Senate File 2069 - Introduced SENATE FILE 2069 BY HOGG A BILL FOR An Act providing an individual and corporate income tax credit 1 for the purchase of a fuel efficient new motor vehicle and 2 including retroactive applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5261XS (2) 84 mm/sc

S.F. 2069 Section 1. NEW SECTION . 422.11I Fuel efficient new motor 1 vehicle tax credit. 2 1. For purposes of this section, unless the context 3 otherwise requires: 4 a. “Fuel economy” means the average number of miles 5 traveled by an automobile per gallon of gasoline consumed as 6 determined by the United States environmental protection agency 7 administrator in accordance with 26 U.S.C. § 4064(c). 8 b. “New motor vehicle” means the same as defined in section 9 321.1, subsection 42, paragraph “c” , excluding motorcycles and 10 motorized bicycles. 11 c. “Plug-in electric drive motor vehicle” means the same as 12 in section 30D(d) of the Internal Revenue Code. 13 2. The taxes imposed under this division, less the credits 14 allowed under section 422.12, shall be reduced by a fuel 15 efficient new motor vehicle tax credit for the purchase in this 16 state of a new motor vehicle subject to registration pursuant 17 to section 321.18, which was purchased by the taxpayer and 18 placed in service in this state during the tax year. The 19 credit shall be equal to the following amount: 20 a. Five hundred dollars if the new motor vehicle has 21 a highway or city fuel economy of between thirty-five and 22 thirty-nine miles per gallon. 23 b. One thousand dollars if the new motor vehicle has a 24 highway or city fuel economy of between forty and forty-four 25 miles per gallon. 26 c. Fifteen hundred dollars if the new motor vehicle has 27 a highway or city fuel economy of between forty-five and 28 forty-nine miles per gallon. 29 d. Two thousand dollars if the new motor vehicle has a 30 highway or city fuel economy of fifty miles per gallon or 31 higher, or if the new motor vehicle is a plug-in electric drive 32 motor vehicle. 33 3. For purposes of this chapter, the basis of any property 34 for which a credit is allowable under this section shall be 35 -1- LSB 5261XS (2) 84 mm/sc 1/ 3

S.F. 2069 reduced by the amount of the credit so allowed. 1 4. Any tax credit in excess of the taxpayer’s liability for 2 the tax year is not refundable, but the taxpayer may elect to 3 have the excess credited to the tax liability for the following 4 three years or until depleted, whichever is earlier. 5 5. An individual may claim the tax credit allowed a 6 partnership, limited liability company, S corporation, estate, 7 or trust electing to have the income taxed directly to the 8 individual. The amount claimed by the individual shall be 9 based upon the pro rata share of the individual’s earnings of 10 the partnership, limited liability company, S corporation, 11 estate, or trust. 12 Sec. 2. Section 422.33, Code Supplement 2011, is amended by 13 adding the following new subsection: 14 NEW SUBSECTION . 29. The taxes imposed under this division 15 shall be reduced by a fuel efficient new motor vehicle tax 16 credit allowed under section 422.11I. 17 Sec. 3. RETROACTIVE APPLICABILITY. This Act applies 18 retroactively to January 1, 2012, for tax years beginning on 19 or after that date. 20 EXPLANATION 21 This bill provides an individual and corporate income tax 22 credit for the purchase in this state of a new motor vehicle 23 subject to registration pursuant to Code section 321.18, which 24 was purchased by the taxpayer and placed in service in this 25 state during the tax year. “New motor vehicle” means the same 26 as defined in Code section 321.1, subsection 42, paragraph “c”, 27 excluding motorcycles and motorized bicycles. 28 The amount of the credit varies depending on the fuel economy 29 of the new motor vehicle, as established by the United States 30 environmental protection agency. The credit equals $500 if the 31 fuel economy is between 35 and 39 miles per gallon; $1,000 if 32 the fuel economy is between 40 and 44 miles per gallon; $1,500 33 if the fuel economy is between 45 and 49 miles per gallon; and 34 $2,000 if the fuel economy is 50 miles per gallon or greater, 35 -2- LSB 5261XS (2) 84 mm/sc 2/ 3

S.F. 2069 or if the new motor vehicle is a plug-in electric drive motor 1 vehicle. “Plug-in electric drive motor vehicle” means the same 2 as in section 30D(d) of the Internal Revenue Code. 3 Taxpayers are required to reduce the basis of their new motor 4 vehicle by the amount of the credit allowed. The credit is not 5 refundable, but may be carried forward for up to three years. 6 An individual may claim the tax credit allowed a 7 partnership, limited liability company, S corporation, estate, 8 or trust electing to have the income taxed directly to the 9 individual. The amount claimed by the individual shall be 10 based upon the pro rata share of the individual’s earnings of 11 the partnership, limited liability company, S corporation, 12 estate, or trust. 13 The bill applies retroactively to January 1, 2012, for tax 14 years beginning on or after that date. 15 -3- LSB 5261XS (2) 84 mm/sc 3/ 3