Senate File 2292 - Introduced SENATE FILE 2292 BY COMMITTEE ON COMMERCE (SUCCESSOR TO SSB 3105) A BILL FOR An Act creating a state corporate income tax deduction for net 1 controlled foreign corporation tested income, and including 2 retroactive applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5960SV (1) 91 jm/jh

S.F. 2292 Section 1. Section 422.35, subsection 12, Code 2026, is 1 amended to read as follows: 2 12. Subtract, to the extent included, global intangible 3 low-taxed income under section 951A of the Internal Revenue 4 Code. 5 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies 6 retroactively to January 1, 2026, for tax years beginning on 7 or after that date. 8 EXPLANATION 9 The inclusion of this explanation does not constitute agreement with 10 the explanation’s substance by the members of the general assembly. 11 This bill creates a state corporate income tax deduction for 12 net controlled foreign corporation tested income (NCTI). 13 Currently, Code section 422.35(12) specifically references 14 global intangible low-taxed income (GILTI) under section 951A 15 of the Internal Revenue Code (IRC) for purposes of a state 16 corporate income tax deduction allowed under that Code section. 17 Recent federal legislation replaced GILTI with NCTI under 18 section 951A of the IRC. NCTI is the aggregate amount of net 19 income subject to federal tax that is earned by a taxpayer from 20 controlled foreign corporations of the taxpayer, and is applied 21 more broadly to foreign income than GILTI. 22 Since the federal legislation replaced GILTI with NCTI in 23 the same section of the IRC (951A), the state corporate income 24 tax deduction no longer applies because Code section 422.35(12) 25 specifically references GILTI income under section 951A of the 26 IRC. The bill strikes the specific reference to GILTI but 27 continues to allow the deduction for income under section 951A 28 of the IRC which is now recharacterized as NCTI. 29 -1- LSB 5960SV (1) 91 jm/jh 1/ 1