HF 2471 (LSB 5602YH (4) 90)

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 available against the individual and corporate income taxes, and including retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  422.12P  Electric outdoor power equipment tax credit.
   1.  As used in this section, “electric outdoor power equipment” means battery-powered equipment used principally for outside service including an aerator, auger, blower, chain saw, dethatcher, edger, trimmer, lawn mower, pole saw, snowblower, and tiller.
   2.  A taxpayer who has purchased electric outdoor power equipment may claim a tax credit in an amount equal to twenty percent of the sales price of electric outdoor power equipment purchased during the tax year.
   3.  The tax credit shall be allowed against the taxes imposed under this subchapter and subchapter III.
   4.  An individual may claim a tax credit under this section of a partnership, limited liability company, S corporation, estate, or trust electing to have income taxed directly to the individual. The amount claimed by the individual shall be based upon the pro rata share of the individual’s earnings from the partnership, limited liability company, S corporation, estate, or trust.
   5.  Any credit in excess of the taxpayer’s liability for the tax year is not refundable but the excess for the tax year may be credited to the tax liability for the following tax year.
   6.  The department shall accept and approve applications on a first-come, first-served basis until the maximum amount of tax credits that may be claimed pursuant to subsection 7 is reached. If, for a tax year, the aggregate amount of tax credits applied for exceeds the amount specified in subsection 7, the department shall establish a wait list for tax credits. Valid applications filed by the taxpayer by May 1 following the year of the purchase but not approved by the department shall be placed on a wait list in the order the applications were received and those applicants shall be given priority for having their applications approved in succeeding years. Placement on a wait list pursuant to this subsection shall not constitute a promise binding the state. The availability of a tax credit and approval of a tax credit application pursuant to this section in a future year is contingent upon the availability of tax credits in that particular year.
   7.  The cumulative value of tax credits claimed annually by applicants pursuant to this section shall not exceed five million dollars. Of this amount, at least two million dollars shall be reserved for individual income taxpayers. In the event that the total amount of claims submitted for individual income taxpayers in a tax year is an amount less than two million dollars, the remaining unclaimed reserved amount shall be made available for claims associated with or resulting from other eligible taxpayers.
   8.  A taxpayer claiming the tax credit shall provide documentation supporting the tax credit claim in a form and manner prescribed by the department.
   9.  Tax credits issued under this section are not transferable to any person.
   10.  The department shall adopt rules pursuant to chapter 17A to administer this section.
    Sec. 2.  Section 422.33, Code 2024, is amended by adding the following new subsection:
   NEW SUBSECTION.  17.  The taxes imposed under this subchapter shall be reduced by an electric outdoor power equipment tax credit allowed under section 422.12P.
    Sec. 3.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to January 1, 2024, for tax years beginning on or after that date.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill creates an electric outdoor power equipment tax credit available against the individual and corporate income taxes.
   Under the bill, a taxpayer who has purchased electric outdoor power equipment may claim a tax credit in an amount equal to 20 percent of the sales price of the electric outdoor power equipment purchased during the tax year.
   The bill defines “electric outdoor power equipment” to mean battery-powered equipment used principally for outside service including an aerator, auger, blower, chain saw, dethatcher, edger, trimmer, lawn mower, pole saw, snowblower, and tiller.
   Any credit in excess of the taxpayer’s liability for the tax year is not refundable but may be credited to the tax liability for the following tax year.
   The bill requires the department of revenue to accept and approve applications on a first-come, first-served basis until the maximum amount of tax credits allowed during the tax year are claimed. The bill establishes the maximum amount of tax credits that may be claimed during the tax year at $5 million. If, for a tax year, the aggregate amount of tax credits applied for exceeds the maximum amount of tax credit available, the department shall establish a wait list for tax credits.
   The bill provides that $2 million of the maximum amount of tax credits available shall be reserved for individual income taxpayers. If the total amount of claims submitted for individual income taxpayers in a tax year is an amount less than $2 million, the remaining unclaimed amount shall be made available for claims associated with other eligible taxpayers.
   A taxpayer claiming the tax credit shall provide documentation supporting the tax credit claim in a form and manner prescribed by the department of revenue.
   A tax credit issued under the bill is not transferable to any person.
   The bill applies retroactively to electric outdoor power equipment purchased on or after January 1, 2024, for tax years occurring on or after that date.