SSB 1174 (LSB 2047XC (2) 85)

SENATE FILE _____

BY  (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON BOLKCOM)

A BILL FOR

An Act creating a tax credit for certain small businesses offering wellness programs to employees and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  135.27B  Wellness program tax credit.
   1.
  a.  A wellness program tax credit shall be allowed against the taxes imposed in chapter 422, divisions II, III, and V, and in chapter 432, and against the moneys and credits tax imposed in section 533.329, for a portion of a taxpayer’s costs incurred in providing a qualified small business wellness program to employees.
   b.  The tax credit shall be an amount equal to fifty percent of the costs incurred in providing a qualified small business wellness program to employees. However, the total amount of the tax credit claimed shall not exceed an amount equal to three hundred dollars per employee per tax year.
   c.  To be eligible for the tax credit, a small business shall be located in this state, be operated for profit and under a single management, and have at least two but not more than one hundred employees employed for at least fifty percent of the employer’s working days during the tax year.
   d.  An individual may claim a tax credit under this section of a partnership, limited liability company, S corporation, estate, or trust electing to have income taxed directly to the individual. The amount claimed by the individual shall be based upon the pro rata share of the individual’s earnings from the partnership, limited liability company, S corporation, estate, or trust.
   e.  Any tax credit in excess of the tax liability is not refundable, but the taxpayer may elect to have the excess credited to the tax liability for the following five years or until depleted, whichever is earlier. A tax credit shall not be carried back to a tax year prior to the tax year in which the taxpayer first receives the tax credit.
   f.  A taxpayer claiming a credit under this section shall not be precluded, in computing taxable income, from deducting the costs of providing a wellness program allowed under any provision of the Internal Revenue Code.

   2.  To claim a wellness program tax credit under this section, a taxpayer must attach a tax credit certificate issued by the department verifying the taxpayer’s eligibility for the credit. The tax credit certificate attached to the taxpayer’s tax return shall be issued in the taxpayer’s name, contain an expiration date that falls on or after the last day of the taxable year for which the taxpayer is claiming the tax credit, and show a tax credit amount equal to or greater than the tax credit claimed on the taxpayer’s tax return.
   3.
  a.  The department shall accept applications from eligible small businesses for wellness program tax credits.
   b.  If the department determines that a wellness program qualifies for a tax credit pursuant to this section, the department shall issue a wellness program tax credit certificate to be attached to the small business’s tax return. The tax credit certificate shall contain the taxpayer’s name, address, tax identification number, the number of employees, the total costs incurred in providing the wellness program, and any other information required by the department of revenue.
   c.  The tax credit certificate, unless otherwise void, shall be accepted by the department of revenue as payment for taxes imposed pursuant to chapter 422, divisions II, III, and V, chapter 432, and section 533.329, subject to any conditions or restrictions placed by the department upon the face of the tax credit and subject to the limitations of this section.
   d.  Tax credits issued under this section are not transferable to any person or entity.
   4.  The department shall not issue a tax credit certificate under this section unless the wellness program offered by a small business provides for all of the following:
   a.  The development of measurable positive health outcomes for employees participating in the wellness program.
   b.  Regular health risk factor assessments and a treatment regimen designed to address health risk factors. For purposes of this paragraph, “health risk factor” means a condition with the potential to negatively affect a person’s health or bodily well-being. “Health risk factors” include but are not limited to cholesterol levels, triglyceride levels, or blood pressure levels that are outside the ranges for such measurements recommended by the centers for disease control and prevention of the United States department of health and human services.
   c.  Tobacco cessation education that covers all of the cessation treatments and counseling approved by the United States food and drug administration. Tobacco cessation education may be provided by direct payment on an employee’s behalf, reimbursement of costs, or by the purchase of insurance coverage providing for such education.
   d.  Weight loss education that addresses both nutrition and physical activity.
   e.  Preventative care education, including information about immunization, promotion of physical activity, nutritional counseling, and stress management techniques.
   f.  Disease management services that identify diseases before onset and treat diseases after onset.
   5.  The department may charge a fee in an amount not to exceed fifty dollars per application for costs incurred in the administration of this section.
   6.  The department shall adopt rules in accordance with chapter 17A for the administration of this section, including rules governing the application process and the criteria used to evaluate applications.
    Sec. 2.  NEW SECTION.  422.11E  Wellness program tax credit.
   The taxes imposed under this division, less the credits allowed under section 422.12, shall be reduced by a wellness program tax credit allowed under section 135.27B.
    Sec. 3.  Section 422.33, Code 2013, is amended by adding the following new subsection:
   NEW SUBSECTION.  30.  The taxes imposed under this division shall be reduced by a wellness program tax credit allowed under section 135.27B.
    Sec. 4.  Section 422.60, Code 2013, is amended by adding the following new subsection:
   NEW SUBSECTION.  12.  The taxes imposed under this division shall be reduced by a wellness program tax credit allowed under section 135.27B.
    Sec. 5.  NEW SECTION.  432.12N  Wellness program tax credit.
   The taxes imposed under this chapter shall be reduced by a wellness program tax credit allowed under section 135.27B.
    Sec. 6.  Section 533.329, subsection 2, Code 2013, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  k.  The moneys and credits tax imposed under this section shall be reduced by a wellness program tax credit allowed under section 135.27B.
    Sec. 7.  EFFECTIVE DATE.  This Act takes effect January 1, 2014.
    Sec. 8.  APPLICABILITY.  This Act applies to tax years beginning on or after January 1, 2014.
EXPLANATION
   This bill provides a credit against the individual and corporate income taxes, franchise tax, insurance premiums tax, and moneys and credits tax for a portion of a taxpayer’s costs incurred in providing a qualified small business wellness program to employees.
   The amount of the tax credit is 50 percent of the costs incurred in providing a qualified small business wellness program to employees, but the total amount of the credit claimed cannot exceed $300 per employee per year.
   To be eligible for the tax credit, a small business must be located in the state, be operated for profit and under a single management, and have at least two but not more than 100 employees employed for at least 50 percent of the employer’s working days during the tax year.
   The tax credit is not refundable, but the taxpayer may elect to have the excess credited to the tax liability for the following five years or until depleted, whichever is earlier. A tax credit shall not be carried back to a tax year prior to the tax year in which the taxpayer first receives the tax credit. The tax credit is not transferable.
   To claim a wellness program tax credit, a taxpayer must attach a tax credit certificate issued by the department of public health verifying the taxpayer’s eligibility for the credit. The department will issue a tax credit certificate if the wellness program offered by the small business provides for all of the following: (1) measurable positive health outcomes, (2) regular health risk factor assessments, (3) tobacco cessation education, (4) weight loss education that addresses both nutrition and physical activity, (5) preventative care education, and (6) disease management services.
   The department may charge a fee in an amount not to exceed $50 per application for administrative costs and is directed to adopt rules for the issuance of the tax credit certificates.
   The bill takes effect January 1, 2014, and applies to tax years beginning on or after that date.