 476C.2, subsection 3, Code 2023, is amended
22to read as follows:
233. A taxpayer who is eligible to claim a renewable energy
24tax credit under this chapter shall not be eligible to claim a
25solar installation tax credit under section 422.10C, 422.33,
26422.60, or 533.329, or the solar energy system tax credit under
27section 422.11L, or 422.33, 422.60, or 533.329.
28 Sec. 5. Section 533.329, subsection 2, Code 2023, is amended
29by adding the following new paragraph:
30 NEW PARAGRAPH. n. The moneys and credits tax imposed under
31this section shall be reduced by a solar installation tax
32credit allowed under section 422.10C.
33 Sec. 6. EFFECTIVE DATE. This Act, being deemed of immediate
34importance, takes effect upon enactment.
35 Sec. 7. RETROACTIVE APPLICABILITY. This Act applies
-3-1retroactively to January 1, 2022, for tax years beginning on
2or after that date.
3EXPLANATION
4The inclusion of this explanation does not constitute agreement with
5the explanation’s substance by the members of the general assembly.
6This bill establishes a solar installation tax credit
7available against the individual and corporate income taxes,
8the moneys and credits tax, and the franchise tax.
9The solar installation credit is similar to the solar energy
10systems tax credit in Code section 422.11L, except the solar
11installation credit established in the bill couples with
12current federal law.
13The credit is equal to 50 percent of the federal residential
14energy efficient property credit related to solar energy
15provided in section 25D of the Internal Revenue Code, not to
16exceed $5,000, and 50 percent of the federal energy credit
17related to solar energy systems provided in section 48 of the
18Internal Revenue Code, not to exceed $20,000. The credit is
19nonrefundable, but may be carried forward for 10 years, or
20until depleted.
21The bill provides that an individual may claim the tax
22credit allowed a partnership, limited liability company, S
23corporation, estate, or trust based upon the individual’s pro
24rata share of the earnings. A taxpayer who is eligible to
25claim a credit under the bill shall not be eligible to claim
26a renewable energy tax credit under Code chapter 476C. A
27taxpayer shall not be eligible to both claim the tax credit
28under the bill and the solar energy tax credit under Code
29section 422.11L for the same installation.
30Further, the bill restricts the cumulative total of solar
31energy systems tax credits issued for all taxpayers to an
32amount not exceeding $5 million annually. Of this amount,
33at least $1 million shall be reserved for claims associated
34with or resulting from residential solar installations. In
35the event that the total amount of claims submitted for
-4-1residential solar installations in a tax year is an amount
2less than $1 million, the remaining unclaimed reserved amount
3shall be made available for claims associated with or resulting
4from nonresidential solar installations received for the tax
5year. If an amount of tax credits available for a tax year
6goes unclaimed, the amount of the unclaimed tax credits shall
7be made available for the following tax year in addition to,
8and cumulated with, the $5 million amount available for the
9following tax year.
10The bill contains reporting requirements regarding the
11number and value of tax credits claimed, and any other
12information the department may deem relevant and appropriate.
13The bill takes effect upon enactment, and applies
14retroactively to tax years beginning on or after January 1,
152023.
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