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Senate Study Bill 1120 - IntroducedA Bill ForAn Act 1creating a geothermal tax credit available against the
2franchise tax and including effective date and retroactive
3applicability provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 422.60, Code 2017, is amended by adding
2the following new subsection:
3 NEW SUBSECTION. 14. a. For purposes of this subsection,
4unless the context otherwise requires:
5(1) “Qualified geothermal energy system property” means any
6equipment that uses the ground or groundwater as a thermal
7energy source to heat a structure or as a thermal energy sink
8to cool a structure.
9(2) “Qualified geothermal energy system property
10expenditures” means an expenditure for qualified geothermal
11energy system property if depreciation or amortization is
12allowable to the taxpayer under the Internal Revenue Code with
13respect to the property, and if the property is installed on or
14in connection with a structure located in Iowa.
15b. The taxes imposed under this division shall be reduced by
16a geothermal tax credit equal to ten percent of the qualified
17geothermal energy system property expenditures made by the
18taxpayer during the tax year.
19c. Qualified geothermal energy system property expenditures
20shall be deemed to have been made on the date the installation
21is complete or, in the case of new construction or
22reconstruction, the date the original use of the structure by
23the taxpayer begins.
24d. Any credit in excess of the tax liability is not
25refundable but the excess for the tax year may be credited
26to the tax liability for the following ten years or until
27depleted, whichever is earlier.
28 Sec. 2. EFFECTIVE UPON ENACTMENT. This Act, being deemed of
29immediate importance, takes effect upon enactment.
30 Sec. 3. RETROACTIVE APPLICABILITY. This Act applies
31retroactively to January 1, 2017, for tax years beginning on
32or after that date.
33EXPLANATION
34The inclusion of this explanation does not constitute agreement with
35the explanation’s substance by the members of the general assembly.
-1- 1This bill creates a geothermal tax credit available against
2the franchise tax equal to 10 percent of the expenditures made
3by a taxpayer for qualified geothermal energy system property
4if depreciation or amortization is allowable to the taxpayer
5under the Internal Revenue Code with respect to the property,
6and if the property is installed on or in connection with a
7structure located in Iowa. “Qualified geothermal energy system
8property” and other related terms are defined in the bill. For
9purposes of the tax credit, expenditures are deemed to be made
10on the date the installation is complete or, in the case of new
11construction or reconstruction, the date the original use of
12the structure begins.
13The tax credit is nonrefundable, but any amount in excess of
14the taxpayer’s tax liability may be carried forward for up to
1510 years.
16The bill takes effect upon enactment and applies
17retroactively to January 1, 2017, for tax years beginning on
18or after that date.
-2-mm/sc/rn
2franchise tax and including effective date and retroactive
3applicability provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 422.60, Code 2017, is amended by adding
2the following new subsection:
3 NEW SUBSECTION. 14. a. For purposes of this subsection,
4unless the context otherwise requires:
5(1) “Qualified geothermal energy system property” means any
6equipment that uses the ground or groundwater as a thermal
7energy source to heat a structure or as a thermal energy sink
8to cool a structure.
9(2) “Qualified geothermal energy system property
10expenditures” means an expenditure for qualified geothermal
11energy system property if depreciation or amortization is
12allowable to the taxpayer under the Internal Revenue Code with
13respect to the property, and if the property is installed on or
14in connection with a structure located in Iowa.
15b. The taxes imposed under this division shall be reduced by
16a geothermal tax credit equal to ten percent of the qualified
17geothermal energy system property expenditures made by the
18taxpayer during the tax year.
19c. Qualified geothermal energy system property expenditures
20shall be deemed to have been made on the date the installation
21is complete or, in the case of new construction or
22reconstruction, the date the original use of the structure by
23the taxpayer begins.
24d. Any credit in excess of the tax liability is not
25refundable but the excess for the tax year may be credited
26to the tax liability for the following ten years or until
27depleted, whichever is earlier.
28 Sec. 2. EFFECTIVE UPON ENACTMENT. This Act, being deemed of
29immediate importance, takes effect upon enactment.
30 Sec. 3. RETROACTIVE APPLICABILITY. This Act applies
31retroactively to January 1, 2017, for tax years beginning on
32or after that date.
33EXPLANATION
34The inclusion of this explanation does not constitute agreement with
35the explanation’s substance by the members of the general assembly.
-1- 1This bill creates a geothermal tax credit available against
2the franchise tax equal to 10 percent of the expenditures made
3by a taxpayer for qualified geothermal energy system property
4if depreciation or amortization is allowable to the taxpayer
5under the Internal Revenue Code with respect to the property,
6and if the property is installed on or in connection with a
7structure located in Iowa. “Qualified geothermal energy system
8property” and other related terms are defined in the bill. For
9purposes of the tax credit, expenditures are deemed to be made
10on the date the installation is complete or, in the case of new
11construction or reconstruction, the date the original use of
12the structure begins.
13The tax credit is nonrefundable, but any amount in excess of
14the taxpayer’s tax liability may be carried forward for up to
1510 years.
16The bill takes effect upon enactment and applies
17retroactively to January 1, 2017, for tax years beginning on
18or after that date.
-2-mm/sc/rn