Senate Study Bill 3192 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON BOLKCOM) A BILL FOR An Act making the research activities tax credits nonrefundable 1 and including effective date and applicability provisions. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 6089XC (4) 84 mm/sc

S.F. _____ Section 1. Section 15.335, subsection 8, Code Supplement 1 2011, is amended by striking the subsection and inserting in 2 lieu thereof the following: 3 8. Any credit in excess of the tax liability is not 4 refundable but the excess for the tax year may be credited to 5 the tax liability for the following seven tax years or until 6 depleted, whichever is the earlier. 7 Sec. 2. Section 15.335, subsection 9, Code Supplement 2011, 8 is amended to read as follows: 9 9. The department of revenue shall by February 15 of 10 each year issue an annual report to the general assembly 11 containing the total amount of all claims made by employers 12 under this section , and the portion of the claims issued as 13 refunds, and the portion of the claims available to claimants 14 for carryforward into future years, for all claims processed 15 during the previous calendar year. The report shall contain 16 the name of each claimant for whom a tax credit in excess of 17 five hundred thousand dollars was issued and the amount of the 18 credit received. 19 Sec. 3. Section 15A.9, subsection 8, paragraph d, Code 20 Supplement 2011, is amended by striking the paragraph and 21 inserting in lieu thereof the following: 22 d. Any credit in excess of the tax liability is not 23 refundable but the excess for the tax year may be credited to 24 the tax liability for the following seven tax years or until 25 depleted, whichever is the earlier. 26 Sec. 4. Section 422.10, subsection 4, Code Supplement 2011, 27 is amended by striking the subsection and inserting in lieu 28 thereof the following: 29 4. Any credit in excess of the tax liability is not 30 refundable but the excess for the tax year may be credited to 31 the tax liability for the following seven tax years or until 32 depleted, whichever is the earlier. 33 Sec. 5. Section 422.10, subsection 6, Code Supplement 2011, 34 is amended to read as follows: 35 -1- LSB 6089XC (4) 84 mm/sc 1/ 3

S.F. _____ 6. The department shall by February 15 of each year issue 1 an annual report to the general assembly containing the total 2 amount of all claims made by employers under this section , and 3 the portion of the claims issued as refunds, and the portion of 4 the claims available to claimants for carryforward into future 5 years, for all claims processed during the previous calendar 6 year. The report shall contain the name of each claimant for 7 whom a tax credit in excess of five hundred thousand dollars 8 was issued and the amount of the credit received. 9 Sec. 6. Section 422.33, subsection 5, paragraph e, Code 10 Supplement 2011, is amended by striking the paragraph and 11 inserting in lieu thereof the following: 12 e. Any credit in excess of the tax liability is not 13 refundable but the excess for the tax year may be credited to 14 the tax liability for the following seven tax years or until 15 depleted, whichever is the earlier. 16 Sec. 7. Section 422.33, subsection 5, paragraph h, Code 17 Supplement 2011, is amended to read as follows: 18 h. The department shall by February 15 of each year issue 19 an annual report to the general assembly containing the total 20 amount of all claims made by employers under this subsection , 21 and the portion of the claims issued as refunds, and the 22 portion of the claims available to claimants for carryforward 23 into future years, for all claims processed during the previous 24 calendar year. The report shall contain the name of each 25 claimant for whom a tax credit in excess of five hundred 26 thousand dollars was issued and the amount of the credit 27 received. 28 Sec. 8. EFFECTIVE DATE. This Act takes effect on January 29 1, 2013. 30 Sec. 9. APPLICABILITY. This Act applies to tax years 31 beginning on or after January 1, 2013. 32 EXPLANATION 33 This bill relates to the research activities credits for 34 the individual and corporate income tax, and the research 35 -2- LSB 6089XC (4) 84 mm/sc 2/ 3

S.F. _____ activities credits awarded by the economic development 1 authority. Under current law, all research activities credits 2 are refundable. The bill amends the credits to make them 3 nonrefundable and eligible for carryforward for seven years. 4 The bill also requires that the department include data on 5 credits available to claimants for carryforward into future 6 years in its annual report to the general assembly. 7 The bill takes effect on January 1, 2013, and applies to tax 8 years beginning on or after that date. 9 -3- LSB 6089XC (4) 84 mm/sc 3/ 3