SF 2285 (LSB 6065XS (3) 91)

SENATE FILE 2285

BY  SINCLAIR

A BILL FOR

An Act providing a tax credit for car registration fees paid by a disabled veteran available against the individual income tax, and including retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  422.12R  Car registration fee tax credit —— disabled veteran.
   1.  As used in this section, “disabled veteran” means either of the following:
   a.  A veteran as defined in section 35.1 with a permanent service-connected disability rating of one hundred percent, as certified by the United States department of veterans affairs, or a permanent and total disability rating based on individual unemployability that is compensated at the one hundred percent disability rate, as certified by the United States department of veterans affairs.
   b.  A former member of the national guard of any state who otherwise meets the service requirements of section 35.1, subsection 2, paragraph “b”, subparagraph (2) or (7), with a permanent service-connected disability rating of one hundred percent, as certified by the United States department of veterans affairs, or a permanent and total disability rating based on individual unemployability that is compensated at the one hundred percent disability rate, as certified by the United States department of veterans affairs.
   2.  The taxes imposed under this subchapter, less the credits allowed under section 422.12, shall be reduced by a car registration fee tax credit equal to the amount of a car registration fee paid by a disabled veteran under section 321.105 for the year, not to exceed a maximum amount of one hundred dollars.
   3.  Any credit in excess of the tax liability is refundable. In lieu of claiming a refund, the taxpayer may elect to have the overpayment shown on the taxpayer’s final, completed return credited to the tax liability for the following tax year.
   4.  The department may adopt rules pursuant to chapter 17A to administer this section.
    Sec. 2.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to January 1, 2026, 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 provides a tax credit for car registration fees paid by a disabled veteran with a 100 percent disability rating that is available against the individual income tax. Under the bill, the disabled veteran shall receive the tax credit in an amount not to exceed $100 for car registration fees paid under Code section 321.105 (annual registration fee) for the year. The bill defines a veteran with a 100 percent disability rating.
   The tax credit is refundable. In lieu of claiming a refund, the taxpayer may elect to have the overpayment shown on the taxpayer’s final, completed return credited to the tax liability for the following tax year.
   The department of revenue may adopt rules pursuant to Code chapter 17A to administer the bill.
   The bill applies retroactively to tax years beginning on or after January 1, 2026.