House File 637 - Introduced HOUSE FILE BY MAY Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act providing for a tax credit against the individual or 2 corporate income tax, the franchise tax, insurance premiums 3 tax, and the moneys and credits tax for a charitable 4 contribution to certain institutions engaged in regenerative 5 medicine research and including a retroactive applicability 6 date provision. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 8 TLSB 2515HH 83 9 tw/mg:sc/14 PAG LIN 1 1 Section 1. NEW SECTION. 422.11X REGENERATIVE MEDICINE 1 2 RESEARCH TAX CREDIT. 1 3 1. a. The taxes imposed under this division, less the 1 4 credits allowed under section 422.12, shall be reduced by a 1 5 regenerative medicine research tax credit. 1 6 b. The credit shall be in an amount equal to twenty 1 7 percent of a taxpayer's charitable contribution to an eligible 1 8 research institution located in the state. For purposes of 1 9 this section, "eligible research institution" means a 1 10 nonprofit organization exempt from federal income taxation 1 11 under section 501(c)(3) of the Internal Revenue Code that is 1 12 engaged in research designed to improve patient care through 1 13 the development and dissemination of novel clinical therapies 1 14 for the functional repair and replacement of diseased tissues 1 15 and organs. 1 16 c. An individual may claim a tax credit under this 1 17 subsection of a partnership, limited liability company, S 1 18 corporation, estate, or trust electing to have income taxed 1 19 directly to the individual. The amount claimed by the 1 20 individual shall be based upon the pro rata share of the 1 21 individual's earnings from the partnership, limited liability 1 22 company, S corporation, estate, or trust. 1 23 d. Any tax credit in excess of the taxpayer's tax 1 24 liability for the tax year is not refundable, but the taxpayer 1 25 may elect to have the excess credited to the tax liability for 1 26 the following four tax years or until depleted, whichever is 1 27 earlier. 1 28 2. a. To claim a tax credit under this section, the 1 29 taxpayer shall apply to the department for a tax credit 1 30 certificate. After verifying the eligibility of a taxpayer 1 31 for a tax credit pursuant to this section, the department 1 32 shall issue a tax credit certificate to be attached to the 1 33 taxpayer's tax return. The tax credit certificate shall be 1 34 issued based upon the date of the application and shall 1 35 contain the taxpayer's name, address, tax identification 2 1 number, the amount of the credit, the certificate expiration 2 2 date, and any other information required by the department. 2 3 b. To claim a tax credit under this section, a taxpayer 2 4 must attach one or more tax credit certificates to the 2 5 taxpayer's tax return. The tax credit certificate or 2 6 certificates attached to the taxpayer's tax return shall be 2 7 issued in the taxpayer's name, and the expiration date on the 2 8 certificate shall be a date that falls on or after the last 2 9 day of the taxable year for which the taxpayer is claiming the 2 10 tax credit. 2 11 c. The tax credit certificate, unless otherwise void, 2 12 shall be accepted by the department as payment toward the tax 2 13 liability of the taxpayer, subject to any conditions or 2 14 restrictions placed by the department upon the face of the tax 2 15 credit certificate and subject to the limitations of this 2 16 section. 2 17 d. Tax credit certificates issued under this section are 2 18 not transferable to any person or entity. 2 19 3. A taxpayer taking a deduction in the computation of 2 20 state taxable income for a charitable contribution to an 2 21 eligible research institution for regenerative medicine 2 22 research shall not claim a tax credit pursuant to this 2 23 section. 2 24 4. The maximum amount of tax credits issued in a fiscal 2 25 year pursuant to this section, section 422.33, subsection 27, 2 26 section 422.60, subsection 15, section 432.12M, and section 2 27 533.329, subsection 2, paragraph "n", shall not exceed ten 2 28 million dollars. 2 29 Sec. 2. Section 422.33, Code 2009, is amended by adding 2 30 the following new subsection: 2 31 NEW SUBSECTION. 27. The taxes imposed under this division 2 32 shall be reduced by a regenerative medicine research tax 2 33 credit in the same manner, for the same amount, and under the 2 34 same conditions as provided in section 422.11X. 2 35 Sec. 3. Section 422.60, Code 2009, is amended by adding 3 1 the following new subsection: 3 2 NEW SUBSECTION. 15. The taxes imposed under this division 3 3 shall be reduced by a regenerative medicine research tax 3 4 credit in the same manner, for the same amount, and under the 3 5 same conditions as provided in section 422.11X. 3 6 Sec. 4. NEW SECTION. 432.12M REGENERATIVE MEDICINE 3 7 RESEARCH TAX CREDIT. 3 8 The taxes imposed under this chapter shall be reduced by a 3 9 regenerative medicine research tax credit in the same manner, 3 10 for the same amount, and under the same conditions as provided 3 11 in section 422.11X. 3 12 Sec. 5. Section 533.329, subsection 2, Code 2009, is 3 13 amended by adding the following new paragraph: 3 14 NEW PARAGRAPH. n. The moneys and credits tax imposed 3 15 under this section shall be reduced by a regenerative medicine 3 16 research tax credit in the same manner, for the same amount, 3 17 and under the same conditions as provided in section 422.11X. 3 18 Sec. 6. RETROACTIVE APPLICABILITY. This Act applies 3 19 retroactively to January 1, 2009, for tax years beginning on 3 20 or after that date. 3 21 EXPLANATION 3 22 This bill provides a credit against the individual or 3 23 corporate income tax, the franchise tax, the insurance 3 24 premiums tax, and the moneys and credits tax for 20 percent of 3 25 a taxpayer's contribution to a regenerative medicine research 3 26 institution located in the state. Generally, such 3 27 contributions are tax deductible under current federal and 3 28 state law, and taking a deduction for the contribution 3 29 precludes the taxpayer from claiming the credit. 3 30 The tax credit is not refundable but, at the taxpayer's 3 31 election, may be credited to the taxpayer's tax liability for 3 32 up to four subsequent tax years or until depletion, whichever 3 33 is earlier. The tax credits are not transferable. The 3 34 maximum amount of tax credits is limited to $10 million in any 3 35 one fiscal year. The department of revenue approves the tax 4 1 credits and issues the tax credit certificates to taxpayers. 4 2 The bill takes effect upon enactment and applies 4 3 retroactively to January 1, 2009, for tax years beginning on 4 4 or after that date. 4 5 LSB 2515HH 83 4 6 tw/mg:sc/14