Senate File 483 - Introduced
SENATE FILE
BY COMMITTEE ON WAYS AND MEANS
(SUCCESSOR TO SSB 1316)
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to state taxes by limiting tax credits available
2 under certain economic development programs and agricultural
3 assets transfer agreements, eliminating the carryback of net
4 operating losses, modifying refund interest provisions, and
5 including retroactive applicability date and other
6 applicability date provisions.
7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 DIVISION I
1 2 TAX CREDIT LIMITS
1 3 Section 1. NEW SECTION. 15.119 AGGREGATE TAX CREDIT
1 4 LIMIT FOR CERTAIN ECONOMIC DEVELOPMENT PROGRAMS.
1 5 1. Notwithstanding any provision to the contrary in
1 6 sections 15.327 through 15.336, 15.393, section 15A.9,
1 7 subsection 8, sections 15E.191 through 15E.197, and 422.11E,
1 8 and section 422.33, subsection 9, the department shall not
1 9 authorize an amount of tax credits for purposes specified in
1 10 subsection 2 in excess of one hundred seventy=five million
1 11 dollars in any fiscal year.
1 12 2. The department, with the approval of the board, shall
1 13 adopt by rule a procedure for allocating the aggregate tax
1 14 credit limit established in this section among the following
1 15 programs administered by the department:
1 16 a. The high quality job creation program administered
1 17 pursuant to sections 15.326 through 15.336.
1 18 b. The film, television, and video project promotion
1 19 program administered pursuant to sections 15.391 through
1 20 15.393.
1 21 c. The corporate tax research credit under the quality
1 22 jobs enterprise zone program pursuant to section 15A.9,
1 23 subsection 8.
1 24 d. The enterprise zones program administered pursuant to
1 25 sections 15E.191 through 15E.197.
1 26 e. The assistive device tax credit program administered
1 27 pursuant to section 422.11E and section 422.33, subsection 9.
1 28 3. The department shall submit to the department of
1 29 revenue on or before August 15 of each year a report on the
1 30 tax credits allocated pursuant to this section and the tax
1 31 credits awarded under each of the programs described in
1 32 subsection 2.
1 33 Sec. 2. Section 175.37, Code 2009, is amended by adding
1 34 the following new subsection:
1 35 NEW SUBSECTION. 10. The amount of tax credit certificates
2 1 that may be issued pursuant to this section shall not exceed
2 2 three million dollars in any fiscal year. The authority shall
2 3 issue the tax credit certificates on a first=come,
2 4 first=served basis.
2 5 Sec. 3. APPLICABILITY DATE. This division of this Act
2 6 applies to contracts and agreements entered into or tax
2 7 credits awarded on or after July 1, 2009.
2 8 DIVISION II
2 9 NET OPERATING LOSS CARRYBACK
2 10 Sec. 4. Section 422.35, subsection 11, Code 2009, is
2 11 amended to read as follows:
2 12 11. If after applying all of the adjustments provided for
2 13 in this section and the allocation and apportionment
2 14 provisions of section 422.33, the Iowa taxable income results
2 15 in a net operating loss, such net operating loss shall be
2 16 deducted as follows:
2 17 a. The For tax years beginning prior to January 1, 2009,
2 18 the Iowa net operating loss shall be carried back three
2 19 taxable years for a net operating loss incurred in a
2 20 presidentially declared disaster area by a taxpayer engaged in
2 21 a small business or in the trade or business of farming. For
2 22 all other Iowa net operating losses for tax years beginning
2 23 prior to January 1, 2009, the net operating loss shall be
2 24 carried back two taxable years or to the taxable year in which
2 25 the corporation first commenced doing business in this state,
2 26 whichever is later.
2 27 b. The An Iowa net operating loss for a tax year beginning
2 28 on or after January 1, 2009, or an Iowa net operating loss
2 29 remaining after being carried back as required in paragraph
2 30 "a" or "f" or if not required to be carried back shall be
2 31 carried forward twenty taxable years.
2 32 c. If the election under section 172(b)(3) of the Internal
2 33 Revenue Code is made, the Iowa net operating loss shall be
2 34 carried forward twenty taxable years.
2 35 d. No portion of a net operating loss which was sustained
3 1 from that portion of the trade or business carried on outside
3 2 the state of Iowa shall be deducted.
3 3 e. The limitations on net operating loss carryback and
3 4 carryforward under sections 172(b)(1)(E) and 172(h) of the
3 5 Internal Revenue Code shall apply.
3 6 f. Notwithstanding paragraph "a", for a taxpayer who is
3 7 engaged in the trade or business of farming as defined in
3 8 section 263A(e)(4) of the Internal Revenue Code and has a loss
3 9 from farming as defined in section 172(b)(1)(F) of the
3 10 Internal Revenue Code including modifications prescribed by
3 11 rule by the director, the Iowa loss from the trade or business
3 12 of farming, for tax years beginning prior to January 1, 2009,
3 13 is a net operating loss which may be carried back five taxable
3 14 years prior to the taxable year of the loss.
3 15 g. Provided, however, that The deductions described in
3 16 paragraphs "a" through "f" of this subsection are allowed
3 17 subject to the requirement that a corporation affected by the
3 18 allocation provisions of section 422.33 shall be permitted to
3 19 deduct only such that portion of the deductions for net
3 20 operating loss and federal income taxes as that is fairly and
3 21 equitably allocable to Iowa, under rules prescribed by the
3 22 director.
3 23 Sec. 5. RETROACTIVE APPLICABILITY DATE. This division of
3 24 this Act applies retroactively to January 1, 2009, for tax
3 25 years beginning on or after that date.
3 26 DIVISION III
3 27 REFUND INTEREST
3 28 Sec. 6. Section 422.25, subsection 3, Code 2009, is
3 29 amended to read as follows:
3 30 3. If the amount of the tax as determined by the
3 31 department is less than the amount paid, the excess shall be
3 32 refunded with interest, the interest to begin to accrue on the
3 33 first day of the second third calendar month following the
3 34 date of payment or the date the return was due to be filed, or
3 35 the extended due date by which the return was due to be filed
4 1 if ninety percent of the tax was paid by the original due
4 2 date, or was filed, whichever is the latest, at the rate in
4 3 effect under section 421.7 counting each fraction of a month
4 4 as an entire month under the rules prescribed by the director.
4 5 If an overpayment of tax results from a net operating loss or
4 6 net capital loss which is carried back to a prior year, the
4 7 overpayment, for purposes of computing interest on refunds,
4 8 shall be considered as having been made on the date a claim
4 9 for refund or amended return carrying back the net operating
4 10 loss or net capital loss is filed with the department or on
4 11 the first day of the second third calendar month following the
4 12 date of the actual payment of the tax, whichever is later.
4 13 However, when the net operating loss or net capital loss
4 14 carryback to a prior year eliminates or reduces an
4 15 underpayment of tax due for an earlier year, the full amount
4 16 of the underpayment of tax shall bear interest at the rate in
4 17 effect under section 421.7 for each month counting each
4 18 fraction of a month as an entire month from the due date of
4 19 the tax for the earlier year to the last day of the taxable
4 20 year in which the net operating loss or net capital loss
4 21 occurred.
4 22 Sec. 7. Section 422.91, Code 2009, is amended to read as
4 23 follows:
4 24 422.91 CREDIT FOR ESTIMATED TAX.
4 25 1. Any amount of estimated tax paid is a credit against
4 26 the amount of tax due on a final, completed return, and any
4 27 overpayment of five dollars or more shall be refunded to the
4 28 taxpayer with interest, the interest to begin to accrue on the
4 29 first day of the second third calendar month following the
4 30 date of payment or the date the return was due to be filed or
4 31 was filed, whichever is the latest, at the rate established
4 32 under section 421.7, and the return constitutes a claim for
4 33 refund for this purpose. Amounts less than five dollars shall
4 34 be refunded to the taxpayer only upon written application in
4 35 accordance with section 422.73, and only if the application is
5 1 filed within twelve months after the due date for the return.
5 2 2. In lieu of claiming a refund, the taxpayer may elect to
5 3 have the overpayment shown on its final, completed return for
5 4 the taxable year credited to the tax liability for the
5 5 following taxable year.
5 6 Sec. 8. RETROACTIVE APPLICABILITY DATE. This division of
5 7 this Act applies retroactively to January 1, 2009, for tax
5 8 years beginning on or after that date.
5 9 EXPLANATION
5 10 This bill relates to tax credits for economic development
5 11 and agricultural assets transfers, to net operating losses,
5 12 and to refund interest.
5 13 Division I of the bill sets a maximum aggregate limit on
5 14 the amount of tax credits the department of economic
5 15 development may issue pursuant to the high quality jobs
5 16 creation program, the film television and video project
5 17 promotion program, the corporate research tax credit of the
5 18 quality jobs enterprise zone program, the enterprise zones
5 19 program, and the assistive device tax credit program. The
5 20 department may not issue more than $175 million of tax credits
5 21 under these programs.
5 22 Division I also limits the amount of tax credits that may
5 23 be issued under the agricultural assets transfer tax credit
5 24 program to $3 million.
5 25 Division I applies to contracts and agreements entered into
5 26 or tax credits awarded on or after July 1, 2009.
5 27 Division II ends the carryback of net operating losses of
5 28 corporations in tax years beginning on or after January 1,
5 29 2009, and provides only for the current carryforward period of
5 30 twenty taxable years.
5 31 Division II applies retroactively to January 1, 2009, for
5 32 tax years beginning on or after that date.
5 33 Code sections 422.25 and 422.91 provide for the accrual of
5 34 interest on refunds due to individual and corporate income
5 35 taxpayers. The refund period begins on the first day of the
6 1 second calendar month following the date of payment or the
6 2 date the return was due to be filed. Division III of the bill
6 3 provides that the period begins on the first day of the third
6 4 calendar month.
6 5 Division III applies retroactively to January 1, 2009, for
6 6 tax years beginning on or after that date.
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