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PAG LIN
1 1 Section 1. NEW SECTION. 422.11D ROYALTIES INCOME CREDIT.
1 2 1. The taxes imposed under this division, less the credits
1 3 allowed under this division, shall be reduced by a royalties
1 4 income credit. An individual may claim the royalties income
1 5 credit allowed a partnership, subchapter S corporation, or
1 6 estate or trust electing to have the income taxed directly to
1 7 the individual. The amount claimed by the individual shall be
1 8 based upon the pro rata share of the individual's earnings of
1 9 a partnership, subchapter S corporation, or estate or trust.
1 10 2. The amount of the credit is equal to five percent of
1 11 royalties income earned by an inventor of a product
1 12 researched, developed, manufactured, packaged, and distributed
1 13 in or from this state beginning with the first tax year in
1 14 which the income from royalties is received and continuing for
1 15 each tax year that the manufacturer of the product is in the
1 16 state at the end of the tax year.
1 17 3. Any credit in excess of the tax liability imposed by
1 18 section 422.5 less the credits allowed under this division for
1 19 the taxable year shall be refunded with interest computed
1 20 under section 422.25. In lieu of claiming a refund, a
1 21 taxpayer may elect to have the overpayment shown on the
1 22 taxpayer's final, completed return credited to the tax
1 23 liability for the following taxable year.
1 24 4. For the purposes of this section:
1 25 a. "Inventor" means a person who perceives a new concept
1 26 which may result in a product patented, trademarked, or
1 27 copyrighted pursuant to federal law.
1 28 b. "Product" means a device, technique, or process, or a
1 29 work of intellectual value.
1 30 c. "Royalties" means things of value received by an
1 31 inventor in connection with the licensing, rental, or sale of
1 32 a product patented, trademarked, or copyrighted pursuant to
1 33 federal law.
1 34 Sec. 2. Section 422.33, Code 1995, is amended by adding
1 35 the following new subsection:
2 1 NEW SUBSECTION. 9. a. The taxes imposed under this
2 2 division, less the credits allowed under this section, shall
2 3 be reduced by a royalties income credit.
2 4 b. The amount of the credit is equal to five percent of
2 5 royalties income earned by an inventor of a product
2 6 researched, developed, manufactured, packaged, and distributed
2 7 in or from this state beginning with the first tax year in
2 8 which the income from royalties is received by the
2 9 manufacturer and continuing for each tax year that the
2 10 manufacturer of the product is in the state at the end of the
2 11 tax year.
2 12 c. Any credit in excess of the tax liability imposed by
2 13 this section less the credits allowed under this division for
2 14 the taxable year shall be refunded with interest computed
2 15 under section 422.25. In lieu of claiming a refund, a
2 16 taxpayer may elect to have the overpayment shown on the
2 17 taxpayer's final, completed return credited to the tax
2 18 liability for the following taxable year.
2 19 d. For the purposes of this section:
2 20 (1) "Inventor" means a person who perceives a new concept
2 21 which may result in a product patented, trademarked, or
2 22 copyrighted pursuant to federal law.
2 23 (2) "Product" means a device, technique, or process, or a
2 24 work of intellectual value.
2 25 (3) "Royalties" means things of value received by an
2 26 inventor in connection with the licensing, rental, or sale of
2 27 a product patented, trademarked, or copyrighted pursuant to
2 28 federal law.
2 29 Sec. 3. RETROACTIVE APPLICABILITY. This Act applies
2 30 retroactively to January 1, 1995, for tax years beginning on
2 31 or after that date.
2 32 EXPLANATION
2 33 This bill allows a refundable state income tax credit for
2 34 individuals and corporations equal to 5 percent of the income
2 35 received by the inventor of a product researched, developed,
3 1 manufactured, packaged, and distributed in or from Iowa. The
3 2 royalties income tax credit continues for each tax year that
3 3 the manufacturer of the product is in the state at the end of
3 4 the tax year.
3 5 The bill applies retroactively to January 1, 1995, for tax
3 6 years beginning on or after that date.
3 7 LSB 2122SC 76
3 8 sc/cf/24
Text: SSB00205 Text: SSB00207 Text: SSB00200 - SSB00299 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
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