House File 2492 - Introduced HOUSE FILE BY PAULSEN Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act related to tax credits for community=based seed capital 2 investments by increasing the aggregate amount of tax credits 3 available and making the credits transferable. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 6165YH 82 6 tw/nh/24 PAG LIN 1 1 Section 1. Section 15E.43, subsections 4 and 5, Code 1 2 Supplement 2007, are amended to read as follows: 1 3 4. The aggregate amount of tax credits issued pursuant to 1 4 this division shall not exceed a total oftenfifteen million 1 5 dollars. The total amount of tax credits issued during the 1 6 fiscal year beginning July 1, 2002, shall not exceed three 1 7 million dollars. The total amount of tax credits issued 1 8 during the fiscal year beginning July 1, 2003, shall not 1 9 exceed three million dollars. The total amount of tax credits 1 10 issued during the fiscal year beginning July 1, 2004, shall 1 11 not exceed four million dollars. Any amount of the maximum 1 12 aggregate limit of tax credits that have not been issued by 1 13 June 30, 2005, may be issued in any subsequent fiscal year. 1 14 Not more than three million dollars of tax credits may be 1 15 issued in any one subsequent fiscal year. 1 16 5. A tax credit shall not be redeemed during any tax year 1 17 beginning prior to January 1, 2005.A tax credit shall not be 1 18 transferable to any other taxpayer.1 19 Sec. 2. Section 15E.43, Code Supplement 2007, is amended 1 20 by adding the following new subsection: 1 21 NEW SUBSECTION. 5A. a. After verifying the eligibility 1 22 of a qualifying business pursuant to section 15E.44 for a tax 1 23 credit pursuant to this section, the department of economic 1 24 development shall issue a seed capital investment tax credit 1 25 certificate to be attached to an equity investor's tax return. 1 26 The tax credit certificate shall contain the taxpayer's name, 1 27 address, tax identification number, the amount of credit, the 1 28 name of the qualifying business, any other information 1 29 required by the department of revenue, and a place for the 1 30 name and tax identification number of a transferee and the 1 31 amount of the tax credit being transferred. 1 32 b. The tax credit certificate, unless rescinded by the 1 33 board, shall be accepted by the department of revenue as 1 34 payment for taxes imposed pursuant to chapter 422, divisions 1 35 II, III, and V, and in chapter 432, and for the moneys and 2 1 credits tax imposed in section 533.329, subject to any 2 2 conditions or restrictions placed by the board upon the face 2 3 of the tax credit certificate and subject to the limitations 2 4 of this section. 2 5 c. Tax credit certificates issued under this section may 2 6 be transferred to any person or entity. Within ninety days of 2 7 transfer, the transferee shall submit the transferred tax 2 8 credit certificate to the department of revenue along with a 2 9 statement containing the transferee's name, tax identification 2 10 number, and address, and the denomination that each 2 11 replacement tax credit certificate is to carry and any other 2 12 information required by the department of revenue. 2 13 d. Within thirty days of receiving the transferred tax 2 14 credit certificate and the transferee's statement, the 2 15 department of revenue shall issue one or more replacement tax 2 16 credit certificates to the transferee. Each replacement tax 2 17 credit certificate must contain the information required for 2 18 the original tax credit certificate and must have the same 2 19 expiration date that appeared in the transferred tax credit 2 20 certificate. Tax credit certificate amounts of less than the 2 21 minimum amount established by rule of the department of 2 22 economic development shall not be transferable. 2 23 e. A tax credit shall not be claimed by a transferee under 2 24 this section until a replacement tax credit certificate 2 25 identifying the transferee as the proper holder has been 2 26 issued. The transferee may use the amount of the tax credit 2 27 transferred against the taxes imposed in chapter 422, 2 28 divisions II, III, and V, and in chapter 432, and against the 2 29 moneys and credits tax imposed in section 533.329, for any tax 2 30 year the original transferor could have claimed the tax 2 31 credit. Any consideration received for the transfer of the 2 32 tax credit shall not be included as income under chapter 422, 2 33 divisions II, III, and V, under chapter 432, or against the 2 34 moneys and credits tax imposed in section 533.329. Any 2 35 consideration paid for the transfer of the tax credit shall 3 1 not be deducted from income under chapter 422, divisions II, 3 2 III, and V, under chapter 432, or against the moneys and 3 3 credits tax imposed in section 533.329. 3 4 Sec. 3. Section 15E.44, subsection 4, Code Supplement 3 5 2007, is amended by striking the subsection. 3 6 EXPLANATION 3 7 This bill relates to investment tax credits for 3 8 community=based seed capital funds. 3 9 The bill increases the total aggregate amount of tax 3 10 credits allowed from $10 million to $15 million. 3 11 The bill also makes the investment tax credits transferable 3 12 from one taxpayer to another. 3 13 LSB 6165YH 82 3 14 tw/nh/24