SSB 3192 (LSB 6089XC (4) 84)

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 and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 15.335, subsection 8, Code Supplement 2011, is amended by striking the subsection and inserting in lieu thereof the following:
   8.  Any credit in excess of the tax liability is not refundable but the excess for the tax year may be credited to the tax liability for the following seven tax years or until depleted, whichever is the earlier.
    Sec. 2.  Section 15.335, subsection 9, Code Supplement 2011, is amended to read as follows:
   9.  The department of revenue shall by February 15 of each year issue an annual report to the general assembly containing the total amount of all claims made by employers under this section, and the portion of the claims issued as refunds,
 
and the portion of the claims available to claimants for carryforward into future years, for all claims processed during the previous calendar year. The report shall contain the name of each claimant for whom a tax credit in excess of five hundred thousand dollars was issued and the amount of the credit received.
    Sec. 3.  Section 15A.9, subsection 8, paragraph d, Code Supplement 2011, is amended by striking the paragraph and inserting in lieu thereof the following:
   d.
  Any credit in excess of the tax liability is not refundable but the excess for the tax year may be credited to the tax liability for the following seven tax years or until depleted, whichever is the earlier.
    Sec. 4.  Section 422.10, subsection 4, Code Supplement 2011, is amended by striking the subsection and inserting in lieu thereof the following:
   4.  Any credit in excess of the tax liability is not refundable but the excess for the tax year may be credited to the tax liability for the following seven tax years or until depleted, whichever is the earlier.
    Sec. 5.  Section 422.10, subsection 6, Code Supplement 2011, is amended to read as follows:
   6.  The department shall by February 15 of each year issue an annual report to the general assembly containing the total amount of all claims made by employers under this section, and the portion of the claims issued as refunds,
 
and the portion of the claims available to claimants for carryforward into future years, for all claims processed during the previous calendar year. The report shall contain the name of each claimant for whom a tax credit in excess of five hundred thousand dollars was issued and the amount of the credit received.
    Sec. 6.  Section 422.33, subsection 5, paragraph e, Code Supplement 2011, is amended by striking the paragraph and inserting in lieu thereof the following:
   e.
  Any credit in excess of the tax liability is not refundable but the excess for the tax year may be credited to the tax liability for the following seven tax years or until depleted, whichever is the earlier.
    Sec. 7.  Section 422.33, subsection 5, paragraph h, Code Supplement 2011, is amended to read as follows:
   h.  The department shall by February 15 of each year issue an annual report to the general assembly containing the total amount of all claims made by employers under this subsection, and the portion of the claims issued as refunds,
 
and the portion of the claims available to claimants for carryforward into future years, for all claims processed during the previous calendar year. The report shall contain the name of each claimant for whom a tax credit in excess of five hundred thousand dollars was issued and the amount of the credit received.
    Sec. 8.  EFFECTIVE DATE.  This Act takes effect on January 1, 2013.
    Sec. 9.  APPLICABILITY.  This Act applies to tax years beginning on or after January 1, 2013.
EXPLANATION
   This bill relates to the research activities credits for the individual and corporate income tax, and the research activities credits awarded by the economic development authority. Under current law, all research activities credits are refundable. The bill amends the credits to make them nonrefundable and eligible for carryforward for seven years.
   The bill also requires that the department include data on credits available to claimants for carryforward into future years in its annual report to the general assembly.
   The bill takes effect on January 1, 2013, and applies to tax years beginning on or after that date.