Text: SF00198 Text: SF00200 Text: SF00100 - SF00199 Text: SF 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 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 losses, as described in section 15E.43, subsection 2, incurred 1 12 by a taxpayer in an equity investment approved pursuant to 1 13 section 15E.43. An individual may claim the credit of a 1 14 partnership, limited liability company, S corporation, estate 1 15 or trust electing to have income taxed directly to the 1 16 individual. The amount claimed by the individual shall be 1 17 based upon the pro rata share of the individual's earnings 1 18 from the partnership, limited liability company, S 1 19 corporation, estate or trust. Any tax credit in excess of the 1 20 taxpayer's liability for the tax year may be credited to the 1 21 tax liability for the following three years or until depleted, 1 22 whichever is earlier. A tax credit shall not be carried back 1 23 to a tax year prior to the tax year in which the taxpayer 1 24 redeems the tax credit. 1 25 2. The maximum tax credit for a qualifying taxpayer shall 1 26 not exceed fifty percent of the taxpayer's equity investment 1 27 in an approved investment or one hundred thousand dollars, 1 28 whichever is less. 1 29 3. The aggregate amount of tax credits issued under this 1 30 section for taxes imposed pursuant to chapter 422, divisions 1 31 II, III, and V, and chapter 432 shall not exceed a total of 1 32 twenty-five million dollars. 1 33 4. The department of revenue and finance, in consultation 1 34 with the department of economic development, shall develop a 1 35 system for registration, authorization, and redemption of tax 2 1 credits issued by the state under this section. The 2 2 department of revenue and finance and the department of 2 3 economic development shall adopt any other policies, 2 4 procedures, or rules pursuant to chapter 17A necessary for the 2 5 administration of this division and of tax credits issued by 2 6 the state under this section. 2 7 Sec. 3. NEW SECTION. 15E.43 APPROVED INVESTMENTS. 2 8 1. In order for an investment to qualify for a tax credit 2 9 under section 15E.42, the investment must be approved by the 2 10 department of economic development and be in a qualifying 2 11 business. In order to be a qualifying business, the business 2 12 must meet all of the following criteria: 2 13 a. The headquarters of the business is located in this 2 14 state. 2 15 b. The business has been in operation for five years or 2 16 less. 2 17 c. The business has a business plan approved by the 2 18 department which details the business's growth strategy, the 2 19 management team if applicable, a production or management 2 20 plan, a financial plan, and other standard elements of a 2 21 business plan. 2 22 d. The business has an owner who has successfully 2 23 completed a recognized entrepreneurial venture development 2 24 curriculum or has three years of relevant business experience. 2 25 e. The business is not a business engaged primarily in 2 26 retail sales, the provision of health care or other 2 27 professional services, or the distribution of products or 2 28 services. 2 29 2. a. A tax credit authorized under section 15E.42 may be 2 30 redeemed for losses of the taxpayer's equity investment 2 31 realized upon either of the following, whichever occurs first: 2 32 (1) Upon the bankruptcy of the business. 2 33 (2) Upon transfer of ownership of substantially all of the 2 34 qualifying business after a minimum of three years from the 2 35 date of the qualifying equity investment that, at the time of 3 1 the transfer, would demonstrate a documented loss in the value 3 2 of the equity investment. 3 3 b. The tax credit shall not be redeemed later than ten 3 4 years from the date of the qualifying investment. 3 5 Sec. 4. NEW SECTION. 15E.44 REPORTS. 3 6 By December 15 of each year, the department of economic 3 7 development, in consultation with the department of revenue 3 8 and finance, shall submit a report to the governor and the 3 9 general assembly. The report shall include, but not be 3 10 limited to, the anticipated value of any tax credits issued 3 11 and the estimated current and anticipated impact the approved 3 12 investments have on the state. 3 13 Sec. 5. NEW SECTION. 422.11C APPROVED INVESTMENT TAX 3 14 CREDIT. 3 15 The taxes imposed under this division, less the credits 3 16 allowed under sections 422.12 and 422.12B, shall be reduced by 3 17 an approved investment tax credit authorized pursuant to 3 18 sections 15E.41 through 15E.44. 3 19 Sec. 6. Section 422.33, Code 2001, is amended by adding 3 20 the following new subsection: 3 21 NEW SUBSECTION. 11. The taxes imposed under this division 3 22 shall be reduced by an approved investment tax credit 3 23 authorized pursuant to sections 15E.41 through 15E.44. 3 24 Sec. 7. Section 422.60, Code 2001, is amended by adding 3 25 the following new subsection: 3 26 NEW SUBSECTION. 4. The taxes imposed under this division 3 27 shall be reduced by an approved investment tax credit 3 28 authorized pursuant to sections 15E.41 through 15E.44. 3 29 Sec. 8. NEW SECTION. 432.12A APPROVED INVESTMENT TAX 3 30 CREDIT. 3 31 The taxes imposed under this chapter shall be reduced by an 3 32 approved investment tax credit authorized pursuant to sections 3 33 15E.41 through 15E.44. 3 34 EXPLANATION 3 35 This bill creates a personal income, corporate income, 4 1 financial institution franchise, and insurance premium tax 4 2 credit which may be claimed by a taxpayer for losses incurred 4 3 by the taxpayer in an approved equity investment. The bill 4 4 provides that any tax credit in excess of the taxpayer's 4 5 liability may be credited to the tax liability for the 4 6 following three years or until depleted, whichever is earlier. 4 7 The bill provides that the tax credit shall not be carried 4 8 back to previous tax years. The bill provides that the 4 9 maximum tax credit for a qualifying taxpayer shall not exceed 4 10 50 percent of the taxpayer's equity investment in an approved 4 11 investment or $100,000, whichever is less. The bill provides 4 12 that the aggregate amount of tax credits issued by the state 4 13 shall not exceed a total of $25 million. 4 14 The bill provides that in order for an investment to 4 15 qualify for a tax credit, the investment must be approved by 4 16 the department of economic development and be in a qualifying 4 17 business which meets certain criteria. The bill provides that 4 18 a tax credit may be redeemed for losses of the taxpayer's 4 19 equity investment incurred upon the bankruptcy of the business 4 20 or upon the transfer of ownership of substantially all of the 4 21 qualifying business after a minimum of three years from the 4 22 date of the qualifying equity investment. The bill provides 4 23 that the tax credit shall not be redeemed later than 10 years 4 24 from the date of the qualifying investment. 4 25 The bill provides that, by December 15 of each year, the 4 26 department of economic development, in consultation with the 4 27 department of revenue and finance, shall submit a report to 4 28 the governor and the general assembly relating to the 4 29 anticipated value of any tax credits issued and the estimated 4 30 current and anticipated impact the approved investments have 4 31 on the state. 4 32 LSB 1054XS 79 4 33 tm/gg/8.1
Text: SF00198 Text: SF00200 Text: SF00100 - SF00199 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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