Text: HF02095 Text: HF02097 Text: HF02000 - HF02099 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. NEW SECTION. 422.11C INVESTMENT TAX CREDIT. 1 2 1. The taxes imposed under this division shall be reduced 1 3 by an investment tax credit equal to ten percent, not to 1 4 exceed five thousand dollars, of the new investment made in 1 5 connection with the location or expansion of a business in 1 6 this state. Any credit in excess of the tax liability for the 1 7 tax year is nonrefundable. For purposes of this section, "new 1 8 investment made in connection with the location or expansion 1 9 of a business" means the cost of machinery and equipment, as 1 10 defined in section 427A.1, subsection 1, paragraphs "e" and 1 11 "j", purchased for use in the operation of the business, the 1 12 purchase price of which has been depreciated in accordance 1 13 with generally accepted accounting principles, and the cost of 1 14 improvements made to real property which is used in the 1 15 operation of the business. 1 16 2. If the business is a partnership, S corporation, 1 17 limited liability company, or estate or trust electing to have 1 18 the income taxed directly to the individual, an individual may 1 19 claim the tax credit allowed. The amount claimed by the 1 20 individual shall be based upon the pro rata share of the 1 21 individual's earnings of the partnership, S corporation, 1 22 limited liability company, or estate or trust. 1 23 3. For purposes of this section, the purchase price of 1 24 real property and any buildings and structures located on the 1 25 real property will be considered a new investment in 1 26 connection with the location or expansion of a business. 1 27 However, if within five years of purchase, the business sells, 1 28 disposes of, razes, or otherwise renders unusable all or a 1 29 part of the land, buildings, or other existing structures for 1 30 which tax credit was claimed under this section, the income 1 31 tax liability of the business for the year in which all or 1 32 part of the property is sold, disposed of, razed, or otherwise 1 33 rendered unusable shall be increased by one of the following 1 34 amounts: 1 35 a. One hundred percent of the tax credit claimed under 2 1 this section if the property is sold, disposed of, razed, or 2 2 otherwise rendered unusable within one full year after being 2 3 placed in service. 2 4 b. Eighty percent of the tax credit claimed under this 2 5 section if the property is sold, disposed of, razed, or 2 6 otherwise rendered unusable within two full years after being 2 7 placed in service. 2 8 c. Sixty percent of the tax credit claimed under this 2 9 section if the property is sold, disposed of, razed, or 2 10 otherwise rendered unusable within three full years after 2 11 being placed in service. 2 12 d. Forty percent of the tax credit claimed under this 2 13 section if the property is sold, disposed of, razed, or 2 14 otherwise rendered unusable within four full years after being 2 15 placed in service. 2 16 e. Twenty percent of the tax credit claimed under this 2 17 section if the property is sold, disposed of, razed, or 2 18 otherwise rendered unusable within five full years after being 2 19 placed in service. 2 20 Sec. 2. Section 422.33, Code Supplement 1999, is amended 2 21 by adding the following new subsection: 2 22 NEW SUBSECTION. 9. a. The taxes imposed under this 2 23 division shall be reduced by an investment tax credit equal to 2 24 ten percent, not to exceed five thousand dollars, of the new 2 25 investment made in connection with the location or expansion 2 26 of a business in this state. Any credit in excess of the tax 2 27 liability for the tax year is nonrefundable. For purposes of 2 28 this subsection, "new investment made in connection with the 2 29 location or expansion of a business" means the cost of 2 30 machinery and equipment, as defined in section 427A.1, 2 31 subsection 1, paragraphs "e" and "j", purchased for use in the 2 32 operation of the business, the purchase price of which has 2 33 been depreciated in accordance with generally accepted 2 34 accounting principles, and the cost of improvements made to 2 35 real property which is used in the operation of the business. 3 1 b. For purposes of this subsection, the purchase price of 3 2 real property and any buildings and structures located on the 3 3 real property will be considered a new investment in 3 4 connection with the location or expansion of a business. 3 5 However, if within five years of purchase, the business sells, 3 6 disposes of, razes, or otherwise renders unusable all or a 3 7 part of the land, buildings, or other existing structures for 3 8 which tax credit was claimed under this subsection, the income 3 9 tax liability of the business for the year in which all or 3 10 part of the property is sold, disposed of, razed, or otherwise 3 11 rendered unusable shall be increased by one of the following 3 12 amounts: 3 13 (1) One hundred percent of the tax credit claimed under 3 14 this subsection if the property is sold, disposed of, razed, 3 15 or otherwise rendered unusable within one full year after 3 16 being placed in service. 3 17 (2) Eighty percent of the tax credit claimed under this 3 18 subsection if the property is sold, disposed of, razed, or 3 19 otherwise rendered unusable within two full years after being 3 20 placed in service. 3 21 (3) Sixty percent of the tax credit claimed under this 3 22 subsection if the property is sold, disposed of, razed, or 3 23 otherwise rendered unusable within three full years after 3 24 being placed in service. 3 25 (4) Forty percent of the tax credit claimed under this 3 26 subsection if the property is sold, disposed of, razed, or 3 27 otherwise rendered unusable within four full years after being 3 28 placed in service. 3 29 (5) Twenty percent of the tax credit claimed under this 3 30 subsection if the property is sold, disposed of, razed, or 3 31 otherwise rendered unusable within five full years after being 3 32 placed in service. 3 33 Sec. 3. EFFECTIVE AND APPLICABILITY DATES. This Act, 3 34 being deemed of immediate importance, takes effect upon 3 35 enactment and applies retroactively to January 1, 2000, for 4 1 tax years beginning on or after that date and applies to new 4 2 investments made on or after the date of enactment of this 4 3 Act. 4 4 EXPLANATION 4 5 This bill provides an investment tax credit for individual 4 6 and corporate tax purposes equal to 10 percent, not to exceed 4 7 $5,000, for new investment made in connection with the 4 8 location or expansion of a business in this state. New 4 9 investment eligible for the credit is the cost of machinery, 4 10 equipment, and computers which are assessed as real property 4 11 and the cost of acquisition of and improvements made to real 4 12 property. 4 13 The bill provides for the recapture of the tax credit for 4 14 the acquisition of real property if the property is disposed 4 15 of, razed, or otherwise made unusable within five years 4 16 following acquisition. The recapture equals 100 percent 4 17 during the first year and decreases by 20 percent for each of 4 18 the following four years. 4 19 The bill takes effect upon enactment and applies to new 4 20 investments made after that date during tax years beginning on 4 21 or after January 1, 2000. 4 22 LSB 5187HH 78 4 23 mg/as/5
Text: HF02095 Text: HF02097 Text: HF02000 - HF02099 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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