Text: SF02043 Text: SF02045 Text: SF02000 - SF02099 Text: SF 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 5572SS 79 5 17 tm/pj/5.1
Text: SF02043 Text: SF02045 Text: SF02000 - SF02099 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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