Text: HSB00024 Text: HSB00026 Text: HSB00000 - HSB00099 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 15.335, unnumbered paragraph 1, Code 1 2 1999, is amended to read as follows: 1 3 An eligible business may claim a corporate tax credit for 1 4 increasing research activities in this state during the period 1 5 the eligible business is participating in the program. The 1 6 credit equals six and one-half percent of the state's 1 7 apportioned share of the qualifying expenditures for 1 8 increasing research activities. The state's apportioned share 1 9 of the qualifying expenditures for increasing research 1 10 activities is a percent equal to the ratio of qualified 1 11 research expenditures in this state to total qualified 1 12 research expenditures. The credit allowed in this section is 1 13 in addition to the credit authorized in section 422.33, 1 14 subsection 5. If the eligible business is a partnership, 1 15 subchapter S corporation, limited liability company, or estate 1 16 or trust electing to have the income taxed directly to the 1 17 individual, an individual may claim the tax credit allowed. 1 18 The amount claimed by the individual shall be based upon the 1 19 pro rata share of the individual's earnings of the 1 20 partnership, subchapter S corporation, limited liability 1 21 company, or estate or trust. For purposes of this section, 1 22 "qualifying expenditures for increasing research activities" 1 23 means the qualifying expenditures as defined for the federal 1 24 credit for increasing research activities which would be 1 25 allowable under section 41 of the Internal Revenue Code in 1 26 effect on January 1,19981999. 1 27 Sec. 2. Section 15A.9, subsection 8, unnumbered paragraph 1 28 2, Code 1999, is amended to read as follows: 1 29 For the purposes of this section, "qualifying expenditures 1 30 for increasing research activities" means the qualifying 1 31 expenditures as defined for the federal credit for increasing 1 32 research activities which would be allowable under section 41 1 33 of the Internal Revenue Code in effect on January 1,19981 34 1999. The credit authorized in this subsection is in lieu of 1 35 the credit authorized in section 422.33, subsection 5. 2 1 Sec. 3. Section 422.3, subsection 4, Code 1999, is amended 2 2 to read as follows: 2 3 4. "Internal Revenue Code" means the Internal Revenue Code 2 4 of 1954, prior to the date of its redesignation as the 2 5 Internal Revenue Code of 1986 by the Tax Reform Act of 1986, 2 6 or means the Internal Revenue Code of 1986 as amended to and 2 7 including January 1,19981999, whichever is applicable. 2 8 Sec. 4. Section 422.6, unnumbered paragraph 1, Code 1999, 2 9 is amended to read as follows: 2 10 The tax imposed by section 422.5 less the credits allowed 2 11 under sections 15.333, 15.335, 15E.193A, 422.10, 422.11, 2 12 422.11A, and 422.11B, and the personal exemption credit 2 13 allowed under section 422.12 apply to and are a charge against 2 14 estates and trusts with respect to their taxable income, and 2 15 the rates are the same as those applicable to individuals. 2 16 The fiduciary shall make the return of income for the estate 2 17 or trust for which the fiduciary acts, whether the income is 2 18 taxable to the estate or trust or to the beneficiaries. 2 19 However, for tax years ending after August 5, 1997, if the 2 20 trust is a qualified preneed funeral trust as set forth in 2 21 section 685 of the Internal Revenue Code and the trustee has 2 22 elected the special tax treatment under section 685 of the 2 23 Internal Revenue Code, neither the trust nor the beneficiary 2 24 is subject to Iowa income tax on income accruing to the trust. 2 25 Sec. 5. Section 422.9, subsection 3, paragraph b, Code 2 26 1999, is amended to read as follow: 2 27 b. The Iowa net operating loss remaining after being 2 28 carried back as required in paragraph "a"of this subsection2 29 or "d" or if not required to be carried back shall be carried 2 30 forward twenty taxable years. 2 31 Sec. 6. Section 422.9, subsection 3, Code 1999, is amended 2 32 by adding the following new paragraph: 2 33 NEW PARAGRAPH. d. Notwithstanding paragraph "a", for a 2 34 taxpayer who is engaged in the trade or business of farming as 2 35 defined in section 263A(e)(4) of the Internal Revenue Code and 3 1 has a loss from farming as defined in section 172(b)(1)(F) of 3 2 the Internal Revenue Code including modifications prescribed 3 3 by rule by the director, the Iowa loss from the trade or 3 4 business of farming is a net operating loss which may be 3 5 carried back five taxable years prior to the taxable year of 3 6 the loss. 3 7 Sec. 7. Section 422.10, unnumbered paragraph 1, Code 1999, 3 8 is amended to read as follows: 3 9 The taxes imposed under this division shall be reduced by a 3 10 state tax credit for increasing research activities in this 3 11 state. For individuals, the credit equals six and one-half 3 12 percent of the state's apportioned share of the qualifying 3 13 expenditures for increasing research activities. The state's 3 14 apportioned share of the qualifying expenditures for 3 15 increasing research activities is a percent equal to the ratio 3 16 of qualified research expenditures in this state to total 3 17 qualified research expenditures. For purposes of this 3 18 section, an individual may claim a research credit for 3 19 qualifying research expenditures incurred by a partnership, 3 20 subchapter S corporation, estate, or trust electing to have 3 21 the income taxed directly to the individual. The amount 3 22 claimed by the individual shall be based upon the pro rata 3 23 share of the individual's earnings of a partnership, 3 24 subchapter S corporation, estate, or trust. For purposes of 3 25 this section, "qualifying expenditures for increasing research 3 26 activities" means the qualifying expenditures as defined for 3 27 the federal credit for increasing research activities which 3 28 would be allowable under section 41 of the Internal Revenue 3 29 Code in effect on January 1,19981999. 3 30 Sec. 8. Section 422.33, subsection 5, unnumbered paragraph 3 31 1, Code 1999, is amended to read as follows: 3 32 The taxes imposed under this division shall be reduced by a 3 33 state tax credit for increasing research activities in this 3 34 state equal to six and one-half percent of the state's 3 35 apportioned share of the qualifying expenditures for 4 1 increasing research activities. The state's apportioned share 4 2 of the qualifying expenditures for increasing research 4 3 activities is a percent equal to the ratio of qualified 4 4 research expenditures in this state to the total qualified 4 5 research expenditures. For purposes of this subsection, 4 6 "qualifying expenditures for increasing research activities" 4 7 means the qualifying expenditures as defined for the federal 4 8 credit for increasing research activities which would be 4 9 allowable under section 41 of the Internal Revenue Code in 4 10 effect on January 1,19981999. 4 11 Sec. 9. Section 422.35, subsection 11, paragraph b, Code 4 12 1999, is amended to read as follows: 4 13 b. The Iowa net operating loss remaining after being 4 14 carried back as required in paragraph "a"of this subsection4 15 or "f" or if not required to be carried back shall be carried 4 16 forward twenty taxable years. 4 17 Sec. 10. Section 422.35, subsection 11, Code 1999, is 4 18 amended by adding the following new paragraph: 4 19 NEW PARAGRAPH. f. Notwithstanding paragraph "a", for a 4 20 taxpayer who is engaged in the trade or business of farming as 4 21 defined in section 263A(e)(4) of the Internal Revenue Code and 4 22 has a loss from farming as defined in section 172(b)(1)(F) of 4 23 the Internal Revenue Code including modifications prescribed 4 24 by rule by the director, the Iowa loss from the trade or 4 25 business of farming is a net operating loss which may be 4 26 carried back five taxable years prior to the taxable year of 4 27 the loss. 4 28 Sec. 11. This Act applies retroactively to January 1, 4 29 1998, for tax years beginning on or after that date. 4 30 Sec. 12. This Act, being deemed of immediate importance, 4 31 takes effect upon enactment. 4 32 EXPLANATION 4 33 This bill updates the references to the Internal Revenue 4 34 Code to make the federal income tax revisions enacted by 4 35 Congress in 1998 applicable for Iowa income tax purposes. 5 1 Iowa Code sections 15.335, 15A.9, 422.10, and 422.33 are 5 2 amended to update the Iowa Code references to the state 5 3 research activities credit for individuals, corporations, 5 4 corporations in economic development areas, and corporations 5 5 in quality jobs enterprise zones to include the 1998 changes 5 6 to the federal research activities credit. 5 7 Iowa Code section 422.3 is amended to update the reference 5 8 in the Iowa Code to January 1, 1999, to include the federal 5 9 income tax revisions made by Congress in the 1998 calendar 5 10 year, making those revisions applicable for Iowa income tax 5 11 purposes. 5 12 Iowa Code section 422.6 is amended to allow estates and 5 13 trusts to take the same credits against computed tax as 5 14 individuals. 5 15 Iowa Code sections 422.9 and 422.35 are amended to extend 5 16 the net operating loss carryback period to five years for net 5 17 operating losses from farming businesses arising in taxable 5 18 years beginning after December 31, 1997. 5 19 The bill applies retroactively to January 1, 1998, for tax 5 20 years beginning on or after that date. 5 21 The bill takes effect upon enactment. 5 22 LSB 1153DP 78 5 23 sc/jw/5.1
Text: HSB00024 Text: HSB00026 Text: HSB00000 - HSB00099 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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