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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