House File 794 - Introduced
HOUSE FILE
BY COMMITTEE ON ECONOMIC GROWTH
(SUCCESSOR TO HSB 229)
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act creating an endow Iowa planned gift tax credit and
2 including a retroactive applicability date.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 2352HV 82
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PAG LIN
1 1 Section 1. Section 15E.303, Code 2007, is amended by
1 2 adding the following new subsection:
1 3 NEW SUBSECTION. 3A. "Endow Iowa planned gift" means an
1 4 irrevocable contribution to a permanent endowment held by an
1 5 endow Iowa qualified community foundation when the
1 6 contribution uses any of the following techniques that are
1 7 authorized by the Internal Revenue Code:
1 8 a. Charitable remainder unitrusts, as defined by 26 U.S.C.
1 9 } 664.
1 10 b. Charitable remainder annuity trusts, as defined by 26
1 11 U.S.C. } 664.
1 12 c. Pooled income fund trusts, as defined by 26 U.S.C. }
1 13 642(c)(5).
1 14 d. Charitable lead unitrusts qualifying under 26 U.S.C. }
1 15 170(f)(2)(B).
1 16 e. Charitable lead annuity trusts qualifying under 26
1 17 U.S.C. } 170(f)(2)(B).
1 18 f. Charitable gift annuities undertaken pursuant to 26
1 19 U.S.C. } 1011(b).
1 20 g. Deferred charitable gift annuity undertaken pursuant to
1 21 26 U.S.C. } 1011(b).
1 22 h. Charitable life estate agreements qualifying under 26
1 23 U.S.C. } 170(f)(3)(B).
1 24 i. Paid=up life insurance policies meeting the
1 25 requirements of 26 U.S.C. } 170.
1 26 Sec. 2. NEW SECTION. 15E.305A ENDOW IOWA PLANNED GIFT
1 27 TAX CREDIT.
1 28 1. For tax years beginning on or after January 1, 2007, a
1 29 tax credit shall be allowed against the taxes imposed in
1 30 chapter 422, divisions II, III, and V, and in chapter 432, and
1 31 against the moneys and credits tax imposed in section 533.24
1 32 equal to twenty percent of the present value of the aggregate
1 33 amount of the charitable gift portion of a taxpayer's endow
1 34 Iowa planned gift, as determined by applicable provisions of
1 35 the Internal Revenue Code, to an endow Iowa qualified
2 1 community foundation. An individual may claim a tax credit
2 2 under this section of a partnership, limited liability
2 3 company, S corporation, estate, or trust electing to have
2 4 income taxed directly to the individual. The amount claimed
2 5 by the individual shall be based upon the pro rata share of
2 6 the individual's earnings from the partnership, limited
2 7 liability company, S corporation, estate, or trust. A tax
2 8 credit shall be allowed only for an endow Iowa planned gift
2 9 made to an endow Iowa qualified community foundation for a
2 10 permanent endowment fund established to benefit a charitable
2 11 cause in this state. Any tax credit in excess of the
2 12 taxpayer's tax liability for the tax year may be credited to
2 13 the tax liability for the following five years or until
2 14 depleted, whichever occurs first. A tax credit shall not be
2 15 carried back to a tax year prior to the tax year in which the
2 16 taxpayer claims the tax credit.
2 17 2. a. The aggregate amount of tax credits authorized
2 18 pursuant to this section shall not exceed a total of four
2 19 million dollars annually. The maximum amount of tax credits
2 20 granted to a taxpayer in a calendar year shall not exceed two
2 21 and one=half percent of the aggregate amount of tax credits
2 22 authorized.
2 23 b. Ten percent of the aggregate amount of tax credits
2 24 authorized in a calendar year shall be reserved for those
2 25 endow Iowa planned gifts in amounts of thirty thousand dollars
2 26 or less. If by September 1 of a calendar year the entire ten
2 27 percent of the reserved tax credits is not distributed, the
2 28 remaining tax credits shall be available to any other eligible
2 29 applicants.
2 30 3. A tax credit shall not be transferable to any other
2 31 taxpayer.
2 32 Sec. 3. RETROACTIVE APPLICABILITY. This Act is
2 33 retroactively applicable to January 1, 2007, and applies to
2 34 tax years beginning on and after that date.
2 35 EXPLANATION
3 1 This bill creates an endow Iowa planned gift tax credit.
3 2 For tax years beginning on or after January 1, 2007, the
3 3 bill allows a tax credit be allowed against personal and
3 4 corporate income tax liabilities, franchise tax liabilities
3 5 for financial institutions, insurance premium tax liabilities,
3 6 and moneys and credits tax liabilities. The bill provides
3 7 that the tax credit shall equal 20 percent of the present
3 8 value of the aggregate amount of the charitable gift portion
3 9 of a taxpayer's endow Iowa planned gift, as determined by
3 10 applicable provisions of the Internal Revenue Code, to an
3 11 endow Iowa qualified community foundation. The bill provides
3 12 that a tax credit shall be allowed only for an endow Iowa
3 13 planned gift made to an endow Iowa qualified community
3 14 foundation for a permanent endowment fund established to
3 15 benefit a charitable cause in this state. The bill provides
3 16 that any tax credit in excess of the taxpayer's tax liability
3 17 for the tax year may be credited to the tax liability for the
3 18 following five years or until depleted, whichever occurs
3 19 first. The bill provides that a tax credit shall not be
3 20 carried back to a tax year prior to the tax year in which the
3 21 taxpayer claims the tax credit.
3 22 The bill provides that the aggregate amount of tax credits
3 23 authorized shall not exceed a total of $4 million annually.
3 24 The bill provides that the maximum amount of tax credits
3 25 granted to a taxpayer in a calendar year shall not exceed 2.5
3 26 percent of the aggregate amount of tax credits authorized.
3 27 The bill provides that 10 percent of the aggregate amount
3 28 of tax credits authorized in a calendar year shall be reserved
3 29 for those endow Iowa planned gifts in amounts of $30,000 or
3 30 less.
3 31 The bill provides that a tax credit shall not be
3 32 transferable to any other taxpayer.
3 33 The bill is retroactively applicable to January 1, 2007,
3 34 and applies to tax years beginning on and after that date.
3 35 LSB 2352HV 82
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