HF 304 (LSB 2064YH (2) 90)

HOUSE FILE 304

BY  KURTH, CROKEN, STAED, LEVIN, BAGNIEWSKI, JAMES, and WILBURN

A BILL FOR

An Act creating a used electric vehicle tax credit available against the individual and corporate income taxes, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  321.116A  Used electric vehicle tax credit.
   1.  As used in this section, “electric vehicle” means the same as “battery electric motor vehicle” as defined in section 321.116, subsection 1.
   2.  A taxpayer who paid a registration fee pursuant to section 321.116, upon the purchase of a used electric vehicle, may claim a tax credit in an amount equal to five hundred dollars.
   3.  The tax credit shall be allowed against the taxes imposed under chapter 422, subchapters II and 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 may be credited to the tax liability for the following five years or until depleted, whichever is earlier.
   6.  A taxpayer claiming the tax credit shall provide documentation supporting the tax credit claim in a form and manner prescribed by the department.
   7.  Tax credits issued under this section are not transferable to any person.
   8.  The department of revenue shall adopt rules pursuant to chapter 17A to administer this section.
    Sec. 2.  NEW SECTION.  422.12P  Used electric vehicle tax credit.
   The taxes imposed under this subchapter, less the credits allowed under section 422.12, shall be reduced by a used electric vehicle tax credit allowed under section 321.116A.
    Sec. 3.  Section 422.33, Code 2023, is amended by adding the following new subsection:
   NEW SUBSECTION.  33.  The taxes imposed under this subchapter shall be reduced by a used electric vehicle tax credit allowed under section 321.116A.
    Sec. 4.  APPLICABILITY.  This Act applies to used electric vehicles purchased on or after January 1, 2024.
    Sec. 5.  APPLICABILITY.  This Act applies to tax years beginning on or after January 1, 2024.
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 a used electric vehicle tax credit available against the individual and corporate income taxes.
   Under the bill, a taxpayer who paid a registration fee pursuant to Code section 321.116 (battery electric and plug-in hybrid electric motor vehicle fees), upon the purchase of a used electric vehicle, may claim a tax credit in an amount equal to $500.
   The bill defines “electric vehicle” to mean the same as “battery electric motor vehicle” as defined in Code section 321.116.
   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 five years or until depleted, whichever is earlier.
   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 to used electric vehicles purchased on or after January 1, 2024, for tax years occurring on or after that date.