House File 732 - Introduced



                                       HOUSE FILE       
                                       BY  VAN FOSSEN


    Passed House,  Date               Passed Senate, Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act relating to a state work opportunity tax credit and
  2    including a retroactive applicability date provision.
  3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  4 TLSB 1720YH 82
  5 mg/je/5

PAG LIN



  1  1    Section 1.  Section 422.7, subsection 8, Code 2007, is
  1  2 amended to read as follows:
  1  3    8.  a.  Subtract the amount of the federal work opportunity
  1  4 tax credit allowable for the tax year under section 51 of the
  1  5 Internal Revenue Code to the extent that the credit increased
  1  6 federal adjusted gross income.
  1  7    b.  Add the amount of the state work opportunity tax credit
  1  8 allowable for the tax year.
  1  9    Sec. 2.  NEW SECTION.  422.11T  STATE WORK OPPORTUNITY TAX
  1 10 CREDIT.
  1 11    The taxes imposed under this division shall be reduced by a
  1 12 state work opportunity tax credit equal to twenty=five percent
  1 13 of the federal work opportunity tax credit provided in section
  1 14 51 of the Internal Revenue Code.  Any credit in excess of the
  1 15 tax liability is nonrefundable.
  1 16    Sec. 3.  Section 422.33, Code 2007, is amended by adding
  1 17 the following new subsection:
  1 18    NEW SUBSECTION.  24.  The taxes imposed under this division
  1 19 shall be reduced by a state work opportunity tax credit equal
  1 20 to twenty=five percent of the federal work opportunity tax
  1 21 credit provided in section 51 of the Internal Revenue Code.
  1 22 Any credit in excess of the tax liability is nonrefundable.
  1 23    Sec. 4.  Section 422.35, subsection 5, Code 2007, is
  1 24 amended to read as follows:
  1 25    5.  a.  Subtract the amount of the federal work opportunity
  1 26 tax credit allowable for the tax year under section 51 of the
  1 27 Internal Revenue Code to the extent that the credit increased
  1 28 federal taxable income.
  1 29    b.  Add the amount of the state work opportunity tax credit
  1 30 allowable for the tax year.
  1 31    Sec. 5.  Section 422.60, Code 2007, is amended by adding
  1 32 the following new subsection:
  1 33    NEW SUBSECTION.  13.  The taxes imposed under this division
  1 34 shall be reduced by a state work opportunity tax credit equal
  1 35 to twenty=five percent of the federal work opportunity tax
  2  1 credit provided in section 51 of the Internal Revenue Code.
  2  2 Any credit in excess of the tax liability is nonrefundable.
  2  3    Sec. 6.  RETROACTIVE APPLICABILITY DATE.  This Act applies
  2  4 retroactively to January 1, 2007, for tax years beginning on
  2  5 or after that date.
  2  6                           EXPLANATION
  2  7    This bill provides a state work opportunity tax credit
  2  8 under the individual and corporate income taxes and franchise
  2  9 tax.  The credit equals 25 percent of the federal work
  2 10 opportunity tax credit.  The federal credit is a percentage of
  2 11 the wages paid to a select category of employees.  Because the
  2 12 federal credit is based upon wages paid, the wages equal to
  2 13 the credit are not deductible.  This same nondeductibility
  2 14 applies to the state credit.  The worker categories covered
  2 15 include recipients of federal aid to families with dependent
  2 16 children, qualified veterans, qualified ex=felons, high=risk
  2 17 youths, vocational rehabilitation referrals, qualified summer
  2 18 youth employees, recipients of food stamps, recipients of
  2 19 supplemental security income assistance, and long=term family
  2 20 assistance recipients.
  2 21    The bill applies retroactively to January 1, 2007, for tax
  2 22 years beginning on or after that date.
  2 23 LSB 1720YH 82
  2 24 mg:sc/je/5