House File 593 - Introduced HOUSE FILE 593 BY HEIN A BILL FOR An Act providing a tax credit against the individual income 1 tax for equity investments in a qualified motor fuel pump 2 station, and including effective date and retroactive and 3 other applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1947YH (2) 86 mm/sc
H.F. 593 Section 1. NEW SECTION . 422.10A Qualified motor fuel pump 1 station investment tax credit. 2 1. For purposes of this section, unless the context 3 otherwise requires: 4 a. “Equity investment” means an equity interest in a 5 business which equity interest was received in exchange for 6 a capital contribution or payment in the form of cash, real 7 property, or tangible personal property. 8 b. “Governing documents” means the organizing documents 9 of a business including but not limited to a certificate of 10 organization, certificate of limited partnership, articles of 11 incorporation, or other similar document, and the operating 12 documents of a business including but not limited to a 13 partnership agreement, operating agreement, bylaws, or other 14 similar documents. 15 c. “Qualified motor fuel pump station” means a business that 16 meets all of the following requirements: 17 (1) The business is operated for profit and primarily 18 engaged in the retail sale of motor fuel to consumers in this 19 state. 20 (2) The business has a commercial domicile, as defined in 21 section 422.32, in this state. 22 (3) The governing documents of the business require that 23 at least one percent of the annual profits of the business be 24 donated for the benefit of fire fighters, police officers, or 25 emergency medical service personnel serving in this state, or 26 veterans living in this state. 27 2. The taxes imposed under this division, less the credits 28 allowed under section 422.12, shall be reduced by a qualified 29 motor fuel pump station tax credit in an amount equal to five 30 percent of a taxpayer’s equity investment in a qualified motor 31 fuel pump station. 32 3. Any tax credit in excess of the taxpayer’s liability 33 for the tax year is not refundable but may be credited to the 34 tax liability for the following five years or until depleted, 35 -1- LSB 1947YH (2) 86 mm/sc 1/ 3
H.F. 593 whichever is earlier. 1 4. In order for an equity investment to qualify for the tax 2 credit, the business in which the equity investment is made 3 shall, within one hundred twenty days of the first investment, 4 do all of the following: 5 a. Submit an application to the department, in the manner 6 and form prescribed by the department, to be verified as a 7 qualified motor fuel pump station. 8 b. Notify the department of the names, addresses, equity 9 issued, consideration paid for the equity interest, and the 10 amount of any tax credits, of all equity owners who may qualify 11 for the tax credits. The list of equity owners who may qualify 12 for the tax credits shall be amended as new equity investments 13 are sold or as any information on the list changes. 14 5. After verifying the eligibility of a qualified motor fuel 15 pump station, the department shall allow the claiming of tax 16 credits as provided in subsection 2. 17 Sec. 2. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 18 immediate importance, takes effect upon enactment. 19 Sec. 3. APPLICABILITY. This Act applies to equity 20 investments made on or after the effective date of this Act. 21 Sec. 4. RETROACTIVE APPLICABILITY. This Act applies 22 retroactively to January 1, 2015, for tax years beginning on 23 or after that date. 24 EXPLANATION 25 The inclusion of this explanation does not constitute agreement with 26 the explanation’s substance by the members of the general assembly. 27 This bill provides an individual income tax credit for 28 an individual who makes an equity investment in a qualified 29 motor fuel pump station. The tax credit is equal to 5 percent 30 of the individual’s equity investment. “Equity investment”, 31 “qualified motor fuel pump station”, and other related terms 32 are defined in the bill. 33 In order to qualify for the tax credit, a business must, 34 within 120 days of the first investment, apply to the 35 -2- LSB 1947YH (2) 86 mm/sc 2/ 3
H.F. 593 department of revenue to be verified as a qualified motor fuel 1 pump station and must provide certain investor and investment 2 information. 3 The tax credit is nonrefundable, but any amount in excess of 4 the tax liability may be carried forward for up to five years. 5 The bill takes effect upon enactment and applies to 6 equity investments made on or after that date, and applies 7 retroactively to tax years beginning on or after January 1, 8 2015. 9 -3- LSB 1947YH (2) 86 mm/sc 3/ 3