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PAG LIN 1 1 Section 1. Section 15A.9, subsection 8, unnumbered 1 2 paragraph 2, Code 1995, is amended to read as follows: 1 3 For the purposes of this section, "qualifying expenditures 1 4 for increasing research activities" means the qualifying 1 5 expenditures as defined for the federal credit for increasing 1 6 research activities which would be allowable under section 41 1 7 of the Internal Revenue Code in effect on January 1,19941 8 1995. The credit authorized in this subsection is in lieu of 1 9 the credit authorized in section 422.33, subsection 5. 1 10 Sec. 2. Section 422.3, subsection 4, Code 1995, is amended 1 11 to read as follows: 1 12 4. "Internal Revenue Code" means the Internal Revenue Code 1 13 of 1954, prior to the date of its redesignation as the 1 14 Internal Revenue Code of 1986 by the Tax Reform Act of 1986, 1 15 or means the Internal Revenue Code of 1986 as amended to and 1 16 including January 1,19941995, whichever is applicable. 1 17 Sec. 3. Section 422.10, unnumbered paragraph 1, Code 1995, 1 18 is amended to read as follows: 1 19 The taxes imposed under this division shall be reduced by a 1 20 state tax credit for increasing research activities in this 1 21 state. For individuals, the credit equals six and one-half 1 22 percent of the state's apportioned share of the qualifying 1 23 expenditures for increasing research activities. The state's 1 24 apportioned share of the qualifying expenditures for 1 25 increasing research activities is a percent equal to the ratio 1 26 of qualified research expenditures in this state to total 1 27 qualified research expenditures. For purposes of this 1 28 section, an individual may claim a research credit for 1 29 qualifying research expenditures incurred by a partnership, 1 30 subchapter S corporation, estate, or trust electing to have 1 31 the income taxed directly to the individual. The amount 1 32 claimed by the individual shall be based upon the pro rata 1 33 share of the individual's earnings of a partnership, 1 34 subchapter S corporation, estate, or trust. For purposes of 1 35 this section, "qualifying expenditures for increasing research 2 1 activities" means the qualifying expenditures as defined for 2 2 the federal credit for increasing research activities which 2 3 would be allowable under section 41 of the Internal Revenue 2 4 Code in effect on January 1,19941995. 2 5 Sec. 4. Section 422.33, subsection 5, unnumbered paragraph 2 6 1, Code 1995, is amended to read as follows: 2 7 The taxes imposed under this division shall be reduced by a 2 8 state tax credit for increasing research activities in this 2 9 state equal to six and one-half percent of the state's 2 10 apportioned share of the qualifying expenditures for 2 11 increasing research activities. The state's apportioned share 2 12 of the qualifying expenditures for increasing research 2 13 activities is a percent equal to the ratio of qualified 2 14 research expenditures in this state to the total qualified 2 15 research expenditures. For purposes of this subsection, 2 16 "qualifying expenditures for increasing research activities" 2 17 means the qualifying expenditures as defined for the federal 2 18 credit for increasing research activities which would be 2 19 allowable under section 41 of the Internal Revenue Code in 2 20 effect on January 1,19941995. 2 21 Sec. 5. This Act applies retroactively to January 1, 1994, 2 22 for tax years beginning on or after that date. 2 23 Sec. 6. This Act, being deemed of immediate importance, 2 24 takes effect upon enactment. 2 25 EXPLANATION 2 26 This bill updates the references to the Internal Revenue 2 27 Code to make the federal income tax changes enacted by 2 28 Congress in 1994 applicable for Iowa income tax purposes. The 2 29 bill updates the Iowa Code references for the state research 2 30 credits for individuals and corporations to include changes in 2 31 the federal research activities credits. 2 32 The bill takes effect immediately upon enactment and 2 33 applies retroactively to tax years beginning on or after 2 34 January 1, 1994. 2 35 BACKGROUND STATEMENT 3 1 SUBMITTED BY THE AGENCY 3 2 Section 1 amends Iowa Code section 15A.9 to update the 3 3 reference to the Internal Revenue Code as it applies to 3 4 qualified research activities credits for corporations in 3 5 quality jobs enterprise zones. 3 6 Section 2 amends subsection 4 of Iowa Code section 422.3 to 3 7 include the changes made in the Internal Revenue Code in the 3 8 1994 calendar year, so that references to the Internal Revenue 3 9 Code in the Iowa Code are deemed to include the federal income 3 10 tax changes made by Congress in 1994. 3 11 Section 3 amends the research activities credit for 3 12 individuals in Iowa Code section 422.10 to include changes in 3 13 the federal research activities credit. 3 14 Section 4 amends the research activities credit for 3 15 corporations in subsection 5 of Iowa Code section 422.33 to 3 16 include changes in the federal research activities credit. 3 17 Section 5 provides that the bill is retroactively 3 18 applicable to January 1, 1994, for tax years beginning on or 3 19 after that date. 3 20 Section 6 makes the bill effective immediately upon 3 21 enactment. 3 22 LSB 1114DP 76 3 23 sc/sc/14
Text: SSB00070 Text: SSB00072 Text: SSB00000 - SSB00099 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
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