House File 893 - Introduced
HOUSE FILE 893
BY COMMITTEE ON WAYS AND MEANS
(SUCCESSOR TO HSB 278)
A BILL FOR
1 An Act relating to state taxation and economic development
2 activities, including future tax contingencies, state
3 income tax deductions, tax credits, the state inheritance
4 tax, the sales and use tax, disaster recovery housing,
5 energy infrastructure, telehealth parity, consumer loans,
6 local regulations, and other properly related matters, and
7 including effective date and retroactive applicability
8 provisions.
9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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1 DIVISION I
2 FUTURE TAX CHANGES
3 Section 1. 2018 Iowa Acts, chapter 1161, section 133, is
4 amended by striking the section and inserting in lieu thereof
5 the following:
6 SEC. 133. EFFECTIVE DATE. This division of this Act takes
7 effect January 1, 2023.
8 DIVISION II
9 CHILD DEPENDENT AND DEVELOPMENT TAX CREDITS
10 Sec. 2. Section 422.12C, subsection 1, paragraphs f and g,
11 Code 2021, are amended to read as follows:
12 f. For a taxpayer with net income of forty thousand dollars
13 or more but less than forty-five ninety thousand dollars,
14 thirty percent.
15 g. For a taxpayer with net income of forty-five ninety
16 thousand dollars or more, zero percent.
17 Sec. 3. Section 422.12C, subsection 2, paragraph a, Code
18 2021, is amended to read as follows:
19 a. The taxes imposed under this subchapter, less the amounts
20 of nonrefundable credits allowed under this subchapter, may
21 be reduced by an early childhood development tax credit equal
22 to twenty-five percent of the first one thousand dollars
23 which the taxpayer has paid to others for each dependent, as
24 defined in the Internal Revenue Code, ages three through five
25 for early childhood development expenses. In determining the
26 amount of early childhood development expenses for the tax year
27 beginning in the 2006 calendar year only, such expenses paid
28 during November and December of the previous tax year shall
29 be considered paid in the tax year for which the tax credit
30 is claimed. This credit is available to a taxpayer whose net
31 income is less than forty-five ninety thousand dollars. If the
32 early childhood development tax credit is claimed for a tax
33 year, the taxpayer and the taxpayer’s spouse shall not claim
34 the child and dependent care credit under subsection 1.
35 Sec. 4. RETROACTIVE APPLICABILITY. This division of this
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1 Act applies retroactively to tax years beginning on or after
2 January 1, 2021.
3 DIVISION III
4 COVID-19 RELATED GRANTS —— TAXATION
5 Sec. 5. Section 422.7, subsection 62, Code 2021, is amended
6 to read as follows:
7 62. a. Subtract, to the extent included, the amount of
8 any financial assistance qualifying COVID-19 grant provided to
9 an eligible small issued to an individual or business by the
10 economic development authority under the Iowa small business
11 relief grant program created during calendar year 2020 to
12 provide financial assistance to eligible small businesses
13 economically impacted by the COVID-19 pandemic, the Iowa
14 finance authority, or the department of agriculture and land
15 stewardship.
16 b. For purposes of this subsection, “qualifying COVID-19
17 grant” includes any grant identified by the department by rule
18 that was issued under a grant program administered by the
19 economic development authority, Iowa finance authority, or
20 the department of agriculture and land stewardship to provide
21 financial assistance to individuals and businesses economically
22 impacted by the COVID-19 pandemic.
23 c. The economic development authority, Iowa finance
24 authority, or the department of agriculture and land
25 stewardship shall notify the department of any COVID-19 grant
26 program that may qualify under this subsection in the manner
27 and form prescribed by the department.
28 d. This subsection is repealed January 1, 2024, and does not
29 apply to tax years beginning on or after that date.
30 Sec. 6. Section 422.35, subsection 30, Code 2021, is amended
31 to read as follows:
32 30. a. Subtract, to the extent included, the amount of
33 any financial assistance qualifying COVID-19 grant provided
34 to an eligible small issued to a business by the economic
35 development authority under the Iowa small business relief
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1 grant program created during calendar year 2020 to provide
2 financial assistance to eligible small businesses economically
3 impacted by the COVID-19 pandemic, the Iowa finance authority,
4 or the department of agriculture and land stewardship.
5 b. For purposes of this subsection, “qualifying COVID-19
6 grant” includes any grant identified by the department by rule
7 that was issued under a grant program administered by the
8 economic development authority, Iowa finance authority, or
9 the department of agriculture and land stewardship to provide
10 financial assistance to businesses economically impacted by the
11 COVID-19 pandemic.
12 c. The economic development authority, Iowa finance
13 authority, or the department of agriculture and land
14 stewardship shall notify the department of any COVID-19 grant
15 program that may qualify under this subsection in the manner
16 and form prescribed by the department.
17 d. This subsection is repealed January 1, 2024, and does not
18 apply to tax years beginning on or after that date.
19 Sec. 7. EFFECTIVE DATE. This division of this Act, being
20 deemed of immediate importance, takes effect upon enactment.
21 Sec. 8. RETROACTIVE APPLICABILITY. This division of this
22 Act applies retroactively to March 23, 2020, for tax years
23 ending on or after that date.
24 DIVISION IV
25 FEDERAL PAYCHECK PROTECTION PROGRAM
26 Sec. 9. FEDERAL PAYCHECK PROTECTION PROGRAM.
27 Notwithstanding any other provision of the law to the contrary,
28 for any tax year ending after March 27, 2020, Division N, Tit.
29 II, subtit. B, §276 and §278(a), of the federal Consolidated
30 Appropriations Act, 2021, Pub. L. No. 116-260, applies in
31 computing net income for state tax purposes under section 422.7
32 or 422.35.
33 Sec. 10. EFFECTIVE DATE. This division of this Act, being
34 deemed of immediate importance, takes effect upon enactment.
35 DIVISION V
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1 SCHOOL TUITION ORGANIZATION TAX CREDIT
2 Sec. 11. Section 422.11S, subsection 1, Code 2021, is
3 amended to read as follows:
4 1. a. The taxes imposed under this subchapter, less the
5 credits allowed under section 422.12, shall be reduced by a
6 school tuition organization tax credit equal to sixty-five
7 percent the following percentage of the amount of the voluntary
8 cash or noncash contributions made by the taxpayer during the
9 applicable tax year to a school tuition organization, subject
10 to the total dollar value of the organization’s tax credit
11 certificates as computed in subsection 8.:
12 (1) For the tax year beginning on or after January 1, 2021,
13 but before January 1, 2022, sixty-five percent.
14 (2) For the tax year beginning on or after January 1, 2022,
15 but before January 1, 2023, seventy-two percent.
16 (3) For the tax year beginning on or after January 1, 2023,
17 but before January 1, 2024, seventy-eight percent.
18 (4) For the tax year beginning on or after January 1, 2024,
19 but before January 1, 2025, eighty-five percent.
20 (5) For tax years beginning on or after January 1, 2025,
21 eighty-seven percent.
22 b. The tax credit shall be claimed by use of a tax credit
23 certificate as provided in subsection 7.
24 Sec. 12. Section 422.11S, subsection 8, paragraph a,
25 subparagraph (2), Code 2021, is amended to read as follows:
26 (2) (a) “Total approved tax credits” means for the 2006
27 calendar year, two million five hundred thousand dollars, for
28 the 2007 calendar year, five million dollars, for calendar
29 years beginning on or after January 1, 2008, but before January
30 1, 2012, seven million five hundred thousand dollars, for
31 calendar years beginning on or after January 1, 2012, but
32 before January 1, 2014, eight million seven hundred fifty
33 thousand dollars, for calendar years beginning on or after
34 January 1, 2014, but before January 1, 2019, twelve million
35 dollars, and for calendar years beginning on or after January
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1 1, 2019, but before January 1, 2020, thirteen million dollars,
2 and for calendar years beginning on or after January 1, 2020,
3 but before January 1, 2022, fifteen million dollars, for
4 calendar years beginning on or after January 1, 2022, but
5 before January 1, 2023, sixteen million five hundred thousand
6 dollars, for calendar years beginning on or after January 1,
7 2023, but before January 1, 2024, eighteen million dollars,
8 for calendar years beginning on or after January 1, 2024, but
9 before January 1, 2025, nineteen million five hundred thousand
10 dollars, and for calendar years beginning on or after January
11 1, 2025, twenty million dollars.
12 (b) (i) During any calendar year beginning on or after
13 January 1, 2022, if the amount of awarded tax credits from the
14 preceding calendar year are equal to or greater than ninety
15 percent of the total approved tax credits for the current
16 calendar year, the total approved tax credits for the current
17 calendar year shall equal the product of ten percent multiplied
18 by the total approved tax credits for the current calendar year
19 plus the total approved tax credits for the current calendar
20 year.
21 (ii) If total approved tax credits are recomputed pursuant
22 to subparagraph subdivision (i), the total approved tax credits
23 shall equal the previous total approved tax credits recomputed
24 pursuant to subparagraph subdivision (i) for purposes of future
25 recomputations under subparagraph subdivision (i), provided
26 that the maximum total approved tax credits recomputed pursuant
27 to this subparagraph division (b) shall not exceed twenty
28 million dollars in a calendar year.
29 Sec. 13. RETROACTIVE APPLICABILITY. This division of this
30 Act applies retroactively to January 1, 2021, for tax years
31 beginning on or after that date.
32 DIVISION VI
33 TARGETED JOBS WITHHOLDING CREDIT
34 Sec. 14. Section 403.19A, subsection 3, paragraph c,
35 subparagraph (2), Code 2021, is amended to read as follows:
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1 (2) The pilot project city and the economic development
2 authority shall not enter into a withholding agreement after
3 June 30, 2021 2026.
4 DIVISION VII
5 ECONOMIC EMERGENCY FUND —— EXCESS MONEYS
6 Sec. 15. Section 8.55, subsection 2, Code 2021, is amended
7 by striking the subsection and inserting in lieu thereof the
8 following:
9 2. The maximum balance of the fund is the amount equal to
10 two and one-half percent of the adjusted revenue estimate for
11 the fiscal year. If the amount of moneys in the fund exceeds
12 the maximum balance, moneys in excess of the maximum balance
13 shall be distributed as follows:
14 a. An amount equal to not more than five percent of
15 the adjusted revenue estimate for the fiscal year shall be
16 transferred to the general fund of the state.
17 b. The remainder of the excess, if any, shall be transferred
18 to the taxpayer relief fund created in section 8.57E.
19 Sec. 16. EFFECTIVE DATE. This division of this Act takes
20 effect July 1, 2022.
21 DIVISION VIII
22 TAXPAYER RELIEF FUND —— TAX CREDIT
23 Sec. 17. Section 8.57E, subsection 2, Code 2021, is amended
24 to read as follows:
25 2. Moneys in the taxpayer relief fund shall only be used
26 pursuant to appropriations or transfers made by the general
27 assembly for tax relief, including but not limited to increases
28 in the general retirement income exclusion under section 422.7,
29 subsection 31, or reductions in income tax rates. During
30 each fiscal year beginning on or after July 1, 2021, in which
31 the balance of the taxpayer relief fund equals or exceeds one
32 hundred twenty million dollars, there is transferred from the
33 taxpayer relief fund to the Iowa taxpayer relief tax credit
34 fund created in section 422.12O the entire balance of the
35 taxpayer relief fund to be used for the Iowa taxpayer relief
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1 tax credit in accordance with section 422.12O, subsection 5.
2 Sec. 18. Section 257.21, subsection 2, Code 2021, is amended
3 to read as follows:
4 2. The instructional support income surtax shall be imposed
5 on the state individual income tax for the calendar year during
6 which the school’s budget year begins, or for a taxpayer’s
7 fiscal year ending during the second half of that calendar year
8 and after the date the board adopts a resolution to participate
9 in the program or the first half of the succeeding calendar
10 year, and shall be imposed on all individuals residing in the
11 school district on the last day of the applicable tax year.
12 As used in this section, “state individual income tax” means
13 the taxes computed under section 422.5, less the amounts of
14 nonrefundable credits allowed under chapter 422, subchapter II,
15 except for the Iowa taxpayer relief tax credit allowed under
16 section 422.12O.
17 Sec. 19. NEW SECTION. 422.12O Iowa taxpayer relief tax
18 credit —— fund.
19 1. For purposes of this section, unless the context
20 otherwise requires:
21 a. “Eligible individual” means, with respect to a tax year,
22 an individual who makes and files an individual income tax
23 return pursuant to section 422.13. “Eligible individual” does
24 not include an estate or trust, or an individual for whom an
25 individual income tax return was not timely filed, including
26 extensions.
27 b. “Unclaimed tax credit” means, with respect to a tax
28 year, the aggregate amount by which the Iowa taxpayer relief
29 tax credits that were eligible to be claimed by eligible
30 individuals, if any, exceeds the Iowa taxpayer relief tax
31 credits actually claimed by eligible individuals, if any.
32 2. The taxes imposed under this subchapter, less the credits
33 allowed under this subchapter except the credits for withheld
34 tax and estimated tax paid in section 422.16, shall be reduced
35 by an Iowa taxpayer relief tax credit to an eligible individual
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1 for the tax year beginning January 1 immediately preceding July
2 1 of any fiscal year during which a transfer, if any, is made
3 from the taxpayer relief fund in section 8.57E to the Iowa
4 taxpayer relief tax credit fund created in this section.
5 3. The credit shall be equal to the quotient of the amount
6 transferred to the Iowa taxpayer relief tax credit fund in
7 the applicable fiscal year, divided by the number of eligible
8 individuals for the tax year immediately preceding the tax year
9 for which the credit in this section is allowed, as determined
10 by the director of revenue in accordance with this section,
11 rounded down to the nearest whole dollar. The department of
12 revenue shall draft the income tax form for any tax year in
13 which a credit will be allowed under this section to provide
14 the information and space necessary for eligible individuals to
15 claim the credit.
16 4. Any credit in excess of the taxpayer’s liability for the
17 tax year is not refundable and shall not be credited to the tax
18 liability for any following year or carried back to a tax year
19 prior to the tax year in which the taxpayer claims the credit.
20 5. a. There is established within the state treasury
21 under the control of the department an Iowa taxpayer relief
22 tax credit fund consisting of any moneys transferred by the
23 general assembly by law from the taxpayer relief fund created