Senate File 2375 - Introduced
SENATE FILE
BY COMMITTEE ON NATURAL
RESOURCES AND ENVIRONMENT
(SUCCESSOR TO SF 2210)
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to alternative energy system tax credits under
2 the individual and corporate income taxes for the installation
3 of alternative energy systems and including a retroactive
4 applicability date provision.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
6 TLSB 6254SV 82
7 rn/nh/24
PAG LIN
1 1 Section 1. NEW SECTION. 422.11V ALTERNATIVE ENERGY
1 2 SYSTEM TAX CREDIT.
1 3 1. As used in this chapter, unless the context otherwise
1 4 requires:
1 5 a. "Alternative energy system" means a system for heating
1 6 or cooling a building, or utilized in conjunction with other
1 7 aspects of the operation or maintenance of a building, which
1 8 utilizes solar, wind turbine, geothermal, waste management,
1 9 resource recovery, refuse=derived fuel, agricultural crops or
1 10 residues, or woodburning as the primary energy source.
1 11 b. "Department" means the department of revenue.
1 12 c. "Small business" means any enterprise which is located
1 13 in this state, which is operated for profit and under a single
1 14 management, and which has either fewer than twenty employees
1 15 or an annual gross income of less than four million dollars
1 16 computed on the average of the three preceding fiscal years.
1 17 2. The taxes imposed under this division, less the credits
1 18 allowed under section 422.12, shall be reduced by an
1 19 alternative energy system tax credit allowed under this
1 20 section.
1 21 3. a. A small business is eligible to receive an
1 22 alternative energy system tax credit for the installation of
1 23 an alternative energy system on the real property of the small
1 24 business. The tax credit is allowed against the tax liability
1 25 imposed under this division and division III. The amount of
1 26 the tax credit is equal to the lesser of twenty=five percent
1 27 of the total cost of installation of an alternative energy
1 28 system, or five thousand dollars. If the small business
1 29 elects to take the alternative energy system tax credit, the
1 30 small business shall not deduct for Iowa tax purposes any
1 31 amount of the costs of the alternative energy system,
1 32 including the cost of installation, which is deductible for
1 33 federal tax purposes.
1 34 b. To receive the alternative energy system tax credit,
1 35 the small business must submit an application to the
2 1 department. If the taxpayer meets the criteria for
2 2 eligibility, as determined by the department by rule, the
2 3 department shall issue to the taxpayer a certification of
2 4 entitlement for the alternative energy system tax credit. Tax
2 5 credit certificates shall be issued on an earliest filed
2 6 basis. The certification shall contain the taxpayer's name,
2 7 address, tax identification number, the amount of the credit,
2 8 and tax year for which the certificate applies. The taxpayer
2 9 must file the tax credit certificate with the taxpayer's
2 10 individual income tax return in order to claim the tax credit.
2 11 c. Any credit used under this division or division III,
2 12 which is in excess of the tax liability shall be refunded with
2 13 interest computed under section 422.25. In lieu of claiming a
2 14 refund, a taxpayer may elect to have the overpayment shown on
2 15 the taxpayer's final, completed return credited to the tax
2 16 liability for the following year.
2 17 d. An individual may claim the tax credit under this
2 18 division, allowed a partnership, limited liability company, S
2 19 corporation, estate, or trust electing to have the income
2 20 taxed directly to the individual. The amount claimed by the
2 21 individual shall be based upon the pro rata share of the
2 22 individual's earnings of the partnership, limited liability
2 23 company, S corporation, estate, or trust.
2 24 4. The department may adopt rules pursuant to chapter 17A
2 25 for the administration and enforcement of this section.
2 26 Sec. 2. Section 422.33, Code Supplement 2007, is amended
2 27 by adding the following new subsection:
2 28 NEW SUBSECTION. 25. The taxes imposed under this division
2 29 shall be reduced by an alternative energy system tax credit
2 30 allowed under section 422.11V.
2 31 Sec. 3. RETROACTIVE APPLICABILITY DATE. This Act applies
2 32 retroactively to January 1, 2008, for tax years beginning on
2 33 or after that date.
2 34 EXPLANATION
2 35 This bill allows small businesses income tax credits for
3 1 the installation of alternative energy systems on their
3 2 property. The amount of credit equals the lesser of 25
3 3 percent of the cost of the alternative energy system,
3 4 including installation costs, or $5,000.
3 5 The bill defines an alternative energy system as a system
3 6 for heating and cooling a building, or utilized in conjunction
3 7 with other aspects of the operation and maintenance of a
3 8 building, which utilizes solar, wind turbine, waste
3 9 management, resource recovery, refuse=derived fuel,
3 10 agricultural crops or residues, or woodburning as the primary
3 11 energy source. The bill defines a small business as an
3 12 enterprise which is located in Iowa, and operated for profit
3 13 under a single management, which has either fewer than 20
3 14 employees or an annual gross income of less than $4 million
3 15 computed on the average of the three preceding fiscal years.
3 16 The bill applies retroactively to January 1, 2008, for tax
3 17 years beginning on or after that date.
3 18 LSB 6254SV 82
3 19 rn/nh/24