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PAG LIN
1 1 Section 1. NEW SECTION. 422.11D ASSISTIVE DEVICE TAX
1 2 CREDIT – SMALL BUSINESS.
1 3 1. The taxes imposed under this division, less the credits
1 4 allowed under sections 422.12 and 422.12B, shall be reduced by
1 5 an assistive device tax credit. A small business purchasing,
1 6 renting, or modifying an assistive device or making workplace
1 7 modifications for an individual with a disability who is
1 8 employed or will be employed by the small business is
1 9 eligible, subject to availability of credits, to receive this
1 10 assistive device tax credit which is equal to fifty percent of
1 11 the first five thousand dollars paid during the tax year for
1 12 the purchase, rental, or modification of the assistive device
1 13 or for making the workplace modifications. Any credit in
1 14 excess of the tax liability shall be refunded with interest
1 15 computed under section 422.25. In lieu of claiming a refund,
1 16 a taxpayer may elect to have the overpayment shown on the
1 17 taxpayer's final, completed return credited to the tax
1 18 liability for the following tax year. If the small business
1 19 elects to take the assistive device tax credit, the small
1 20 business shall not deduct for Iowa tax purposes any amount of
1 21 the cost of an assistive device or workplace modifications
1 22 which is deductible for federal tax purposes.
1 23 2. To receive the assistive device tax credit, the
1 24 eligible small business must submit an application to the
1 25 department of economic development. If the taxpayer meets the
1 26 criteria for eligibility, the department of economic
1 27 development shall issue to the taxpayer a certification of
1 28 entitlement for the assistive device tax credit. However, the
1 29 combined amount of tax credits that may be approved for a
1 30 fiscal year under this section and section 422.33, subsection
1 31 9, shall not exceed five hundred thousand dollars. Tax
1 32 credit certificates shall be issued on an earliest filed
1 33 basis. The certification shall contain the taxpayer's name,
1 34 address, tax identification number, the amount of the credit,
1 35 and tax year for which the certificate applies. The taxpayer
2 1 must file the tax credit certificate with the taxpayer's
2 2 individual income tax return in order to claim the tax credit.
2 3 The departments of economic development and revenue and
2 4 finance shall each adopt rules to jointly administer this
2 5 section and shall provide by rule for the method to be used to
2 6 determine for which fiscal year the tax credits are approved.
2 7 3. An individual may claim an assistive device tax credit
2 8 allowed a partnership, limited liability company, S
2 9 corporation, estate, or trust electing to have the income
2 10 taxed directly to the individual. The amount claimed by the
2 11 individual shall be based upon the pro rata share of the
2 12 individual's earnings of the partnership, limited liability
2 13 company, S corporation, estate, or trust.
2 14 4. For purposes of this section:
2 15 a. "Assistive device" means any item, piece of equipment,
2 16 or product system which is used to increase, maintain, or
2 17 improve the functional capabilities of an individual with a
2 18 disability in the workplace or on the job. "Assistive device"
2 19 does not mean any medical device, surgical device, or organ
2 20 implanted or transplanted into or attached directly to an
2 21 individual. "Assistive device" does not include any device
2 22 for which a certificate of title is issued by the state
2 23 department of transportation, but does include any item, piece
2 24 of equipment, or product system otherwise meeting the
2 25 definition of "assistive device" that is incorporated,
2 26 attached, or included as a modification in or to such a device
2 27 issued a certificate of title.
2 28 b. "Disability" means the same as defined in section
2 29 225C.46.
2 30 c. "Small business" means a business that either had gross
2 31 receipts for its preceding tax year of three million dollars
2 32 or less or employed not more than fourteen full-time employees
2 33 during its preceding tax year.
2 34 d. "Workplace modifications" means physical alterations to
2 35 the work environment.
3 1 Sec. 2. Section 422.33, Code Supplement 1999, is amended
3 2 by adding the following new subsection:
3 3 NEW SUBSECTION. 9. a. The taxes imposed under this
3 4 division shall be reduced by an assistive device tax credit.
3 5 A small business purchasing, renting, or modifying an
3 6 assistive device or making workplace modifications for an
3 7 individual with a disability who is employed or will be
3 8 employed by the small business is eligible, subject to
3 9 availability of credits, to receive this assistive device tax
3 10 credit which is equal to fifty percent of the first five
3 11 thousand dollars paid during the tax year for the purchase,
3 12 rental, or modification of the assistive device or for making
3 13 the workplace modifications. Any credit in excess of the tax
3 14 liability shall be refunded with interest computed under
3 15 section 422.25. In lieu of claiming a refund, a taxpayer may
3 16 elect to have the overpayment shown on the taxpayer's final,
3 17 completed return credited to the tax liability for the
3 18 following tax year. If the small business elects to take the
3 19 assistive device tax credit, the small business shall not
3 20 deduct for Iowa tax purposes any amount of the cost of an
3 21 assistive device or workplace modifications which is
3 22 deductible for federal income tax purposes.
3 23 b. To receive the assistive device tax credit, the
3 24 eligible small business must submit an application to the
3 25 department of economic development. If the taxpayer meets the
3 26 criteria for eligibility, the department of economic
3 27 development shall issue to the taxpayer a certification of
3 28 entitlement for the assistive device tax credit. However, the
3 29 combined amount of tax credits that may be approved for a
3 30 fiscal year under this subsection and section 422.11D shall
3 31 not exceed five hundred thousand dollars. Tax credit
3 32 certificates shall be issued on an earliest filed basis. The
3 33 certification shall contain the taxpayer's name, address, tax
3 34 identification number, the amount of the credit, and tax year
3 35 for which the certificate applies. The taxpayer must file the
4 1 tax credit certificate with the taxpayer's corporate income
4 2 tax return in order to claim the tax credit. The departments
4 3 of economic development and revenue and finance shall each
4 4 adopt rules to jointly administer this subsection and shall
4 5 provide by rule for the method to be used to determine for
4 6 which fiscal year the tax credits are approved.
4 7 c. For purposes of this subsection:
4 8 (1) "Assistive device" means any item, piece of equipment,
4 9 or product system which is used to increase, maintain, or
4 10 improve the functional capabilities of an individual with a
4 11 disability in the workplace or on the job. "Assistive device"
4 12 does not mean any medical device, surgical device, or organ
4 13 implanted or transplanted into or attached directly to an
4 14 individual. "Assistive device" does not include any device
4 15 for which a certificate of title is issued by the state
4 16 department of transportation, but does include any item, piece
4 17 of equipment, or product system otherwise meeting the
4 18 definition of "assistive device" that is incorporated,
4 19 attached, or included as a modification in or to such a device
4 20 issued a certificate of title.
4 21 (2) "Disability" means the same as defined in section
4 22 225C.46.
4 23 (3) "Small business" means a business that either had
4 24 gross receipts for its preceding tax year of three million
4 25 dollars or less or employed not more than fourteen full-time
4 26 employees during its preceding tax year.
4 27 (4) "Workplace modifications" means physical alterations
4 28 to the work environment.
4 29 Sec. 3. EFFECTIVE AND RETROACTIVE APPLICABILITY DATE.
4 30 This Act, being deemed of immediate importance, takes effect
4 31 upon enactment and applies retroactively to January 1, 2000,
4 32 for tax years beginning on or after that date.
4 33 EXPLANATION
4 34 This bill allows a tax credit equal to 50 percent of the
4 35 first $5,000 paid for the purchase, rental, or modification of
5 1 an assistive device or for the renovation of the workplace for
5 2 an individual with a disability. The credit is refundable and
5 3 applies to both the individual and corporate income taxes.
5 4 Only small businesses are entitled to the credit. A small
5 5 business is one that either had gross receipts in the
5 6 preceding tax year of $3 million or less or employed not more
5 7 than 14 full-time employees during its preceding tax year. An
5 8 assistive device is an item, piece of equipment, or product
5 9 system which is used to increase, maintain, or improve the
5 10 functional capabilities of an individual with a disability in
5 11 the workplace or on the job. If the assistive tax credit is
5 12 claimed, the small business is not allowed to deduct any
5 13 amount of the cost of the device or modification which is
5 14 deductible for federal income tax purposes.
5 15 The bill provides that only $500,000 in combined individual
5 16 and corporate income tax credits are allowed for any fiscal
5 17 year. Because of this, eligible small businesses must apply
5 18 for the credits with the department of economic development
5 19 which approves the eligible credits on an earliest date
5 20 applied basis.
5 21 The bill takes effect upon enactment and applies
5 22 retroactively to January 1, 2000, for tax years beginning on
5 23 or after that date.
5 24 LSB 6616SV 78
5 25 mg/cls/14
Text: SF02424 Text: SF02426 Text: SF02400 - SF02499 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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