House File 795 - Introduced
HOUSE FILE
BY COMMITTEE ON ECONOMIC GROWTH
(SUCCESSOR TO HF 297)
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to an inheritance tax credit for transferring a
2 portion of an inheritance to an entity for capital investment,
3 programming, including education, performance, and access, in
4 arts and culture and providing a penalty.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
6 TLSB 1182HV 81
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PAG LIN
1 1 Section 1. NEW SECTION. 450.11 ARTS AND CULTURE TAX
1 2 CREDIT.
1 3 1. The inheritance tax imposed under this chapter shall be
1 4 reduced by an arts and culture tax credit equal to the amount
1 5 of property or interest in property passing to a qualified
1 6 entity, not to exceed ten percent of the inheritance tax
1 7 imposed on the taxpayer. The tax credit shall be provided by
1 8 means of tax credit certificates issued by the department to
1 9 the estate of the decedent at the time of the decedent's
1 10 death. A tax credit certificate shall be utilized at the time
1 11 of payment of the inheritance tax by the taxpayer. Along with
1 12 the tax credit certificate, the taxpayer shall submit proof of
1 13 the passing of property or an interest in property upon which
1 14 the tax credit certificate is based. Any tax credit
1 15 certificate issued under this section shall be considered
1 16 property of the decedent's estate and may be passed to another
1 17 by will or the statutes of inheritance of this or any other
1 18 state or country.
1 19 2. To be eligible for the tax credit certificate, the
1 20 decedent or decedent's estate shall do all of the following:
1 21 a. Enter into an agreement with a qualified entity at
1 22 least one year prior to the decedent's death. The agreement
1 23 shall contain all of the following:
1 24 (1) The identity of the qualified entity or entities that
1 25 are to receive the bequest.
1 26 (2) The amount of the bequest which may be expressed as a
1 27 monetary amount, a percentage of the property or interest in
1 28 property, or a combination of both.
1 29 (3) The bequest shall only be expended for capital
1 30 investment, programming, including education, performance, and
1 31 access, in arts and culture in the state.
1 32 b. File the agreement entered into as required in
1 33 paragraph "a" with the department of revenue.
1 34 3. A qualified entity is any of the following:
1 35 a. The department of cultural affairs.
2 1 b. The Iowa cultural trust created in section 303A.4.
2 2 c. The vision Iowa fund created in section 12.72.
2 3 d. The community attraction and tourism fund created in
2 4 section 15F.204.
2 5 e. A nonprofit organization that is exempt from federal
2 6 income taxes under section 501(c) of the Internal Revenue Code
2 7 whose major activity is capital investment, programming,
2 8 including education, performance, and access, in arts and
2 9 culture.
2 10 4. A qualified entity receiving a bequest for which a
2 11 credit was allowed under this section shall use the bequest
2 12 for capital investment, programming, including education,
2 13 performance, and access, in arts and culture in the state.
2 14 Such entity may distribute the bequest to a local entity that
2 15 meets the criteria as a qualified entity under subsection 3,
2 16 paragraph "e".
2 17 5. The departments of revenue and cultural affairs shall
2 18 each adopt rules for the administration of this section. The
2 19 department of revenue shall keep a record of any agreements
2 20 the department receives pursuant to subsection 2 and shall
2 21 make available a listing of qualified entities described in
2 22 subsection 3, paragraph "e", to the extent those entities have
2 23 identified themselves as such.
2 24 6. An entity violating any provision of this section shall
2 25 be required to pay the inheritance tax equal to the amount of
2 26 the tax credit certificates issued as a result of the bequest
2 27 to the entity plus penalty and interest.
2 28 7. For purposes of this section, "taxpayer" means the
2 29 person to whom property or an interest in property passes from
2 30 the decedent and who is liable for the tax imposed in this
2 31 chapter as provided in section 450.5.
2 32 EXPLANATION
2 33 This bill provides for an inheritance tax credit equal to
2 34 the amount of property or interest in property passing to a
2 35 qualified entity not to exceed 10 percent of the inheritance
3 1 tax imposed on the taxpayer. The tax credit is provided in
3 2 the form of a tax credit certificate issued to the decedent or
3 3 decedent's estate which can be passed like other property to
3 4 heirs and used by an heir to reduce the heir's tax liability.
3 5 The bequest received by the qualified entity upon which the
3 6 credit is based is to be used by the entity for capital
3 7 investment, programming, including education, performance, and
3 8 access, in arts and culture in the state.
3 9 To be eligible for the tax credit certificate, the decedent
3 10 or estate must enter into an agreement, with a qualified
3 11 entity specifying the amount of the bequest, at least one year
3 12 prior to the death of the decedent.
3 13 A qualified entity includes a nonprofit organization exempt
3 14 from federal income tax whose major activity is capital
3 15 investment, programming, including education, performance, and
3 16 access, in arts and culture, the department of cultural
3 17 affairs, the Iowa cultural trust, the vision Iowa fund, and
3 18 the community attraction and tourism fund.
3 19 LSB 1182HV 81
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