Senate File 211 - Introduced SENATE FILE 211 BY ZAUN , SHIPLEY , FEENSTRA , CHELGREN , BEHN , WHITVER , ROZENBOOM , SINCLAIR , and SCHULTZ A BILL FOR An Act creating an exemption from the computation of the state 1 individual income tax of net capital gains from the sale 2 of an equity investment in a qualified Iowa business and 3 including retroactive applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1807XS (3) 86 mm/sc

S.F. 211 Section 1. Section 422.7, Code 2015, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 57. a. Subtract, to the extent included, 3 the net capital gains from the sale of an equity investment in 4 a qualified Iowa business. 5 b. In order to be eligible for the deduction in paragraph 6 “a” , the taxpayer must be a resident of this state. 7 c. For purposes of this subsection: 8 (1) “Equity investment” means an equity interest in a 9 business which equity interest was received in exchange for 10 a capital contribution or payment in the form of cash, real 11 property, or tangible personal property. 12 (2) “Qualified Iowa business” means a business whose 13 commercial domicile, as defined in section 422.32, is 14 in this state, and includes a sole proprietorship, joint 15 venture, partnership, limited liability company, corporation, 16 association, or any other business entity operated for profit. 17 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies 18 retroactively to January 1, 2015, for tax years beginning on 19 or after that date. 20 EXPLANATION 21 The inclusion of this explanation does not constitute agreement with 22 the explanation’s substance by the members of the general assembly. 23 This bill creates an exemption from the computation of 24 net income for the individual income tax of net capital 25 gains from the sale of an equity investment in a qualified 26 Iowa business. “Equity investment” is defined as an equity 27 interest in a business that was received in exchange for a 28 capital contribution or payment in the form of cash, real 29 property, or tangible personal property. “Qualified Iowa 30 business” is defined as any business operated for profit whose 31 commercial domicile is in Iowa. In order to be eligible for 32 this exemption a taxpayer must be a resident of Iowa. 33 The bill applies retroactively to January 1, 2015, for tax 34 years beginning on or after that date. 35 -1- LSB 1807XS (3) 86 mm/sc 1/ 1