SSB 1102 (LSB 1874XC (2) 88)

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 from individual and corporate income taxes if used to make beer for sale, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 422.7, Code 2019, is amended by adding the following new subsection:
   NEW SUBSECTION.  60.  a.  Subtract an additional deduction for the expense of purchasing Iowa brewing ingredients if used to make beer for sale.
   b.  This subsection applies to a taxpayer that holds a valid class “A” or special class “A” beer permit to manufacture beer. 
   c.  A taxpayer may claim the deduction as a partnership, S corporation, limited liability company, estate, or trust or claim the deduction as an individual. The amount claimed by the individual shall be based upon the pro rata share of the individual’s earnings of a partnership, S corporation, limited liability company, estate, or trust.
   d.  For purposes of this subsection, “Iowa brewing ingredient” means any ingredient that is grown or produced in Iowa that is added to water and yeast to produce beer, including but not limited to the following: hops, fruits, vegetables, herbs, spices, and honey.
    Sec. 2.  Section 422.35, Code 2019, is amended by adding the following new subsection:
   NEW SUBSECTION.  26.  a.  Subtract an additional deduction for the expense of purchasing Iowa brewing ingredients if used to make beer for sale.
   b.  This subsection applies to a taxpayer that holds a valid class “A” or special class “A” beer permit to manufacture beer.
   c.  For purposes of this subsection, “Iowa brewing ingredient” means any ingredient that is grown or produced in Iowa that is added to water and yeast to produce beer, including but not limited to the following: hops, fruits, vegetables, herbs, spices, and honey.
    Sec. 3.  APPLICABILITY.  This Act applies to tax years beginning on or after January 1, 2020.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to deducting Iowa brewing ingredients from individual and corporate income taxes if used to make beer for sale.
   The bill allows an additional deduction expense for purchasing Iowa brewing ingredients from individual and corporate income taxes. 
   The bill applies to holders of a valid class “A” or special class “A” beer permit to manufacture beer. Class “A” and special class “A” beer permits are defined in Code section 123.130.
   The bill defines “Iowa brewing ingredient” to mean any ingredient that is grown or produced in Iowa that is added to water and yeast to produce beer, including but not limited to the following: hops, fruits, vegetables, herbs, spices, and honey.
   The bill applies to tax years beginning on or after January 1, 2020.