Text: SF02356 Text: SF02358 Text: SF02300 - SF02399 Text: SF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 SENATE FILE 2357 1 2 1 3 AN ACT 1 4 UPDATING THE IOWA CODE REFERENCES TO THE INTERNAL REVENUE CODE, 1 5 EXEMPTING CERTAIN PRENEED FUNERAL TRUST INCOME FROM TAXATION, 1 6 REVISING THE CARRYBACK AND CARRYOVER PERIODS FOR CERTAIN NET 1 7 OPERATING LOSSES, PROVIDING REFUNDS, AND PROVIDING AN 1 8 EFFECTIVE DATE AND RETROACTIVE APPLICABILITY DATES. 1 9 1 10 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 1 11 1 12 Section 1. Section 15.335, unnumbered paragraph 1, Code 1 13 Supplement 1997, is amended to read as follows: 1 14 An eligible business may claim a corporate tax credit for 1 15 increasing research activities in this state during the period 1 16 the eligible business is participating in the program. The 1 17 credit equals six and one-half percent of the state's 1 18 apportioned share of the qualifying expenditures for 1 19 increasing research activities. The state's apportioned share 1 20 of the qualifying expenditures for increasing research 1 21 activities is a percent equal to the ratio of qualified 1 22 research expenditures in this state to total qualified 1 23 research expenditures. The credit allowed in this section is 1 24 in addition to the credit authorized in section 422.33, 1 25 subsection 5. If the eligible business is a partnership, 1 26 subchapter S corporation, limited liability company, or estate 1 27 or trust electing to have the income taxed directly to the 1 28 individual, an individual may claim the tax credit allowed. 1 29 The amount claimed by the individual shall be based upon the 1 30 pro rata share of the individual's earnings of the 1 31 partnership, subchapter S corporation, limited liability 1 32 company, or estate or trust. For purposes of this section, 1 33 "qualifying expenditures for increasing research activities" 1 34 means the qualifying expenditures as defined for the federal 1 35 credit for increasing research activities which would be 2 1 allowable under section 41 of the Internal Revenue Code in 2 2 effect on January 1,19971998. 2 3 Sec. 2. Section 15A.9, subsection 8, unnumbered paragraph 2 4 2, Code Supplement 1997, is amended to read as follows: 2 5 For the purposes of this section, "qualifying expenditures 2 6 for increasing research activities" means the qualifying 2 7 expenditures as defined for the federal credit for increasing 2 8 research activities which would be allowable under section 41 2 9 of the Internal Revenue Code in effect on January 1,19972 10 1998. The credit authorized in this subsection is in lieu of 2 11 the credit authorized in section 422.33, subsection 5. 2 12 Sec. 3. Section 422.3, subsection 4, Code Supplement 1997, 2 13 is amended to read as follows: 2 14 4. "Internal Revenue Code" means the Internal Revenue Code 2 15 of 1954, prior to the date of its redesignation as the 2 16 Internal Revenue Code of 1986 by the Tax Reform Act of 1986, 2 17 or means the Internal Revenue Code of 1986 as amended to and 2 18 including January 1,19971998, whichever is applicable. 2 19 Sec. 4. Section 422.6, unnumbered paragraph 1, Code 2 20 Supplement 1997, is amended to read as follows: 2 21 The tax imposed by section 422.5 less the credits allowed 2 22 under sections 422.10, 422.11A, and 422.11B, and the personal 2 23 exemption credit allowed under section 422.12 apply to and are 2 24 a charge against estates and trusts with respect to their 2 25 taxable income, and the rates are the same as those applicable 2 26 to individuals. The fiduciary shall make the return of income 2 27 for the estate or trust for which the fiduciary acts, whether 2 28 the income is taxable to the estate or trust or to the 2 29 beneficiaries. However, for tax years ending after August 5, 2 30 1997, if the trust is a qualified preneed funeral trust as set 2 31 forth in section 685 of the Internal Revenue Code and the 2 32 trustee has elected the special tax treatment under section 2 33 685 of the Internal Revenue Code, neither the trust nor the 2 34 beneficiary is subject to Iowa income tax on income accruing 2 35 to the trust. 3 1 Sec. 5. Section 422.9, subsection 3, paragraphs a, b, and 3 2 c, Code Supplement 1997, are amended to read as follows: 3 3 a. The Iowa net operating loss shall be carried back three 3 4 taxable years for an individual taxpayer with a casualty or 3 5 theft property loss or for a net operating loss in a 3 6 presidentially declared disaster area incurred by a taxpayer 3 7 engaged in a small business or in the trade or business of 3 8 farming. For all other Iowa net operating losses, the net 3 9 operating loss shall be carried back two taxable years or to 3 10 the taxable year in which theindividualtaxpayer first earned 3 11 income in Iowa whichever year is the later. 3 12 b. The Iowa net operating loss remaining after being 3 13 carried back as required in paragraph "a" of this subsection 3 14 or if not required to be carried back shall be carried forward 3 15fifteentwenty taxable years. 3 16 c. If the election under section 172(b)(3) of the Internal 3 17 Revenue Code is made, the Iowa net operating loss shall be 3 18 carried forwardfifteentwenty taxable years. 3 19 Sec. 6. Section 422.10, unnumbered paragraph 1, Code 3 20 Supplement 1997, is amended to read as follows: 3 21 The taxes imposed under this division shall be reduced by a 3 22 state tax credit for increasing research activities in this 3 23 state. For individuals, the credit equals six and one-half 3 24 percent of the state's apportioned share of the qualifying 3 25 expenditures for increasing research activities. The state's 3 26 apportioned share of the qualifying expenditures for 3 27 increasing research activities is a percent equal to the ratio 3 28 of qualified research expenditures in this state to total 3 29 qualified research expenditures. For purposes of this 3 30 section, an individual may claim a research credit for 3 31 qualifying research expenditures incurred by a partnership, 3 32 subchapter S corporation, estate, or trust electing to have 3 33 the income taxed directly to the individual. The amount 3 34 claimed by the individual shall be based upon the pro rata 3 35 share of the individual's earnings of a partnership, 4 1 subchapter S corporation, estate, or trust. For purposes of 4 2 this section, "qualifying expenditures for increasing research 4 3 activities" means the qualifying expenditures as defined for 4 4 the federal credit for increasing research activities which 4 5 would be allowable under section 41 of the Internal Revenue 4 6 Code in effect on January 1,19971998. 4 7 Sec. 7. Section 422.33, subsection 5, unnumbered paragraph 4 8 1, Code Supplement 1997, is amended to read as follows: 4 9 The taxes imposed under this division shall be reduced by a 4 10 state tax credit for increasing research activities in this 4 11 state equal to six and one-half percent of the state's 4 12 apportioned share of the qualifying expenditures for 4 13 increasing research activities. The state's apportioned share 4 14 of the qualifying expenditures for increasing research 4 15 activities is a percent equal to the ratio of qualified 4 16 research expenditures in this state to the total qualified 4 17 research expenditures. For purposes of this subsection, 4 18 "qualifying expenditures for increasing research activities" 4 19 means the qualifying expenditures as defined for the federal 4 20 credit for increasing research activities which would be 4 21 allowable under section 41 of the Internal Revenue Code in 4 22 effect on January 1,19971998. 4 23 Sec. 8. Section 422.35, subsection 11, paragraphs a, b, 4 24 and c, Code Supplement 1997, are amended to read as follows: 4 25 a. The Iowa net operating loss shall be carried back three 4 26 taxable years for a net operating loss incurred in a 4 27 presidentially declared disaster area by a taxpayer engaged in 4 28 a small business or in the trade or business of farming. For 4 29 all other Iowa net operating losses, the net operating loss 4 30 shall be carried back two taxable years or to the taxable year 4 31 in which the corporation first commenced doing business in 4 32 this state, whichever is later. 4 33 b. The Iowa net operating loss remaining after being 4 34 carried back as required in paragraph "a" of this subsection 4 35 or if not required to be carried back shall be carried forward 5 1fifteentwenty taxable years. 5 2 c. If the election under section 172(b)(3) of the Internal 5 3 Revenue Code is made, the Iowa net operating loss shall be 5 4 carried forwardfifteentwenty taxable years. 5 5 Sec. 9. Section 422.73, Code 1997, is amended by adding 5 6 the following new subsection: 5 7 NEW SUBSECTION. 3. Notwithstanding subsection 2, a claim 5 8 for credit or refund of the income tax paid is considered 5 9 timely if the claim is filed with the department on or before 5 10 June 30, 1999, if the taxpayer's federal income tax was 5 11 refunded due to a provision in the federal Taxpayer Relief Act 5 12 of 1997, Pub. L. No. 105-34, which affected the federal 5 13 adjusted gross incomes of individuals or estates and trusts, 5 14 or affected the taxable incomes of corporate taxpayers. 5 15 Sec. 10. Sections 1, 2, 3, 6, and 7 of this Act apply 5 16 retroactively to January 1, 1997, for tax years beginning on 5 17 or after that date. 5 18 Sec. 11. Section 4 of this Act applies retroactively to 5 19 tax years ending after August 5, 1997. 5 20 Sec. 12. Sections 5 and 8 of this Act apply retroactively 5 21 to net operating losses and casualty losses arising in taxable 5 22 years beginning after August 5, 1997. 5 23 Sec. 13. Section 9 of this Act applies retroactively to 5 24 January 1, 1977, for tax years beginning on or after that 5 25 date. 5 26 Sec. 14. This Act, being deemed of immediate importance, 5 27 takes effect upon enactment. 5 28 5 29 5 30 5 31 MARY E. KRAMER 5 32 President of the Senate 5 33 5 34 5 35 6 1 RON J. CORBETT 6 2 Speaker of the House 6 3 6 4 I hereby certify that this bill originated in the Senate and 6 5 is known as Senate File 2357, Seventy-seventh General Assembly. 6 6 6 7 6 8 6 9 MARY PAT GUNDERSON 6 10 Secretary of the Senate 6 11 Approved , 1998 6 12 6 13 6 14 6 15 TERRY E. BRANSTAD 6 16 Governor
Text: SF02356 Text: SF02358 Text: SF02300 - SF02399 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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