House File 608
HOUSE FILE
BY TYMESON, JENKINS, KURTENBACH,
and BOAL
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act providing a corporate income tax, franchise tax, or
2 insurance premiums tax credit for continuation of salary or
3 wages, or health benefits coverage for employees that are
4 members of the national guard or military service reserve and
5 are ordered to active duty, and including effective and
6 retroactive applicability date provisions.
7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
8 TLSB 2724HH 80
9 mg/pj/5
PAG LIN
1 1 Section 1. Section 422.33, Code 2003, is amended by adding
1 2 the following new subsection:
1 3 NEW SUBSECTION. 14. a. The taxes imposed under this
1 4 division shall be reduced by an active duty continuation of
1 5 benefits tax credit. A business is entitled to the credit if
1 6 it has an employee who is a member of the national guard or
1 7 military service reserve who is ordered to active duty, other
1 8 than for annual training exercises, for whom the business does
1 9 either of the following:
1 10 (1) Continues to include on its payroll at a salary or
1 11 wages equal to at least the difference between the average
1 12 monthly salary or wages paid by the business to the employee
1 13 during the six months immediately preceding the employee's
1 14 commencement of active duty and the monthly active duty pay.
1 15 (2) Continues to pay for health benefits coverage for the
1 16 employee which coverage was the same as provided during the
1 17 six months immediately preceding the employee's commencement
1 18 of active duty.
1 19 b. The amount of the credit for a business entitled to the
1 20 credit equals one thousand dollars for each employee for whom
1 21 the business meets the requirements of paragraph "a",
1 22 subparagraph (1) or (2), during the tax year. However, if the
1 23 business qualifies for the credit for the same employee in
1 24 more than one tax year, the business shall select the year for
1 25 which the credit will be claimed.
1 26 c. Any credit in excess of the tax liability for the tax
1 27 year may be credited to the tax liability for the following
1 28 ten tax years or until depleted, whichever is the earlier.
1 29 Sec. 2. Section 422.60, Code 2003, is amended by adding
1 30 the following new subsection:
1 31 NEW SUBSECTION. 7. a. The taxes imposed under this
1 32 division shall be reduced by an active duty continuation of
1 33 benefits tax credit. A business is entitled to the credit if
1 34 it has an employee who is a member of the national guard or
1 35 military service reserve who is ordered to active duty, other
2 1 than for annual training exercises, for whom the business does
2 2 either of the following:
2 3 (1) Continues to include on its payroll at a salary or
2 4 wages equal to at least the difference between the average
2 5 monthly salary or wages paid by the business to the employee
2 6 during the six months immediately preceding the employee's
2 7 commencement of active duty and the monthly active duty pay.
2 8 (2) Continues to pay for health benefits coverage for the
2 9 employee which coverage was the same as provided during the
2 10 six months immediately preceding the employee's commencement
2 11 of active duty.
2 12 b. The amount of the credit for a business entitled to the
2 13 credit equals one thousand dollars for each employee for whom
2 14 the business meets the requirements of paragraph "a",
2 15 subparagraph (1) or (2), during the tax year. However, if the
2 16 business qualifies for the credit for the same employee in
2 17 more than one tax year, the business shall select the year for
2 18 which the credit will be claimed.
2 19 c. Any credit in excess of the tax liability for the tax
2 20 year may be credited to the tax liability for the following
2 21 ten tax years or until depleted, whichever is the earlier.
2 22 Sec. 3. NEW SECTION. 432.12D ACTIVE DUTY CONTINUATION OF
2 23 BENEFITS TAX CREDIT.
2 24 1. The taxes imposed under this chapter shall be reduced
2 25 by an active duty continuation of benefits tax credit. A
2 26 business is entitled to the credit if it has an employee who
2 27 is a member of the national guard or military service reserve
2 28 who is ordered to active duty, other than for annual training
2 29 exercises, for whom the business does either of the following:
2 30 a. Continues to include on its payroll at a salary or
2 31 wages equal to at least the difference between the average
2 32 monthly salary or wages paid by the business to the employee
2 33 during the six months immediately preceding the employee's
2 34 commencement of active duty and the monthly active duty pay.
2 35 b. Continues to pay for health benefits coverage for the
3 1 employee which coverage was the same as provided during the
3 2 six months immediately preceding the employee's commencement
3 3 of active duty.
3 4 2. The amount of the credit for a business entitled to the
3 5 credit equals one thousand dollars for each employee for whom
3 6 the business meets the requirements of subsection 1, paragraph
3 7 "a" or "b", during the tax year. However, if the business
3 8 qualifies for the credit for the same employee in more than
3 9 one tax year, the business shall select the year for which the
3 10 credit will be claimed.
3 11 c. Any credit in excess of the tax liability for the tax
3 12 year may be credited to the tax liability for the following
3 13 ten tax years or until depleted, whichever is the earlier.
3 14 Sec. 4. EFFECTIVE AND APPLICABILITY DATE. This Act, being
3 15 deemed of immediate importance, takes effect upon enactment
3 16 and applies retroactively to January 1, 2003, for tax years
3 17 beginning on or after that date.
3 18 EXPLANATION
3 19 This bill provides corporate income tax, franchise tax, and
3 20 insurance premiums tax credits for a business that has an
3 21 employee who is a member of the national guard or military
3 22 service reserve who is called to active duty and that either
3 23 continues the employee on the business's payroll or continues
3 24 providing health benefit coverage. The amount of the credit
3 25 equals $1,000 per such employee. The credit is nonrefundable
3 26 but may be carried forward 10 tax years or until depleted.
3 27 The bill takes effect upon enactment and applies
3 28 retroactively to January 1, 2003, for tax years beginning on
3 29 or after that date.
3 30 LSB 2724HH 80
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