Text: HF02559 Text: HF02561 Text: HF02500 - HF02599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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 equalssix and one-half percent of the1 8state's apportioned share of the qualifying expenditures for1 9increasing 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 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 are one and sixty-five hundredths percent, two and twenty 2 3 hundredths percent, and two and seventy-five hundredths 2 4 percent, respectively. 2 5 2. The credit allowed in this section is in addition to 2 6 the credit authorized in section 422.33, subsection 5, and 2 7 section 422.10. However, if the alternative credit 2 8 computation method is used in section 422.33, subsection 5, or 2 9 section 422.10, the credit allowed in this section shall also 2 10 be computed using that method. 2 11 3. If the eligible business is a partnership,subchapterS 2 12 corporation, limited liability company, or estate or trust 2 13 electing to have the income taxed directly to the individual, 2 14 an individual may claim the tax credit allowed. The amount 2 15 claimed by the individual shall be based upon the pro rata 2 16 share of the individual's earnings of the partnership, 2 17subchapterS corporation, limited liability company, or estate 2 18 or trust. 2 19 4. For purposes of this section,"qualifying expenditures2 20for increasing research activities" means the qualifying2 21expenditures"base amount", "basic research payment", and 2 22 "qualified research expense" mean the same as defined for the 2 23 federal credit for increasing research activitieswhich would2 24be allowableunder section 41 of the Internal Revenue Codein2 25effect on January 1, 1999, except that for the alternative 2 26 incremental credit such amounts are for research conducted 2 27 within this state. For purposes of this section, "Internal 2 28 Revenue Code" means the Internal Revenue Code in effect on 2 29 January 1, 2000. 2 30 5. Any credit in excess of the tax liability for the 2 31 taxable year shall be refunded with interest computed under 2 32 section 422.25. In lieu of claiming a refund, a taxpayer may 2 33 elect to have the overpayment shown on its final, completed 2 34 return credited to the tax liability for the following year. 2 35 Sec. 2. Section 15A.9, subsection 8, Code Supplement 1999, 3 1 is amended to read as follows: 3 2 8. CORPORATE TAX RESEARCH CREDIT. A corporate tax credit 3 3 shall be available to the primary business or a supporting 3 4 business for increasing research activities in this state 3 5 within the zone. 3 6 a. The credit equalsthirteen percent of the state's3 7apportioned share of the qualifying expenditures for3 8increasing research activities.the sum of the following: 3 9 (1) Thirteen percent of the excess of qualified research 3 10 expenses during the tax year over the base amount for the tax 3 11 year based upon the state's apportioned share of the 3 12 qualifying expenditures for increasing research activities. 3 13 (2) Thirteen percent of the basic research payments 3 14 determined under section 41(e)(1)(A) of the Internal Revenue 3 15 Code during the tax year based upon the state's apportioned 3 16 share of the qualifying expenditures for increasing research 3 17 activities. 3 18 The state's apportioned share of the qualifying 3 19 expenditures for increasing research activities is a percent 3 20 equal to the ratio of qualified research expenditures in this 3 21 state within the zone to total qualified research 3 22 expenditures. 3 23 b. In lieu of the credit amount computed in paragraph "a", 3 24 subparagraph (1), a business may elect to compute the credit 3 25 amount for qualified research expenses incurred in this state 3 26 within the zone in a manner consistent with the alternative 3 27 incremental credit described in section 41(c)(4) of the 3 28 Internal Revenue Code. The taxpayer may make this election 3 29 regardless of the method used for the taxpayer's federal 3 30 income tax. The election made under this paragraph is for the 3 31 tax year and the taxpayer may use another or the same method 3 32 for any subsequent year. 3 33 c. For purposes of the alternate credit computation method 3 34 in paragraph "b", the credit percentages applicable to 3 35 qualified research expenses described in clauses (i), (ii), 4 1 and (iii) of section 41(c)(4)(A) of the Internal Revenue Code 4 2 are three and thirty hundredths percent, four and forty 4 3 hundredths percent, and five and fifty hundredths percent, 4 4 respectively. 4 5 d. Any credit in excess of the tax liability for the tax 4 6 year shall be refunded with interest computed under section 4 7 422.25. In lieu of claiming a refund, the primary business or 4 8 a supporting business may elect to have the overpayment shown 4 9 on its final return credited to its tax liability for the 4 10 following tax year. 4 11 e. For the purposes of thissection, "qualifying4 12expenditures for increasing research activities" means the4 13qualifying expendituressubsection, "base amount", "basic 4 14 research payment", and "qualified research expense" mean the 4 15 same as defined for the federal credit for increasing research 4 16 activitieswhich would be allowableunder section 41 of the 4 17 Internal Revenue Codein effect on January 1, 1999, except 4 18 that for the alternative incremental credit such amounts are 4 19 for research conducted within this state within the zone. For 4 20 purposes of this subsection, "Internal Revenue Code" means the 4 21 Internal Revenue Code in effect on January 1, 2000. 4 22 f. The credit authorized in this subsection is in lieu of 4 23 the credit authorized in section 422.33, subsection 5 and 4 24 section 422.10. 4 25 Sec. 3. NEW SECTION. 404A.1 PROPERTY REHABILITATION TAX 4 26 CREDIT – ELIGIBLE PROPERTY. 4 27 1. A property rehabilitation tax credit, subject to the 4 28 availability of the credit, is granted against the income tax 4 29 imposed under chapter 422, division II or division III, for 4 30 the rehabilitation of eligible property located in this state 4 31 as provided in this chapter. Tax credits in excess of tax 4 32 liabilities shall be refunded as provided in section 404A.4, 4 33 subsection 3. 4 34 2. Eligible property for which a taxpayer may receive the 4 35 property rehabilitation tax credit computed under this chapter 5 1 includes all of the following: 5 2 a. Property listed on the national register of historic 5 3 places or is eligible for such listing. 5 4 b. Property designated as of historic significance to a 5 5 district listed in the national register of historic places or 5 6 is eligible for such designation. 5 7 c. Property or district designated a local landmark by a 5 8 city or county ordinance. 5 9 d. A barn constructed prior to 1937. 5 10 Sec. 4. NEW SECTION. 404A.2 AMOUNT OF CREDIT. 5 11 The amount of the credit equals twenty-five percent of the 5 12 qualified rehabilitation costs made to eligible property. In 5 13 the case of commercial property, rehabilitation costs must 5 14 equal at least fifty percent of the assessed value of the 5 15 property, excluding the land, prior to the rehabilitation. In 5 16 the case of residential property or barns, the rehabilitation 5 17 costs must equal at least twenty-five thousand dollars or 5 18 twenty-five percent of the fair market value, excluding the 5 19 land, prior to the rehabilitation, whichever is less. In 5 20 computing the tax credit for eligible property that is 5 21 classified as residential or as commercial with multifamily 5 22 residential units, the rehabilitation costs used shall not 5 23 exceed one hundred thousand dollars per residential unit. In 5 24 computing the tax credit, the only costs which may be included 5 25 are the rehabilitation costs incurred between the period 5 26 ending on the project completion date and beginning on the 5 27 later of either the date of issuance of the approval of the 5 28 project as provided in section 404A.3 or two years prior to 5 29 the project completion date. 5 30 For purposes of this chapter, qualified rehabilitation 5 31 costs include amounts if they are properly includable in 5 32 computing the basis for tax purposes of the eligible property. 5 33 Amounts treated as an expense and deducted in the tax year in 5 34 which they are paid or incurred and amounts that are otherwise 5 35 not added to the basis for tax purposes of the eligible 6 1 property are not qualified rehabilitation costs. Amounts 6 2 incurred for architectural and engineering fees, site survey 6 3 fees, legal expenses, insurance premiums, development fees, 6 4 and other construction-related costs are qualified 6 5 rehabilitation costs to the extent they are added to the basis 6 6 for tax purposes of the eligible property. Costs of 6 7 sidewalks, parking lots, and landscaping do not constitute 6 8 qualified rehabilitation costs. 6 9 Any rehabilitation costs used in the computation of the tax 6 10 credit under this chapter shall not be deductible for purposes 6 11 of individual and corporate income taxes. 6 12 Sec. 5. NEW SECTION. 404A.3 APPROVAL OF REHABILITATION 6 13 PROJECT. 6 14 1. a. In order for costs of a rehabilitation project to 6 15 qualify for a tax credit, the rehabilitation project must 6 16 receive approval from the state historical preservation office 6 17 of the department of cultural affairs. 6 18 b. Applications for approvals from the state historical 6 19 preservation office of the department of cultural affairs 6 20 shall be on forms approved by the state historical 6 21 preservation office and shall contain information as required 6 22 by the state historical preservation office. The information 6 23 shall at least include the approximate date of the start of 6 24 rehabilitation, the approximate date of completion, as well as 6 25 the cost. 6 26 c. The approval process shall not exceed ninety days 6 27 beginning from the date the rehabilitation project is 6 28 submitted. After the ninety-day limit, the rehabilitation 6 29 project is deemed to be approved. 6 30 2. The state historical preservation office shall 6 31 establish selection criteria and standards for rehabilitation 6 32 projects involving eligible property. The main emphasis of 6 33 the standards shall be to ensure that a rehabilitation project 6 34 maintains the integrity of the eligible property. To the 6 35 extent applicable, the standards shall be consistent with the 7 1 standards of the United States secretary of the interior for 7 2 rehabilitation of eligible property that is listed on the 7 3 national register of historic places or is designated as of 7 4 historic significance to a district listed in the national 7 5 register of historic places or shall be consistent with 7 6 standards for issuance of certificates of appropriation under 7 7 sections 303.27 through 303.32. 7 8 The selection standards shall provide that a person who 7 9 qualifies for the rehabilitation tax credit under section 47 7 10 of the Internal Revenue Code shall automatically qualify for 7 11 the state property rehabilitation tax credit under this 7 12 chapter. 7 13 Sec. 6. NEW SECTION. 404A.4 PROJECT COMPLETION AND TAX 7 14 CREDIT CERTIFICATION – CREDIT REFUND. 7 15 1. Upon completion of the rehabilitation project, a 7 16 certification of completion must be obtained from the state 7 17 historical preservation office of the department of cultural 7 18 affairs. A completion certificate shall identify the person 7 19 claiming the tax credit under this chapter and the 7 20 rehabilitation costs incurred up to the two years preceding 7 21 the completion date. 7 22 2. After verifying the eligibility for the tax credit, the 7 23 state historical preservation office, in consultation with the 7 24 department of economic development, shall issue a property 7 25 rehabilitation tax credit certificate to be attached to the 7 26 person's tax return. The tax credit certificate shall contain 7 27 the taxpayer's name, address, tax identification number, the 7 28 date of project completion, the amount of credit, and other 7 29 information required by the department of revenue and finance. 7 30 3. A person receiving a property rehabilitation tax credit 7 31 under this chapter which is in excess of the person's tax 7 32 liability for the tax year is entitled to a refund of the 7 33 excess at a discounted value. The discounted value of the tax 7 34 credit refund, as calculated by the department of economic 7 35 development, in consultation with the department of revenue 8 1 and finance, shall be determined based on the discounted value 8 2 of the tax credit five years after the tax year of the project 8 3 completion at an interest rate equivalent to the prime rate 8 4 plus two percent. The refunded tax credit shall not exceed 8 5 seventy-five percent of the allowable tax credit. 8 6 4. The total amount of tax credits that may be approved 8 7 for a fiscal year under this chapter shall not exceed two 8 8 million four hundred thousand dollars. Tax credit 8 9 certificates shall be issued on the basis of the earliest 8 10 awarding of certifications of completion as provided in 8 11 subsection 1. The departments of economic development and 8 12 revenue and finance shall each adopt rules to jointly 8 13 administer this subsection and shall provide by rule for the 8 14 method to be used to determine for which fiscal year the tax 8 15 credits are approved. 8 16 Sec. 7. NEW SECTION. 404A.5 ECONOMIC IMPACT – 8 17 RECOMMENDATIONS. 8 18 The department of cultural affairs, in consultation with 8 19 the department of economic development, shall be responsible 8 20 for keeping the general assembly and the legislative fiscal 8 21 bureau informed on the overall economic impact to the state of 8 22 the rehabilitation of eligible properties. An annual report 8 23 shall be filed which shall include, but is not limited to, 8 24 data on the number and potential value of rehabilitation 8 25 projects begun during the latest twelve-month period, the 8 26 total property rehabilitation tax credits originally granted 8 27 during that period, the potential reduction in state tax 8 28 revenues as a result of all tax credits still unused and 8 29 eligible for refund, and the potential increase in local 8 30 property tax revenues as a result of the rehabilitated 8 31 projects. The department, to the extent it is able, shall 8 32 provide recommendations on whether a limit on tax credits 8 33 should be established, the need for a broader or more 8 34 restrictive definition of eligible property, and other 8 35 adjustments to the tax credits under this chapter. 9 1 Sec. 8. Section 422.7, subsection 31, Code 1999, is 9 2 amended to read as follows: 9 3 31. For a person who is disabled, or is fifty-five years 9 4 of age or older, or is the surviving spouse of an individual 9 5 or a survivor having an insurable interest in an individual 9 6 who would have qualified for the exemption under this 9 7 subsection for the tax year, subtract, to the extent included, 9 8 the total amount of a governmental or other pension or 9 9 retirement pay, including, but not limited to, defined benefit 9 10 or defined contribution plans, annuities, individual 9 11 retirement accounts, plans maintained or contributed to by an 9 12 employer, or maintained or contributed to by a self-employed 9 13 person as an employer, and deferred compensation plans or any 9 14 earnings attributable to the deferred compensation plans, up 9 15 to a maximum offivesix thousand dollars for a person, other 9 16 than a husband or wife, who files a separate state income tax 9 17 return and up to a maximum oftentwelve thousand dollars for 9 18 a husband and wife who file a joint state income tax return. 9 19 However, a surviving spouse who is not disabled or fifty-five 9 20 years of age or older can only exclude the amount of pension 9 21 or retirement pay received as a result of the death of the 9 22 other spouse. A husband and wife filing separate state income 9 23 tax returns or separately on a combined state return are 9 24 allowed a combined maximum exclusion under this subsection of 9 25 up totentwelve thousand dollars. Thetentwelve thousand 9 26 dollar exclusion shall be allocated to the husband or wife in 9 27 the proportion that each spouse's respective pension and 9 28 retirement pay received bears to total combined pension and 9 29 retirement pay received. 9 30 Sec. 9. Section 422.10, Code Supplement 1999, is amended 9 31 to read as follows: 9 32 422.10 RESEARCH ACTIVITIES CREDIT. 9 33 1. The taxes imposed under this division shall be reduced 9 34 by a state tax credit for increasing research activities in 9 35 this state. 10 1 a. For individuals, the credit equalssix and one-half10 2percent of the state's apportioned share of the qualifying10 3expenditures for increasing research activities.the sum of 10 4 the following: 10 5 (1) Six and one-half percent of the excess of qualified 10 6 research expenses during the tax year over the base amount for 10 7 the tax year based upon the state's apportioned share of the 10 8 qualifying expenditures for increasing research activities. 10 9 (2) Six and one-half percent of the basic research 10 10 payments determined under section 41(e)(1)(A) of the Internal 10 11 Revenue Code during the tax year based upon the state's 10 12 apportioned share of the qualifying expenditures for 10 13 increasing research activities. 10 14 The state's apportioned share of the qualifying 10 15 expenditures for increasing research activities is a percent 10 16 equal to the ratio of qualified research expenditures in this 10 17 state to total qualified research expenditures. 10 18 b. In lieu of the credit amount computed in paragraph "a", 10 19 subparagraph (1), a taxpayer may elect to compute the credit 10 20 amount for qualified research expenses incurred in this state 10 21 in a manner consistent with the alternative incremental credit 10 22 described in section 41(c)(4) of the Internal Revenue Code. 10 23 The taxpayer may make this election regardless of the method 10 24 used for the taxpayer's federal income tax. The election made 10 25 under this paragraph is for the tax year and the taxpayer may 10 26 use another or the same method for any subsequent year. 10 27 c. For purposes of the alternate credit computation method 10 28 in paragraph "b", the credit percentages applicable to 10 29 qualified research expenses described in clauses (i), (ii), 10 30 and (iii) of section 41(c)(4)(A) of the Internal Revenue Code 10 31 are one and sixty-five hundredths percent, two and twenty 10 32 hundredths percent, and two and seventy-five hundredths 10 33 percent, respectively. 10 34 2. For purposes of this section, an individual may claim a 10 35 research creditfor qualifying research expendituresincurred 11 1 by a partnership,subchapterS corporation, limited liability 11 2 company, estate, or trust electing to have the income taxed 11 3 directly to the individual. The amount claimed by the 11 4 individual shall be based upon the pro rata share of the 11 5 individual's earnings of a partnership,subchapterS 11 6 corporation, limited liability company, estate, or trust. 11 7 3. For purposes of this section,"qualifying expenditures11 8for increasing research activities" means the qualifying11 9expenditures"base amount", "basic research payment", and 11 10 "qualified research expense" mean the same as defined for the 11 11 federal credit for increasing research activitieswhich would11 12be allowableunder section 41 of the Internal Revenue Codein11 13effect on January 1, 1999, except that for the alternative 11 14 incremental credit such amounts are for research conducted 11 15 within this state. For purposes of this section, "Internal 11 16 Revenue Code" means the Internal Revenue Code in effect on 11 17 January 1, 2000. 11 18 4. Any credit in excess of the tax liability imposed by 11 19 section 422.5 less the credits allowed under sections 422.11A, 11 20 422.12, and 422.12B for the taxable year shall be refunded 11 21 with interest computed under section 422.25. In lieu of 11 22 claiming a refund, a taxpayer may elect to have the 11 23 overpayment shown on the taxpayer's final, completed return 11 24 credited to the tax liability for the following taxable year. 11 25 Sec. 10. NEW SECTION. 422.11D PROPERTY REHABILITATION 11 26 TAX CREDIT. 11 27 1. The taxes imposed under this division, less the credits 11 28 allowed under sections 422.12 and 422.12B, shall be reduced by 11 29 a property rehabilitation tax credit equal to the amount as 11 30 computed under chapter 404A for rehabilitating eligible 11 31 property. Any credit in excess of the tax liability shall be 11 32 refunded as provided in section 404A.4, subsection 3. 11 33 2. An individual may claim a property rehabilitation tax 11 34 credit allowed a partnership, limited liability company, S 11 35 corporation, estate, or trust electing to have the income 12 1 taxed directly to the individual. The amount claimed by the 12 2 individual shall be based upon the pro rata share of the 12 3 individual's earnings of a partnership, limited liability 12 4 company, S corporation, estate, or trust. 12 5 3. For purposes of this section, "eligible property" means 12 6 the same as used in section 404A.1. 12 7 Sec. 11. NEW SECTION. 422.11E ASSISTIVE DEVICE TAX 12 8 CREDIT – SMALL BUSINESS. 12 9 1. The taxes imposed under this division, less the credits 12 10 allowed under sections 422.12 and 422.12B, shall be reduced by 12 11 an assistive device tax credit. A small business purchasing, 12 12 renting, or modifying an assistive device or making workplace 12 13 modifications for an individual with a disability who is 12 14 employed or will be employed by the small business is 12 15 eligible, subject to availability of credits, to receive this 12 16 assistive device tax credit which is equal to fifty percent of 12 17 the first five thousand dollars paid during the tax year for 12 18 the purchase, rental, or modification of the assistive device 12 19 or for making the workplace modifications. Any credit in 12 20 excess of the tax liability shall be refunded with interest 12 21 computed under section 422.25. In lieu of claiming a refund, 12 22 a taxpayer may elect to have the overpayment shown on the 12 23 taxpayer's final, completed return credited to the tax 12 24 liability for the following tax year. If the small business 12 25 elects to take the assistive device tax credit, the small 12 26 business shall not deduct for Iowa tax purposes any amount of 12 27 the cost of an assistive device or workplace modifications 12 28 which is deductible for federal tax purposes. 12 29 2. To receive the assistive device tax credit, the 12 30 eligible small business must submit an application to the 12 31 department of economic development. If the taxpayer meets the 12 32 criteria for eligibility, the department of economic 12 33 development shall issue to the taxpayer a certification of 12 34 entitlement for the assistive device tax credit. However, the 12 35 combined amount of tax credits that may be approved for a 13 1 fiscal year under this section and section 422.33, subsection 13 2 8A, shall not exceed five hundred thousand dollars. Tax 13 3 credit certificates shall be issued on an earliest filed 13 4 basis. The certification shall contain the taxpayer's name, 13 5 address, tax identification number, the amount of the credit, 13 6 and tax year for which the certificate applies. The taxpayer 13 7 must file the tax credit certificate with the taxpayer's 13 8 individual income tax return in order to claim the tax credit. 13 9 The departments of economic development and revenue and 13 10 finance shall each adopt rules to jointly administer this 13 11 section and shall provide by rule for the method to be used to 13 12 determine for which fiscal year the tax credits are approved. 13 13 3. An individual may claim an assistive device tax credit 13 14 allowed a partnership, limited liability company, S 13 15 corporation, estate, or trust electing to have the income 13 16 taxed directly to the individual. The amount claimed by the 13 17 individual shall be based upon the pro rata share of the 13 18 individual's earnings of the partnership, limited liability 13 19 company, S corporation, estate, or trust. 13 20 4. For purposes of this section: 13 21 a. "Assistive device" means any item, piece of equipment, 13 22 or product system which is used to increase, maintain, or 13 23 improve the functional capabilities of an individual with a 13 24 disability in the workplace or on the job. "Assistive device" 13 25 does not mean any medical device, surgical device, or organ 13 26 implanted or transplanted into or attached directly to an 13 27 individual. "Assistive device" does not include any device 13 28 for which a certificate of title is issued by the state 13 29 department of transportation, but does include any item, piece 13 30 of equipment, or product system otherwise meeting the 13 31 definition of "assistive device" that is incorporated, 13 32 attached, or included as a modification in or to such a device 13 33 issued a certificate of title. 13 34 b. "Disability" means the same as defined in section 13 35 225C.46. 14 1 c. "Small business" means a business that either had gross 14 2 receipts for its preceding tax year of three million dollars 14 3 or less or employed not more than fourteen full-time employees 14 4 during its preceding tax year. 14 5 d. "Workplace modifications" means physical alterations to 14 6 the work environment. 14 7 Sec. 12. Section 422.33, subsection 5, Code Supplement 14 8 1999, is amended to read as follows: 14 9 5. a. The taxes imposed under this division shall be 14 10 reduced by a state tax credit for increasing research 14 11 activities in this state equal tosix and one-half percent of14 12the state's apportioned share of the qualifying expenditures14 13for increasing research activities.the sum of the following: 14 14 (1) Six and one-half percent of the excess of qualified 14 15 research expenses during the tax year over the base amount for 14 16 the tax year based upon the state's apportioned share of the 14 17 qualifying expenditures for increasing research activities. 14 18 (2) Six and one-half percent of the basic research 14 19 payments determined under section 41(e)(1)(A) of the Internal 14 20 Revenue Code during the tax year based upon the state's 14 21 apportioned share of the qualifying expenditures for 14 22 increasing research activities. 14 23 The state's apportioned share of the qualifying 14 24 expenditures for increasing research activities is a percent 14 25 equal to the ratio of qualified research expenditures in this 14 26 state to the total qualified research expenditures. 14 27 b. In lieu of the credit amount computed in paragraph "a", 14 28 subparagraph (1), a corporation may elect to compute the 14 29 credit amount for qualified research expenses incurred in this 14 30 state in a manner consistent with the alternative incremental 14 31 credit described in section 41(c)(4) of the Internal Revenue 14 32 Code. The taxpayer may make this election regardless of the 14 33 method used for the taxpayer's federal income tax. The 14 34 election made under this paragraph is for the tax year and the 14 35 taxpayer may use another or the same method for any subsequent 15 1 year. 15 2 c. For purposes of the alternate credit computation method 15 3 in paragraph "b", the credit percentages applicable to 15 4 qualified research expenses described in clauses (i), (ii), 15 5 and (iii) of section 41(c)(4)(A) of the Internal Revenue Code 15 6 are one and sixty-five hundredths percent, two and twenty 15 7 hundredths percent, and two and seventy-five hundredths 15 8 percent, respectively. 15 9 d. For purposes of this subsection,"qualifying15 10expenditures for increasing research activities" means the15 11qualifying expenditures"base amount", "basic research 15 12 payment", and "qualified research expense" mean the same as 15 13 defined for the federal credit for increasing research 15 14 activitieswhich would be allowableunder section 41 of the 15 15 Internal Revenue Codein effect on January 1, 1999, except 15 16 that for the alternative incremental credit such amounts are 15 17 for research conducted within this state. For purposes of 15 18 this subsection, "Internal Revenue Code" means the Internal 15 19 Revenue Code in effect on January 1, 2000. 15 20 e. Any credit in excess of the tax liability for the 15 21 taxable year shall be refunded with interest computed under 15 22 section 422.25. In lieu of claiming a refund, a taxpayer may 15 23 elect to have the overpayment shown on its final, completed 15 24 return credited to the tax liability for the following taxable 15 25 year. 15 26 Sec. 13. Section 422.33, Code Supplement 1999, is amended 15 27 by adding the following new subsection: 15 28 NEW SUBSECTION. 8A. a. The taxes imposed under this 15 29 division shall be reduced by an assistive device tax credit. 15 30 A small business purchasing, renting, or modifying an 15 31 assistive device or making workplace modifications for an 15 32 individual with a disability who is employed or will be 15 33 employed by the small business is eligible, subject to 15 34 availability of credits, to receive this assistive device tax 15 35 credit which is equal to fifty percent of the first five 16 1 thousand dollars paid during the tax year for the purchase, 16 2 rental, or modification of the assistive device or for making 16 3 the workplace modifications. Any credit in excess of the tax 16 4 liability shall be refunded with interest computed under 16 5 section 422.25. In lieu of claiming a refund, a taxpayer may 16 6 elect to have the overpayment shown on the taxpayer's final, 16 7 completed return credited to the tax liability for the 16 8 following tax year. If the small business elects to take the 16 9 assistive device tax credit, the small business shall not 16 10 deduct for Iowa tax purposes any amount of the cost of an 16 11 assistive device or workplace modifications which is 16 12 deductible for federal income tax purposes. 16 13 b. To receive the assistive device tax credit, the 16 14 eligible small business must submit an application to the 16 15 department of economic development. If the taxpayer meets the 16 16 criteria for eligibility, the department of economic 16 17 development shall issue to the taxpayer a certification of 16 18 entitlement for the assistive device tax credit. However, the 16 19 combined amount of tax credits that may be approved for a 16 20 fiscal year under this subsection and section 422.11E shall 16 21 not exceed five hundred thousand dollars. Tax credit 16 22 certificates shall be issued on an earliest filed basis. The 16 23 certification shall contain the taxpayer's name, address, tax 16 24 identification number, the amount of the credit, and tax year 16 25 for which the certificate applies. The taxpayer must file the 16 26 tax credit certificate with the taxpayer's corporate income 16 27 tax return in order to claim the tax credit. The departments 16 28 of economic development and revenue and finance shall each 16 29 adopt rules to jointly administer this subsection and shall 16 30 provide by rule for the method to be used to determine for 16 31 which fiscal year the tax credits are approved. 16 32 c. For purposes of this subsection: 16 33 (1) "Assistive device" means any item, piece of equipment, 16 34 or product system which is used to increase, maintain, or 16 35 improve the functional capabilities of an individual with a 17 1 disability in the workplace or on the job. "Assistive device" 17 2 does not mean any medical device, surgical device, or organ 17 3 implanted or transplanted into or attached directly to an 17 4 individual. "Assistive device" does not include any device 17 5 for which a certificate of title is issued by the state 17 6 department of transportation, but does include any item, piece 17 7 of equipment, or product system otherwise meeting the 17 8 definition of "assistive device" that is incorporated, 17 9 attached, or included as a modification in or to such a device 17 10 issued a certificate of title. 17 11 (2) "Disability" means the same as defined in section 17 12 225C.46. 17 13 (3) "Small business" means a business that either had 17 14 gross receipts for its preceding tax year of three million 17 15 dollars or less or employed not more than fourteen full-time 17 16 employees during its preceding tax year. 17 17 (4) "Workplace modifications" means physical alterations 17 18 to the work environment. 17 19 Sec. 14. Section 422.33, Code Supplement 1999, is amended 17 20 by adding the following new subsection: 17 21 NEW SUBSECTION. 9.a. The taxes imposed under this 17 22 division shall be reduced by a property rehabilitation tax 17 23 credit equal to the amount as computed under chapter 404A for 17 24 rehabilitating eligible property. Any credit in excess of the 17 25 tax liability shall be refunded as provided in section 404A.4, 17 26 subsection 3. 17 27 b. For purposes of this subsection, "eligible property" 17 28 means the same as used in section 404A.1. 17 29 Sec. 15. Section 427.1, Code Supplement 1999, is amended 17 30 by adding the following new subsection: 17 31 NEW SUBSECTION. 31. BARN PRESERVATION. The increase in 17 32 assessed value added to a farm structure constructed prior to 17 33 1937 as a result of improvements made to the farm structure 17 34 for purposes of preserving the integrity of the internal and 17 35 external features of the structure as a barn is exempt from 18 1 taxation. To be eligible for the exemption, the structure 18 2 must have been first placed in service as a barn prior to 18 3 1937. The exemption shall apply to the assessment year 18 4 beginning after the completion of the improvements to preserve 18 5 the structure as a barn. 18 6 For purposes of this subsection, "barn" means an 18 7 agricultural structure, in whatever shape or design, which is 18 8 used for the storage of farm products or feed or for the 18 9 housing of farm animals, poultry, or farm equipment. 18 10 Application for this exemption shall be filed with the 18 11 assessing authority not later than February 1 of the first 18 12 year for which the exemption is requested, on forms provided 18 13 by the department of revenue and finance. The application 18 14 shall describe and locate the specific structure for which the 18 15 added value is requested to be exempt. 18 16 Once the exemption is granted, the exemption shall continue 18 17 to be granted for subsequent assessment years without further 18 18 filing of applications as long as the structure continues to 18 19 be used as a barn. The taxpayer shall notify the assessing 18 20 authority when the structure ceases to be used as a barn. 18 21 Sec. 16. Section 25B.7 does not apply to the exemption 18 22 granted pursuant to section 15 of this Act. 18 23 Sec. 17. Section 427.1, Code Supplement 1999, is amended 18 24 by adding the following new subsection: 18 25 NEW SUBSECTION. 32. ONE-ROOM SCHOOLHOUSE PRESERVATION. 18 26 The increase in assessed value added to a one-room schoolhouse 18 27 as a result of improvements made to the structure for purposes 18 28 of preserving the integrity of the internal and external 18 29 features of the structure as a one-room schoolhouse is exempt 18 30 from taxation. The exemption shall apply to the assessment 18 31 year beginning after the completion of the improvements to 18 32 preserve the structure as a one-room schoolhouse. 18 33 Application for this exemption shall be filed with the 18 34 assessing authority not later than February 1 of the first 18 35 year for which the exemption is requested, on forms provided 19 1 by the department of revenue and finance. The application 19 2 shall describe and locate the specific one-room schoolhouse 19 3 for which the added value is requested to be exempt. 19 4 Once the exemption is granted, the exemption shall continue 19 5 to be granted for subsequent assessment years without further 19 6 filing of applications as long as the structure is not used 19 7 for dwelling purposes and the structure is preserved as a one- 19 8 room schoolhouse. The taxpayer shall notify the assessing 19 9 authority when the structure ceases to be eligible. The 19 10 exemption in this subsection applies even though the one-room 19 11 schoolhouse is no longer used for instructional purposes. 19 12 Sec. 18. Section 25B.7 does not apply to the exemption 19 13 granted pursuant to section 17 of this Act. 19 14 Sec. 19. The legislative council is requested to establish 19 15 an interim study committee to review the benefits of allowing 19 16 state tax credits to be transferable. In reviewing the 19 17 transferability of state tax credits, the study committee 19 18 shall analyze the benefits to the transferor, the transferee, 19 19 and to the state, the administrative costs involved, the 19 20 conditions under which transferability should be allowed, and 19 21 the restrictions that should be placed on transferability, if 19 22 any. The study committee's report along with its 19 23 recommendations shall be filed with the legislative council by 19 24 January 1, 2001. 19 25 Sec. 20. APPLICABILITY PROVISION. Chapter 404A, enacted 19 26 in this Act, applies to qualified rehabilitation costs 19 27 incurred on or after July 1, 2000. 19 28 Sec. 21. APPLICABILITY DATE. Sections 1, 2, 9, 11, 12, 19 29 and 13, of this Act apply retroactively to January 1, 2000, 19 30 for tax years beginning on or after that date. Section 8 of 19 31 this Act applies to tax years beginning on or after January 1, 19 32 2001. 19 33 HF 2560 19 34 mg/jg/25
Text: HF02559 Text: HF02561 Text: HF02500 - HF02599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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