Text: HSB00503 Text: HSB00505 Text: HSB00500 - HSB00599 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. NEW SECTION. 422.24A START-UP BUSINESS TAX 1 2 DEFERMENT. 1 3 1. For purposes of this section, "start-up business" does 1 4 not include any of the following: 1 5 a. An existing business locating in this state from 1 6 another state or from another location in this state. 1 7 b. A newly created business which is the result of the 1 8 merger of two or more businesses. 1 9 c. A newly created subsidiary of a corporation. 1 10 d. A previously existing business which has been dissolved 1 11 and reincorporated. 1 12 e. An existing business operating under a different name 1 13 and located in a different location. 1 14 f. A newly created partnership owned by many of the same 1 15 partners as an existing business and engaging in similar 1 16 business activity as the existing business. 1 17 g. A business entity that reorganizes or experiences a 1 18 change in either the legal or trade name of the business. 1 19 h. A joint venture. 1 20 2. In order to qualify for a deferment of taxable income 1 21 and the tax to be imposed on it pursuant to this section, a 1 22 taxpayer must meet all of the following criteria: 1 23 a. The taxpayer is a business that is a wholly new start- 1 24 up business beginning operations during the first tax year for 1 25 which the deferment of taxable income is claimed. 1 26 b. The business has its commercial domicile, as defined in 1 27 section 422.32, in the state. 1 28 c. The operations of the business are at least twenty-five 1 29 percent funded by venture capital moneys. 1 30 d. The taxpayer does not have any delinquent taxes 1 31 outstanding and owed to the state. 1 32 3. A taxpayer meeting the criteria provided in subsection 1 33 2 may submit a request to the department for the deferment of 1 34 taxable income for the first three tax years that the taxpayer 1 35 business is in operation. If a deferment is approved by the 2 1 department pursuant to subsection 4, the taxpayer shall pay 2 2 taxes on the deferred taxable income in five equal annual 2 3 installments during the five tax years following the three 2 4 years of taxable income deferment. Section 422.26 shall apply 2 5 if the taxpayer refuses or neglects to pay the taxes owed on 2 6 the deferred taxable income in the manner provided in this 2 7 section. A taxpayer receiving a deferment shall file a return 2 8 for each tax year in which a deferment is approved. If the 2 9 taxpayer has a net loss during a tax year during the three- 2 10 year period in which taxable income is deferred, the loss may 2 11 be applied to any deferred taxable income during that period. 2 12 4. Upon a determination that the criteria provided in 2 13 subsection 2 have been met, the department shall approve a 2 14 request for deferment of taxable income. 2 15 5. For purposes of assessing penalty and interest, the tax 2 16 on any deferred taxable income is not due and payable until 2 17 the tax years in which the annual installments as provided in 2 18 subsection 3 are due and payable. 2 19 6. The department shall adopt rules pursuant to chapter 2 20 17A necessary for the administration of this section. 2 21 Sec. 2. EFFECTIVE AND APPLICABILITY DATES. This Act, 2 22 being deemed of immediate importance, takes effect upon 2 23 enactment and is retroactively applicable to January 1, 2002. 2 24 EXPLANATION 2 25 This bill relates to certain businesses deferring taxable 2 26 income. 2 27 The bill provides that start-up business meeting certain 2 28 criteria may submit a request to the department of revenue and 2 29 finance for the deferment of taxable income and the tax on it 2 30 for the first three years that the business is in operation. 2 31 The bill provides that if a deferment is approved, the 2 32 taxpayer shall pay taxes owed on the deferred income in five 2 33 equal annual installments during the five tax years following 2 34 the three years of income deferment. The bill provides that 2 35 the taxpayer shall file a return for each tax year in which a 3 1 deferment is approved. The bill provides that net losses 3 2 during the three-year deferment period may be applied to any 3 3 deferred income. The bill provides that the department shall 3 4 approve a request for deferment if the business is a wholly 3 5 new start-up business beginning operations during the first 3 6 tax year for which the income deferment is claimed, the 3 7 business has its commercial domicile in the state, the 3 8 operations of the business are at least 25 percent funded by 3 9 venture capital moneys, and the taxpayer does not have any 3 10 delinquent taxes outstanding and owed to the state. Penalty 3 11 and interest are not to be assessed until after the tax on the 3 12 deferred income is due and payable. The bill provides that 3 13 the department shall adopt rules necessary for the 3 14 administration of the deferment program. 3 15 The bill takes effect upon enactment and is retroactively 3 16 applicable to January 1, 2002. 3 17 LSB 5447HC 79 3 18 tm/sh/8
Text: HSB00503 Text: HSB00505 Text: HSB00500 - HSB00599 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
© 2002 Cornell College and League of Women Voters of Iowa
Comments about this site or page?
webmaster@legis.iowa.gov.
Please remember that the person listed above does not vote on bills. Direct all comments concerning legislation to State Legislators.
Last update: Fri Jan 18 06:35:39 CST 2002
URL: /DOCS/GA/79GA/Legislation/HSB/00500/HSB00504/020114.html
jhf