House File 560 - Introduced
HOUSE FILE
BY COWNIE
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act increasing the percentage of qualified expenditures that
2 may be claimed for purposes of the research activities tax
3 credit and including a retroactive applicability date
4 provision.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. Section 15.335, subsection 1, paragraph a,
1 2 subparagraph (1), Code 2009, is amended to read as follows:
1 3 (1) The credit equals the sum of the following:
1 4 (a) Six and one=half Ten percent of the excess of
1 5 qualified research expenses during the tax year over the base
1 6 amount for the tax year based upon the state's apportioned
1 7 share of the qualifying expenditures for increasing research
1 8 activities.
1 9 (b) Six and one=half Ten percent of the basic research
1 10 payments determined under section 41(e)(1)(A) of the Internal
1 11 Revenue Code during the tax year based upon the state's
1 12 apportioned share of the qualifying expenditures for
1 13 increasing research activities.
1 14 Sec. 2. Section 15A.9, subsection 8, paragraph a,
1 15 subparagraph (1), Code 2009, is amended to read as follows:
1 16 (1) The credit equals the sum of the following:
1 17 (a) Thirteen Twenty percent of the excess of qualified
1 18 research expenses during the tax year over the base amount for
1 19 the tax year based upon the state's apportioned share of the
1 20 qualifying expenditures for increasing research activities.
1 21 (b) Thirteen Twenty percent of the basic research payments
1 22 determined under section 41(e)(1)(A) of the Internal Revenue
1 23 Code during the tax year based upon the state's apportioned
1 24 share of the qualifying expenditures for increasing research
1 25 activities.
1 26 Sec. 3. Section 422.10, subsection 1, paragraph a, Code
1 27 2009, is amended to read as follows:
1 28 a. (1) For individuals, the credit equals the sum of the
1 29 following:
1 30 (1) (a) Six and one=half Ten percent of the excess of
1 31 qualified research expenses during the tax year over the base
1 32 amount for the tax year based upon the state's apportioned
1 33 share of the qualifying expenditures for increasing research
1 34 activities.
1 35 (2) (b) Six and one=half Ten percent of the basic
2 1 research payments determined under section 41(e)(1)(A) of the
2 2 Internal Revenue Code during the tax year based upon the
2 3 state's apportioned share of the qualifying expenditures for
2 4 increasing research activities.
2 5 (2) The state's apportioned share of the qualifying
2 6 expenditures for increasing research activities is a percent
2 7 equal to the ratio of qualified research expenditures in this
2 8 state to total qualified research expenditures.
2 9 Sec. 4. Section 422.33, subsection 5, paragraph a, Code
2 10 2009, is amended to read as follows:
2 11 a. (1) The taxes imposed under this division shall be
2 12 reduced by a state tax credit for increasing research
2 13 activities in this state equal to the sum of the following:
2 14 (1) (a) Six and one=half Ten percent of the excess of
2 15 qualified research expenses during the tax year over the base
2 16 amount for the tax year based upon the state's apportioned
2 17 share of the qualifying expenditures for increasing research
2 18 activities.
2 19 (2) (b) Six and one=half Ten percent of the basic
2 20 research payments determined under section 41(e)(1)(A) of the
2 21 Internal Revenue Code during the tax year based upon the
2 22 state's apportioned share of the qualifying expenditures for
2 23 increasing research activities.
2 24 (2) The state's apportioned share of the qualifying
2 25 expenditures for increasing research activities is a percent
2 26 equal to the ratio of qualified research expenditures in this
2 27 state to the total qualified research expenditures.
2 28 Sec. 5. RETROACTIVE APPLICABILITY. This Act applies
2 29 retroactively to January 1, 2009, for tax years beginning on
2 30 or after that date.
2 31 EXPLANATION
2 32 This bill increases the amount of the research activities
2 33 tax credit.
2 34 Currently, the amount of the tax credit under the
2 35 individual and corporate income taxes is 6.5 percent of
3 1 qualified research expenditures, but under Code section
3 2 15.335, the department of economic development may award an
3 3 additional 6.5 percent. The bill increases to 10 percent the
3 4 amount available under both the individual and corporate
3 5 income taxes as well as the additional credits awarded by the
3 6 department of economic development. Because the research
3 7 activities tax credit is in lieu of the income tax credits
3 8 under the quality jobs enterprise zone program, the bill
3 9 increases the percentage from 13 percent to 20 percent.
3 10 The bill applies retroactively to January 1, 2009, for tax
3 11 years beginning on or after that date.
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