Text: SSB03179 Text: SSB03181 Text: SSB03100 - SSB03199 Text: SSB 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 5447SC 79
3 18 tm/sh/8
Text: SSB03179 Text: SSB03181 Text: SSB03100 - SSB03199 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
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