House File 219 - Introduced HOUSE FILE BY MASCHER Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act providing individual and corporate income tax credits to 2 businesses that provide apprenticeships and internships for 3 students at community colleges or state board of regents 4 institutions and for subsequent employment, and including 5 effective and retroactive applicability date provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 2280HH 81 8 mg/gg/14 PAG LIN 1 1 Section 1. NEW SECTION. 422.11K APPRENTICESHIP AND 1 2 INTERNSHIP TAX CREDIT. 1 3 1. The taxes imposed under this division, less the credits 1 4 allowed under sections 422.12 and 422.12B, shall be reduced by 1 5 an apprenticeship and internship tax credit. To qualify for 1 6 the tax credit, a business shall be an employer of a student 1 7 at a community college established under chapter 260C or 1 8 institution of higher learning under the control of the state 1 9 board of regents under an apprenticeship program as defined in 1 10 section 260C.44, or in an internship under a work=study 1 11 program similar to one described in section 261.81. The 1 12 amount of the credit equals four hundred dollars for each tax 1 13 year during which the student is employed by the business in 1 14 the apprenticeship or internship program. 1 15 2. A business that employs an individual upon graduation 1 16 for which it has received the tax credit under subsection 1 is 1 17 entitled to an employment tax credit for that individual for 1 18 up to the first three years following the individual's 1 19 graduation from the Iowa community college or Iowa board of 1 20 regents institution. To receive the employment tax credit in 1 21 a tax year, the graduate must be employed for more than six 1 22 months in the tax year. The amount of the tax credit equals 1 23 one thousand six hundred dollars for the tax year per 1 24 individual employee. 1 25 3. An individual may claim the tax credits under 1 26 subsections 1 and 2 allowed a partnership, limited liability 1 27 company, S corporation, estate, or trust electing to have the 1 28 income taxed directly to the individual. The amount claimed 1 29 by the individual shall be based upon the pro rata share of 1 30 the individual's earnings of the partnership, limited 1 31 liability company, S corporation, estate, or trust. 1 32 4. Any credit in excess of the tax liability for the tax 1 33 year is nonrefundable but may be credited to the tax liability 1 34 for the following ten tax years or until depleted, whichever 1 35 is the earlier. 2 1 Sec. 2. Section 422.33, Code 2005, is amended by adding 2 2 the following new subsection: 2 3 NEW SUBSECTION. 17. a. The taxes imposed under this 2 4 division shall be reduced by an apprenticeship and internship 2 5 tax credit. To qualify for the tax credit, a business shall 2 6 be an employer of a student at a community college established 2 7 under chapter 260C or institution of higher learning under the 2 8 control of the state board of regents under an apprenticeship 2 9 program as defined in section 260C.44, or in an internship 2 10 under a work=study program similar to one described in section 2 11 261.81. The amount of the credit equals four hundred dollars 2 12 for each tax year during which the student is employed by the 2 13 business in the apprenticeship or internship program. 2 14 b. A business that employs an individual upon graduation 2 15 for which it has received the tax credit under paragraph "a" 2 16 is entitled to an employment tax credit for that individual 2 17 for up to the first three years following the individual's 2 18 graduation from the Iowa community college or Iowa board of 2 19 regents institution. To receive the employment tax credit in 2 20 a tax year, the graduate must be employed for more than six 2 21 months in the tax year. The amount of the tax credit equals 2 22 one thousand six hundred dollars for the tax year per 2 23 individual employee. 2 24 c. Any credit in excess of the tax liability for the tax 2 25 year is nonrefundable but may be credited to the tax liability 2 26 for the following ten tax years or until depleted, whichever 2 27 is the earlier. 2 28 Sec. 3. EFFECTIVE AND APPLICABILITY DATES. This Act, 2 29 being deemed of immediate importance, takes effect upon 2 30 enactment and applies retroactively to January 1, 2005, for 2 31 tax years beginning on or after that date. 2 32 EXPLANATION 2 33 This bill provides an individual or corporate income tax 2 34 credit to a business that employs a student from an Iowa 2 35 community college or Iowa board of regents institution in an 3 1 apprenticeship or internship program. The amount of credit 3 2 equals $400 per student. In addition, if the business hires 3 3 that student upon graduation, the business can receive another 3 4 tax credit equal to $1,600 for each year, up to three years, 3 5 that the graduate is employed by the business. The graduate 3 6 must be employed for at least six months during the tax year. 3 7 Any tax credit in excess of the tax liability is nonrefundable 3 8 but may be carried forward for up to 10 tax years. 3 9 The bill takes effect upon enactment and applies 3 10 retroactively to January 1, 2005, for tax years beginning on 3 11 or after that date. 3 12 LSB 2280HH 81 3 13 mg:nh/gg/14