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Senate File 23 - 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 2019, 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 tax credit that may be refunded pursuant to this
7section and section 422.10 or 422.33, subsection 5, shall not
8exceed one million dollars per taxpayer per year. In lieu of
9claiming a refund, a taxpayer may elect to have the overpayment
10shown on its final, completed return credited to the tax
11liability for the following year.
12 Sec. 2. Section 422.10, subsection 4, Code 2019, 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 division for the taxable year shall be refunded
17with interest in accordance with section 421.60, subsection 2,
18paragraph “e”. However, the aggregate amount of tax credit that
19may be refunded pursuant to this section and section 15.335
20shall not exceed one million dollars per taxpayer per year. In
21lieu of claiming a refund, a taxpayer may elect to have the
22overpayment shown on the taxpayer’s final, completed return
23credited to the tax liability for the following taxable year.
24 Sec. 3. Section 422.33, subsection 5, paragraph g, Code
252019, is amended to read as follows:
26g. Any credit in excess of the tax liability for the taxable
27year shall be refunded with interest in accordance with section
28421.60, subsection 2, paragraph “e”. However, the aggregate
29amount of tax credit that may be refunded pursuant to this
30subsection and section 15.335 shall not exceed one million
31dollars per taxpayer per taxable year. In lieu of claiming a
32refund, a taxpayer may elect to have the overpayment shown on
33its final, completed return credited to the tax liability for
34the following taxable year.
35 Sec. 4. RETROACTIVE APPLICABILITY. This Act applies
-1-1retroactively to January 1, 2019, for tax years beginning on
2or after that date.
3EXPLANATION
4The inclusion of this explanation does not constitute agreement with
5the explanation’s substance by the members of the general assembly.
6Under current law, the research activities tax credits are
7refundable, meaning any amount of the tax credits in excess of
8a taxpayer’s tax liability are issued to the taxpayer in the
9form of a tax refund.
10This bill limits the aggregate amount of research activities
11tax credits that may be refunded to $1 million per taxpayer
12per taxable year. This limitation includes the individual and
13corporate research activities credits, and the supplemental
14research activities tax credit awarded by the economic
15development authority under Code section 15.335.
16The bill applies retroactively to January 1, 2019, for tax
17years 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 2019, 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 tax credit that may be refunded pursuant to this
7section and section 422.10 or 422.33, subsection 5, shall not
8exceed one million dollars per taxpayer per year. In lieu of
9claiming a refund, a taxpayer may elect to have the overpayment
10shown on its final, completed return credited to the tax
11liability for the following year.
12 Sec. 2. Section 422.10, subsection 4, Code 2019, 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 division for the taxable year shall be refunded
17with interest in accordance with section 421.60, subsection 2,
18paragraph “e”. However, the aggregate amount of tax credit that
19may be refunded pursuant to this section and section 15.335
20shall not exceed one million dollars per taxpayer per year. In
21lieu of claiming a refund, a taxpayer may elect to have the
22overpayment shown on the taxpayer’s final, completed return
23credited to the tax liability for the following taxable year.
24 Sec. 3. Section 422.33, subsection 5, paragraph g, Code
252019, is amended to read as follows:
26g. Any credit in excess of the tax liability for the taxable
27year shall be refunded with interest in accordance with section
28421.60, subsection 2, paragraph “e”. However, the aggregate
29amount of tax credit that may be refunded pursuant to this
30subsection and section 15.335 shall not exceed one million
31dollars per taxpayer per taxable year. In lieu of claiming a
32refund, a taxpayer may elect to have the overpayment shown on
33its final, completed return credited to the tax liability for
34the following taxable year.
35 Sec. 4. RETROACTIVE APPLICABILITY. This Act applies
-1-1retroactively to January 1, 2019, for tax years beginning on
2or after that date.
3EXPLANATION
4The inclusion of this explanation does not constitute agreement with
5the explanation’s substance by the members of the general assembly.
6Under current law, the research activities tax credits are
7refundable, meaning any amount of the tax credits in excess of
8a taxpayer’s tax liability are issued to the taxpayer in the
9form of a tax refund.
10This bill limits the aggregate amount of research activities
11tax credits that may be refunded to $1 million per taxpayer
12per taxable year. This limitation includes the individual and
13corporate research activities credits, and the supplemental
14research activities tax credit awarded by the economic
15development authority under Code section 15.335.
16The bill applies retroactively to January 1, 2019, for tax
17years beginning on or after that date.
-2-jm/jh