Senate File 191 - Introduced
SENATE FILE
BY DANIELSON
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act providing for a disaster recovery tax credit and including
2 a retroactive applicability date provision.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 1822SS 83
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PAG LIN
1 1 Section 1. NEW SECTION. 404B.1 DISASTER RECOVERY TAX
1 2 CREDIT.
1 3 1. a. A disaster recovery tax credit shall be allowed
1 4 against the taxes imposed in chapter 422, divisions II, III,
1 5 and V, and in chapter 432, for a portion of a taxpayer's costs
1 6 incurred in projects rehabilitating certain historic property
1 7 located in this state and damaged as a result of a natural
1 8 disaster occurring in calendar year 2008.
1 9 b. To be eligible for the credit, a taxpayer shall meet
1 10 all of the following requirements:
1 11 (1) The rehabilitation project shall be one of the
1 12 following:
1 13 (a) A certified rehabilitation of a certified historic
1 14 structure, as designated by the United States secretary of the
1 15 interior pursuant to 36 C.F.R. pt. 67.
1 16 (b) The rehabilitation of a nonhistoric, nonresidential
1 17 building placed in service before 1936.
1 18 (2) The rehabilitation project shall be for property
1 19 located in an area declared a disaster area in calendar year
1 20 2008 by the governor or by a federal official.
1 21 (3) The rehabilitation project shall be for property
1 22 damaged as a result of a natural disaster occurring in
1 23 calendar year 2008.
1 24 (4) The rehabilitation project shall have begun on or
1 25 before December 31, 2009.
1 26 c. An individual may claim a tax credit under this section
1 27 of a partnership, limited liability company, S corporation,
1 28 estate, or trust electing to have income taxed directly to the
1 29 individual. The amount claimed by the individual shall be
1 30 based upon the pro rata share of the individual's earnings
1 31 from the partnership, limited liability company, S
1 32 corporation, estate, or trust.
1 33 d. A tax credit in excess of a taxpayer's tax liability
1 34 shall be refunded with interest computed under section 422.25.
1 35 In lieu of claiming a refund, a taxpayer may elect to have the
2 1 overpayment shown on the taxpayer's final, completed return
2 2 credited to the tax liability for the following year.
2 3 2. a. The amount of the tax credit shall be one of the
2 4 following:
2 5 (1) If the property is a certified rehabilitation of a
2 6 certified historic structure, the amount of the tax credit
2 7 shall equal twenty percent of the qualified rehabilitation
2 8 costs.
2 9 (2) If the property is a nonhistoric, nonresidential
2 10 building placed in service before 1936, the amount of the tax
2 11 credit shall equal ten percent of the qualified rehabilitation
2 12 costs.
2 13 b. In computing the amount of the tax credit, the only
2 14 costs which may be included are the rehabilitation costs
2 15 incurred between the period ending on the project completion
2 16 date and beginning on the date two years prior to the project
2 17 completion date, provided that any qualified rehabilitation
2 18 costs incurred prior to the date of approval of the project as
2 19 provided in this section must be qualified rehabilitation
2 20 expenditures under the federal rehabilitation credit in
2 21 section 47 of the Internal Revenue Code.
2 22 c. For purposes of this subsection, qualified
2 23 rehabilitation costs include amounts if they are properly
2 24 includable in computing the basis of the eligible property for
2 25 tax purposes. Amounts treated as an expense and deducted in
2 26 the tax year in which they are paid or incurred and amounts
2 27 that are otherwise not added to the basis of the eligible
2 28 property for tax purposes are not qualified rehabilitation
2 29 costs. Amounts incurred for architectural and engineering
2 30 fees, site survey fees, legal expenses, insurance premiums,
2 31 development fees, and other construction=related costs are
2 32 qualified rehabilitation costs to the extent they are added to
2 33 the basis of the eligible property for tax purposes. Costs of
2 34 sidewalks, parking lots, and landscaping do not constitute
2 35 qualified rehabilitation costs.
3 1 d. For purposes of individual and corporate income taxes
3 2 and the franchise tax, the increase in the basis of the
3 3 rehabilitated property that would otherwise result from the
3 4 qualified rehabilitation costs shall be reduced by the amount
3 5 of the credit computed under this section.
3 6 3. a. In order to qualify for a tax credit pursuant to
3 7 this section, a rehabilitation project shall receive approval
3 8 from the state historic preservation office of the department
3 9 of cultural affairs in the same manner described in section
3 10 404A.3.
3 11 b. Upon completion of the rehabilitation project, a
3 12 certification of completion must be obtained from the state
3 13 historic preservation office of the department of cultural
3 14 affairs. A completion certificate shall identify the person
3 15 claiming the tax credit under this section and the
3 16 rehabilitation costs incurred up to the two years preceding
3 17 the completion date.
3 18 c. To claim a tax credit under this section, a taxpayer
3 19 must attach a tax credit certificate issued by the department
3 20 of cultural affairs to the taxpayer's tax return verifying the
3 21 taxpayer's eligibility for the credit.
3 22 4. a. After verifying the eligibility for the tax credit,
3 23 the state historic preservation office of the department of
3 24 cultural affairs, in consultation with the department of
3 25 economic development, shall issue a disaster recovery tax
3 26 credit certificate to be attached to the person's tax return.
3 27 b. The tax credit certificate shall contain the taxpayer's
3 28 name, address, tax identification number, the date of project
3 29 completion, the amount of credit, any other information
3 30 required by the department of revenue, and a place for the
3 31 name and tax identification number of a transferee and the
3 32 amount of the tax credit being transferred.
3 33 5. a. Tax credit certificates issued under this section
3 34 may be transferred to any person or entity. Within ninety
3 35 days of transfer, the transferee must submit the transferred
4 1 tax credit certificate to the department of revenue along with
4 2 a statement containing the transferee's name, tax
4 3 identification number, and address, and the denomination that
4 4 each replacement tax credit certificate is to carry and any
4 5 other information required by the department of revenue.
4 6 b. Within thirty days of receiving the transferred tax
4 7 credit certificate and the transferee's statement, the
4 8 department of revenue shall issue one or more replacement tax
4 9 credit certificates to the transferee. Each replacement
4 10 certificate must contain the information required under
4 11 subsection 4, paragraph "b".
4 12 c. Tax credit certificate amounts of less than the minimum
4 13 amount established by rule of the state historic preservation
4 14 office shall not be transferable. A tax credit shall not be
4 15 claimed by a transferee under this section until a replacement
4 16 tax credit certificate identifying the transferee as the
4 17 proper holder has been issued.
4 18 d. The transferee may use the amount of the tax credit
4 19 transferred against the taxes imposed under chapter 422,
4 20 divisions II, III, and V, and chapter 432 for any tax year the
4 21 original transferor could have claimed the tax credit. Any
4 22 consideration received for the transfer of the tax credit
4 23 shall not be included as income under chapter 422, divisions
4 24 II, III, and V. Any consideration paid for the transfer of
4 25 the tax credit shall not be deducted from income under chapter
4 26 422, divisions II, III, and V.
4 27 6. a. A taxpayer claiming a tax credit pursuant to this
4 28 section cannot claim a tax credit pursuant to chapter 404A for
4 29 the same rehabilitation costs for the same project.
4 30 b. A taxpayer claiming a tax credit pursuant to chapter
4 31 404A cannot claim a tax credit pursuant to this section for
4 32 the same rehabilitation costs for the same project.
4 33 7. The department of cultural affairs shall establish by
4 34 rule the procedures for the application, review, selection,
4 35 and awarding of certifications of completion under this
5 1 section.
5 2 8. Tax credits under this section shall not be issued for
5 3 rehabilitation projects completed after June 30, 2012.
5 4 Sec. 2. RETROACTIVE APPLICABILITY DATE. This Act applies
5 5 retroactively to January 1, 2009, for tax years beginning on
5 6 or after that date.
5 7 EXPLANATION
5 8 This bill provides for a disaster recovery tax credit.
5 9 The tax credit is allowed against the individual and
5 10 corporate income taxes, the franchise tax, and the insurance
5 11 companies tax.
5 12 To be eligible for the credit, a taxpayer has to meet the
5 13 following requirements: (1) The rehabilitation project shall
5 14 be either a certified rehabilitation of a certified historic
5 15 structure, as designated by the United States secretary of the
5 16 interior, or the project shall be for the rehabilitation of a
5 17 nonhistoric, nonresidential building placed in service before
5 18 1936; (2) the rehabilitation project shall be for property
5 19 located in an area declared a disaster area in calendar year
5 20 2008; (3) the rehabilitation project shall be for property
5 21 damaged as a result of a natural disaster occurring in
5 22 calendar year 2008; and (4) the rehabilitation project shall
5 23 have begun on or before December 31, 2009.
5 24 The tax credit is refundable, or, at the taxpayer's
5 25 election, may be credited to the tax liability in the
5 26 following year.
5 27 The amount of the tax credit is 20 percent of certain
5 28 qualified rehabilitation costs of a certified historic
5 29 structure or 10 percent of certain qualified rehabilitation
5 30 costs of a nonhistoric, nonresidential building placed in
5 31 service before 1936.
5 32 In order to claim the tax credit, a taxpayer must receive
5 33 approval in the same manner as currently provided for under
5 34 the historic preservation and cultural entertainment district
5 35 tax credit in Code chapter 404A.
6 1 Upon completion of the project, a certification of
6 2 completion must be obtained from the state historic
6 3 preservation office of the department of cultural affairs. To
6 4 claim the credit, a taxpayer must attach a tax credit
6 5 certificate to the taxpayer's tax return.
6 6 Disaster recovery tax credit certificates are transferable
6 7 in most circumstances.
6 8 A taxpayer claiming a disaster recovery tax credit cannot
6 9 also claim a historic preservation and cultural entertainment
6 10 district tax credit pursuant to Code chapter 404A and vice
6 11 versa for the same costs for the same project.
6 12 Tax credits shall not be issued for projects completed
6 13 after June 30, 2012.
6 14 The bill applies retroactively to January 1, 2009, for tax
6 15 years beginning on or after that date.
6 16 LSB 1822SS 83
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