House File 2471 - Introduced HOUSE FILE 2471 BY KURTH , WILBURN , CROKEN , BAGNIEWSKI , AMOS JR. , SRINIVAS , OLSON , STECKMAN , and WESSEL-KROESCHELL A BILL FOR An Act creating an electric outdoor power equipment tax credit 1 available against the individual and corporate income taxes, 2 and including retroactive applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5602YH (4) 90 jm/jh

H.F. 2471 Section 1. NEW SECTION . 422.12P Electric outdoor power 1 equipment tax credit. 2 1. As used in this section, “electric outdoor power 3 equipment” means battery-powered equipment used principally for 4 outside service including an aerator, auger, blower, chain saw, 5 dethatcher, edger, trimmer, lawn mower, pole saw, snowblower, 6 and tiller. 7 2. A taxpayer who has purchased electric outdoor power 8 equipment may claim a tax credit in an amount equal to twenty 9 percent of the sales price of electric outdoor power equipment 10 purchased during the tax year. 11 3. The tax credit shall be allowed against the taxes imposed 12 under this subchapter and subchapter III. 13 4. An individual may claim a tax credit under this section 14 of a partnership, limited liability company, S corporation, 15 estate, or trust electing to have income taxed directly to 16 the individual. The amount claimed by the individual shall 17 be based upon the pro rata share of the individual’s earnings 18 from the partnership, limited liability company, S corporation, 19 estate, or trust. 20 5. Any credit in excess of the taxpayer’s liability for the 21 tax year is not refundable but the excess for the tax year may 22 be credited to the tax liability for the following tax year. 23 6. The department shall accept and approve applications 24 on a first-come, first-served basis until the maximum amount 25 of tax credits that may be claimed pursuant to subsection 7 26 is reached. If, for a tax year, the aggregate amount of tax 27 credits applied for exceeds the amount specified in subsection 28 7, the department shall establish a wait list for tax credits. 29 Valid applications filed by the taxpayer by May 1 following 30 the year of the purchase but not approved by the department 31 shall be placed on a wait list in the order the applications 32 were received and those applicants shall be given priority 33 for having their applications approved in succeeding years. 34 Placement on a wait list pursuant to this subsection shall not 35 -1- LSB 5602YH (4) 90 jm/jh 1/ 3

H.F. 2471 constitute a promise binding the state. The availability of a 1 tax credit and approval of a tax credit application pursuant 2 to this section in a future year is contingent upon the 3 availability of tax credits in that particular year. 4 7. The cumulative value of tax credits claimed annually 5 by applicants pursuant to this section shall not exceed five 6 million dollars. Of this amount, at least two million dollars 7 shall be reserved for individual income taxpayers. In the 8 event that the total amount of claims submitted for individual 9 income taxpayers in a tax year is an amount less than two 10 million dollars, the remaining unclaimed reserved amount shall 11 be made available for claims associated with or resulting from 12 other eligible taxpayers. 13 8. A taxpayer claiming the tax credit shall provide 14 documentation supporting the tax credit claim in a form and 15 manner prescribed by the department. 16 9. Tax credits issued under this section are not 17 transferable to any person. 18 10. The department shall adopt rules pursuant to chapter 17A 19 to administer this section. 20 Sec. 2. Section 422.33, Code 2024, is amended by adding the 21 following new subsection: 22 NEW SUBSECTION . 17. The taxes imposed under this subchapter 23 shall be reduced by an electric outdoor power equipment tax 24 credit allowed under section 422.12P. 25 Sec. 3. RETROACTIVE APPLICABILITY. This Act applies 26 retroactively to January 1, 2024, for tax years beginning on 27 or after that date. 28 EXPLANATION 29 The inclusion of this explanation does not constitute agreement with 30 the explanation’s substance by the members of the general assembly. 31 This bill creates an electric outdoor power equipment tax 32 credit available against the individual and corporate income 33 taxes. 34 Under the bill, a taxpayer who has purchased electric 35 -2- LSB 5602YH (4) 90 jm/jh 2/ 3

H.F. 2471 outdoor power equipment may claim a tax credit in an amount 1 equal to 20 percent of the sales price of the electric outdoor 2 power equipment purchased during the tax year. 3 The bill defines “electric outdoor power equipment” to mean 4 battery-powered equipment used principally for outside service 5 including an aerator, auger, blower, chain saw, dethatcher, 6 edger, trimmer, lawn mower, pole saw, snowblower, and tiller. 7 Any credit in excess of the taxpayer’s liability for the tax 8 year is not refundable but may be credited to the tax liability 9 for the following tax year. 10 The bill requires the department of revenue to accept and 11 approve applications on a first-come, first-served basis until 12 the maximum amount of tax credits allowed during the tax year 13 are claimed. The bill establishes the maximum amount of tax 14 credits that may be claimed during the tax year at $5 million. 15 If, for a tax year, the aggregate amount of tax credits applied 16 for exceeds the maximum amount of tax credit available, the 17 department shall establish a wait list for tax credits. 18 The bill provides that $2 million of the maximum amount 19 of tax credits available shall be reserved for individual 20 income taxpayers. If the total amount of claims submitted for 21 individual income taxpayers in a tax year is an amount less 22 than $2 million, the remaining unclaimed amount shall be made 23 available for claims associated with other eligible taxpayers. 24 A taxpayer claiming the tax credit shall provide 25 documentation supporting the tax credit claim in a form and 26 manner prescribed by the department of revenue. 27 A tax credit issued under the bill is not transferable to any 28 person. 29 The bill applies retroactively to electric outdoor power 30 equipment purchased on or after January 1, 2024, for tax years 31 occurring on or after that date. 32 -3- LSB 5602YH (4) 90 jm/jh 3/ 3