Senate File 454 - Introduced
SENATE FILE
BY McKINLEY
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act providing for a new jobs tax credit and including an
2 effective and applicability date provision.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. NEW SECTION. 422.11X NEW JOBS TAX CREDIT.
1 2 1. a. The taxes imposed under this division, less the
1 3 credits allowed under section 422.12, shall be reduced by a
1 4 new jobs tax credit in an amount equal to fifty percent of the
1 5 amount of wages paid in a tax year for each new job created.
1 6 b. The amount of the credit that may be claimed by a
1 7 taxpayer is computed on the greater of the following:
1 8 (1) The first fifty jobs created by the employer.
1 9 (2) A five percent expansion of the employer's current
1 10 workforce.
1 11 2. To be eligible for the tax credit, an employer shall
1 12 not be an applicant for or a recipient of financial assistance
1 13 from the department of economic development or a recipient of
1 14 moneys under the federal American Recovery and Reinvestment
1 15 Act of 2009, Pub. L. No. 111=5.
1 16 3. A job must meet the following conditions to qualify for
1 17 the new jobs tax credit:
1 18 a. The job is a permanent full=time equivalent position
1 19 that did not exist in the business within the previous six
1 20 months in the state.
1 21 b. The job is filled by a new employee for at least twelve
1 22 months.
1 23 c. The job shall be filled by a resident of the state.
1 24 d. The job was not created as a result of a change in
1 25 ownership or as a result of a consolidation, merger, or
1 26 restructuring of a business entity if the job does not
1 27 represent a new job in the state.
1 28 e. The job shall not have been previously filled by the
1 29 same employee in the state.
1 30 f. The job was not relocated from another location in the
1 31 state.
1 32 g. The job pays at least one hundred percent of the lower
1 33 of the average county or average regional wage, excluding
1 34 benefits, as calculated by the department of revenue based on
1 35 data from the wage and employment information from the
2 1 quarterly covered wage and employment data report issued by
2 2 the department of workforce development.
2 3 h. The job is created on or after the effective date of
2 4 this Act but before June 30, 2011.
2 5 4. a. A new jobs tax credit may only be claimed once for
2 6 each qualifying new job.
2 7 b. A taxpayer is entitled to claim the tax credit upon the
2 8 end of the twelfth month of the job having been filled.
2 9 However, if the job is eliminated within twelve months from
2 10 the date the taxpayer is entitled to claim the tax credit, the
2 11 taxpayer is subject to repayment of the amount of the tax
2 12 credit received.
2 13 5. An individual may claim a tax credit under this section
2 14 of a partnership, limited liability company, S corporation,
2 15 estate, or trust electing to have income taxed directly to the
2 16 individual. The amount claimed by the individual shall be
2 17 based upon the pro rata share of the individual's earnings
2 18 from the partnership, limited liability company, S
2 19 corporation, estate, or trust.
2 20 6. a. Any tax credit in excess of the taxpayer's
2 21 liability for the tax year is not refundable, but the taxpayer
2 22 may elect to have the excess credited to the tax liability for
2 23 the following five years or until depleted, whichever is
2 24 earlier.
2 25 b. A tax credit shall not be carried back to a tax year
2 26 prior to the tax year in which the taxpayer first receives the
2 27 tax credit.
2 28 7. A taxpayer eligible for the tax credit shall include
2 29 with the taxpayer's return information relating to each new
2 30 job created during the tax year and shall include information
2 31 establishing the total amount of wages paid for those jobs
2 32 during the tax year pursuant to rules of the department.
2 33 8. The tax credit authorized in this section is in lieu of
2 34 the new jobs tax credits authorized in sections 422.11A and
2 35 422.33, subsection 6.
3 1 9. This section is repealed June 30, 2017. This repeal
3 2 does not affect the ability to carry forward tax credits
3 3 pursuant to subsection 6.
3 4 Sec. 2. Section 422.33, Code 2009, is amended by adding
3 5 the following new subsection:
3 6 NEW SUBSECTION. 27. The taxes imposed under this division
3 7 shall be reduced by a new jobs tax credit in the same manner,
3 8 for the same amount, and under the same conditions as provided
3 9 in section 422.11X.
3 10 Sec. 3. Section 422.60, Code 2009, is amended by adding
3 11 the following new subsection:
3 12 NEW SUBSECTION. 15. The taxes imposed under this division
3 13 shall be reduced by a new jobs tax credit in the same manner,
3 14 for the same amount, and under the same conditions as provided
3 15 in section 422.11X.
3 16 Sec. 4. NEW SECTION. 432.12M NEW JOBS TAX CREDIT.
3 17 The taxes imposed under this chapter shall be reduced by a
3 18 new jobs tax credit in the same manner, for the same amount,
3 19 and under the same conditions as provided in section 422.11X.
3 20 Sec. 5. Section 533.329, subsection 2, Code 2009, is
3 21 amended by adding the following new paragraph:
3 22 NEW PARAGRAPH. n. The moneys and credits tax imposed
3 23 under this section shall be reduced by a new jobs tax credit
3 24 in the same manner, for the same amount, and under the same
3 25 conditions as provided in section 422.11X.
3 26 Sec. 6. EFFECTIVE AND APPLICABILITY DATE. This Act, being
3 27 deemed of immediate importance, takes effect upon enactment
3 28 and applies to new jobs created on or after that date.
3 29 EXPLANATION
3 30 This bill provides a tax credit to employers in an amount
3 31 equal to 50 percent of the wages paid for new jobs created in
3 32 the next two years. The amount of the tax credit is computed
3 33 on 50 new jobs or a 5 percent expansion of the workforce,
3 34 whichever is greater.
3 35 To be eligible for the tax credit, an employer must not be
4 1 an applicant for or a recipient of financial assistance from
4 2 the department of economic development or a recipient of
4 3 moneys from the federal American Recovery and Reinvestment Act
4 4 of 2009.
4 5 A qualifying new job:
4 6 1. Must be a full=time equivalent position that did not
4 7 exist in the business within the previous six months in the
4 8 state.
4 9 2. Must be filled by a new employee for at least 12 months
4 10 before the credit can be claimed.
4 11 3. Must be filled by a resident of the state.
4 12 4. Must not be created as a result of a change in
4 13 ownership or as a result of a consolidation, merger, or
4 14 restructuring of a business entity if the job does not
4 15 represent a new job in the state.
4 16 5. Must not have been previously filled by the same
4 17 employee in the state.
4 18 6. Must not have been relocated from another location in
4 19 the state.
4 20 7. Must pay at least 100 percent of the lower of the
4 21 average county or average regional wage, excluding benefits.
4 22 8. Must have been created on or after the effective date
4 23 of the bill but before June 30, 2011.
4 24 The tax credit is available against the individual and
4 25 corporate income taxes, the franchise tax, the insurance
4 26 companies tax, and the moneys and credits tax.
4 27 A tax credit may only be claimed once for each qualifying
4 28 new job. A taxpayer is entitled to claim the credit upon the
4 29 end of the twelfth month of the job having been filled.
4 30 However, if the job is eliminated within 12 months from the
4 31 date the taxpayer is entitled to claim the credit, the
4 32 taxpayer is subject to repayment of the amount of the tax
4 33 credit received.
4 34 Any tax credit in excess of the taxpayer's liability for
4 35 the tax year is not refundable, but the taxpayer may elect to
5 1 have the excess credited to the tax liability for the
5 2 following five years or until depleted, whichever is earlier.
5 3 A tax credit shall not be carried back to a tax year prior to
5 4 the tax year in which the taxpayer first receives the tax
5 5 credit.
5 6 The tax credit is in lieu of the existing new jobs tax
5 7 credit allowed against the individual and corporate income
5 8 taxes.
5 9 The bill takes effect upon enactment and applies to new
5 10 jobs created on or after that date.
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