Text: SF00229 Text: SF00231 Text: SF00200 - SF00299 Text: SF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 SENATE FILE 230 1 2 1 3 AN ACT 1 4 UPDATING THE IOWA CODE REFERENCES TO THE INTERNAL REVENUE 1 5 CODE, EXTENDING THE LOSS CARRYBACK PERIOD FOR FARM NET 1 6 OPERATING LOSSES, PROVIDING CERTAIN TAX CREDITS TO ESTATES 1 7 AND TRUSTS, PROVIDING A FRANCHISE TAX CREDIT TO CERTAIN 1 8 TAXPAYERS, AND PROVIDING AN EFFECTIVE DATE AND A RETROACTIVE 1 9 APPLICABILITY DATE. 1 10 1 11 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 1 12 1 13 Section 1. Section 15.335, unnumbered paragraph 1, Code 1 14 1999, is amended to read as follows: 1 15 An eligible business may claim a corporate tax credit for 1 16 increasing research activities in this state during the period 1 17 the eligible business is participating in the program. The 1 18 credit equals six and one-half percent of the state's 1 19 apportioned share of the qualifying expenditures for 1 20 increasing research activities. The state's apportioned share 1 21 of the qualifying expenditures for increasing research 1 22 activities is a percent equal to the ratio of qualified 1 23 research expenditures in this state to total qualified 1 24 research expenditures. The credit allowed in this section is 1 25 in addition to the credit authorized in section 422.33, 1 26 subsection 5. If the eligible business is a partnership, 1 27 subchapter S corporation, limited liability company, or estate 1 28 or trust electing to have the income taxed directly to the 1 29 individual, an individual may claim the tax credit allowed. 1 30 The amount claimed by the individual shall be based upon the 1 31 pro rata share of the individual's earnings of the 1 32 partnership, subchapter S corporation, limited liability 1 33 company, or estate or trust. For purposes of this section, 1 34 "qualifying expenditures for increasing research activities" 1 35 means the qualifying expenditures as defined for the federal 2 1 credit for increasing research activities which would be 2 2 allowable under section 41 of the Internal Revenue Code in 2 3 effect on January 1,19981999. 2 4 Sec. 2. Section 15A.9, subsection 8, unnumbered paragraph 2 5 2, Code 1999, is amended to read as follows: 2 6 For the purposes of this section, "qualifying expenditures 2 7 for increasing research activities" means the qualifying 2 8 expenditures as defined for the federal credit for increasing 2 9 research activities which would be allowable under section 41 2 10 of the Internal Revenue Code in effect on January 1,19982 11 1999. The credit authorized in this subsection is in lieu of 2 12 the credit authorized in section 422.33, subsection 5. 2 13 Sec. 3. Section 422.3, subsection 4, Code 1999, is amended 2 14 to read as follows: 2 15 4. "Internal Revenue Code" means the Internal Revenue Code 2 16 of 1954, prior to the date of its redesignation as the 2 17 Internal Revenue Code of 1986 by the Tax Reform Act of 1986, 2 18 or means the Internal Revenue Code of 1986 as amended to and 2 19 including January 1,19981999, whichever is applicable. 2 20 Sec. 4. Section 422.6, unnumbered paragraph 1, Code 1999, 2 21 is amended to read as follows: 2 22 The tax imposed by section 422.5 less the credits allowed 2 23 under sections 15.333, 15.335, 15E.193A, 422.10, 422.11, 2 24 422.11A, and 422.11B, and the personal exemption credit 2 25 allowed under section 422.12 apply to and are a charge against 2 26 estates and trusts with respect to their taxable income, and 2 27 the rates are the same as those applicable to individuals. 2 28 The fiduciary shall make the return of income for the estate 2 29 or trust for which the fiduciary acts, whether the income is 2 30 taxable to the estate or trust or to the beneficiaries. 2 31 However, for tax years ending after August 5, 1997, if the 2 32 trust is a qualified preneed funeral trust as set forth in 2 33 section 685 of the Internal Revenue Code and the trustee has 2 34 elected the special tax treatment under section 685 of the 2 35 Internal Revenue Code, neither the trust nor the beneficiary 3 1 is subject to Iowa income tax on income accruing to the trust. 3 2 Sec. 5. Section 422.9, subsection 3, paragraph b, Code 3 3 1999, is amended to read as follows: 3 4 b. The Iowa net operating loss remaining after being 3 5 carried back as required in paragraph "a"of this subsection3 6 or "d" or if not required to be carried back shall be carried 3 7 forward twenty taxable years. 3 8 Sec. 6. Section 422.9, subsection 3, Code 1999, is amended 3 9 by adding the following new paragraph: 3 10 NEW PARAGRAPH. d. Notwithstanding paragraph "a", for a 3 11 taxpayer who is engaged in the trade or business of farming as 3 12 defined in section 263A(e)(4) of the Internal Revenue Code and 3 13 has a loss from farming as defined in section 172(b)(1)(F) of 3 14 the Internal Revenue Code including modifications prescribed 3 15 by rule by the director, the Iowa loss from the trade or 3 16 business of farming is a net operating loss which may be 3 17 carried back five taxable years prior to the taxable year of 3 18 the loss. 3 19 Sec. 7. Section 422.10, unnumbered paragraph 1, Code 1999, 3 20 is amended to read as follows: 3 21 The taxes imposed under this division shall be reduced by a 3 22 state tax credit for increasing research activities in this 3 23 state. For individuals, the credit equals six and one-half 3 24 percent of the state's apportioned share of the qualifying 3 25 expenditures for increasing research activities. The state's 3 26 apportioned share of the qualifying expenditures for 3 27 increasing research activities is a percent equal to the ratio 3 28 of qualified research expenditures in this state to total 3 29 qualified research expenditures. For purposes of this 3 30 section, an individual may claim a research credit for 3 31 qualifying research expenditures incurred by a partnership, 3 32 subchapter S corporation, estate, or trust electing to have 3 33 the income taxed directly to the individual. The amount 3 34 claimed by the individual shall be based upon the pro rata 3 35 share of the individual's earnings of a partnership, 4 1 subchapter S corporation, estate, or trust. For purposes of 4 2 this section, "qualifying expenditures for increasing research 4 3 activities" means the qualifying expenditures as defined for 4 4 the federal credit for increasing research activities which 4 5 would be allowable under section 41 of the Internal Revenue 4 6 Code in effect on January 1,19981999. 4 7 Sec. 8. Section 422.33, subsection 5, unnumbered paragraph 4 8 1, Code 1999, is amended to read as follows: 4 9 The taxes imposed under this division shall be reduced by a 4 10 state tax credit for increasing research activities in this 4 11 state equal to six and one-half percent of the state's 4 12 apportioned share of the qualifying expenditures for 4 13 increasing research activities. The state's apportioned share 4 14 of the qualifying expenditures for increasing research 4 15 activities is a percent equal to the ratio of qualified 4 16 research expenditures in this state to the total qualified 4 17 research expenditures. For purposes of this subsection, 4 18 "qualifying expenditures for increasing research activities" 4 19 means the qualifying expenditures as defined for the federal 4 20 credit for increasing research activities which would be 4 21 allowable under section 41 of the Internal Revenue Code in 4 22 effect on January 1,19981999. 4 23 Sec. 9. Section 422.33, Code 1999, is amended by adding 4 24 the following new subsection: 4 25 NEW SUBSECTION. 9. The taxes imposed under this division 4 26 shall be reduced by a franchise tax credit. A taxpayer who is 4 27 a shareholder in a financial institution, as defined in 4 28 section 581 of the Internal Revenue Code, which has in effect 4 29 for the tax year an election under subchapter S of the 4 30 Internal Revenue Code shall compute the amount of the tax 4 31 credit by recomputing the amount of tax under this division by 4 32 reducing the taxable income of the taxpayer by the taxpayer's 4 33 pro rata share of the items of income and expense of the 4 34 financial institution. This recomputed tax shall be 4 35 subtracted from the tax computed under this division and the 5 1 resulting amount, which shall not exceed the taxpayer's pro 5 2 rata share of franchise tax paid by the financial institution, 5 3 is the amount of the franchise tax credit allowed. 5 4 Sec. 10. Section 422.35, subsection 11, paragraph b, Code 5 5 1999, is amended to read as follows: 5 6 b. The Iowa net operating loss remaining after being 5 7 carried back as required in paragraph "a"of this subsection5 8 or "f" or if not required to be carried back shall be carried 5 9 forward twenty taxable years. 5 10 Sec. 11. Section 422.35, subsection 11, Code 1999, is 5 11 amended by adding the following new paragraph: 5 12 NEW PARAGRAPH. f. Notwithstanding paragraph "a", for a 5 13 taxpayer who is engaged in the trade or business of farming as 5 14 defined in section 263A(e)(4) of the Internal Revenue Code and 5 15 has a loss from farming as defined in section 172(b)(1)(F) of 5 16 the Internal Revenue Code including modifications prescribed 5 17 by rule by the director, the Iowa loss from the trade or 5 18 business of farming is a net operating loss which may be 5 19 carried back five taxable years prior to the taxable year of 5 20 the loss. 5 21 Sec. 12. This Act applies retroactively to January 1, 5 22 1998, for tax years beginning on or after that date. 5 23 Sec. 13. This Act, being deemed of immediate importance, 5 24 takes effect upon enactment. 5 25 5 26 5 27 5 28 MARY E. KRAMER 5 29 President of the Senate 5 30 5 31 5 32 5 33 RON J. CORBETT 5 34 Speaker of the House 5 35 6 1 I hereby certify that this bill originated in the Senate and 6 2 is known as Senate File 230, Seventy-eighth General Assembly. 6 3 6 4 6 5 6 6 MICHAEL E. MARSHALL 6 7 Secretary of the Senate 6 8 Approved , 1999 6 9 6 10 6 11 6 12 THOMAS J. VILSACK 6 13 Governor
Text: SF00229 Text: SF00231 Text: SF00200 - SF00299 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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