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Senate File 37 - IntroducedA Bill ForAn Act 1creating a tax credit against the individual and
2corporate income taxes, the franchise tax, insurance
3premiums tax, and the moneys and credits tax for a
4charitable contribution to certain institutions engaged in
5regenerative medicine research and including retroactive and
6other applicability provisions.
7BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 422.10C Regenerative medicine
2research tax credit.
31. a. The taxes imposed under this division, less the
4credits allowed under section 422.12, shall be reduced by a
5regenerative medicine research tax credit.
6b. The credit shall be in an amount equal to sixty percent
7of a taxpayer’s charitable contribution to an eligible research
8institution located in the state. A charitable contribution
9shall not be eligible for the tax credit to the extent the
10contribution was taken as a deduction pursuant to section 170
11of the Internal Revenue Code for state tax purposes. For
12purposes of this section, “eligible research institution”
13means an organization qualifying under section 501(c)(3) of
14the Internal Revenue Code as an organization exempt from
15federal income tax under section 501(a) of the Internal
16Revenue Code that is engaged in research designed to improve
17patient care through the development and dissemination of novel
18clinical therapies for the functional repair and replacement
19of diseased tissues and organs, including research for the
20treatment of cancer. “Eligible research institution” excludes
21a postsecondary institution or an entity or organization
22receiving twenty-five percent or more of its annual budget from
23a postsecondary institution.
24c. An individual may claim the tax credit allowed a
25partnership, limited liability company, S corporation, estate,
26or trust electing to have the income taxed directly to the
27individual. The amount claimed by the individual shall be
28based upon the pro rata share of the individual’s earnings of
29the partnership, limited liability company, S corporation,
30estate, or trust.
31d. Any tax credit in excess of the taxpayer’s tax liability
32is not refundable but the excess for the tax year may be
33credited to the tax liability for the following four tax years
34or until depleted, whichever is earlier.
352. a. A taxpayer must submit an application to the
-1-1department on or after the date the charitable contribution is
2made. The application must be approved by the department in
3order to claim the tax credit.
4b. The department shall accept and approve applications
5on a first-come, first-served basis according to the date
6the application was received until the maximum amount of tax
7credits that may be approved under subsection 3 is reached.
8If for a fiscal year the aggregate amount of tax credits
9applied for exceeds the amount specified in subsection 3,
10the department shall establish a wait list for tax credits.
11Valid applications filed by the taxpayer but not approved by
12the department shall be placed on a wait list in the order
13the applications were received and those applicants shall
14be given priority for having their applications approved
15in succeeding years. Placement on a wait list pursuant to
16this paragraph shall not constitute a promise binding the
17state. The availability of a tax credit and approval of a tax
18credit application pursuant to this section in a future year
19is contingent upon the availability of tax credits in that
20particular year.
21c. For tax credit applications received and approved by
22the department in the fiscal year during which the charitable
23contribution is made, the tax credit shall be claimed for the
24tax year during which the charitable contribution is made. For
25tax credit applications approved in any fiscal year following
26the fiscal year during which the charitable contribution is
27made, the tax credit shall be claimed for the tax year during
28which the application is approved by the department. A tax
29credit shall not be carried back to a tax year prior to the tax
30year in which the taxpayer claims the tax credit.
313. The maximum aggregate amount of tax credits approved
32in a fiscal year pursuant to this section, section 422.33,
33subsection 27, section 422.60, subsection 14, section 432.12N,
34and section 533.329, subsection 2, paragraph “l”, shall not
35exceed ten million dollars.
-2-1 Sec. 2. Section 422.33, Code 2019, is amended by adding the
2following new subsection:
3 NEW SUBSECTION. 27. The taxes imposed under this division
4shall be reduced by a regenerative medicine research tax credit
5in the same manner, for the same amount, and under the same
6conditions as provided in section 422.10C.
7 Sec. 3. Section 422.60, Code 2019, is amended by adding the
8following new subsection:
9 NEW SUBSECTION. 14. The taxes imposed under this division
10shall be reduced by a regenerative medicine research tax credit
11in the same manner, for the same amount, and under the same
12conditions as provided in section 422.10C.
13 Sec. 4. NEW SECTION. 432.12N Regenerative medicine research
14tax credit.
15The taxes imposed under this chapter shall be reduced by a
16regenerative medicine research tax credit in the same manner,
17for the same amount, and under the same conditions as provided
18in section 422.10C.
19 Sec. 5. Section 533.329, subsection 2, Code 2019, is amended
20by adding the following new paragraph:
21 NEW PARAGRAPH. l. The moneys and credits tax imposed
22under this section shall be reduced by a regenerative medicine
23research tax credit in the same manner, for the same amount,
24and under the same conditions as provided in section 422.10C.
25 Sec. 6. APPLICABILITY. This Act applies to charitable
26contributions to an eligible research institution located in
27this state made on or after January 1, 2019.
28 Sec. 7. RETROACTIVE APPLICABILITY. This Act applies
29retroactively to January 1, 2019, for tax years beginning on
30or after that date.
31EXPLANATION
32The inclusion of this explanation does not constitute agreement with
33the explanation’s substance by the members of the general assembly.
34This bill provides a credit against the individual or
35corporate income tax, the franchise tax, the insurance premiums
-3-1tax, and the moneys and credits tax for 60 percent of a
2taxpayer’s contribution to a regenerative medicine research
3institution located in the state. Contributions claimed as
4a charitable deduction for Iowa tax purposes shall not be
5eligible for the tax credit. In order to qualify for the
6credit, the regenerative medicine research institute must be
7qualified under 501(c)(3) of the Internal Revenue Code and must
8engage in research that is designed to improve patient care
9through the development and dissemination of novel clinical
10therapies for the functional repair and replacement of diseased
11tissues and organs, including cancer research. Postsecondary
12institutions and entities that receive 25 percent or more of
13their annual budget from a postsecondary institution do not
14qualify.
15In order to claim a tax credit, the taxpayer must submit
16an application to the department of revenue (department) on
17or after the date of the charitable contribution, and have
18that application approved by the department. No more than
19$10 million in tax credits may be approved per fiscal year.
20If applications for the tax credit exceed that amount, the
21department is required to establish a wait list in the order
22the applications were received and those applicants will
23receive priority for receiving tax credits in succeeding years.
24The tax credit is nonrefundable, but any amount in excess of
25the taxpayer’s tax liability may be carried forward for up to
26four years. The tax credit cannot be carried back to a prior
27tax year. For tax credit applications received and approved by
28the department in the fiscal year during which the charitable
29contribution is made, the tax credit shall be claimed for the
30tax year during which the charitable contribution is made. For
31applications approved by the department in any later fiscal
32year, the tax credit shall be claimed for the tax year during
33which the application is approved.
34The bill applies retroactively to January 1, 2019, for
35tax years beginning on or after that date, and applies to
-4-1charitable contributions made on or after that date.
-5-jm/jh
2corporate income taxes, the franchise tax, insurance
3premiums tax, and the moneys and credits tax for a
4charitable contribution to certain institutions engaged in
5regenerative medicine research and including retroactive and
6other applicability provisions.
7BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 422.10C Regenerative medicine
2research tax credit.
31. a. The taxes imposed under this division, less the
4credits allowed under section 422.12, shall be reduced by a
5regenerative medicine research tax credit.
6b. The credit shall be in an amount equal to sixty percent
7of a taxpayer’s charitable contribution to an eligible research
8institution located in the state. A charitable contribution
9shall not be eligible for the tax credit to the extent the
10contribution was taken as a deduction pursuant to section 170
11of the Internal Revenue Code for state tax purposes. For
12purposes of this section, “eligible research institution”
13means an organization qualifying under section 501(c)(3) of
14the Internal Revenue Code as an organization exempt from
15federal income tax under section 501(a) of the Internal
16Revenue Code that is engaged in research designed to improve
17patient care through the development and dissemination of novel
18clinical therapies for the functional repair and replacement
19of diseased tissues and organs, including research for the
20treatment of cancer. “Eligible research institution” excludes
21a postsecondary institution or an entity or organization
22receiving twenty-five percent or more of its annual budget from
23a postsecondary institution.
24c. An individual may claim the tax credit allowed a
25partnership, limited liability company, S corporation, estate,
26or trust electing to have the income taxed directly to the
27individual. The amount claimed by the individual shall be
28based upon the pro rata share of the individual’s earnings of
29the partnership, limited liability company, S corporation,
30estate, or trust.
31d. Any tax credit in excess of the taxpayer’s tax liability
32is not refundable but the excess for the tax year may be
33credited to the tax liability for the following four tax years
34or until depleted, whichever is earlier.
352. a. A taxpayer must submit an application to the
-1-1department on or after the date the charitable contribution is
2made. The application must be approved by the department in
3order to claim the tax credit.
4b. The department shall accept and approve applications
5on a first-come, first-served basis according to the date
6the application was received until the maximum amount of tax
7credits that may be approved under subsection 3 is reached.
8If for a fiscal year the aggregate amount of tax credits
9applied for exceeds the amount specified in subsection 3,
10the department shall establish a wait list for tax credits.
11Valid applications filed by the taxpayer but not approved by
12the department shall be placed on a wait list in the order
13the applications were received and those applicants shall
14be given priority for having their applications approved
15in succeeding years. Placement on a wait list pursuant to
16this paragraph shall not constitute a promise binding the
17state. The availability of a tax credit and approval of a tax
18credit application pursuant to this section in a future year
19is contingent upon the availability of tax credits in that
20particular year.
21c. For tax credit applications received and approved by
22the department in the fiscal year during which the charitable
23contribution is made, the tax credit shall be claimed for the
24tax year during which the charitable contribution is made. For
25tax credit applications approved in any fiscal year following
26the fiscal year during which the charitable contribution is
27made, the tax credit shall be claimed for the tax year during
28which the application is approved by the department. A tax
29credit shall not be carried back to a tax year prior to the tax
30year in which the taxpayer claims the tax credit.
313. The maximum aggregate amount of tax credits approved
32in a fiscal year pursuant to this section, section 422.33,
33subsection 27, section 422.60, subsection 14, section 432.12N,
34and section 533.329, subsection 2, paragraph “l”, shall not
35exceed ten million dollars.
-2-1 Sec. 2. Section 422.33, Code 2019, is amended by adding the
2following new subsection:
3 NEW SUBSECTION. 27. The taxes imposed under this division
4shall be reduced by a regenerative medicine research tax credit
5in the same manner, for the same amount, and under the same
6conditions as provided in section 422.10C.
7 Sec. 3. Section 422.60, Code 2019, is amended by adding the
8following new subsection:
9 NEW SUBSECTION. 14. The taxes imposed under this division
10shall be reduced by a regenerative medicine research tax credit
11in the same manner, for the same amount, and under the same
12conditions as provided in section 422.10C.
13 Sec. 4. NEW SECTION. 432.12N Regenerative medicine research
14tax credit.
15The taxes imposed under this chapter shall be reduced by a
16regenerative medicine research tax credit in the same manner,
17for the same amount, and under the same conditions as provided
18in section 422.10C.
19 Sec. 5. Section 533.329, subsection 2, Code 2019, is amended
20by adding the following new paragraph:
21 NEW PARAGRAPH. l. The moneys and credits tax imposed
22under this section shall be reduced by a regenerative medicine
23research tax credit in the same manner, for the same amount,
24and under the same conditions as provided in section 422.10C.
25 Sec. 6. APPLICABILITY. This Act applies to charitable
26contributions to an eligible research institution located in
27this state made on or after January 1, 2019.
28 Sec. 7. RETROACTIVE APPLICABILITY. This Act applies
29retroactively to January 1, 2019, for tax years beginning on
30or after that date.
31EXPLANATION
32The inclusion of this explanation does not constitute agreement with
33the explanation’s substance by the members of the general assembly.
34This bill provides a credit against the individual or
35corporate income tax, the franchise tax, the insurance premiums
-3-1tax, and the moneys and credits tax for 60 percent of a
2taxpayer’s contribution to a regenerative medicine research
3institution located in the state. Contributions claimed as
4a charitable deduction for Iowa tax purposes shall not be
5eligible for the tax credit. In order to qualify for the
6credit, the regenerative medicine research institute must be
7qualified under 501(c)(3) of the Internal Revenue Code and must
8engage in research that is designed to improve patient care
9through the development and dissemination of novel clinical
10therapies for the functional repair and replacement of diseased
11tissues and organs, including cancer research. Postsecondary
12institutions and entities that receive 25 percent or more of
13their annual budget from a postsecondary institution do not
14qualify.
15In order to claim a tax credit, the taxpayer must submit
16an application to the department of revenue (department) on
17or after the date of the charitable contribution, and have
18that application approved by the department. No more than
19$10 million in tax credits may be approved per fiscal year.
20If applications for the tax credit exceed that amount, the
21department is required to establish a wait list in the order
22the applications were received and those applicants will
23receive priority for receiving tax credits in succeeding years.
24The tax credit is nonrefundable, but any amount in excess of
25the taxpayer’s tax liability may be carried forward for up to
26four years. The tax credit cannot be carried back to a prior
27tax year. For tax credit applications received and approved by
28the department in the fiscal year during which the charitable
29contribution is made, the tax credit shall be claimed for the
30tax year during which the charitable contribution is made. For
31applications approved by the department in any later fiscal
32year, the tax credit shall be claimed for the tax year during
33which the application is approved.
34The bill applies retroactively to January 1, 2019, for
35tax years beginning on or after that date, and applies to
-4-1charitable contributions made on or after that date.
-5-jm/jh