Text: HF02253 Text: HF02255 Text: HF02200 - HF02299 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 15.327, Code 1995, is amended by adding 1 2 the following new subsections: 1 3 NEW SUBSECTION. 1A. "Contractor or subcontractor" means a 1 4 person who contracts with the eligible business or a 1 5 supporting business or subcontracts with a contractor for the 1 6 provision of property, materials, or services for the 1 7 construction or equipping of a facility, located within the 1 8 economic development area, of the eligible business or a 1 9 supporting business. 1 10 NEW SUBSECTION. 3A. "Economic development area" means a 1 11 site or sites designated by the department of economic 1 12 development for the purpose of attracting an eligible business 1 13 and supporting businesses to locate facilities within the 1 14 state. 1 15 NEW SUBSECTION. 6. "Project completion" means the first 1 16 date upon which the average annualized production of finished 1 17 product for the preceding ninety-day period at the 1 18 manufacturing facility operated by the eligible business 1 19 within the economic development area is at least fifty percent 1 20 of the initial design capacity of the facility. The eligible 1 21 business shall inform the department of revenue and finance in 1 22 writing within two weeks of project completion. 1 23 NEW SUBSECTION. 7. "Supporting business" means a business 1 24 under contract with the eligible business to provide property, 1 25 materials, or services which are a necessary component of the 1 26 operation of the manufacturing facility. To qualify as a 1 27 supporting business, the business shall have a permanent 1 28 facility or operations located within the economic development 1 29 area and the revenue from fulfilling the contract with the 1 30 eligible business shall constitute at least seventy-five 1 31 percent of the revenue generated by the business from all 1 32 activities undertaken from the facility within the economic 1 33 development area. 1 34 Sec. 2. NEW SECTION. 15.331A SALES, SERVICE, AND USE TAX 1 35 REFUND – CONTRACTOR OR SUBCONTRACTOR. 2 1 The eligible business or a supporting business shall be 2 2 entitled to a refund of the taxes paid under chapters 422 and 2 3 423 for gas, electricity, water, or sewer utility services, 2 4 goods, wares, or merchandise, or on services rendered, 2 5 furnished, or performed to or for a contractor or 2 6 subcontractor and used in the fulfillment of a written 2 7 contract relating to the construction or equipping of a 2 8 facility within the economic development area of the eligible 2 9 business or a supporting business. Taxes attributable to 2 10 intangible property and furniture and furnishings shall not be 2 11 refunded. 2 12 To receive the refund a claim shall be filed by the 2 13 eligible business or a supporting business with the department 2 14 of revenue and finance as follows: 2 15 a. The contractor or subcontractor shall state under oath, 2 16 on forms provided by the department, the amount of the sales 2 17 of goods, wares, or merchandise or services rendered, 2 18 furnished, or performed including water, sewer, gas, and 2 19 electric utility services for use in the economic development 2 20 area upon which sales or use tax has been paid prior to the 2 21 project completion, and shall file the forms with the eligible 2 22 business or supporting business before final settlement is 2 23 made. 2 24 b. The eligible business or a supporting business shall, 2 25 not more than six months after project completion, make 2 26 application to the department for any refund of the amount of 2 27 the taxes paid pursuant to chapter 422 or 423 upon any goods, 2 28 wares, or merchandise, or services rendered, furnished, or 2 29 performed, including water, sewer, gas, and electric utility 2 30 services. The application shall be made in the manner and 2 31 upon forms to be provided by the department, and the 2 32 department shall audit the claim and, if approved, issue a 2 33 warrant to the eligible business or supporting business in the 2 34 amount of the sales or use tax which has been paid to the 2 35 state of Iowa under a contract. A claim filed by the eligible 3 1 business or a supporting business in accordance with this 3 2 subsection shall not be denied by reason of a limitation 3 3 provision set forth in chapter 421, 422, or 423. 3 4 c. A contractor or subcontractor who willfully makes a 3 5 false report of tax paid under the provisions of this 3 6 subsection is guilty of a simple misdemeanor and in addition 3 7 is liable for the payment of the tax and any applicable 3 8 penalty and interest. 3 9 Sec. 3. NEW SECTION. 15.332A SALES AND USE TAX 3 10 EXEMPTION. 3 11 An eligible business may claim an exemption from sales and 3 12 use taxation under section 422.45, subsection 27, for property 3 13 which is exempt from taxation under section 15.332, 3 14 notwithstanding the requirements of section 422.45, subsection 3 15 27, or any other provision of the Code to the contrary. 3 16 Sec. 4. Section 15.335, unnumbered paragraph 2, Code 1995, 3 17 is amended by striking the unnumbered paragraph and inserting 3 18 in lieu thereof the following: 3 19 Any credit in excess of the tax liability for the taxable 3 20 year shall be refunded with interest computed under section 3 21 422.25. In lieu of claiming a refund, a taxpayer may elect to 3 22 have the overpayment shown on its final, completed return 3 23 credited to the tax liability for the following year. 3 24 Sec. 5. NEW SECTION. 15.337 WAIVER OF PROGRAM 3 25 QUALIFICATION REQUIREMENTS. 3 26 A community may request the waiver of the capital 3 27 investment requirement or the requirement for number of 3 28 positions created under section 15.329. The department may 3 29 grant a waiver for good cause shown and approve the program 3 30 application. 3 31 As used in this section, "good cause shown" includes but is 3 32 not limited to a demonstrated lack of growth in the community, 3 33 a significant percentage of persons in the community who have 3 34 incomes at or below the poverty level, community unemployment 3 35 rate higher than the state average, or an immediate threat 4 1 posed to the community's workforce due to business downsizing 4 2 or closure. 4 3 Sec. 6. Section 422.45, subsection 27, unnumbered 4 4 paragraph 1, Code Supplement 1995, is amended to read as 4 5 follows: 4 6 The gross receipts from the sale or rental, on or after4 7July 1, 1987 or on or after July 1, 1985, in the case of an4 8industry which has entered into an agreement under chapter4 9260E prior to the sale or lease,of industrial machinery, 4 10 equipment and computers, including replacement parts which are 4 11 depreciable for state and federal income tax purposes, if the 4 12 following conditions are met: 4 13 Sec. 7. Section 422.45, subsection 27, paragraph b, Code 4 14 Supplement 1995, is amended to read as follows: 4 15 b. The industrial machinery, equipment and computers must 4 16 be real property within the scope of section 427A.1, 4 17 subsection 1, paragraphs "e" or "j", and must. For sales 4 18 occurring on or after January 1, 1994, the property is not 4 19 required to be subject to taxation as real property.This4 20paragraph does not apply to machinery and equipment used in4 21the recycling or reprocessing of waste products qualifying for4 22an exemption under paragraph "a".4 23However, the provisions of chapters 404 and 427B which4 24result in the exemption from taxation of property for property4 25tax purposes do not preclude the property from receiving this4 26exemption if the property otherwise qualifies.4 27 The gross receipts from the sale or rental of hand tools 4 28 are not exempt. The gross receipts from the sale or rental of 4 29 pollution control equipment qualifying under paragraph "a" 4 30 shall be exempt. 4 31 The gross receipts from the sale or rental of industrial 4 32 machinery, equipment, and computers, including pollution 4 33 control equipment, within the scope of section 427A.1, 4 34 subsection 1, paragraphs "h" and "i", shall not be exempt. 4 35 EXPLANATION 5 1 This bill creates additional benefits which are available 5 2 to businesses which participate in the new jobs and income 5 3 program administered by the department of economic development 5 4 and authorizes the department to waive eligibility 5 5 requirements in certain circumstances. 5 6 Specifically, the bill provides as follows: 5 7 1. The bill defines the terms, contractor or 5 8 subcontractor, project completion, supporting business, and 5 9 economic development area for the purposes of certain benefits 5 10 under the new jobs and income program. 5 11 2. That the business participating in the new jobs and 5 12 income program or a supporting business is entitled to a 5 13 refund of sales, service, and use taxes paid by a contractor 5 14 or subcontractor in the performance of a written contract 5 15 relating to the construction or equipping of a facility within 5 16 an economic development area. 5 17 3. That the eligible business may claim as exempt from 5 18 sales and use taxation, machinery and equipment which is 5 19 subject to the value-added property tax exemption under the 5 20 program. 5 21 4. That the research activities credit provided under the 5 22 program is a refundable credit. In lieu of receiving a refund 5 23 of corporate taxes paid, the business may have the amount of 5 24 the overpaid taxes credited against next year's tax liability. 5 25 5. That the department may waive the eligibility 5 26 requirements for the program for good cause. Good cause 5 27 includes, high unemployment in the community, a high poverty 5 28 level in the community, and lack of community growth. 5 29 The bill provides that for sales of machinery and equipment 5 30 occurring on or after July 1, 1994, the machinery and 5 31 equipment does not have to be taxable as real property to 5 32 qualify for the exemption from the sales and use tax. 5 33 LSB 3416HV 76 5 34 mk/sc/14
Text: HF02253 Text: HF02255 Text: HF02200 - HF02299 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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