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Senate File 27 - IntroducedA Bill ForAn Act 1limiting the amount of research activities tax credit
2that is refundable and including retroactive applicability
3provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 15.335, subsection 8, Code 2021, is
2amended to read as follows:
38. Any credit in excess of the tax liability for the taxable
4year shall be refunded with interest in accordance with section
5421.60, subsection 2, paragraph “e”. However, the aggregate
6amount of the tax credit that may be refunded pursuant to this
7section and section 422.10 or section 422.33, subsection 5,
8shall not exceed one million dollars per taxpayer per tax year.
9 In lieu of claiming a refund, a taxpayer may elect to have the
10overpayment shown on its final, completed return credited to
11the tax liability for the following year.
12 Sec. 2. Section 422.10, subsection 4, Code 2021, is amended
13to read as follows:
144. Any credit in excess of the tax liability imposed by
15section 422.5 less the amounts of nonrefundable credits allowed
16under this subchapter for the taxable year shall be refunded
17with interest in accordance with section 421.60, subsection 2,
18paragraph “e”. However, the aggregate amount of the tax credit
19that may be refunded pursuant to this section and section
2015.335 shall not exceed one million dollars per taxpayer per
21tax year. In lieu of claiming a refund, a taxpayer may elect to
22have the overpayment shown on the taxpayer’s final, completed
23return credited to the tax liability for the following taxable
24year.
25 Sec. 3. Section 422.33, subsection 5, paragraph g, Code
262021, is amended to read as follows:
27g. Any credit in excess of the tax liability for the taxable
28year shall be refunded with interest in accordance with section
29421.60, subsection 2, paragraph “e”. However, the aggregate
30amount of the tax credit that may be refunded pursuant to this
31subsection and section 15.335 shall not exceed one million
32dollars per taxpayer per tax year. In lieu of claiming a
33refund, a taxpayer may elect to have the overpayment shown on
34its final, completed return credited to the tax liability for
35the following taxable year.
-1-1 Sec. 4. RETROACTIVE APPLICABILITY. This Act applies
2retroactively to January 1, 2021, for tax years beginning on
3or after that date.
4EXPLANATION
5The inclusion of this explanation does not constitute agreement with
6the explanation’s substance by the members of the general assembly.
7Under current law, research activities tax credits are
8refundable, meaning any amount of the tax credits in excess of
9a taxpayer’s tax liability are issued to the taxpayer in the
10form of a tax refund.
11This bill limits the aggregate amount of research activities
12tax credits that may be refunded to $1 million per taxpayer
13per taxable year. This limitation includes the individual and
14corporate research activities credits, and the supplemental
15research activities tax credit awarded by the economic
16development authority under Code section 15.335.
17The bill applies retroactively to January 1, 2021, for tax
18years beginning on or after that date.
-2-jm/jh
2that is refundable and including retroactive applicability
3provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 15.335, subsection 8, Code 2021, is
2amended to read as follows:
38. Any credit in excess of the tax liability for the taxable
4year shall be refunded with interest in accordance with section
5421.60, subsection 2, paragraph “e”. However, the aggregate
6amount of the tax credit that may be refunded pursuant to this
7section and section 422.10 or section 422.33, subsection 5,
8shall not exceed one million dollars per taxpayer per tax year.
9 In lieu of claiming a refund, a taxpayer may elect to have the
10overpayment shown on its final, completed return credited to
11the tax liability for the following year.
12 Sec. 2. Section 422.10, subsection 4, Code 2021, is amended
13to read as follows:
144. Any credit in excess of the tax liability imposed by
15section 422.5 less the amounts of nonrefundable credits allowed
16under this subchapter for the taxable year shall be refunded
17with interest in accordance with section 421.60, subsection 2,
18paragraph “e”. However, the aggregate amount of the tax credit
19that may be refunded pursuant to this section and section
2015.335 shall not exceed one million dollars per taxpayer per
21tax year. In lieu of claiming a refund, a taxpayer may elect to
22have the overpayment shown on the taxpayer’s final, completed
23return credited to the tax liability for the following taxable
24year.
25 Sec. 3. Section 422.33, subsection 5, paragraph g, Code
262021, is amended to read as follows:
27g. Any credit in excess of the tax liability for the taxable
28year shall be refunded with interest in accordance with section
29421.60, subsection 2, paragraph “e”. However, the aggregate
30amount of the tax credit that may be refunded pursuant to this
31subsection and section 15.335 shall not exceed one million
32dollars per taxpayer per tax year. In lieu of claiming a
33refund, a taxpayer may elect to have the overpayment shown on
34its final, completed return credited to the tax liability for
35the following taxable year.
-1-1 Sec. 4. RETROACTIVE APPLICABILITY. This Act applies
2retroactively to January 1, 2021, for tax years beginning on
3or after that date.
4EXPLANATION
5The inclusion of this explanation does not constitute agreement with
6the explanation’s substance by the members of the general assembly.
7Under current law, research activities tax credits are
8refundable, meaning any amount of the tax credits in excess of
9a taxpayer’s tax liability are issued to the taxpayer in the
10form of a tax refund.
11This bill limits the aggregate amount of research activities
12tax credits that may be refunded to $1 million per taxpayer
13per taxable year. This limitation includes the individual and
14corporate research activities credits, and the supplemental
15research activities tax credit awarded by the economic
16development authority under Code section 15.335.
17The bill applies retroactively to January 1, 2021, for tax
18years beginning on or after that date.
-2-jm/jh