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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