Text: HF02557                           Text: HF02559
Text: HF02500 - HF02599                 Text: HF Index
Bills and Amendments: General Index     Bill History: General Index



House File 2558

Partial Bill History

Bill Text

PAG LIN
  1  1    Section 1.  Section 15.335, Code Supplement 1999, is
  1  2 amended to read as follows:
  1  3    15.335  RESEARCH ACTIVITIES CREDIT.
  1  4    1.  An eligible business may claim a corporate tax credit
  1  5 for increasing research activities in this state during the
  1  6 period the eligible business is participating in the program.
  1  7    a.  The credit equals six and one-half percent of the
  1  8 state's apportioned share of the qualifying expenditures for
  1  9 increasing research activities. the sum of the following:
  1 10    (1)  Six and one-half percent of the excess of qualified
  1 11 research expenses during the tax year over the base amount for
  1 12 the tax year based upon the state's apportioned share of the
  1 13 qualifying expenditures for increasing research activities.
  1 14    (2)  Six and one-half percent of the basic research
  1 15 payments determined under section 41(e)(1)(A) of the Internal
  1 16 Revenue Code during the tax year based upon the state's
  1 17 apportioned share of the qualifying expenditures for
  1 18 increasing research activities.
  1 19    The state's apportioned share of the qualifying
  1 20 expenditures for increasing research activities is a percent
  1 21 equal to the ratio of qualified research expenditures in this
  1 22 state to total qualified research expenditures.
  1 23    b.  In lieu of the credit amount computed in paragraph "a",
  1 24 subparagraph (1), an eligible business may elect to compute
  1 25 the credit amount for qualified research expenses incurred in
  1 26 this state in a manner consistent with the alternative
  1 27 incremental credit described in section 41(c)(4) of the
  1 28 Internal Revenue Code.  The taxpayer may make this election
  1 29 regardless of the method used for the taxpayer's federal
  1 30 income tax.  The election made under this paragraph is for the
  1 31 tax year and the taxpayer may use another or the same method
  1 32 for any subsequent year.
  1 33    c.  For purposes of the alternate credit computation method
  1 34 in paragraph "b", the same credit percentages applicable to
  1 35 qualified research expenses described in clauses (i), (ii),
  2  1 and (iii) of section 41(c)(4)(A) of the Internal Revenue Code
  2  2 shall be used.
  2  3    2.  The credit allowed in this section is in addition to
  2  4 the credit authorized in section 422.33, subsection 5, and
  2  5 section 422.10.  However, if the alternative credit
  2  6 computation method is used in section 422.33, subsection 5, or
  2  7 section 422.10, the credit allowed in this section shall also
  2  8 be computed using that method.
  2  9    3.  If the eligible business is a partnership, subchapter S
  2 10 corporation, limited liability company, or estate or trust
  2 11 electing to have the income taxed directly to the individual,
  2 12 an individual may claim the tax credit allowed.  The amount
  2 13 claimed by the individual shall be based upon the pro rata
  2 14 share of the individual's earnings of the partnership,
  2 15 subchapter S corporation, limited liability company, or estate
  2 16 or trust.
  2 17    4.  For purposes of this section, "qualifying expenditures
  2 18 for increasing research activities" means the qualifying
  2 19 expenditures "base amount", "basic research payment", and
  2 20 "qualified research expense" mean the same as defined for the
  2 21 federal credit for increasing research activities which would
  2 22 be allowable under section 41 of the Internal Revenue Code in
  2 23 effect on January 1, 1999, except that for the alternative
  2 24 incremental credit such amounts are for research conducted
  2 25 within this state.  For purposes of this section, "Internal
  2 26 Revenue Code" means the Internal Revenue Code in effect on
  2 27 January 1, 2000.
  2 28    5.  Any credit in excess of the tax liability for the
  2 29 taxable year shall be refunded with interest computed under
  2 30 section 422.25.  In lieu of claiming a refund, a taxpayer may
  2 31 elect to have the overpayment shown on its final, completed
  2 32 return credited to the tax liability for the following year.
  2 33    Sec. 2.  Section 15A.9, subsection 8, Code Supplement 1999,
  2 34 is amended to read as follows:
  2 35    8.  CORPORATE TAX RESEARCH CREDIT.  A corporate tax credit
  3  1 shall be available to the primary business or a supporting
  3  2 business for increasing research activities in this state
  3  3 within the zone.
  3  4    a.  The credit equals thirteen percent of the state's
  3  5 apportioned share of the qualifying expenditures for
  3  6 increasing research activities. the sum of the following:
  3  7    (1)  Thirteen percent of the excess of qualified research
  3  8 expenses during the tax year over the base amount for the tax
  3  9 year based upon the state's apportioned share of the
  3 10 qualifying expenditures for increasing research activities.
  3 11    (2)  Thirteen percent of the basic research payments
  3 12 determined under section 41(e)(1)(A) of the Internal Revenue
  3 13 Code during the tax year based upon the state's apportioned
  3 14 share of the qualifying expenditures for increasing research
  3 15 activities.
  3 16    The state's apportioned share of the qualifying
  3 17 expenditures for increasing research activities is a percent
  3 18 equal to the ratio of qualified research expenditures in this
  3 19 state within the zone to total qualified research
  3 20 expenditures.
  3 21    b.  In lieu of the credit amount computed in paragraph "a",
  3 22 subparagraph (1), a business may elect to compute the credit
  3 23 amount for qualified research expenses incurred in this state
  3 24 within the zone in a manner consistent with the alternative
  3 25 incremental credit described in section 41(c)(4) of the
  3 26 Internal Revenue Code.  The taxpayer may make this election
  3 27 regardless of the method used for the taxpayer's federal
  3 28 income tax.  The election made under this paragraph is for the
  3 29 tax year and the taxpayer may use another or the same method
  3 30 for any subsequent year.
  3 31    c.  For purposes of the alternate credit computation method
  3 32 in paragraph "b", double the credit percentages applicable to
  3 33 qualified research expenses described in clauses (i), (ii),
  3 34 and (iii) of section 41(c)(4)(A) of the Internal Revenue Code
  3 35 shall be used.
  4  1    d.  Any credit in excess of the tax liability for the tax
  4  2 year shall be refunded with interest computed under section
  4  3 422.25.  In lieu of claiming a refund, the primary business or
  4  4 a supporting business may elect to have the overpayment shown
  4  5 on its final return credited to its tax liability for the
  4  6 following tax year.
  4  7    e.  For the purposes of this section, "qualifying
  4  8 expenditures for increasing research activities" means the
  4  9 qualifying expenditures subsection, "base amount", "basic
  4 10 research payment", and "qualified research expense" mean the
  4 11 same as defined for the federal credit for increasing research
  4 12 activities which would be allowable under section 41 of the
  4 13 Internal Revenue Code in effect on January 1, 1999, except
  4 14 that for the alternative incremental credit such amounts are
  4 15 for research conducted within this state within the zone.  For
  4 16 purposes of this subsection, "Internal Revenue Code" means the
  4 17 Internal Revenue Code in effect on January 1, 2000.
  4 18    f.  The credit authorized in this subsection is in lieu of
  4 19 the credit authorized in section 422.33, subsection 5 and
  4 20 section 422.10.
  4 21    Sec. 3.  Section 422.10, Code Supplement 1999, is amended
  4 22 to read as follows:
  4 23    422.10  RESEARCH ACTIVITIES CREDIT.
  4 24    1.  The taxes imposed under this division shall be reduced
  4 25 by a state tax credit for increasing research activities in
  4 26 this state.
  4 27    a.  For individuals, the credit equals six and one-half
  4 28 percent of the state's apportioned share of the qualifying
  4 29 expenditures for increasing research activities. the sum of
  4 30 the following:
  4 31    (1)  Six and one-half percent of the excess of qualified
  4 32 research expenses during the tax year over the base amount for
  4 33 the tax year based upon the state's apportioned share of the
  4 34 qualifying expenditures for increasing research activities.
  4 35    (2)  Six and one-half percent of the basic research
  5  1 payments determined under section 41(e)(1)(A) of the Internal
  5  2 Revenue Code during the tax year based upon the state's
  5  3 apportioned share of the qualifying expenditures for
  5  4 increasing research activities.
  5  5    The state's apportioned share of the qualifying
  5  6 expenditures for increasing research activities is a percent
  5  7 equal to the ratio of qualified research expenditures in this
  5  8 state to total qualified research expenditures.
  5  9    b.  In lieu of the credit amount computed in paragraph "a",
  5 10 subparagraph (1), a taxpayer may elect to compute the credit
  5 11 amount for qualified research expenses incurred in this state
  5 12 in a manner consistent with the alternative incremental credit
  5 13 described in section 41(c)(4) of the Internal Revenue Code.
  5 14 The taxpayer may make this election regardless of the method
  5 15 used for the taxpayer's federal income tax.  The election made
  5 16 under this paragraph is for the tax year and the taxpayer may
  5 17 use another or the same method for any subsequent year.
  5 18    c.  For purposes of the alternate credit computation method
  5 19 in paragraph "b", the same credit percentages applicable to
  5 20 qualified research expenses described in clauses (i), (ii),
  5 21 and (iii) of section 41(c)(4)(A) of the Internal Revenue Code
  5 22 shall be used.
  5 23    2.  For purposes of this section, an individual may claim a
  5 24 research credit for qualifying research expenditures incurred
  5 25 by a partnership, subchapter S corporation, limited liability
  5 26 company, estate, or trust electing to have the income taxed
  5 27 directly to the individual.  The amount claimed by the
  5 28 individual shall be based upon the pro rata share of the
  5 29 individual's earnings of a partnership, subchapter S
  5 30 corporation, limited liability company, estate, or trust.
  5 31    3.  For purposes of this section, "qualifying expenditures
  5 32 for increasing research activities" means the qualifying
  5 33 expenditures "base amount", "basic research payment", and
  5 34 "qualified research expense" mean the same as defined for the
  5 35 federal credit for increasing research activities which would
  6  1 be allowable under section 41 of the Internal Revenue Code in
  6  2 effect on January 1, 1999, except that for the alternative
  6  3 incremental credit such amounts are for research conducted
  6  4 within this state.  For purposes of this section, "Internal
  6  5 Revenue Code" means the Internal Revenue Code in effect on
  6  6 January 1, 2000.
  6  7    4.  Any credit in excess of the tax liability imposed by
  6  8 section 422.5 less the credits allowed under sections 422.11A,
  6  9 422.12, and 422.12B for the taxable year shall be refunded
  6 10 with interest computed under section 422.25.  In lieu of
  6 11 claiming a refund, a taxpayer may elect to have the
  6 12 overpayment shown on the taxpayer's final, completed return
  6 13 credited to the tax liability for the following taxable year.
  6 14    Sec. 4.  Section 422.33, subsection 5, Code Supplement
  6 15 1999, is amended to read as follows:
  6 16    5.  a.  The taxes imposed under this division shall be
  6 17 reduced by a state tax credit for increasing research
  6 18 activities in this state equal to six and one-half percent of
  6 19 the state's apportioned share of the qualifying expenditures
  6 20 for increasing research activities. the sum of the following:
  6 21    (1)  Six and one-half percent of the excess of qualified
  6 22 research expenses during the tax year over the base amount for
  6 23 the tax year based upon the state's apportioned share of the
  6 24 qualifying expenditures for increasing research activities.
  6 25    (2)  Six and one-half percent of the basic research
  6 26 payments determined under section 41(e)(1)(A) of the Internal
  6 27 Revenue Code during the tax year based upon the state's
  6 28 apportioned share of the qualifying expenditures for
  6 29 increasing research activities.
  6 30    The state's apportioned share of the qualifying
  6 31 expenditures for increasing research activities is a percent
  6 32 equal to the ratio of qualified research expenditures in this
  6 33 state to the total qualified research expenditures.
  6 34    b.  In lieu of the credit amount computed in paragraph "a",
  6 35 subparagraph (1), a corporation may elect to compute the
  7  1 credit amount for qualified research expenses incurred in this
  7  2 state in a manner consistent with the alternative incremental
  7  3 credit described in section 41(c)(4) of the Internal Revenue
  7  4 Code.  The taxpayer may make this election regardless of the
  7  5 method used for the taxpayer's federal income tax.  The
  7  6 election made under this paragraph is for the tax year and the
  7  7 taxpayer may use another or the same method for any subsequent
  7  8 year.
  7  9    c.  For purposes of the alternate credit computation method
  7 10 in paragraph "b", the same credit percentages applicable to
  7 11 qualified research expenses described in clauses (i), (ii),
  7 12 and (iii) of section 41(c)(4)(A) of the Internal Revenue Code
  7 13 shall be used.
  7 14    d.  For purposes of this subsection, "qualifying
  7 15 expenditures for increasing research activities" means the
  7 16 qualifying expenditures "base amount", "basic research
  7 17 payment", and "qualified research expense" mean the same as
  7 18 defined for the federal credit for increasing research
  7 19 activities which would be allowable under section 41 of the
  7 20 Internal Revenue Code in effect on January 1, 1999, except
  7 21 that for the alternative incremental credit such amounts are
  7 22 for research conducted within this state.  For purposes of
  7 23 this subsection, "Internal Revenue Code" means the Internal
  7 24 Revenue Code in effect on January 1, 2000.
  7 25    e.  Any credit in excess of the tax liability for the
  7 26 taxable year shall be refunded with interest computed under
  7 27 section 422.25.  In lieu of claiming a refund, a taxpayer may
  7 28 elect to have the overpayment shown on its final, completed
  7 29 return credited to the tax liability for the following taxable
  7 30 year.
  7 31    Sec. 5.  APPLICABILITY DATE.  This Act applies
  7 32 retroactively to January 1, 2000, for tax years beginning on
  7 33 or after that date.  
  7 34                           EXPLANATION
  7 35    This bill expands the research activities credit for income
  8  1 tax purposes for businesses under the new jobs and income
  8  2 program, the quality jobs enterprise zone program, the
  8  3 incentives for building in enterprise zones, the individual
  8  4 income tax, and corporate income tax.  The expansion provides
  8  5 for an alternative method of computing the tax credit based
  8  6 upon the federal approach using an incremental computation
  8  7 method for measuring increased research activities.  This
  8  8 alternative method is in lieu of a portion of Iowa's present
  8  9 computation approach.  Therefore, the present Iowa law is
  8 10 rewritten in a manner that coincides with the computation
  8 11 under the federal income tax credit.
  8 12    The bill applies retroactively to January 1, 2000, for tax
  8 13 years beginning on or after that date.  
  8 14 LSB 5584HV 78
  8 15 mg/cf/24
     

Text: HF02557                           Text: HF02559
Text: HF02500 - HF02599                 Text: HF Index
Bills and Amendments: General Index     Bill History: General Index

Return To Home index


© 2000 Cornell College and League of Women Voters of Iowa


Comments about this site or page? webmaster@legis.iowa.gov.
Please remember that the person listed above does not vote on bills. Direct all comments concerning legislation to State Legislators.

Last update: Fri Apr 21 03:35:32 CDT 2000
URL: /DOCS/GA/78GA/Legislation/HF/02500/HF02558/000403.html
jhf