House File 2443 - Introduced HOUSE FILE 2443 BY LUKAN A BILL FOR An Act relating to economic development by establishing a 1 headquarters relocation tax credit program within the 2 economic development authority for corporations that 3 relocate headquarters to the state and including effective 4 date and applicability provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 5368YH (1) 84 mm/sc

H.F. 2443 Section 1. NEW SECTION . 15E.371 Headquarters relocation 1 tax credit program. 2 1. For purposes of this section, unless the context 3 otherwise requires: 4 a. “Corporate headquarters” means the building or buildings 5 where the principal offices of the principal executive officers 6 of an eligible corporation are located. 7 b. “Eligible corporation” means a corporation that is 8 engaged in either interstate or intrastate commerce, that 9 maintains corporate headquarters at a location without 10 this state, that has not previously maintained corporate 11 headquarters at a location within this state, and that commits 12 contractually to relocating its corporate headquarters to this 13 state. 14 c. “Qualifying project” means the relocation of the 15 corporate headquarters of an eligible corporation from a 16 location without this state to a location within this state. 17 d. (1) “Relocation costs” means reasonable and necessary 18 expenses incurred by an eligible corporation for a qualifying 19 project. The term includes: 20 (a) Moving costs and related expenses. 21 (b) The purchase of new or replacement equipment. 22 (c) Capital investment costs. 23 (d) Property assembly and development costs, including: 24 (i) The purchase, lease, or construction of buildings and 25 land. 26 (ii) Infrastructure improvements. 27 (iii) Site development costs. 28 (2) “Relocation costs” does not include any cost that 29 does not directly result from relocation of the corporate 30 headquarters from a location without this state to a location 31 within this state. 32 2. A tax credit shall be allowed against the taxes imposed 33 in chapter 422, division III for an eligible corporation that 34 completes a qualifying project and incurs relocation costs. 35 -1- LSB 5368YH (1) 84 mm/sc 1/ 4

H.F. 2443 The credit shall be an amount equal to fifty percent of the 1 relocation costs of the eligible corporation that completes the 2 qualifying project. 3 3. To receive the headquarters relocation tax credit, an 4 eligible corporation must submit an application and proof of 5 the eligible corporation’s relocation costs to the authority, 6 made in the manner and form prescribed by the authority. The 7 authority shall audit all costs submitted by the eligible 8 corporation and determine which costs qualify as relocation 9 costs. In determining whether a cost qualifies as a relocation 10 cost, the authority shall consider whether an expense would 11 likely have been incurred by the eligible corporation if the 12 eligible corporation had not relocated from its original 13 location. 14 4. After determining the relocation costs of an eligible 15 corporation, the authority shall issue to the eligible 16 corporation a tax certificate for the headquarters relocation 17 tax credit. The certificate shall contain the eligible 18 corporation’s name, address, tax identification number, the 19 amount of the credit, the tax year for which the certificate 20 applies, and an expiration date for the certificate. The 21 eligible corporation must file the tax credit certificate with 22 the eligible corporation’s income tax return in order to claim 23 the tax credit. 24 5. The tax credit, unless otherwise void, shall be 25 accepted by the department of revenue as payment for taxes 26 imposed pursuant to chapter 422, division III, subject to any 27 conditions or restrictions placed by the authority upon the 28 face of the tax credit and subject to the limitations of this 29 section. 30 6. The tax credits issued under this section are not 31 transferrable to any person or entity. 32 7. Any credit in excess of the tax liability is not 33 refundable, but the excess for the tax year may be credited to 34 the tax liability for the following year. 35 -2- LSB 5368YH (1) 84 mm/sc 2/ 4

H.F. 2443 8. The authority, in consultation with the department of 1 revenue, shall adopt rules pursuant to chapter 17A for the 2 administration of this section, including rules for entering 3 into contracts with eligible corporations that wish to relocate 4 corporate headquarters to this state and rules for auditing and 5 determining relocation costs. 6 Sec. 2. Section 422.33, Code Supplement 2011, is amended by 7 adding the following new subsection: 8 NEW SUBSECTION . 29. The taxes imposed under this division 9 shall be reduced by a headquarters relocation tax credit 10 allowed under section 15E.371. 11 Sec. 3. EFFECTIVE DATE. This Act takes effect January 1, 12 2013. 13 Sec. 4. APPLICABILITY. This Act applies to qualifying 14 projects started and relocation costs incurred on or after 15 January 1, 2013. 16 EXPLANATION 17 This bill provides a credit against the corporate income tax 18 for a corporation that relocates its corporate headquarters 19 to this state. In order to be eligible for the tax credit, 20 the corporation must have its corporate headquarters outside 21 of Iowa, must not have previously maintained corporate 22 headquarters within Iowa, and must contractually agree to 23 relocate its headquarters to Iowa. 24 The credit is equal to 50 percent of the relocation costs 25 of a corporation that moves its corporate headquarters to this 26 state. “Relocation costs” are those that directly result 27 from relocation of the corporate headquarters and include 28 moving costs; the purchase of new or replacement equipment; 29 capital investment costs; costs related to the purchase, 30 lease or construction of buildings and land; infrastructure 31 improvements; and site development costs. 32 To receive the tax credit, a corporation must submit an 33 application and proof of its costs to the economic development 34 authority. The economic development authority is required 35 -3- LSB 5368YH (1) 84 mm/sc 3/ 4

H.F. 2443 to audit all the submitted costs and determine which qualify 1 for the credit. The economic development authority shall 2 then issue a tax credit certificate to the corporation, which 3 certificate shall be attached to the corporation’s tax return. 4 The tax credits are nontransferable and nonrefundable, but may 5 be carried forward to the following year. 6 The authority, in consultation with the department of 7 revenue, shall adopt rules for the administration of this 8 credit. 9 The bill takes effect January 1, 2013, and applies to 10 qualifying projects started and relocation costs incurred on 11 or after that date. 12 -4- LSB 5368YH (1) 84 mm/sc 4/ 4