Senate File 481 - Introduced
SENATE FILE
BY ZAUN
A BILL FOR
1 An Act relating to state taxes by eliminating the individual
2 income tax, increasing the sales and use tax rates, making
3 conforming changes, and including effective date and
4 applicability provisions.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 DIVISION I
1 2 REPEAL OF THE INDIVIDUAL INCOME TAX
1 3 Section 1. Section 15.293A, subsection 1, paragraph a, Code
1 4 2015, is amended to read as follows:
1 5 a. A redevelopment tax credit shall be allowed against
1 6 the taxes imposed in chapter 422, divisions II, III, and V,
1 7 and in chapter 432, and against the moneys and credits tax
1 8 imposed in section 533.329, for a portion of a taxpayer's
1 9 equity investment, as provided in subsection 3, in a qualifying
1 10 redevelopment project.
1 11 Sec. 2. Section 15.293A, subsection 1, paragraph b, Code
1 12 2015, is amended by striking the paragraph.
1 13 Sec. 3. Section 15.293A, subsection 2, paragraphs c and f,
1 14 Code 2015, are amended to read as follows:
1 15 c. The tax credit certificate, unless rescinded by the
1 16 authority, shall be accepted by the department of revenue as
1 17 payment for taxes imposed pursuant to chapter 422, divisions
1 18 II, III, and V, and in chapter 432, and for the moneys and
1 19 credits tax imposed in section 533.329, subject to any
1 20 conditions or restrictions placed by the authority upon
1 21 the face of the tax credit certificate and subject to the
1 22 limitations of this section.
1 23 f. A tax credit shall not be claimed by a transferee
1 24 under this section until a replacement tax credit certificate
1 25 identifying the transferee as the proper holder has been
1 26 issued. The transferee may use the amount of the tax credit
1 27 transferred against the taxes imposed in chapter 422, divisions
1 28 II, III, and V, and in chapter 432, and against the moneys and
1 29 credits tax imposed in section 533.329, for any tax year the
1 30 original transferor could have claimed the tax credit. Any
1 31 consideration received for the transfer of the tax credit shall
1 32 not be included as income under chapter 422, divisions II, III,
1 33 and V. Any consideration paid for the transfer of the tax
1 34 credit shall not be deducted from income under chapter 422,
1 35 divisions II, III, and V.
2 1 Sec. 4. Section 15.293A, subsection 4, Code 2015, is amended
2 2 to read as follows:
2 3 4. For purposes of individual and corporate income taxes and
2 4 the franchise tax, the increase in the basis of the redeveloped
2 5 property that would otherwise result from the qualified
2 6 redevelopment costs shall be reduced by the amount of the
2 7 credit computed under this part.
2 8 Sec. 5. Section 15.333, subsection 1, Code 2015, is amended
2 9 to read as follows:
2 10 1. An eligible business may claim a tax credit equal to a
2 11 percentage of the new investment directly related to new jobs
2 12 created or retained by the project. The tax credit shall be
2 13 amortized equally over five calendar years. The tax credit
2 14 shall be allowed against taxes imposed under chapter 422,
2 15 division II, III, or V, and against the moneys and credits tax
2 16 imposed in section 533.329. If the business is a partnership,
2 17 S corporation, limited liability company, cooperative organized
2 18 under chapter 501 and filing as a partnership for federal tax
2 19 purposes, or estate or trust electing to have the income taxed
2 20 directly to the individual, an individual may claim the tax
2 21 credit allowed. The amount claimed by the individual shall
2 22 be based upon the pro rata share of the individual's earnings
2 23 of the partnership, S corporation, limited liability company,
2 24 cooperative organized under chapter 501 and filing as a
2 25 partnership for federal tax purposes, or estate or trust. The
2 26 percentage shall be determined as provided in section 15.335A.
2 27 Any tax credit in excess of the tax liability for the tax year
2 28 may be credited to the tax liability for the following seven
2 29 years or until depleted, whichever occurs first.
2 30 Sec. 6. Section 15.335, subsection 6, Code 2015, is amended
2 31 by striking the subsection.
2 32 Sec. 7. Section 15.355, subsection 3, paragraph b, Code
2 33 2015, is amended to read as follows:
2 34 b. The tax credit shall be allowed against the taxes imposed
2 35 in chapter 422, divisions II, III, and V, and in chapter 432,
3 1 and against the moneys and credits tax imposed in section
3 2 533.329.
3 3 Sec. 8. Section 15.355, subsection 3, paragraph c, Code
3 4 2015, is amended by striking the paragraph.
3 5 Sec. 9. Section 15.355, subsection 3, paragraph e,
3 6 subparagraphs (3) and (6), Code 2015, are amended to read as
3 7 follows:
3 8 (3) The tax credit certificate, unless rescinded by the
3 9 authority, shall be accepted by the department of revenue as
3 10 payment for taxes imposed pursuant to chapter 422, divisions
3 11 II, III, and V, and in chapter 432, and for the moneys and
3 12 credits tax imposed in section 533.329, subject to any
3 13 conditions or restrictions placed by the authority upon
3 14 the face of the tax credit certificate and subject to the
3 15 limitations of this program.
3 16 (6) A tax credit shall not be claimed by a transferee
3 17 under this section until a replacement tax credit certificate
3 18 identifying the transferee as the proper holder has been
3 19 issued. The transferee may use the amount of the tax credit
3 20 transferred against the taxes imposed in chapter 422, divisions
3 21 II, III, and V, and in chapter 432, and against the moneys and
3 22 credits tax imposed in section 533.329, for any tax year the
3 23 original transferor could have claimed the tax credit. Any
3 24 consideration received for the transfer of the tax credit shall
3 25 not be included as income under chapter 422, divisions II, III,
3 26 and V. Any consideration paid for the transfer of the tax
3 27 credit shall not be deducted from income under chapter 422,
3 28 divisions II, III, and V.
3 29 Sec. 10. Section 15.355, subsection 3, paragraph f, Code
3 30 2015, is amended to read as follows:
3 31 f. For purposes of the individual and corporate income
3 32 taxes and the franchise tax, the increase in the basis of the
3 33 property that would otherwise result from the qualifying new
3 34 investment shall be reduced by the amount of the tax credit
3 35 computed under this subsection.
4 1 Sec. 11. Section 15E.43, subsection 1, paragraph a, Code
4 2 2015, is amended to read as follows:
4 3 a. For tax years beginning on or after January 1, 2002,
4 4 a tax credit shall be allowed against the taxes imposed in
4 5 chapter 422, divisions II, III, and V, and in chapter 432, and
4 6 against the moneys and credits tax imposed in section 533.329,
4 7 for a portion of a taxpayer's equity investment, as provided
4 8 in subsection 2, in a qualifying business or a community=based
4 9 seed capital fund. An individual may claim a tax credit
4 10 under this paragraph of a partnership, limited liability
4 11 company, S corporation, estate, or trust electing to have
4 12 income taxed directly to the individual. The amount claimed
4 13 by the individual shall be based upon the pro rata share of the
4 14 individual's earnings from the partnership, limited liability
4 15 company, S corporation, estate, or trust.
4 16 Sec. 12. Section 15E.43, subsection 1, paragraph c, Code
4 17 2015, is amended by striking the paragraph.
4 18 Sec. 13. Section 15E.44, subsection 4, Code 2015, is amended
4 19 to read as follows:
4 20 4. After verifying the eligibility of a qualifying
4 21 business, the authority shall issue a tax credit certificate
4 22 to be included with the equity investor's tax return. The tax
4 23 credit certificate shall contain the taxpayer's name, address,
4 24 tax identification number, the amount of credit, the name of
4 25 the qualifying business, and other information required by the
4 26 department of revenue. The tax credit certificate, unless
4 27 rescinded by the authority, shall be accepted by the department
4 28 of revenue as payment for taxes imposed pursuant to chapter
4 29 422, divisions II, III, and V, and in chapter 432, and for the
4 30 moneys and credits tax imposed in section 533.329, subject to
4 31 any conditions or restrictions placed by the authority upon
4 32 the face of the tax credit certificate and subject to the
4 33 limitations of section 15E.43.
4 34 Sec. 14. Section 15E.45, subsection 4, Code 2015, is amended
4 35 to read as follows:
5 1 4. After verifying the eligibility of the community=based
5 2 seed capital fund, the authority shall issue a tax credit
5 3 certificate to be included with the taxpayer's tax return.
5 4 The tax credit certificate shall contain the taxpayer's name,
5 5 address, tax identification number, the amount of the tax
5 6 credit, the name of the community=based seed capital fund, and
5 7 other information required by the department of revenue. The
5 8 tax credit certificate, unless rescinded by the authority,
5 9 shall be accepted by the department of revenue or a local
5 10 taxing district, as applicable, as payment for taxes imposed
5 11 pursuant to chapter 422, divisions II, III, and V, and chapter
5 12 432, and as payment for the moneys and credits tax imposed
5 13 pursuant to section 533.329, subject to any conditions or
5 14 restrictions placed by the authority on the face of the tax
5 15 credit certificate and subject to the limitations of section
5 16 15E.43.
5 17 Sec. 15. Section 15E.52, subsection 2, paragraph a, Code
5 18 2015, is amended to read as follows:
5 19 a. A tax credit shall be allowed against the taxes imposed
5 20 in chapter 422, divisions II, III, and V, and in chapter 432,
5 21 and against the moneys and credits tax imposed in section
5 22 533.329, for a portion of a taxpayer's equity investment in the
5 23 form of cash in an innovation fund.
5 24 Sec. 16. Section 15E.52, subsection 2, paragraph b, Code
5 25 2015, is amended by striking the paragraph.
5 26 Sec. 17. Section 15E.62, subsection 8, Code 2015, is amended
5 27 to read as follows:
5 28 8. "Tax credit" means a contingent tax credit issued
5 29 pursuant to section 15E.66 that is available against tax
5 30 liabilities imposed by chapter 422, divisions II, III, and
5 31 V, and by chapter 432 and against the moneys and credits tax
5 32 imposed by section 533.329.
5 33 Sec. 18. Section 15E.66, subsection 1, Code 2015, is amended
5 34 to read as follows:
5 35 1. The board may issue certificates and related tax credits
6 1 to designated investors which, if redeemed for the maximum
6 2 possible amount, shall not exceed a total aggregate of sixty
6 3 million dollars of tax credits. The certificates shall be
6 4 issued contemporaneously with a commitment to invest in the
6 5 Iowa fund of funds by a designated investor. A certificate
6 6 issued by the board shall have a specific maturity date or
6 7 dates designated by the board and shall be redeemable only in
6 8 accordance with the contingencies reflected on the certificate
6 9 or incorporated therein by reference. A certificate and the
6 10 related tax credit shall be transferable by the designated
6 11 investor. A tax credit shall not be claimed or redeemed except
6 12 by a designated investor or transferee in accordance with the
6 13 terms of a certificate from the board. A tax credit shall not
6 14 be claimed for a tax year that begins earlier than the maturity
6 15 date or dates stated on the certificate. An individual may
6 16 claim the credit of a partnership, limited liability company,
6 17 S corporation, estate, or trust electing to have the income
6 18 taxed directly to the individual. The amount claimed by the
6 19 individual shall be based upon the pro rata share of the
6 20 individual's earnings from the partnership, limited liability
6 21 company, S corporation, estate, or trust. Any tax credit in
6 22 excess of the taxpayer's tax liability for the tax year may be
6 23 credited to the tax liability for the following seven years, or
6 24 until depleted, whichever is earlier.
6 25 Sec. 19. Section 15E.305, subsection 1, Code 2015, is
6 26 amended to read as follows:
6 27 1. For tax years beginning on or after January 1, 2003,
6 28 a tax credit shall be allowed against the taxes imposed in
6 29 chapter 422, divisions II, III, and V, and in chapter 432, and
6 30 against the moneys and credits tax imposed in section 533.329
6 31 equal to twenty=five percent of a taxpayer's endowment gift to
6 32 an endow Iowa qualified community foundation. An individual
6 33 may claim a tax credit under this section of a partnership,
6 34 limited liability company, S corporation, estate, or trust
6 35 electing to have income taxed directly to the individual. The
7 1 amount claimed by the individual shall be based upon the pro
7 2 rata share of the individual's earnings from the partnership,
7 3 limited liability company, S corporation, estate, or trust. A
7 4 tax credit shall be allowed only for an endowment gift made to
7 5 an endow Iowa qualified community foundation for a permanent
7 6 endowment fund established to benefit a charitable cause in
7 7 this state. The amount of the endowment gift for which the
7 8 tax credit is claimed shall not be deductible in determining
7 9 taxable income for state income tax purposes. Any tax credit
7 10 in excess of the taxpayer's tax liability for the tax year may
7 11 be credited to the tax liability for the following five years
7 12 or until depleted, whichever occurs first. A tax credit shall
7 13 not be carried back to a tax year prior to the tax year in which
7 14 the taxpayer claims the tax credit.
7 15 Sec. 20. Section 16.64, subsection 2, Code 2015, is amended
7 16 to read as follows:
7 17 2. Bonds and notes issued by the authority for purposes of
7 18 financing the beginning farmer loan program provided in section
7 19 16.75 are exempt from taxation by the state, and interest
7 20 earned on the bonds and notes is deductible in determining
7 21 net income for purposes of the state individual and corporate
7 22 income tax under divisions II and division III of chapter 422.
7 23 Sec. 21. Section 16.80, subsection 1, Code 2015, is amended
7 24 to read as follows:
7 25 1. An agricultural assets transfer tax credit is allowed
7 26 under this section. The tax credit is allowed against the
7 27 taxes imposed in chapter 422, division II, as provided in
7 28 section 422.11M, and in chapter 422, division III, as provided
7 29 in section 422.33, to facilitate the transfer of agricultural
7 30 assets from a taxpayer to a qualified beginning farmer.
7 31 Sec. 22. Section 16.80, subsection 3, Code 2015, is amended
7 32 by striking the subsection.
7 33 Sec. 23. Section 16.80, subsection 6, Code 2015, is amended
7 34 to read as follows:
7 35 6. A tax credit in excess of the taxpayer's liability
8 1 for the tax year may be credited to the tax liability for
8 2 the following ten tax years or until depleted, whichever is
8 3 earlier. A tax credit shall not be carried back to a tax year
8 4 prior to the tax year in which the taxpayer redeems the tax
8 5 credit. A tax credit shall not be transferable to any other
8 6 person other than the taxpayer's estate or trust upon the
8 7 taxpayer's death.
8 8 Sec. 24. Section 16.81, subsection 1, Code 2015, is amended
8 9 to read as follows:
8 10 1. A custom farming contract tax credit is allowed under
8 11 this section. The tax credit is allowed against the taxes
8 12 imposed in chapter 422, division II, as provided in section
8 13 422.11M, and in chapter 422, division III, as provided in
8 14 section 422.33, to encourage taxpayers who are considering
8 15 custom farming agricultural land located in this state to
8 16 negotiate with qualified beginning farmers.
8 17 Sec. 25. Section 16.81, subsection 3, Code 2015, is amended
8 18 by striking the subsection.
8 19 Sec. 26. Section 16.81, subsection 9, Code 2015, is amended
8 20 to read as follows:
8 21 9. A custom farming contract tax credit in excess of the
8 22 taxpayer's liability for the tax year may be credited to
8 23 the tax liability for the following ten tax years or until
8 24 depleted, whichever is earlier. A tax credit shall not be
8 25 carried back to a tax year prior to the tax year in which the
8 26 taxpayer redeems the tax credit. A tax credit shall not be
8 27 transferable to any other person other than the taxpayer's
8 28 estate or trust upon the taxpayer's death.
8 29 Sec. 27. Section 28A.24, Code 2015, is amended to read as
8 30 follows:
8 31 28A.24 Exemption from taxation.
8 32 Since an authority is performing essential governmental
8 33 functions, an authority is not required to pay any taxes or
8 34 assessments of any kind or nature upon any property required
8 35 or used by it for its purposes, or any rates, fees, rentals,
9 1 receipts, or incomes at any time received by it, and the
9 2 bonds issued by an authority, their transfer, and the income,
9 3 including any profits made on the sale of the bonds, is
9 4 deductible in determining net income for the purposes of the
9 5 state individual and corporate income tax under chapter 422,
9 6 divisions II and division III, and shall not be taxed by any
9 7 political subdivision of this state.
9 8 Sec. 28. Section 35A.13, subsection 2, paragraph b, Code
9 9 2015, is amended to read as follows:
9 10 b. Moneys credited to the fund pursuant to an income tax
9 11 checkoff provided in chapter 422, division II, Code 2015, if
9 12 applicable.
9 13 Sec. 29. Section 68A.102, subsection 21, Code 2015, is
9 14 amended by striking the subsection.
9 15 Sec. 30. Section 85.61, subsection 6, paragraph b, Code
9 16 2015, is amended by striking the paragraph.
9 17 Sec. 31. Section 100B.13, subsection 2, paragraph a, Code
9 18 2015, is amended to read as follows:
9 19 a. Moneys credited to the fund pursuant to an income tax
9 20 checkoff provided in chapter 422, division II, Code 2015, if
9 21 applicable.
9 22 Sec. 32. Section 190B.103, Code 2015, is amended to read as
9 23 follows:
9 24 190B.103 From farm to food donation tax credit.
9 25 A from farm to food donation tax credit is allowed against
9 26 the taxes imposed in chapter 422, divisions II and division
9 27 III, as provided in this chapter.
9 28 Sec. 33. Section 235A.2, subsection 1, Code 2015, is amended
9 29 to read as follows:
9 30 1. A child abuse prevention program fund is created in
9 31 the state treasury under the control of the department of
9 32 human services. The fund is composed of moneys appropriated
9 33 or available to and obtained or accepted by the treasurer of
9 34 state for deposit in the fund. The fund shall include moneys
9 35 transferred to the fund pursuant to an income tax checkoff
10 1 provided in chapter 422, division II, Code 2015, if applicable.
10 2 All interest earned on moneys in the fund shall be credited to
10 3 and remain in the fund. Section 8.33 does not apply to moneys
10 4 in the fund.
10 5 Sec. 34. Section 257.19, Code 2015, is amended to read as
10 6 follows:
10 7 257.19 Instructional support funding.
10 8 1. The additional funding for the instructional support
10 9 program for a budget year is limited to an amount not exceeding
10 10 ten percent of the total of regular program district cost
10 11 for the budget year and moneys received under section 257.14
10 12 as a budget adjustment for the budget year. Moneys received
10 13 by a district for the instructional support program are
10 14 miscellaneous income and may be used for any general fund
10 15 purpose. However, moneys received by a district for the
10 16 instructional support program shall not be used as, or in a
10 17 manner which has the effect of, supplanting funds authorized to
10 18 be received under sections 257.41, 257.46, 298.2, and 298.4,
10 19 or to cover any deficiencies in funding for special education
10 20 instructional services resulting from the application of the
10 21 special education weighting plan under section 256B.9.
10 22 2. Certification of a board's intent to participate for
10 23 a budget year, the method of funding, and the amount to be
10 24 raised shall be made to the department of management not later
10 25 than April 15 of the base year. Funding for the instructional
10 26 support program shall be obtained from instructional support
10 27 state aid and from local funding using either an instructional
10 28 support property tax or a combination of an instructional
10 29 support property tax and an instructional support income
10 30 surtax.
10 31 The board of directors shall determine whether the
10 32 instructional support property tax or the combination of the
10 33 instructional support property tax and instructional support
10 34 income surtax shall be used for the local funding. Subject to
10 35 the limitation specified in section 298.14, if the board elects
11 1 to use the combination of the instructional support property
11 2 tax and instructional support income surtax, for each budget
11 3 year the board shall determine the percent of income surtax
11 4 that will be imposed, expressed as full percentage points, not
11 5 to exceed twenty percent.
11 6 Sec. 35. Section 257.21, Code 2015, is amended to read as
11 7 follows:
11 8 257.21 Computation of instructional support amount.
11 9 1. The department of management shall establish the amount
11 10 of instructional support property tax to be levied and the
11 11 amount of instructional support income surtax to be imposed
11 12 by a district in accordance with the decision of the board
11 13 under section 257.19 for each school year for which the
11 14 instructional support program is authorized. The department
11 15 of management shall determine these amounts based upon the
11 16 most recent figures available for the district's valuation of
11 17 taxable property, individual state income tax paid, and budget
11 18 enrollment in the district, and shall certify to the district's
11 19 county auditor the amount of instructional support property
11 20 tax, and to the director of revenue the amount of instructional
11 21 support income surtax to be imposed if an instructional support
11 22 income surtax is to be imposed levied.
11 23 2. The instructional support income surtax shall be imposed
11 24 on the state individual income tax for the calendar year during
11 25 which the school's budget year begins, or for a taxpayer's
11 26 fiscal year ending during the second half of that calendar year
11 27 and after the date the board adopts a resolution to participate
11 28 in the program or the first half of the succeeding calendar
11 29 year, and shall be imposed on all individuals residing in the
11 30 school district on the last day of the applicable tax year.
11 31 As used in this section, "state individual income tax" means
11 32 the taxes computed under section 422.5, less the amounts of
11 33 nonrefundable credits allowed under chapter 422, division II,
11 34 except for the Iowa taxpayers trust fund tax credit allowed
11 35 under section 422.11E.
12 1 Sec. 36. Section 257.29, subsections 3 and 4, Code 2015, are
12 2 amended to read as follows:
12 3 3. The educational improvement program shall be funded
12 4 by either an educational improvement property tax or by a
12 5 combination of an educational improvement property tax and an
12 6 educational improvement income surtax. The method of raising
12 7 the educational improvement moneys shall be determined by the
12 8 board. Subject to the limitation in section 298.14, if the
12 9 board uses a combination of an educational improvement property
12 10 tax and an educational improvement income surtax, the board
12 11 shall determine the percent of income surtax to be imposed,
12 12 expressed as full percentage points, not to exceed twenty
12 13 percent.
12 14 4. The department of management shall establish the amount
12 15 of the educational improvement property tax to be levied or
12 16 the amount of the combination of the educational improvement
12 17 property tax to be levied and the amount of the school district
12 18 income surtax to be imposed for each school year that the
12 19 educational improvement amount is authorized. The educational
12 20 improvement property tax and income surtax, if an income
12 21 surtax is imposed, shall be levied and imposed, collected,
12 22 and paid to the school district in the manner provided for
12 23 the instructional support program in sections section 257.21
12 24 through 257.26. Moneys received by a school district under the
12 25 educational improvement program are miscellaneous income.
12 26 Sec. 37. Section 279.63, subsection 2, paragraph a, Code
12 27 2015, is amended to read as follows:
12 28 a. All property tax levies, income surtaxes, and local
12 29 option sales taxes in place in the school district, listed by
12 30 type of levy, rate, amount, duration, and notification of the
12 31 maximum rate and amount limitations permitted by statute.
12 32 Sec. 38. Section 298.2, subsections 1 and 4, Code 2015, are
12 33 amended to read as follows:
12 34 1. A physical plant and equipment levy of not exceeding
12 35 one dollar and sixty=seven cents per thousand dollars of
13 1 assessed valuation in the district is established except as
13 2 otherwise provided in this subsection. The physical plant
13 3 and equipment levy consists of the regular physical plant
13 4 and equipment levy of not exceeding thirty=three cents per
13 5 thousand dollars of assessed valuation in the district and
13 6 a voter=approved physical plant and equipment levy of not
13 7 exceeding one dollar and thirty=four cents per thousand
13 8 dollars of assessed valuation in the district. However, the
13 9 voter=approved physical plant and equipment levy may consist
13 10 of a combination of a physical plant and equipment property
13 11 tax levy and a physical plant and equipment income surtax as
13 12 provided in subsection 4 with the maximum amount levied and
13 13 imposed limited to an amount that could be raised by a one
13 14 dollar and thirty=four cent property tax levy.
13 15 4. a. The board may on its own motion, and upon the
13 16 written request of not less than one hundred eligible electors
13 17 or thirty percent of the number of eligible electors voting
13 18 at the last regular school election, whichever is greater,
13 19 shall, direct the county commissioner of elections to provide
13 20 for submitting the proposition of levying the voter=approved
13 21 physical plant and equipment levy for a period of time
13 22 authorized by the voters at the election, not to exceed ten
13 23 years. The election shall be held on a date specified in
13 24 section 39.2, subsection 4, paragraph "c". The proposition is
13 25 adopted if a majority of those voting on the proposition at the
13 26 election approves it. The voter=approved physical plant and
13 27 equipment levy shall be funded either by a physical plant and
13 28 equipment property tax or by a combination of a physical plant
13 29 and equipment property tax and a physical plant and equipment
13 30 income surtax, as determined by the board. However, if the
13 31 board intends to enter into a rental or lease arrangement under
13 32 section 279.26, or intends to enter into a loan agreement under
13 33 section 297.36, only a property tax shall be levied for those
13 34 purposes. Subject to the limitations of section 298.14, if
13 35 the board uses a combination of a physical plant and equipment
14 1 property tax and a physical plant and equipment surtax, for
14 2 each fiscal year the board shall determine the percent of
14 3 income surtax to be imposed expressed as full percentage
14 4 points, not to exceed twenty percent.
14 5 b. If a combination of a property tax and income surtax
14 6 is used, by April 15 of the previous school year, the board
14 7 shall certify the percent of the income surtax to be imposed
14 8 and the amount to be raised to the department of management
14 9 and the department of management shall establish the rate of
14 10 the property tax and income surtax for the school year. The
14 11 physical plant and equipment property tax and income surtax
14 12 shall be levied or imposed, collected, and paid to the school
14 13 district in the manner provided for the instructional support
14 14 program in sections section 257.21 through 257.26.
14 15 Sec. 39. Section 404A.2, subsection 2, Code 2015, is amended
14 16 to read as follows:
14 17 2. The tax credit shall be allowed against the taxes imposed
14 18 in chapter 422, divisions II, III, and V, and in chapter
14 19 432. An individual may claim a tax credit under this section
14 20 of a partnership, limited liability company, S corporation,
14 21 estate, or trust electing to have income taxed directly to the
14 22 individual. For an individual claiming a tax credit of an
14 23 estate or trust, the amount claimed by the individual shall be
14 24 based upon the pro rata share of the individual's earnings from
14 25 the estate or trust. For an individual claiming a tax credit
14 26 of a partnership, limited liability company, or S corporation,
14 27 the amount claimed by the partner, member, or shareholder,
14 28 respectively, shall be based upon the amounts designated by
14 29 the eligible partnership, S corporation, or limited liability
14 30 company, as applicable.
14 31 Sec. 40. Section 404A.2, subsection 4, paragraph c, Code
14 32 2015, is amended to read as follows:
14 33 c. The tax credit certificate, unless rescinded by the
14 34 department, shall be accepted by the department of revenue
14 35 as payment for taxes imposed in chapter 422, divisions II,
15 1 III, and V, and in chapter 432, subject to any conditions or
15 2 restrictions placed by the department or the department of
15 3 revenue upon the face of the tax credit certificate and subject
15 4 to the limitations of this program.
15 5 Sec. 41. Section 404A.2, subsection 5, paragraph c, Code
15 6 2015, is amended to read as follows:
15 7 c. A tax credit shall not be claimed by a transferee
15 8 under this section until a replacement tax credit certificate
15 9 identifying the transferee as the proper holder has been
15 10 issued. The transferee may use the amount of the tax credit
15 11 transferred against the taxes imposed in chapter 422, divisions
15 12 II, III, and V, and in chapter 432, for any tax year the
15 13 original transferor could have claimed the tax credit. Any
15 14 consideration received for the transfer of the tax credit shall
15 15 not be included as income under chapter 422, divisions II, III,
15 16 and V. Any consideration paid for the transfer of the tax
15 17 credit shall not be deducted from income under chapter 422,
15 18 divisions II, III, and V.
15 19 Sec. 42. Section 422.1, subsection 2, Code 2015, is amended
15 20 to read as follows:
15 21 2. Division II Personal net income tax Provisions
15 22 related to the business tax on corporations.
15 23 Sec. 43. Section 422.11L, subsection 1, unnumbered
15 24 paragraph 1, Code 2015, is amended to read as follows:
15 25 The taxes imposed under this division, less the credits
15 26 allowed under section 422.12, III shall be reduced by a solar
15 27 energy system tax credit equal to the sum of the following:
15 28 Sec. 44. Section 422.11L, subsection 3, paragraph a, Code
15 29 2015, is amended by striking the paragraph.
15 30 Sec. 45. Section 422.11N, subsection 3, unnumbered
15 31 paragraph 1, Code 2015, is amended to read as follows:
15 32 The taxes imposed under this division, less the credits
15 33 allowed under section 422.12, III shall be reduced by an
15 34 ethanol promotion tax credit for each tax year that the
15 35 taxpayer is eligible to claim the tax credit under this
16 1 section. In order to be eligible, all of the following must
16 2 apply:
16 3 Sec. 46. Section 422.11N, subsection 9, Code 2015, is
16 4 amended by striking the subsection.
16 5 Sec. 47. Section 422.11O, subsection 2, unnumbered
16 6 paragraph 1, Code 2015, is amended to read as follows:
16 7 The taxes imposed under this division, less the credits
16 8 allowed under section 422.12, III shall be reduced by an
16 9 E=85 gasoline promotion tax credit for each tax year that
16 10 the taxpayer is eligible to claim the tax credit under this
16 11 subsection.
16 12 Sec. 48. Section 422.11O, subsection 7, Code 2015, is
16 13 amended by striking the subsection.
16 14 Sec. 49. Section 422.11P, subsection 3, unnumbered
16 15 paragraph 1, Code 2015, is amended to read as follows:
16 16 The taxes imposed under this division, less the credits
16 17 allowed under section 422.12, III shall be reduced by a
16 18 biodiesel blended fuel tax credit for each tax year that
16 19 the taxpayer is eligible to claim a tax credit under this
16 20 subsection.
16 21 Sec. 50. Section 422.11P, subsection 7, Code 2015, is
16 22 amended by striking the subsection.
16 23 Sec. 51. Section 422.11S, subsection 1, Code 2015, is
16 24 amended to read as follows:
16 25 1. The taxes imposed under this division, less the credits
16 26 allowed under section 422.12, III shall be reduced by a
16 27 school tuition organization tax credit equal to sixty=five
16 28 percent of the amount of the voluntary cash or noncash
16 29 contributions made by the taxpayer during the tax year to a
16 30 school tuition organization, subject to the total dollar value
16 31 of the organization's tax credit certificates as computed in
16 32 subsection 8. The tax credit shall be claimed by use of a tax
16 33 credit certificate as provided in subsection 7.
16 34 Sec. 52. Section 422.11S, subsections 4 and 5, Code 2015,
16 35 are amended by striking the subsections.
17 1 Sec. 53. Section 422.11S, subsection 8, paragraph a,
17 2 subparagraph (2), Code 2015, is amended to read as follows:
17 3 (2) "Total approved tax credits" means for the tax year
17 4 beginning in the 2006 calendar year, two million five hundred
17 5 thousand dollars, for the tax year beginning in the 2007
17 6 calendar year, five million dollars, for tax years beginning
17 7 on or after January 1, 2008, but before January 1, 2012, seven
17 8 million five hundred thousand dollars, for tax years beginning
17 9 on or after January 1, 2012, but before January 1, 2014, eight
17 10 million seven hundred fifty thousand dollars, and for tax years
17 11 beginning on or after January 1, 2014, twelve for tax years
17 12 beginning on or after January 1, 2015, three million dollars.
17 13 Sec. 54. Section 422.11Y, subsection 3, unnumbered
17 14 paragraph 1, Code 2015, is amended to read as follows:
17 15 The taxes imposed under this division, less the credits
17 16 allowed under section 422.12, III shall be reduced by the
17 17 amount of the E=15 plus gasoline promotion tax credit for each
17 18 tax year that the taxpayer is eligible to claim a tax credit
17 19 under this subsection.
17 20 Sec. 55. Section 422.11Y, subsection 8, Code 2015, is
17 21 amended by striking the subsection.
17 22 Sec. 56. Section 422.15, subsections 2 and 3, Code 2015, are
17 23 amended by striking the subsections.
17 24 Sec. 57. Section 422.15, subsection 4, Code 2015, is amended
17 25 to read as follows:
17 26 4. Notwithstanding subsections subsection 1, 2, and 3, or
17 27 any other provision of this chapter, withholding of income
17 28 tax and any reporting requirement shall not be imposed upon
17 29 a person, corporation, or withholding agent or any payor of
17 30 deferred compensation, pensions, or annuities with regard to
17 31 such payments made to a nonresident of the state.
17 32 Sec. 58. Section 422.21, Code 2015, is amended by striking
17 33 the section and inserting in lieu thereof the following:
17 34 422.21 Form and time of return.
17 35 Returns shall be in the form the director prescribes, and
18 1 shall be filed with the department on or before the last day
18 2 of the fourth month after the expiration of the tax year.
18 3 However, cooperative associations as defined in section 6072(d)
18 4 of the Internal Revenue Code shall file their returns on or
18 5 before the fifteenth day of the ninth month following the
18 6 close of the taxable year and nonprofit corporations subject
18 7 to the unrelated business income tax imposed by section
18 8 422.33, subsection 1A, shall file their returns on or before
18 9 the fifteenth day of the fifth month following the close of
18 10 the taxable year. If, under the Internal Revenue Code, a
18 11 corporation is required to file a return covering a tax period
18 12 of less than twelve months, the state return shall be for the
18 13 same period and is due forty=five days after the due date of
18 14 the federal tax return, excluding any extension of time to
18 15 file. In case of sickness, absence, or other disability, or
18 16 if good cause exists, the director may allow further time for
18 17 filing returns. The director shall cause to be prepared blank
18 18 forms for the returns and shall cause them to be distributed
18 19 throughout the state and to be furnished upon application,
18 20 but failure to receive or secure the form does not relieve
18 21 the taxpayer from the obligation of making a return that is
18 22 required. The department may as far as consistent with the
18 23 Code draft income tax forms to conform to the income tax
18 24 forms of the internal revenue department of the United States
18 25 government.
18 26 Sec. 59. Section 422.22, Code 2015, is amended to read as
18 27 follows:
18 28 422.22 Supplementary returns.
18 29 If the director shall be of the opinion that any taxpayer
18 30 required under this division III to file a return has failed
18 31 to file such a return or to include in a return filed, either
18 32 intentionally or through error, items of taxable income,
18 33 the director may require from such taxpayer a return or
18 34 supplementary return in such form as the director shall
18 35 prescribe, of all the items of income which the taxpayer
19 1 received during the year for which the return is made, whether
19 2 or not taxable under the provisions of this division III. If
19 3 from a supplementary return, or otherwise, the director finds
19 4 that any items of income, taxable under this division III, have
19 5 been omitted from the original return, the director may require
19 6 the items so omitted to be added to the original return. Such
19 7 supplementary return and the correction of the original return
19 8 shall not relieve the taxpayer from any of the penalties to
19 9 which the taxpayer may be liable under any provisions of this
19 10 division III, whether or not the director required a return or
19 11 a supplementary return under this section.
19 12 Sec. 60. Section 422.32, Code 2015, is amended to read as
19 13 follows:
19 14 422.32 Definitions.
19 15 1. For the purpose of this division and unless otherwise
19 16 required by the context:
19 17 a. 1. "Affiliated group" means a group of corporations as
19 18 defined in section 1504(a) of the Internal Revenue Code.
19 19 b.2. a. "Business income" means income arising from
19 20 transactions and activity in the regular course of the
19 21 taxpayer's trade or business; or income from tangible and
19 22 intangible property if the acquisition, management, and
19 23 disposition of the property constitute integral parts of the
19 24 taxpayer's regular trade or business operations; or gain or
19 25 loss resulting from the sale, exchange, or other disposition of
19 26 real property or of tangible or intangible personal property,
19 27 if the property while owned by the taxpayer was operationally
19 28 related to the taxpayer's trade or business carried on in
19 29 Iowa or operationally related to sources within Iowa, or the
19 30 property was operationally related to sources outside this
19 31 state and to the taxpayer's trade or business carried on in
19 32 Iowa; or gain or loss resulting from the sale, exchange, or
19 33 other disposition of stock in another corporation if the
19 34 activities of the other corporation were operationally related
19 35 to the taxpayer's trade or business carried on in Iowa while
20 1 the stock was owned by the taxpayer. A taxpayer may have more
20 2 than one regular trade or business in determining whether
20 3 income is business income.
20 4 (1) b. It is the intent of the general assembly to treat as
20 5 apportionable business income all income that may be treated
20 6 as apportionable business income under the Constitution of the
20 7 United States.
20 8 (2) c. The filing of an Iowa income tax return on a
20 9 combined report basis is neither allowed nor required by this
20 10 paragraph "b" subsection.
20 11 c. 3. "Commercial domicile" means the principal place from
20 12 which the trade or business of the taxpayer is directed or
20 13 managed.
20 14 d. 4. "Corporation" includes joint stock companies, and
20 15 associations organized for pecuniary profit, and partnerships
20 16 and limited liability companies taxed as corporations under the
20 17 Internal Revenue Code.
20 18 e. 5. "Domestic corporation" means any corporation
20 19 organized under the laws of this state.
20 20 6. "Fiduciary" means a guardian, trustee, executor,
20 21 administrator, receiver, conservator, or any person, whether
20 22 individual or corporate, acting in any fiduciary capacity for
20 23 any person, trust, or estate.
20 24 7. "Fiscal year" means an accounting period of twelve
20 25 months, ending on the last day of any month other than
20 26 December.
20 27 f. 8. "Foreign corporation" means any corporation other
20 28 than a domestic corporation.
20 29 9. "Foreign country" means any jurisdiction other than one
20 30 embraced within the United States. The words "United States",
20 31 when used in a geographical sense, include the states, the
20 32 District of Columbia, and the possessions of the United States.
20 33 g. 10. "Income from sources within this state" means income
20 34 from real, tangible, or intangible property located or having
20 35 a situs in this state.
21 1 11. "Income year" means the calendar year or the fiscal year
21 2 upon the basis of which the net income is computed under this
21 3 division.
21 4 12. "Individual" means a natural person.
21 5 h. 13. "Internal Revenue Code" means the Internal Revenue
21 6 Code of 1954, prior to the date of its redesignation as the
21 7 Internal Revenue Code of 1986 by the Tax Reform Act of 1986,
21 8 or means the Internal Revenue Code of 1986 as amended to and
21 9 including January 1, 2014.
21 10 i. 14. "Nonbusiness income" means all income other than
21 11 business income.
21 12 15. The word "paid", for the purposes of the deductions
21 13 under this division, means "paid or accrued" or "paid or
21 14 incurred", and the terms "paid or incurred" and "paid or
21 15 accrued" shall be construed according to the method of
21 16 accounting upon the basis of which the net income is computed
21 17 under this division. The term "received", for the purpose
21 18 of the computation of net income under this division, means
21 19 "received or accrued", and the term "received or accrued" shall
21 20 be construed according to the method of accounting upon the
21 21 basis of which the net income is computed under this division.
21 22 16. "Resident" applies only to individuals and includes, for
21 23 the purpose of determining liability to the tax imposed by this
21 24 division upon or with reference to the income of any tax year,
21 25 any individual domiciled in the state, and any other individual
21 26 who maintains a permanent place of abode within the state.
21 27 j. 17. "State" means any state of the United States, the
21 28 District of Columbia, the Commonwealth of Puerto Rico, any
21 29 territory or possession of the United States, and any foreign
21 30 country or political subdivision thereof.
21 31 18. a. "Tax year" means the calendar year, or the fiscal
21 32 year ending during such calendar year, upon the basis of which
21 33 the net income is computed under this division.
21 34 b. If a taxpayer has made the election provided by section
21 35 441, subsection "f", of the Internal Revenue Code, "tax year"
22 1 means the annual period so elected, varying from fifty=two to
22 2 fifty=three weeks.
22 3 c. If the effective date or the applicability of a provision
22 4 of this division is expressed in terms of a tax year beginning,
22 5 including, or ending with reference to a specified date which
22 6 is the first or last day of a month, a tax year described in
22 7 paragraph "a" of this subsection shall be treated as beginning
22 8 with the first day of the calendar month beginning nearest to
22 9 the first day of the tax year or as ending with the last day of
22 10 the calendar month ending nearest to the last day of the tax
22 11 year.
22 12 k. 19. "Taxable in another state". For purposes of
22 13 allocation and apportionment of income under this division, a
22 14 taxpayer is "taxable in another state" if:
22 15 (1) a. In that state the taxpayer is subject to a net
22 16 income tax, a franchise tax measured by net income, a franchise
22 17 tax for the privilege of doing business, or a corporate stock
22 18 tax; or
22 19 (2) b. That state has jurisdiction to subject the taxpayer
22 20 to a net income tax regardless of whether, in fact, the state
22 21 does or does not.
22 22 l. 20. "Unitary business" means a business carried on
22 23 partly within and partly without a state where the portion
22 24 of the business carried on within the state depends on or
22 25 contributes to the business outside the state.
22 26 2. The words, terms, and phrases defined in section 422.4,
22 27 subsections 4 to 6, 8, 9, 13, and 15 to 17, when used in this
22 28 division, shall have the meanings ascribed to them in said
22 29 section except where the context clearly indicates a different
22 30 meaning.
22 31 Sec. 61. Section 422.33, subsection 28, Code 2015, is
22 32 amended to read as follows:
22 33 28. The taxes imposed under this division shall be reduced
22 34 by a school tuition organization tax credit allowed under
22 35 section 422.11S. The maximum amount of tax credits that
23 1 may be approved under this subsection for a tax year equals
23 2 twenty=five percent of the school tuition organization's tax
23 3 credits that may be approved pursuant to section 422.11S,
23 4 subsection 8, for a tax year.
23 5 Sec. 62. Section 422D.1, Code 2015, is amended to read as
23 6 follows:
23 7 422D.1 Authorization == election == imposition and repeal ==
23 8 use of revenues.
23 9 1. a. A county board of supervisors may offer for voter
23 10 approval any of the following taxes or a combination of the
23 11 following taxes:
23 12 (1) Local option income surtax.
23 13 (2) An an ad valorem property tax.
23 14 b. Revenues generated from these taxes the ad valorem
23 15 property tax shall be used for emergency medical services as
23 16 provided in section 422D.6.
23 17 2. a. The taxes property tax for emergency medical services
23 18 shall only be imposed after an election at which a majority of
23 19 those voting on the question of imposing the tax or combination
23 20 of taxes specified in subsection 1, paragraph "a", subparagraph
23 21 (1) or (2), vote in favor of the question. However, the tax
23 22 or combination of taxes specified in subsection 1 shall not
23 23 be imposed on property within or on residents of a benefited
23 24 emergency medical services district under chapter 357F. The
23 25 question of imposing the tax or combination of the taxes may
23 26 be submitted at the regular city election, a special election,
23 27 or the general election. Notice of the question shall be
23 28 provided by publication at least sixty days before the time of
23 29 the election and shall identify the tax or combination of taxes
23 30 and the levy rate or rates, as applicable. If a majority of
23 31 those voting on the question approve the imposition of the tax
23 32 or combination of taxes, the tax or combination of taxes shall
23 33 be imposed as follows:
23 34 (1) A local option income surtax shall be imposed for tax
23 35 years beginning on or after January 1 of the fiscal year in
24 1 which the favorable election was held.
24 2 (2) An ad valorem property tax shall be imposed levied for
24 3 the fiscal year in which the election was held.
24 4 b. Before a county imposes an income surtax as specified
24 5 in subsection 1, paragraph "a", subparagraph (1), a benefited
24 6 emergency medical services district in the county shall be
24 7 dissolved, and the county shall be liable for the outstanding
24 8 obligations of the benefited district. If the benefited
24 9 district extends into more than one county, the county imposing
24 10 the income surtax shall be liable for only that portion of the
24 11 obligations relating to the portion of the benefited district
24 12 in the county.
24 13 3. Revenues received by the county from the taxes imposed
24 14 tax levied under this chapter shall be deposited into the
24 15 emergency medical services trust fund created pursuant to
24 16 section 422D.6 and shall be used as provided in that section.
24 17 4. Any tax or combination of taxes imposed levied under this
24 18 chapter shall be for a maximum period of five years.
24 19 Sec. 63. Section 425.23, subsection 4, paragraph b, Code
24 20 2015, is amended to read as follows:
24 21 b. The annual adjustment factor for the 1998 base year is
24 22 one hundred percent. For each subsequent base year, the annual
24 23 adjustment factor equals the annual inflation factor for the
24 24 calendar year, in which the base year begins, as computed in
24 25 section 422.4 for purposes of the individual income tax, Code
24 26 2015.
24 27 Sec. 64. Section 476.20, subsection 3, paragraph b, Code
24 28 2015, is amended to read as follows:
24 29 b. A qualified applicant for the low income home energy
24 30 assistance program or the weatherization assistance program who
24 31 is also a "head of household", as defined in section 422.4,
24 32 subsection 7, head of household shall be promptly certified
24 33 by the local agency administering the applicant's program to
24 34 the applicant's public utility that the resident is a "head
24 35 of household" as defined in section 422.4, subsection 7, head
25 1 of household and is qualified for the low income home energy
25 2 assistance program or weatherization assistance program.
25 3 Notwithstanding subsection 1, a public utility furnishing gas
25 4 or electricity shall not disconnect service from November 1
25 5 through April 1 to a residence which has a resident that has
25 6 been certified under this paragraph. For purposes of this
25 7 paragraph, "head of household" has the same meaning as provided
25 8 by the Internal Revenue Code.
25 9 Sec. 65. Section 476B.2, Code 2015, is amended to read as
25 10 follows:
25 11 476B.2 General rule.
25 12 The owner of a qualified facility shall, for each
25 13 kilowatt=hour of qualified electricity that the owner sells
25 14 or uses for on=site consumption during the ten=year period
25 15 beginning on the date the qualified facility was originally
25 16 placed in service, be allowed a wind energy production tax
25 17 credit to the extent provided in this chapter against the tax
25 18 imposed in chapter 422, divisions II, III, and V, and chapter
25 19 432, and may claim a refund of tax imposed by chapter 423 or
25 20 437A for any tax year within the time period set forth in
25 21 section 423.47 or 437A.14.
25 22 Sec. 66. Section 476B.6, subsection 5, paragraphs a, b, and
25 23 c, Code 2015, are amended to read as follows:
25 24 a. If the tax credit application is filed by a partnership,
25 25 limited liability company, S corporation, estate, trust, or
25 26 other reporting entity all of the income of which is taxed
25 27 directly to its equity holders or beneficiaries, for the taxes
25 28 imposed under chapter 422, division II or III, the tax credit
25 29 certificate shall be issued directly to equity holders or
25 30 beneficiaries of the applicant in proportion to their pro rata
25 31 share of the income of such entity. The applicant shall, in
25 32 the application made under this section, identify its equity
25 33 holders or beneficiaries, and the percentage of such entity's
25 34 income that is allocable to each equity holder or beneficiary.
25 35 b. If the tax credit applicant under this section is
26 1 eligible to receive renewable electricity production credits
26 2 authorized under section 45 of the Internal Revenue Code,
26 3 as amended, and the tax credit applicant is a partnership,
26 4 limited liability company, S corporation, estate, trust, or
26 5 other reporting entity all of the income of which is taxed
26 6 directly to its equity holders or beneficiaries, for the taxes
26 7 imposed under chapter 422, division II or III, the tax credit
26 8 certificate may be issued to a partner if the business is a
26 9 partnership, a shareholder if the business is an S corporation,
26 10 or a member if the business is a limited liability company
26 11 in the amounts designated by the eligible partnership, S
26 12 corporation, or limited liability company. In absence of
26 13 such designation, the credits under this section shall flow
26 14 through to the partners, shareholders, or members in accordance
26 15 with their pro rata share of the income of the entity. The
26 16 applicant shall, in the application made under this section,
26 17 identify the holders or beneficiaries that are to receive the
26 18 tax credit certificates and the percentage of the tax credit
26 19 that is allocable to each holder or beneficiary.
26 20 c. If an applicant under this section is eligible to
26 21 receive renewable electricity production credits authorized
26 22 under section 45 of the Internal Revenue Code, as amended, and
26 23 the tax credit applicant is a partnership, limited liability
26 24 company, S corporation, estate, trust, or other reporting
26 25 entity all of the income of which is taxed directly to its
26 26 equity holders or beneficiaries, for the taxes imposed under
26 27 chapter 422, division II or III, the tax credit certificates
26 28 and all future rights to the tax credit in this section may be
26 29 distributed to an equity holder or beneficiary as a liquidating
26 30 distribution or portion thereof, of a holder or beneficiary's
26 31 interest in the applicant entity. The applicant shall, in the
26 32 application made under this section, designate the percentage
26 33 of the tax credit allocable to the liquidating equity holder
26 34 or beneficiary that is to receive the current and future tax
26 35 credit certificates under this section.
27 1 Sec. 67. Section 476B.7, subsection 2, Code 2015, is amended
27 2 to read as follows:
27 3 2. The tax credit shall be freely transferable. The
27 4 transferee may use the amount of the tax credit transferred
27 5 against the taxes imposed under chapter 422, divisions II, III,
27 6 and V, and chapter 432 for any tax year the original transferor
27 7 could have claimed the tax credit. The transferee may claim
27 8 a refund under chapter 423 or 437A for any tax year within
27 9 the time period set forth in section 423.47 or 437A.14 for
27 10 which the original transferor could have claimed a refund.
27 11 Any consideration received for the transfer of the tax credit
27 12 shall not be included as income under chapter 422, divisions
27 13 II, III, and V. Any consideration paid for the transfer of the
27 14 tax credit shall not be deducted from income under chapter 422,
27 15 divisions II, III, and V.
27 16 Sec. 68. Section 476C.4, subsection 4, paragraph a, Code
27 17 2015, is amended to read as follows:
27 18 a. If the tax credit application is filed by a partnership,
27 19 limited liability company, S corporation, estate, trust, or
27 20 other reporting entity all of the income of which is taxed
27 21 directly to its equity holders or beneficiaries, for the taxes
27 22 imposed under chapter 422, division II or III, the tax credit
27 23 certificate shall be issued directly to equity holders or
27 24 beneficiaries of the applicant in proportion to their pro rata
27 25 share of the income of such entity. The applicant shall, in
27 26 the application made under this section, identify its equity
27 27 holders or beneficiaries, and the percentage of such entity's
27 28 income that is allocable to each equity holder or beneficiary.
27 29 Sec. 69. Section 476C.4, subsection 4, paragraph b,
27 30 subparagraph (1), Code 2015, is amended to read as follows:
27 31 (1) If the tax credit applicant under this section is
27 32 eligible to receive renewable electricity production credits
27 33 authorized under section 45 of the Internal Revenue Code,
27 34 as amended, and the tax credit applicant is a partnership,
27 35 limited liability company, S corporation, estate, trust, or
28 1 other reporting entity all of the income of which is taxed
28 2 directly to its equity holders or beneficiaries, for the taxes
28 3 imposed under chapter 422, division II or III, the tax credit
28 4 certificate may be issued to a partner if the business is a
28 5 partnership, a shareholder if the business is an S corporation,
28 6 or a member if the business is a limited liability company
28 7 in the amounts designated by the eligible partnership, S
28 8 corporation, or limited liability company. In absence of such
28 9 designation, the credits under this section shall flow through
28 10 to the partners, shareholders, or members in accordance with
28 11 their pro rata share of the income of the entity.
28 12 Sec. 70. Section 476C.4, subsection 4, paragraph c,
28 13 subparagraph (1), Code 2015, is amended to read as follows:
28 14 (1) If an applicant under this section is eligible to
28 15 receive renewable electricity production credits authorized
28 16 under section 45 of the Internal Revenue Code, as amended, and
28 17 the tax credit applicant is a partnership, limited liability
28 18 company, S corporation, estate, trust, or other reporting
28 19 entity all of the income of which is taxed directly to its
28 20 equity holders or beneficiaries, for the taxes imposed under
28 21 chapter 422, division II or III, the tax credit certificates
28 22 and all future rights to the tax credit in this section may be
28 23 distributed to an equity holder or beneficiary as a liquidating
28 24 distribution or portion thereof, of a holder or beneficiary's
28 25 interest in the applicant entity.
28 26 Sec. 71. Section 476C.6, subsection 1, paragraph b, Code
28 27 2015, is amended to read as follows:
28 28 b. The transferee may use the amount of the tax credit
28 29 transferred against taxes imposed under chapter 422, divisions
28 30 II, III, and V, and chapter 432 for any tax year the original
28 31 transferor could have claimed the tax credit. The transferee
28 32 may claim a refund under chapter 423 or 437A for any tax
28 33 year within the time period set forth in section 423.47 or
28 34 437A.14 for which the original transferor could have claimed
28 35 the refund. Any consideration received for the transfer of
29 1 the tax credit shall not be included as income under chapter
29 2 422, divisions II, III, and V. Any consideration paid for the
29 3 transfer of the tax credit shall not be deducted from income
29 4 under chapter 422, divisions II, III, and V.
29 5 Sec. 72. Section 483A.1A, subsection 10, paragraph e, Code
29 6 2015, is amended to read as follows:
29 7 e. Is a member of the armed forces of the United States
29 8 who is serving on active duty, and claims residency in this
29 9 state, and has filed a state individual income tax return
29 10 as a resident pursuant to chapter 422, division II, for the
29 11 preceding tax year, or is stationed in this state.
29 12 Sec. 73. REPEAL. Sections 68A.601, 190B.105, 257.22
29 13 through 257.26, 298.14, 422.4 through 422.11F, 422.11H through
29 14 422.11J, 422.11M, 422.11Q, 422.11R, 422.11V, 422.11W, 422.11Z,
29 15 422.12, 422.12A through 422.12E, 422.12H, 422.12J through
29 16 422.14, 422.16, 422.17, 422.19, 422.23, 422.27, 422.31, 422D.2
29 17 through 422D.4, Code 2015, are repealed.
29 18 Sec. 74. CORRESPONDING AMENDMENTS LEGISLATION. Additional
29 19 legislation is required to fully implement this division of
29 20 this Act. The director of the department of revenue shall, in
29 21 compliance with section 2.16, prepare draft legislation for
29 22 submission to the legislative services agency, as necessary, to
29 23 implement the repeal of the individual income tax under this
29 24 division of this Act and under other provisions of law.
29 25 Sec. 75. APPLICABILITY. This division of this Act applies
29 26 to tax years beginning on or after January 1, 2016.
29 27 DIVISION II
29 28 SALES AND USE TAX
29 29 Sec. 76. Section 423.2, subsection 1, unnumbered paragraph
29 30 1, Code 2015, is amended to read as follows:
29 31 There is imposed a tax of six eleven percent upon the sales
29 32 price of all sales of tangible personal property, consisting
29 33 of goods, wares, or merchandise, sold at retail in the state
29 34 to consumers or users except as otherwise provided in this
29 35 subchapter.
30 1 Sec. 77. Section 423.2, subsections 2 and 3, Code 2015, are
30 2 amended to read as follows:
30 3 2. A tax of six eleven percent is imposed upon the sales
30 4 price of the sale or furnishing of gas, electricity, water,
30 5 heat, pay television service, and communication service,
30 6 including the sales price from such sales by any municipal
30 7 corporation or joint water utility furnishing gas, electricity,
30 8 water, heat, pay television service, and communication service
30 9 to the public in its proprietary capacity, except as otherwise
30 10 provided in this subchapter, when sold at retail in the state
30 11 to consumers or users.
30 12 3. A tax of six eleven percent is imposed upon the
30 13 sales price of all sales of tickets or admissions to places
30 14 of amusement, fairs, and athletic events except those of
30 15 elementary and secondary educational institutions. A tax
30 16 of six eleven percent is imposed on the sales price of an
30 17 entry fee or like charge imposed solely for the privilege of
30 18 participating in an activity at a place of amusement, fair, or
30 19 athletic event unless the sales price of tickets or admissions
30 20 charges for observing the same activity are taxable under this
30 21 subchapter. A tax of six eleven percent is imposed upon that
30 22 part of private club membership fees or charges paid for the
30 23 privilege of participating in any athletic sports provided club
30 24 members.
30 25 Sec. 78. Section 423.2, subsection 4, paragraph a, Code
30 26 2015, is amended to read as follows:
30 27 a. A tax of six eleven percent is imposed upon the sales
30 28 price derived from the operation of all forms of amusement
30 29 devices and games of skill, games of chance, raffles, and bingo
30 30 games as defined in chapter 99B, and card game tournaments
30 31 conducted under section 99B.7B, that are operated or conducted
30 32 within the state, the tax to be collected from the operator in
30 33 the same manner as for the collection of taxes upon the sales
30 34 price of tickets or admission as provided in this section.
30 35 Nothing in this subsection shall legalize any games of skill
31 1 or chance or slot=operated devices which are now prohibited by
31 2 law.
31 3 Sec. 79. Section 423.2, subsection 5, Code 2015, is amended
31 4 to read as follows:
31 5 5. There is imposed a tax of six eleven percent upon the
31 6 sales price from the furnishing of services as defined in
31 7 section 423.1.
31 8 Sec. 80. Section 423.2, subsection 7, paragraph a,
31 9 unnumbered paragraph 1, Code 2015, is amended to read as
31 10 follows:
31 11 A tax of six eleven percent is imposed upon the sales
31 12 price from the sales, furnishing, or service of solid waste
31 13 collection and disposal service.
31 14 Sec. 81. Section 423.2, subsection 8, paragraph a, Code
31 15 2015, is amended to read as follows:
31 16 a. A tax of six eleven percent is imposed on the sales
31 17 price from sales of bundled transactions. For the purposes of
31 18 this subsection, a "bundled transaction" is the retail sale of
31 19 two or more distinct and identifiable products, except real
31 20 property and services to real property, which are sold for one
31 21 nonitemized price. A "bundled transaction" does not include
31 22 the sale of any products in which the sales price varies, or
31 23 is negotiable, based on the selection by the purchaser of the
31 24 products included in the transaction.
31 25 Sec. 82. Section 423.2, subsection 9, Code 2015, is amended
31 26 to read as follows:
31 27 9. A tax of six eleven percent is imposed upon the
31 28 sales price from any mobile telecommunications service,
31 29 including all paging services, that this state is allowed
31 30 to tax pursuant to the provisions of the federal Mobile
31 31 Telecommunications Sourcing Act, Pub. L. No. 106=252, 4 U.S.C.
31 32 {116 et seq. For purposes of this subsection, taxes on mobile
31 33 telecommunications service, as defined under the federal Mobile
31 34 Telecommunications Sourcing Act that are deemed to be provided
31 35 by the customer's home service provider, shall be paid to
32 1 the taxing jurisdiction whose territorial limits encompass
32 2 the customer's place of primary use, regardless of where the
32 3 mobile telecommunications service originates, terminates,
32 4 or passes through and shall in all other respects be taxed
32 5 in conformity with the federal Mobile Telecommunications
32 6 Sourcing Act. All other provisions of the federal Mobile
32 7 Telecommunications Sourcing Act are adopted by the state of
32 8 Iowa and incorporated into this subsection by reference. With
32 9 respect to mobile telecommunications service under the federal
32 10 Mobile Telecommunications Sourcing Act, the director shall, if
32 11 requested, enter into agreements consistent with the provisions
32 12 of the federal Act.
32 13 Sec. 83. Section 423.2, subsection 11, paragraph b,
32 14 subparagraph (3), Code 2015, is amended to read as follows:
32 15 (3) Transfer one=sixth seventeen and two thousand five
32 16 hundred forty=eight ten=thousandths percent of the remaining
32 17 revenues to the secure an advanced vision for education fund
32 18 created in section 423F.2. This subparagraph (3) is repealed
32 19 December 31, 2029.
32 20 Sec. 84. Section 423.2, subsection 13, Code 2015, is amended
32 21 to read as follows:
32 22 13. The sales tax rate of six eleven percent is reduced to
32 23 five ten percent on January 1, 2030.
32 24 Sec. 85. Section 423.5, subsection 1, unnumbered paragraph
32 25 1, Code 2015, is amended to read as follows:
32 26 Except as provided in paragraph "c", an excise tax at the
32 27 rate of six eleven percent of the purchase price or installed
32 28 purchase price is imposed on the following:
32 29 Sec. 86. Section 423.5, subsection 5, Code 2015, is amended
32 30 to read as follows:
32 31 5. The use tax rate of six eleven percent is reduced to five
32 32 ten percent on January 1, 2030.
32 33 Sec. 87. Section 423.43, subsection 1, paragraph b, Code
32 34 2015, is amended to read as follows:
32 35 b. Subsequent to the deposit into the general fund of
33 1 the state and after the transfer of such revenues collected
33 2 under chapter 423B, the department shall transfer one=sixth
33 3 one=eleventh of such remaining revenues to the secure an
33 4 advanced vision for education fund created in section 423F.2.
33 5 This paragraph is repealed December 31, 2029.
33 6 Sec. 88. EFFECTIVE DATE. This division of this Act takes
33 7 effect January 1, 2016.
33 8 EXPLANATION
33 9 The inclusion of this explanation does not constitute agreement with
33 10 the explanation's substance by the members of the general assembly.
33 11 This bill relates to state taxes by repealing the individual
33 12 income tax and increasing the state sales and use tax rates.
33 13 Division I repeals the individual income tax and makes
33 14 numerous conforming changes to the Code to remove references
33 15 to the individual income tax and to update or move provisions
33 16 of the individual income tax that are also applicable by
33 17 reference to the corporate income tax and the franchise tax.
33 18 The division also repeals the emergency medical services income
33 19 surtax in Code chapter 422D, the instructional support income
33 20 surtax in Code section 257.21, the educational improvement
33 21 income surtax in Code section 257.29, and the physical plant
33 22 and equipment income surtax in Code section 298.2, because
33 23 income surtax revenues will no longer be generated without the
33 24 state individual income tax.
33 25 The division provides that additional legislation is
33 26 required to fully implement the division and requires the
33 27 director of the department of revenue to prepare draft
33 28 legislation in compliance with Code section 2.16 for submission
33 29 to the legislative services agency to implement the repeal of
33 30 the individual income tax.
33 31 The division takes effect on January 1, 2016, and applies to
33 32 tax years beginning on or after that date.
33 33 Division II increases the state sales and use tax rate to
33 34 11 percent from 6 percent. By operation of law as provided in
33 35 Article VII, section 10 of the Iowa Constitution, a portion
34 1 (0.375 percent) of the state sales tax generated and collected
34 2 from the rate increase provided in this division will be
34 3 transferred to the natural resources and outdoor recreation
34 4 trust fund in Code section 461.31. The division amends the
34 5 transfer of state sales tax revenues to the secure an advanced
34 6 vision for education fund (SAVE) in Code section 423F.2 from
34 7 one=sixth (approximately 16.66 percent) of the revenues to
34 8 17.2548 percent of the revenues to ensure that SAVE receives
34 9 approximately the same proportion of the total sales tax
34 10 revenue as it did prior to the sales tax rate increase provided
34 11 in the division.
34 12 The division takes effect on January 1, 2016.
LSB 1746XS (5) 86
mm/sc