House File 418 - Introduced HOUSE FILE BY WISE Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to a commercial property tax credit for 2 individual and corporation income tax, and including effective 3 and retroactive applicability date provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2521YH 82 6 mg/gg/14 PAG LIN 1 1 Section 1. NEW SECTION. 422.11T COMMERCIAL PROPERTY TAX 1 2 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 a commercial property tax credit. To qualify for this credit, 1 6 the taxpayer shall have paid property tax during the tax year 1 7 levied on property that is assessed as commercial property for 1 8 property tax purposes. 1 9 2. The total amount of tax credit that may be claimed by a 1 10 taxpayer equals two hundred seventy=five dollars for a tax 1 11 year beginning in the 2007 calendar year and five hundred 1 12 fifty dollars for each tax year beginning in the 2008 calendar 1 13 year or the 2009 calendar year. 1 14 3. The amount of the tax credit claimed under this section 1 15 shall not be deducted in computing the taxpayer's taxable 1 16 income for state income tax purposes. 1 17 4. Any credit in excess of the tax liability shall be 1 18 refunded with interest computed under section 422.25. In lieu 1 19 of claiming a refund, a taxpayer may elect to have the 1 20 overpayment shown on the taxpayer's final, completed return 1 21 credited to the tax liability for the following tax year. 1 22 5. An individual may claim the tax credit allowed a 1 23 partnership, limited liability company, S corporation, estate, 1 24 or trust electing to have the income taxed directly to the 1 25 individual. The amount claimed by the individual shall be 1 26 based upon the pro rata share of the individual's earnings of 1 27 the partnership, limited liability company, S corporation, 1 28 estate, or trust. 1 29 6. This section is repealed January 1, 2010, for the tax 1 30 years beginning on or after that date. 1 31 Sec. 2. Section 422.33, Code 2007, is amended by adding 1 32 the following new subsection: 1 33 NEW SUBSECTION. 24. a. The taxes imposed under this 1 34 division shall be reduced by a commercial property tax credit. 1 35 To qualify for this credit, the taxpayer shall have paid 2 1 property tax during the tax year levied on property that is 2 2 assessed as commercial property for property tax purposes. 2 3 b. The total amount of credit that may be claimed by a 2 4 taxpayer equals two hundred seventy=five dollars for a tax 2 5 year beginning in the 2007 calendar year and five hundred 2 6 fifty dollars for each tax year beginning in the 2008 calendar 2 7 year or the 2009 calendar year. For corporations that file a 2 8 consolidated Iowa return in accordance with section 422.37, 2 9 each corporation filing on the consolidated return that paid 2 10 commercial property tax during the tax year may claim the 2 11 maximum tax credit. 2 12 c. The amount of the tax credit claimed under this 2 13 subsection shall not be deducted in computing the taxpayer's 2 14 taxable income for state income tax purposes. For 2 15 corporations that file a consolidated Iowa return in 2 16 accordance with section 422.37, each corporation filing on the 2 17 consolidated return that claimed the credit shall not deduct 2 18 the amount of the tax credit claimed by it for state income 2 19 tax purposes. 2 20 d. Any credit in excess of the tax liability shall be 2 21 refunded with interest computed under section 422.25. In lieu 2 22 of claiming a refund, a taxpayer may elect to have the 2 23 overpayment shown on the taxpayer's final, completed return 2 24 credited to the tax liability for the following tax year. 2 25 e. This subsection is repealed January 1, 2010, for tax 2 26 years beginning on or after that date. 2 27 Sec. 3. EFFECTIVE AND RETROACTIVE APPLICABILITY DATES. 2 28 This Act, being deemed of immediate importance, takes effect 2 29 upon enactment and applies retroactively to January 1, 2007, 2 30 for tax years beginning on or after that date. 2 31 EXPLANATION 2 32 This bill provides for an individual and corporation income 2 33 tax credit for a certain amount of commercial property tax 2 34 paid during the tax year. The credit is equal to $275 for tax 2 35 years beginning in the 2007 calendar year and $550 for tax 3 1 years beginning in the 2008 and 2009 calendar years. For 3 2 corporations included in a consolidated Iowa return, each 3 3 corporation in the consolidated return that paid commercial 3 4 property tax can claim the maximum credit. The credit amount 3 5 is not allowed as a deduction in computing Iowa taxable 3 6 income. Any credit in excess of the tax liability is 3 7 refundable. 3 8 This credit is repealed effective January 1, 2010, for tax 3 9 periods beginning on or after that date. 3 10 The bill takes effect upon enactment and applies 3 11 retroactively to January 1, 2007, for tax years beginning on 3 12 or after that date. 3 13 LSB 2521YH 82 3 14 mg:rj/gg/14