House File 852 - Introduced
HOUSE FILE
BY COMMITTEE ON WAYS AND MEANS
(SUCCESSOR TO HF 795)
(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 1182HZ 81
7 mg/sh/8
PAG LIN
1 1 Section 1. Section 450.4, Code 2005, is amended by adding
1 2 the following new subsection:
1 3 NEW SUBSECTION. 9. On the value of an inheritance tax
1 4 credit certificate transferred by an estate either by will or
1 5 the statutes of inheritance of this or any other state or
1 6 country to a beneficiary for payment against Iowa inheritance
1 7 tax owed by the beneficiary.
1 8 Sec. 2. NEW SECTION. 450.11 ARTS AND CULTURE TAX CREDIT.
1 9 1. The inheritance tax imposed under this chapter shall be
1 10 reduced by an arts and culture tax credit equal to the amount
1 11 of property or interest in property passing to a qualified
1 12 entity, not to exceed ten percent of the inheritance tax
1 13 imposed on the taxpayer. The tax credit shall be provided by
1 14 means of tax credit certificates issued by the department to
1 15 the estate of the decedent at the time of the decedent's
1 16 death. A tax credit certificate shall be transferred by an
1 17 estate to the taxpayer and shall be utilized at the time of
1 18 payment of the inheritance tax owed by the taxpayer who
1 19 received the tax credit certificate from the estate. A tax
1 20 credit certificate can only be used by the taxpayer who
1 21 received the transfer of the certificate from the estate. A
1 22 taxpayer that cannot use the tax credit certificate cannot
1 23 transfer by any means the certificate to another person or
1 24 entity. An estate may be entitled to more than one
1 25 certificate that can be transferred by the estate to
1 26 taxpayers. Along with the tax credit certificate, the
1 27 taxpayer shall submit proof of the passing of property or an
1 28 interest in property upon which the tax credit certificate is
1 29 based. Any tax credit certificate issued under this section
1 30 shall be considered property of the decedent's estate and may
1 31 be passed to a taxpayer by will or the statutes of inheritance
1 32 of this or any other state or country.
1 33 2. To be eligible for the tax credit certificate, the
1 34 decedent or decedent's estate shall do all of the following:
1 35 a. Enter into an agreement with a qualified entity at
2 1 least one year prior to the decedent's death. The agreement
2 2 shall contain all of the following:
2 3 (1) The identity of the qualified entity or entities that
2 4 are to receive the bequest.
2 5 (2) The amount of the bequest which may be expressed as a
2 6 monetary amount, a percentage of the property or interest in
2 7 property, or a combination of both.
2 8 (3) The bequest shall only be expended for capital
2 9 investment, programming, including education, performance, and
2 10 access, in arts and culture in the state.
2 11 b. File the agreement entered into as required in
2 12 paragraph "a" with the department of revenue.
2 13 3. A qualified entity is any of the following:
2 14 a. The department of cultural affairs.
2 15 b. The Iowa cultural trust created in section 303A.4.
2 16 c. The vision Iowa fund created in section 12.72.
2 17 d. The community attraction and tourism fund created in
2 18 section 15F.204.
2 19 e. A nonprofit organization that is exempt from federal
2 20 income taxes under section 501(c) of the Internal Revenue Code
2 21 whose major activity is capital investment, programming,
2 22 including education, performance, and access, in arts and
2 23 culture.
2 24 4. A qualified entity receiving a bequest for which a
2 25 credit was allowed under this section shall use the bequest
2 26 for capital investment, programming, including education,
2 27 performance, and access, in arts and culture in the state.
2 28 Such entity may distribute the bequest to a local entity that
2 29 meets the criteria as a qualified entity under subsection 3,
2 30 paragraph "e".
2 31 5. The departments of revenue and cultural affairs shall
2 32 each adopt rules for the administration of this section. The
2 33 department of revenue shall keep a record of any agreements
2 34 the department receives pursuant to subsection 2 and shall
2 35 make available a listing of qualified entities described in
3 1 subsection 3, paragraph "e", to the extent those entities have
3 2 identified themselves as such.
3 3 6. An entity violating any provision of this section shall
3 4 be required to pay the inheritance tax equal to the amount of
3 5 the tax credit certificates issued as a result of the bequest
3 6 to the entity plus penalty and interest.
3 7 7. For purposes of this section, "taxpayer" means the
3 8 person to whom property or an interest in property passes from
3 9 the decedent and who is liable for the tax imposed in this
3 10 chapter as provided in section 450.5.
3 11 EXPLANATION
3 12 This bill provides for an inheritance tax credit equal to
3 13 the amount of property or interest in property passing to a
3 14 qualified entity not to exceed 10 percent of the inheritance
3 15 tax imposed on the taxpayer. The tax credit is provided in
3 16 the form of a tax credit certificate issued to the decedent or
3 17 decedent's estate which can be transferred like other property
3 18 to heirs and used by an heir to reduce the heir's tax
3 19 liability. The tax credit certificate can only be used by the
3 20 heir receiving the certificate and cannot be transferred by
3 21 the heir to any other person. The bequest received by the
3 22 qualified entity upon which the credit is based is to be used
3 23 by the entity for capital investment, programming, including
3 24 education, performance, and access, in arts and culture in the
3 25 state.
3 26 To be eligible for the tax credit certificate, the decedent
3 27 or estate must enter into an agreement, with a qualified
3 28 entity specifying the amount of the bequest, at least one year
3 29 prior to the death of the decedent. A decedent may receive
3 30 more than one tax credit certificate.
3 31 A qualified entity includes a nonprofit organization exempt
3 32 from federal income tax whose major activity is capital
3 33 investment, programming, including education, performance, and
3 34 access, in arts and culture, the department of cultural
3 35 affairs, the Iowa cultural trust, the vision Iowa fund, and
4 1 the community attraction and tourism fund.
4 2 The bill also specifies that the value of an inheritance
4 3 tax certificate transferred by an estate is exempt from the
4 4 state inheritance tax.
4 5 LSB 1182HZ 81
4 6 mg:rj/sh/8