Senate Study Bill 1102 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON FEENSTRA) A BILL FOR An Act relating to the deduction of Iowa brewing ingredients 1 from individual and corporate income taxes if used to make 2 beer for sale, and including applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1874XC (2) 88 jm/jh

S.F. _____ Section 1. Section 422.7, Code 2019, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 60. a. Subtract an additional deduction 3 for the expense of purchasing Iowa brewing ingredients if used 4 to make beer for sale. 5 b. This subsection applies to a taxpayer that holds a valid 6 class “A” or special class “A” beer permit to manufacture beer. 7 c. A taxpayer may claim the deduction as a partnership, S 8 corporation, limited liability company, estate, or trust or 9 claim the deduction as an individual. The amount claimed by 10 the individual shall be based upon the pro rata share of the 11 individual’s earnings of a partnership, S corporation, limited 12 liability company, estate, or trust. 13 d. For purposes of this subsection, “Iowa brewing 14 ingredient” means any ingredient that is grown or produced 15 in Iowa that is added to water and yeast to produce beer, 16 including but not limited to the following: hops, fruits, 17 vegetables, herbs, spices, and honey. 18 Sec. 2. Section 422.35, Code 2019, is amended by adding the 19 following new subsection: 20 NEW SUBSECTION . 26. a. Subtract an additional deduction 21 for the expense of purchasing Iowa brewing ingredients if used 22 to make beer for sale. 23 b. This subsection applies to a taxpayer that holds a valid 24 class “A” or special class “A” beer permit to manufacture beer. 25 c. For purposes of this subsection, “Iowa brewing 26 ingredient” means any ingredient that is grown or produced 27 in Iowa that is added to water and yeast to produce beer, 28 including but not limited to the following: hops, fruits, 29 vegetables, herbs, spices, and honey. 30 Sec. 3. APPLICABILITY. This Act applies to tax years 31 beginning on or after January 1, 2020. 32 EXPLANATION 33 The inclusion of this explanation does not constitute agreement with 34 the explanation’s substance by the members of the general assembly. 35 -1- LSB 1874XC (2) 88 jm/jh 1/ 2

S.F. _____ This bill relates to deducting Iowa brewing ingredients from 1 individual and corporate income taxes if used to make beer for 2 sale. 3 The bill allows an additional deduction expense for 4 purchasing Iowa brewing ingredients from individual and 5 corporate income taxes. 6 The bill applies to holders of a valid class “A” or special 7 class “A” beer permit to manufacture beer. Class “A” and 8 special class “A” beer permits are defined in Code section 9 123.130. 10 The bill defines “Iowa brewing ingredient” to mean any 11 ingredient that is grown or produced in Iowa that is added to 12 water and yeast to produce beer, including but not limited to 13 the following: hops, fruits, vegetables, herbs, spices, and 14 honey. 15 The bill applies to tax years beginning on or after January 16 1, 2020. 17 -2- LSB 1874XC (2) 88 jm/jh 2/ 2