House Study Bill 674 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON SANDS) A BILL FOR An Act reducing the state franchise tax rate, and including 1 effective date and applicability provisions. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 6137HC (1) 85 mm/sc

H.F. _____ Section 1. Section 422.63, Code 2014, is amended to read as 1 follows: 2 422.63 Amount of tax. 3 The franchise tax is imposed annually in an amount equal 4 to five one-half of one percent of the net income received or 5 accrued during the taxable year. If the net income of the 6 financial institution is derived from its business carried on 7 entirely within the state, the tax shall be imposed on the 8 entire net income, but if the business is carried on partly 9 within and partly without the state, the portion of net income 10 reasonably attributable to the business within the state shall 11 be specifically allocated or equitably apportioned within and 12 without the state under rules of the director. 13 Sec. 2. EFFECTIVE DATE. This Act takes effect January 1, 14 2015. 15 Sec. 3. APPLICABILITY. This Act applies to tax years 16 beginning on or after January 1, 2015. 17 EXPLANATION 18 The inclusion of this explanation does not constitute agreement with 19 the explanation’s substance by the members of the general assembly. 20 This bill reduces from 5 percent to 0.50 percent the state 21 franchise tax rate imposed on financial institutions for the 22 privilege of doing business in this state. 23 The bill takes effect January 1, 2015, and applies to tax 24 years beginning on or after that date. 25 -1- LSB 6137HC (1) 85 mm/sc 1/ 1