House
Study
Bill
223
-
Introduced
SENATE/HOUSE
FILE
_____
BY
(PROPOSED
GOVERNOR’S
BILL)
A
BILL
FOR
An
Act
relating
to
the
tax
rates
imposed
on
certain
gambling
1
establishments
and
corporations
and
including
retroactive
2
applicability
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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H.F.
_____
DIVISION
I
1
TAXATION
OF
GAMBLING
GAMES
2
Section
1.
Section
99F.11,
subsection
2,
Code
2011,
is
3
amended
by
striking
the
subsection
and
inserting
in
lieu
4
thereof
the
following:
5
2.
The
tax
rate
imposed
each
fiscal
year
on
any
amount
of
6
adjusted
gross
receipts
over
three
million
dollars
shall
be
7
thirty-six
percent.
8
DIVISION
II
9
CORPORATE
INCOME
TAX
RATE
10
Sec.
2.
Section
422.33,
subsection
1,
Code
2011,
is
amended
11
by
striking
the
subsection
and
inserting
in
lieu
thereof
the
12
following:
13
1.
a.
A
tax
is
imposed
annually
upon
each
corporation
14
doing
business
in
this
state,
or
deriving
income
from
sources
15
within
this
state,
at
the
rate
of
six
percent
of
the
net
income
16
received
by
the
corporation
during
the
income
year.
17
b.
For
purposes
of
this
section:
18
(1)
“Income
from
sources
within
this
state”
means
income
19
from
real,
tangible,
or
intangible
property
located
or
having
20
a
situs
in
this
state.
21
(2)
“Net
income”
means
the
net
income
as
calculated
in
22
section
422.35
and
determined
to
be
reasonably
attributable
to
23
Iowa
pursuant
to
subsections
2
and
3.
24
Sec.
3.
Section
422.33,
subsection
1A,
Code
2011,
is
amended
25
to
read
as
follows:
26
1A.
There
is
imposed
upon
each
corporation
exempt
from
27
the
general
business
tax
on
corporations
by
section
422.34,
28
subsection
2
,
a
tax
at
the
rates
rate
specified
in
subsection
1
29
upon
the
state’s
apportioned
share
computed
in
accordance
with
30
subsections
2
and
3
of
the
unrelated
business
income
computed
31
in
accordance
with
the
Internal
Revenue
Code
and
with
the
32
adjustments
set
forth
in
section
422.35
.
33
Sec.
4.
Section
422.33,
subsection
4,
unnumbered
paragraph
34
1,
Code
2011,
is
amended
to
read
as
follows:
35
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S.F.
_____
H.F.
_____
In
addition
to
all
taxes
imposed
under
this
division
,
1
there
is
imposed
upon
each
corporation
doing
business
within
2
the
state
the
greater
of
the
tax
determined
in
subsection
1
,
3
paragraphs
“a”
through
“d”
or
the
state
alternative
minimum
tax
4
equal
to
sixty
percent
of
the
maximum
state
corporate
income
5
tax
rate,
rounded
to
the
nearest
one-tenth
of
one
percent,
of
6
the
state
alternative
minimum
taxable
income
of
the
taxpayer
7
computed
under
this
subsection
.
8
Sec.
5.
RETROACTIVE
APPLICABILITY.
This
division
of
this
9
Act
applies
retroactively
to
January
1,
2011,
for
tax
years
10
beginning
on
or
after
that
date.
11
EXPLANATION
12
This
bill
relates
to
certain
tax
rates
applied
to
gambling
13
establishments
and
corporations.
14
Division
I
of
the
bill
sets
a
single
tax
rate
of
36
percent
15
on
the
adjusted
gross
receipts
over
$3
million
from
gambling
16
games
authorized
under
Code
chapter
99F.
The
current
Code
17
provision
applies
different
tax
rates
of
either
22
percent
or
18
24
percent
on
adjusted
gross
receipts
over
$3
million,
based
19
upon
certain
provisions.
20
Division
II
of
the
bill
relates
to
corporate
income
tax
21
rates.
Currently,
the
corporate
income
tax
is
imposed
in
a
22
progressive
manner
using
four
income
brackets
with
increasing
23
rates:
on
the
first
$25,000
of
income,
the
rate
is
6
percent;
24
on
income
between
$25,000
and
$100,000,
the
rate
is
8
percent;
25
on
income
between
$100,000
and
$250,000,
the
rate
is
10
26
percent;
on
income
of
$250,000
or
more,
the
rate
is
12
percent.
27
The
bill
eliminates
this
tiered
bracket
and
rate
structure
and
28
imposes
the
tax
at
the
rate
of
6
percent
on
the
corporation’s
29
net
income
attributable
to
Iowa.
30
Division
II
applies
retroactively
to
tax
years
beginning
on
31
or
after
January
1,
2011.
32
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