Text: HF02528 Text: HF02530 Text: HF02500 - HF02599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 15.335, unnumbered paragraph 1, Code 1 2 Supplement 1997, is amended to read as follows: 1 3 An eligible business may claim a corporate tax credit for 1 4 increasing research activities in this state during the period 1 5 the eligible business is participating in the program. The 1 6 credit equals six and one-half percent of the state's 1 7 apportioned share of the qualifying expenditures for 1 8 increasing research activities. The state's apportioned share 1 9 of the qualifying expenditures for increasing research 1 10 activities is a percent equal to the ratio of qualified 1 11 research expenditures in this state to total qualified 1 12 research expenditures. The credit allowed in this section is 1 13 in addition to the credit authorized in section 422.33, 1 14 subsection 5. If the eligible business is a partnership, 1 15 subchapter S corporation, limited liability company, or estate 1 16 or trust electing to have the income taxed directly to the 1 17 individual, an individual may claim the tax credit allowed. 1 18 The amount claimed by the individual shall be based upon the 1 19 pro rata share of the individual's earnings of the 1 20 partnership, subchapter S corporation, limited liability 1 21 company, or estate or trust. For purposes of this section, 1 22 "qualifying expenditures for increasing research activities" 1 23 means the qualifying expenditures as defined for the federal 1 24 credit for increasing research activities which would be 1 25 allowable under section 41 of the Internal Revenue Code in 1 26 effect on January 1,19971998. 1 27 Sec. 2. Section 15A.9, subsection 8, unnumbered paragraph 1 28 2, Code Supplement 1997, is amended to read as follows: 1 29 For the purposes of this section, "qualifying expenditures 1 30 for increasing research activities" means the qualifying 1 31 expenditures as defined for the federal credit for increasing 1 32 research activities which would be allowable under section 41 1 33 of the Internal Revenue Code in effect on January 1,19971 34 1998. The credit authorized in this subsection is in lieu of 1 35 the credit authorized in section 422.33, subsection 5. 2 1 Sec. 3. Section 422.3, subsection 4, Code Supplement 1997, 2 2 is amended to read as follows: 2 3 4. "Internal Revenue Code" means the Internal Revenue Code 2 4 of 1954, prior to the date of its redesignation as the 2 5 Internal Revenue Code of 1986 by the Tax Reform Act of 1986, 2 6 or means the Internal Revenue Code of 1986 as amended to and 2 7 including January 1,19971998, whichever is applicable. 2 8 Sec. 4. Section 422.6, unnumbered paragraph 1, Code 2 9 Supplement 1997, is amended to read as follows: 2 10 The tax imposed by section 422.5 less the credits allowed 2 11 under sections 422.10, 422.11A, and 422.11B, and the personal 2 12 exemption credit allowed under section 422.12 apply to and are 2 13 a charge against estates and trusts with respect to their 2 14 taxable income, and the rates are the same as those applicable 2 15 to individuals. The fiduciary shall make the return of income 2 16 for the estate or trust for which the fiduciary acts, whether 2 17 the income is taxable to the estate or trust or to the 2 18 beneficiaries. However, for tax years ending after August 5, 2 19 1997, if the trust is a qualified preneed funeral trust as set 2 20 forth in section 685 of the Internal Revenue Code and the 2 21 trustee has elected the special tax treatment under section 2 22 685 of the Internal Revenue Code, neither the trust nor the 2 23 beneficiary is subject to Iowa income tax on income accruing 2 24 to the trust. 2 25 Sec. 5. Section 422.9, subsection 3, paragraphs a, b, and 2 26 c, Code Supplement 1997, are amended to read as follows: 2 27 a. The Iowa net operating loss shall be carried back three 2 28 taxable years for an individual taxpayer with a casualty or 2 29 theft property loss or for a net operating loss in a 2 30 presidentially declared disaster area incurred by a taxpayer 2 31 engaged in a small business or in the trade or business of 2 32 farming. For all other Iowa net operating losses, the net 2 33 operating loss shall be carried back two taxable years or to 2 34 the taxable year in which theindividualtaxpayer first earned 2 35 income in Iowa whichever year is the later. 3 1 b. The Iowa net operating loss remaining after being 3 2 carried back as required in paragraph "a" of this subsection 3 3 or if not required to be carried back shall be carried forward 3 4fifteentwenty taxable years. 3 5 c. If the election under section 172(b)(3) of the Internal 3 6 Revenue Code is made, the Iowa net operating loss shall be 3 7 carried forwardfifteentwenty taxable years. 3 8 Sec. 6. Section 422.10, unnumbered paragraph 1, Code 3 9 Supplement 1997, is amended to read as follows: 3 10 The taxes imposed under this division shall be reduced by a 3 11 state tax credit for increasing research activities in this 3 12 state. For individuals, the credit equals six and one-half 3 13 percent of the state's apportioned share of the qualifying 3 14 expenditures for increasing research activities. The state's 3 15 apportioned share of the qualifying expenditures for 3 16 increasing research activities is a percent equal to the ratio 3 17 of qualified research expenditures in this state to total 3 18 qualified research expenditures. For purposes of this 3 19 section, an individual may claim a research credit for 3 20 qualifying research expenditures incurred by a partnership, 3 21 subchapter S corporation, estate, or trust electing to have 3 22 the income taxed directly to the individual. The amount 3 23 claimed by the individual shall be based upon the pro rata 3 24 share of the individual's earnings of a partnership, 3 25 subchapter S corporation, estate, or trust. For purposes of 3 26 this section, "qualifying expenditures for increasing research 3 27 activities" means the qualifying expenditures as defined for 3 28 the federal credit for increasing research activities which 3 29 would be allowable under section 41 of the Internal Revenue 3 30 Code in effect on January 1,19971998. 3 31 Sec. 7. Section 422.33, subsection 5, unnumbered paragraph 3 32 1, Code Supplement 1997, is amended to read as follows: 3 33 The taxes imposed under this division shall be reduced by a 3 34 state tax credit for increasing research activities in this 3 35 state equal to six and one-half percent of the state's 4 1 apportioned share of the qualifying expenditures for 4 2 increasing research activities. The state's apportioned share 4 3 of the qualifying expenditures for increasing research 4 4 activities is a percent equal to the ratio of qualified 4 5 research expenditures in this state to the total qualified 4 6 research expenditures. For purposes of this subsection, 4 7 "qualifying expenditures for increasing research activities" 4 8 means the qualifying expenditures as defined for the federal 4 9 credit for increasing research activities which would be 4 10 allowable under section 41 of the Internal Revenue Code in 4 11 effect on January 1,19971998. 4 12 Sec. 8. Section 422.35, subsection 11, paragraphs a, b, 4 13 and c, Code Supplement 1997, are amended to read as follows: 4 14 a. The Iowa net operating loss shall be carried back three 4 15 taxable years for a net operating loss incurred in a 4 16 presidentially declared disaster area by a taxpayer engaged in 4 17 a small business or in the trade or business of farming. For 4 18 all other Iowa net operating losses, the net operating loss 4 19 shall be carried back two taxable years or to the taxable year 4 20 in which the corporation first commenced doing business in 4 21 this state, whichever is later. 4 22 b. The Iowa net operating loss remaining after being 4 23 carried back as required in paragraph "a" of this subsection 4 24 or if not required to be carried back shall be carried forward 4 25fifteentwenty taxable years. 4 26 c. If the election under section 172(b)(3) of the Internal 4 27 Revenue Code is made, the Iowa net operating loss shall be 4 28 carried forwardfifteentwenty taxable years. 4 29 Sec. 9. Section 422.73, Code 1997, is amended by adding 4 30 the following new subsection: 4 31 NEW SUBSECTION. 3. Notwithstanding subsection 2, a claim 4 32 for credit or refund of the income tax paid is considered 4 33 timely if the claim is filed with the department on or before 4 34 June 30, 1999, if the taxpayer's federal income tax was 4 35 refunded due to a provision in the federal Taxpayer Relief Act 5 1 of 1997, Pub. L. No. 105-34, which affected the federal 5 2 adjusted gross incomes of individuals or estates and trusts, 5 3 or affected the taxable incomes of corporate taxpayers. 5 4 Sec. 10. Sections 1, 2, 3, 6, and 7 of this Act apply 5 5 retroactively to January 1, 1997, for tax years beginning on 5 6 or after that date. 5 7 Sec. 11. Section 4 of this Act applies retroactively to 5 8 tax years ending after August 5, 1997. 5 9 Sec. 12. Sections 5 and 8 of this Act apply retroactively 5 10 to net operating losses and casualty losses arising in taxable 5 11 years beginning after August 5, 1997. 5 12 Sec. 13. Section 9 of this Act applies retroactively to 5 13 January 1, 1977, for tax years beginning on or after that 5 14 date. 5 15 Sec. 14. This Act, being deemed of immediate importance, 5 16 takes effect upon enactment. 5 17 EXPLANATION 5 18 This bill updates the references to the Internal Revenue 5 19 Code to make the federal income tax revisions enacted by 5 20 Congress in 1997 applicable for Iowa income tax purposes and 5 21 makes other changes related to Iowa income tax. Iowa Code 5 22 sections 15.335, 15A.9, 422.10, and 422.33 are amended to 5 23 update the Iowa Code references to the state research 5 24 activities credit for individuals, corporations, corporations 5 25 in economic development areas, and corporations in quality 5 26 jobs enterprise zones to include the 1997 changes to the 5 27 federal research activities credits. 5 28 Iowa Code section 422.3 is amended to update the reference 5 29 in the Iowa Code to the Internal Revenue Code to January 1, 5 30 1998, to include the federal income tax revisions made by 5 31 Congress in the 1997 calendar year, making those revisions 5 32 applicable for Iowa income tax purposes. 5 33 Iowa Code section 422.6 is amended to exempt preneed 5 34 funeral trusts electing special tax treatment, and 5 35 beneficiaries of such trusts, from Iowa income tax on the 6 1 income accruing to such trusts. 6 2 Iowa Code sections 422.9 and 422.35 are amended to revise 6 3 the carryback and carryover periods for net operating losses 6 4 and casualty losses to conform with the federal changes in the 6 5 carryback and carryforward periods for these losses in the 6 6 federal Taxpayer Relief Act of 1997. 6 7 Iowa Code section 422.73 is amended to authorize refunds 6 8 beyond the state's three-year statute of limitations for 6 9 refund if a taxpayer qualifies for refund for federal tax 6 10 purposes as a result of retroactive application of some 6 11 provisions of the federal Taxpayer Relief Act of 1997. 6 12 Amendments to Iowa Code sections 15.335, 15A.9, 422.3, 6 13 422.10, and 422.33 apply retroactively to January 1, 1997, for 6 14 tax years beginning on or after that date. 6 15 The amendment to Iowa Code section 422.6 applies 6 16 retroactively to tax years ending after August 5, 1997. 6 17 Amendments to Iowa Code sections 422.9 and 422.35 apply 6 18 retroactively to losses arising in taxable years beginning 6 19 after August 5, 1997. 6 20 The amendment to Iowa Code section 422.73 applies 6 21 retroactively to January 1, 1977, for tax years beginning on 6 22 or after that date. 6 23 The bill takes effect upon enactment. 6 24 LSB 3231HV 77 6 25 sc/cf/24
Text: HF02528 Text: HF02530 Text: HF02500 - HF02599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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