Text: HF02162 Text: HF02164 Text: HF02100 - HF02199 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. NEW SECTION. 15E.221 DEFINITIONS.
1 2 As used in this division, unless the context otherwise
1 3 requires:
1 4 1. "Equity" means common stock or preferred stock,
1 5 regardless of class or series, of a corporation; a partnership
1 6 interest in a limited partnership; or a membership interest in
1 7 a limited liability company, which is not required or subject
1 8 to an option on the part of the taxpayer to be redeemed by the
1 9 issuer within two years from the date of issuance.
1 10 2. "Qualified business" means a business that meets all of
1 11 the following criteria:
1 12 a. Has annual gross revenues of five million dollars or
1 13 less in its most recent fiscal year.
1 14 b. Is domiciled in the state of Iowa.
1 15 c. Is engaged in business primarily in, or does
1 16 substantially all of its production in, the state of Iowa.
1 17 d. Is primarily engaged in a business that produces,
1 18 develops, or markets a product for detecting, containing,
1 19 preventing, or countering harmful biological or chemical
1 20 agents.
1 21 3. "Subordinated debt" means debt that either is unsecured
1 22 or has a subordinate claim on the assets of the debtor.
1 23 Sec. 2. NEW SECTION. 15E.222 TAX CREDITS.
1 24 1. For tax years beginning on or after January 1, 2002, a
1 25 tax credit shall be allowed against the taxes imposed under
1 26 chapter 422, divisions II, III, and V, and under chapter 432,
1 27 for a certified equity or subordinated debt investment in a
1 28 qualified business. An individual may claim the credit of a
1 29 partnership, limited liability company, S corporation, estate,
1 30 or trust electing to have income taxed directly to the
1 31 individual. The amount claimed by the individual shall be
1 32 based upon the pro rata share of the individual's earnings
1 33 from the partnership, limited liability company, S
1 34 corporation, estate, or trust.
1 35 2. a. The tax credit allowed under this section shall be
2 1 for the following amounts:
2 2 (1) After the certified equity or subordinated debt
2 3 investment is held for a period of two years, twenty percent
2 4 of the certified equity or subordinated debt investment.
2 5 (2) After the certified equity or subordinated debt
2 6 investment is held for a period of four years, an additional
2 7 ten percent of the certified equity or subordinated debt
2 8 investment.
2 9 (3) After the certified equity or subordinated debt
2 10 investment is held for a period of six years, an additional
2 11 ten percent of the certified equity or subordinated debt
2 12 investment.
2 13 (4) After the certified equity or subordinated debt
2 14 investment is held for a period of eight years, an additional
2 15 ten percent of the certified equity or subordinated debt
2 16 investment.
2 17 b. For purposes of paragraph "a" in computing the holding
2 18 period of an equity investment that was obtained by the
2 19 taxpayer as a result of the conversion of the taxpayer's
2 20 investment in a subordinated debt, the time the taxpayer held
2 21 the investment in the subordinated debt shall be added to the
2 22 time the taxpayer held the equity investment.
2 23 c. Any tax credit in excess of the taxpayer's liability
2 24 for the tax year may be credited to the tax liability for the
2 25 following three years or until depleted, whichever is earlier.
2 26 A tax credit shall not be carried back to a tax year prior to
2 27 the tax year in which the taxpayer redeems the tax credit.
2 28 d. A taxpayer shall not claim a tax credit in a single tax
2 29 year under this section of more than fifty thousand dollars.
2 30 e. A taxpayer making an equity or subordinated debt
2 31 investment in a qualified business shall submit an application
2 32 to the department of economic development for certification of
2 33 eligibility for a tax credit.
2 34 3. The aggregate amount of tax credits issued under this
2 35 section for taxes imposed pursuant to chapter 422, divisions
3 1 II, III, and V, and chapter 432 shall not exceed a total of
3 2 five million dollars.
3 3 4. The department of revenue and finance, in consultation
3 4 with the department of economic development, shall develop a
3 5 system for registration, authorization, and redemption of tax
3 6 credits issued by the state under this section. The
3 7 department of revenue and finance and the department of
3 8 economic development shall adopt any other policies,
3 9 procedures, or rules pursuant to chapter 17A necessary for the
3 10 administration of this section and of tax credits issued by
3 11 the state under this section.
3 12 Sec. 3. NEW SECTION. 422.11F HARMFUL BIOLOGICAL OR
3 13 CHEMICAL AGENTS TAX CREDIT.
3 14 The taxes imposed under this division, less the credits
3 15 allowed under section 422.12 and any other nonrefundable
3 16 credit, shall be reduced by a tax credit in the manner as
3 17 authorized pursuant to section 15E.222.
3 18 Sec. 4. Section 422.33, Code Supplement 2001, is amended
3 19 by adding the following new subsection:
3 20 NEW SUBSECTION. 12. The taxes imposed under this division
3 21 shall be reduced by a tax credit in the manner as authorized
3 22 pursuant to section 15E.222.
3 23 Sec. 5. Section 422.60, Code 2001, is amended by adding
3 24 the following new subsection:
3 25 NEW SUBSECTION. 4. The taxes imposed under this division
3 26 shall be reduced by a tax credit in the manner as authorized
3 27 pursuant to section 15E.222.
3 28 Sec. 6. NEW SECTION. 432.12A HARMFUL BIOLOGICAL OR
3 29 CHEMICAL AGENT TAX CREDIT.
3 30 The taxes imposed under this chapter shall be reduced by a
3 31 tax credit in the manner as authorized pursuant to section
3 32 15E.222.
3 33 Sec. 7. EFFECTIVE AND APPLICABILITY DATES. This Act,
3 34 being deemed of immediate importance, takes effect upon
3 35 enactment and applies retroactively to January 1, 2002, for
4 1 tax years beginning on or after that date.
4 2 EXPLANATION
4 3 This bill allows a tax credit to be claimed against
4 4 personal income tax liability, corporate income tax liability,
4 5 franchise tax liability, and insurance premium tax liability
4 6 for a certified equity or subordinated debt investment in a
4 7 qualified business. The tax credit is available for tax years
4 8 beginning on or after January 1, 2002. The bill provides that
4 9 a qualified business is a business that has annual gross
4 10 revenues of $5 million or less in its most recent fiscal year,
4 11 is domiciled in the state of Iowa, is engaged in business
4 12 primarily in or does substantially all of its production in
4 13 the state of Iowa, and is primarily engaged in a business that
4 14 produces, develops, or markets a product for detecting,
4 15 containing, preventing, or countering harmful biological or
4 16 chemical agents. The bill provides that the department of
4 17 economic development shall certify investments in qualified
4 18 businesses.
4 19 The bill provides that the tax credit allowed shall be for
4 20 the following amounts:
4 21 1. After the certified equity or subordinated debt
4 22 investment is held for a period of two years, 20 percent of
4 23 the certified equity or subordinated debt investment.
4 24 2. After the certified equity or subordinated debt
4 25 investment is held for a period of four years, an additional
4 26 10 percent of the certified equity or subordinated debt
4 27 investment.
4 28 3. After the certified equity or subordinated debt
4 29 investment is held for a period of six years, an additional 10
4 30 percent of the certified equity or subordinated debt
4 31 investment.
4 32 4. After the certified equity or subordinated debt
4 33 investment is held for a period of eight years, an additional
4 34 10 percent of the certified equity or subordinated debt
4 35 investment.
5 1 The bill provides that any tax credit in excess of the
5 2 taxpayer's liability for the tax year may be credited to the
5 3 tax liability for the following three years or until depleted,
5 4 whichever is earlier. The bill provides that a taxpayer shall
5 5 not claim a tax credit in a single tax year of more than
5 6 $50,000.
5 7 The bill provides that the aggregate amount of tax credits
5 8 issued shall not exceed a total of $5 million. The bill
5 9 provides that the department of revenue and finance, in
5 10 consultation with the department of economic development,
5 11 shall develop a system for registration, authorization, and
5 12 redemption of tax credits issued pursuant to the bill.
5 13 The bill takes effect upon enactment and is retroactively
5 14 applicable to January 1, 2002, for tax years beginning on or
5 15 after that date.
5 16 LSB 5572HH 79
5 17 tm/pj/5.1
Text: HF02162 Text: HF02164 Text: HF02100 - HF02199 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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