Text: HF00750 Text: HF00752 Text: HF00700 - HF00799 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. NEW SECTION. 15E.41 PURPOSE. 1 2 The purpose of this division is to enhance the quality of 1 3 life for citizens of this state by encouraging the creation of 1 4 new jobs, industry, products, and wealth through the increased 1 5 availability and accessibility to capital, particularly at the 1 6 seed and venture capital investment stages. 1 7 Sec. 2. NEW SECTION. 15E.42 INVESTMENT TAX CREDITS. 1 8 1. For tax years beginning on or after January 1, 2001, a 1 9 tax credit shall be allowed against the taxes imposed in 1 10 chapter 422, divisions II, III, and V, and in chapter 432, for 1 11 a portion of the taxpayer's equity investment, as provided in 1 12 subsection 2, in a qualified business. However, for tax 1 13 credits earned from investments made in the 2001, 2002, 2003, 1 14 and 2004 calendar years, taxpayers shall not claim the tax 1 15 credit sooner than the tax year beginning in the 2005 calendar 1 16 year. An individual may claim the credit of a partnership, 1 17 limited liability company, S corporation, estate, or trust 1 18 electing to have income taxed directly to the individual. The 1 19 amount claimed by the individual shall be based upon the pro 1 20 rata share of the individual's earnings from the partnership, 1 21 limited liability company, S corporation, estate, or trust. 1 22 Any tax credit in excess of the taxpayer's liability for the 1 23 tax year may be credited to the tax liability for the 1 24 following five years or until depleted, whichever is earlier. 1 25 A tax credit shall not be carried back to a tax year prior to 1 26 the tax year in which the taxpayer redeems the tax credit. 1 27 2. The tax credit equals fifty percent, not to exceed one 1 28 hundred thousand dollars, of the taxpayer's equity investment 1 29 made in a qualified business during the tax year. 1 30 3. The aggregate amount of tax credits issued under this 1 31 section for taxes imposed pursuant to chapter 422, divisions 1 32 II, III, and V, and chapter 432 shall not exceed a total of 1 33 twenty-five million dollars. 1 34 4. The department of revenue and finance, in consultation 1 35 with the department of economic development, shall develop a 2 1 system for registration, authorization, and redemption of tax 2 2 credits issued by the state under this section. The 2 3 department of revenue and finance and the department of 2 4 economic development shall adopt any other policies, 2 5 procedures, or rules pursuant to chapter 17A necessary for the 2 6 administration of this division and of tax credits issued by 2 7 the state under this section. 2 8 Sec. 3. NEW SECTION. 15E.43 QUALIFYING BUSINESSES. 2 9 1. In order for an equity investment to qualify for a tax 2 10 credit, a taxpayer, within ninety days of making an investment 2 11 in a qualifying business, shall notify the department of 2 12 economic development regarding the investment and provide the 2 13 department with information documenting the investment. In 2 14 order to be a qualifying business, the business must meet all 2 15 of the following criteria: 2 16 a. The principal business operations of the business are 2 17 located in this state. 2 18 b. The business has been in operation for five years or 2 19 less. 2 20 c. The business has a business plan approved by the 2 21 department which details the business's growth strategy, the 2 22 management team if applicable, a production or management 2 23 plan, a financial plan, and other standard elements of a 2 24 business plan. 2 25 d. The business has an owner who has successfully 2 26 completed a recognized entrepreneurial venture development 2 27 curriculum or has three years of relevant business experience. 2 28 e. The business is not a business engaged primarily in 2 29 retail sales or the provision of health care or other 2 30 professional services. 2 31 f. The business shall not have a net worth that exceeds 2 32 five million dollars. 2 33 2. After verifying the eligibility of the business, the 2 34 department of economic development shall notify the department 2 35 of revenue and finance that the investment has been made in a 3 1 qualifying business and the department of revenue and finance 3 2 shall issue a tax credit certificate to be attached to the 3 3 person's tax return. The tax credit certificate shall contain 3 4 the taxpayer's name, address, tax identification number, the 3 5 amount of credit, other information required by the department 3 6 of revenue and finance, and a place for the name and tax 3 7 identification number of any transferee and the amount of the 3 8 tax credit being transferred. 3 9 3. The tax credit shall not be redeemed during any tax 3 10 year beginning prior to January 1, 2005. 3 11 4. A person receiving a tax credit under this section may 3 12 transfer all or a portion of the unused tax credit to any 3 13 other person. However, the tax credit shall only be 3 14 transferred once. The transferee may use the amount of the 3 15 tax credit transferred against taxes imposed under chapter 3 16 422, divisions II, III, and V, and under chapter 432 for any 3 17 tax year the original transferor could have claimed the 3 18 credit. Any consideration received for the transfer of the 3 19 tax credit shall not be included as income under chapter 422, 3 20 divisions II, III, and V, or as premiums under chapter 432. 3 21 Any consideration paid for the transfer of the tax credit 3 22 shall not be deducted from income under chapter 422, divisions 3 23 II, III, and V, or from premiums under chapter 432. 3 24 5. Any consideration received by a transferor shall be 3 25 invested in the qualifying business. 3 26 Sec. 4. NEW SECTION. 422.11C INVESTMENT TAX CREDITS. 3 27 The taxes imposed under this division, less the credits 3 28 allowed under sections 422.12 and 422.12B, shall be reduced by 3 29 an investment tax credit authorized pursuant to sections 3 30 15E.41 through 15E.43. 3 31 Sec. 5. Section 422.33, Code 2001, is amended by adding 3 32 the following new subsection: 3 33 NEW SUBSECTION. 11. The taxes imposed under this division 3 34 shall be reduced by an investment tax credit authorized 3 35 pursuant to sections 15E.41 through 15E.43. 4 1 Sec. 6. Section 422.60, Code 2001, is amended by adding 4 2 the following new subsection: 4 3 NEW SUBSECTION. 4. The taxes imposed under this division 4 4 shall be reduced by an investment tax credit authorized 4 5 pursuant to sections 15E.41 through 15E.43. 4 6 Sec. 7. NEW SECTION. 432.12A INVESTMENT TAX CREDITS. 4 7 The taxes imposed under this chapter shall be reduced by an 4 8 investment tax credit authorized pursuant to sections 15E.41 4 9 through 15E.43. 4 10 EXPLANATION 4 11 This bill creates a personal income, corporate income, 4 12 financial institution franchise, and insurance premium tax 4 13 credit which may be claimed by a taxpayer for a portion of the 4 14 taxpayer's equity investment in a qualified business. The 4 15 bill provides that for tax credits earned from investments 4 16 made in 2001, 2002, 2003, and 2004 calendar years, taxpayers 4 17 shall not claim the tax credit sooner than the tax year 4 18 beginning in the 2005 calendar year. The bill provides that 4 19 any tax credit in excess of the taxpayer's liability for the 4 20 tax year may be credited to the tax liability for the 4 21 following five years or until depleted, whichever is earlier. 4 22 The bill provides that the tax credit shall not be carried 4 23 back to previous tax years. The bill provides that the tax 4 24 credit equals 50 percent, not to exceed $100,000, of the 4 25 taxpayer's equity investment in a qualified business during 4 26 the tax year. 4 27 The bill provides that, in order for an equity investment 4 28 to qualify for a tax credit, a taxpayer, within 90 days of 4 29 making an investment in a qualifying business, shall notify 4 30 the department of economic development regarding the 4 31 investment and provide the department with information 4 32 documenting the investment and the business must meet certain 4 33 identified criteria. The bill provides that, after verifying 4 34 the eligibility of the business, the department of economic 4 35 development shall notify the department of revenue and finance 5 1 that the investment has been made in a qualifying business and 5 2 the department of revenue and finance shall issue a tax credit 5 3 certificate to be attached to the person's tax return. 5 4 The bill provides that the aggregate amount of tax credits 5 5 issued by the state shall not exceed a total of $25 million. 5 6 The bill provides that a person receiving a tax credit may 5 7 transfer all or a portion of the unused tax credit to any 5 8 other person; however, a tax credit shall only be transferred 5 9 once. The bill provides that the transferee may use the 5 10 amount of the tax credit transferred against personal income 5 11 taxes, corporate income taxes, financial institution franchise 5 12 taxes, and insurance premium taxes for any tax year the 5 13 original transferor could have claimed the tax credit. The 5 14 bill provides that any consideration received by a transferor 5 15 shall be invested in the qualifying business. 5 16 The bill requires the department of revenue and finance, in 5 17 consultation with the department of economic development, to 5 18 develop a system for registration, authorization, and 5 19 redemption of investment tax credits. 5 20 LSB 3714YH 79 5 21 tm/cls/14
Text: HF00750 Text: HF00752 Text: HF00700 - HF00799 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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