Iowa Code 15E.43 – Investment tax credits
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1. a. For tax years beginning on or after January 1, 2015, a tax credit shall be allowed against the taxes imposed in chapter 422, subchapters II, III, and V, and in chapter 432, and against the moneys and credits tax imposed in section 533.329, for a portion of a taxpayer’s equity investment, as provided in subsection 2, in a qualifying business.
b. An individual may claim a tax credit underthis section of a partnership, limited liability company, S corporation, estate, or trust electing to have income taxed directly to the individual. The amount claimed by the individual shall be based upon the pro rata share of the individual’s earnings from the partnership, limited liability company, S corporation, estate, or trust.
c. A tax credit shall be allowed only for an investment made in the form of cash to purchase equity in a qualifying business.
d. For a tax credit claimed against the taxes imposed in chapter 422, subchapter II, any tax credit in excess of the tax liability is refundable. In lieu of claiming a refund, the taxpayer may elect to have the overpayment shown on the taxpayer’s final, completed return credited to the tax liability for the following tax year. For a tax credit claimed against the taxes imposed in chapter 422, subchapters III and V, and in chapter 432, and against the moneys and credits tax imposed in section 533.329, any tax credit in excess of the taxpayer’s liability for the tax year may be credited to the tax liability for the following three years or until depleted, whichever is earlier. A tax credit shall not be carried back to a tax year prior to the tax year in which the taxpayer redeems the tax credit.
Terms Used In Iowa Code 15E.43
- authority: means the economic development authority created in section 15. See Iowa Code 15E.1
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Dependent: A person dependent for support upon another.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- person: means individual, corporation, limited liability company, government or governmental subdivision or agency, business trust, estate, trust, partnership or association, or any other legal entity. See Iowa Code 4.1
- Tax credit: means a contingent tax credit issued pursuant to section 15E. See Iowa Code 15E.62
- year: means twelve consecutive months. See Iowa Code 4.1
2. a. The amount of the tax credit shall equal twenty-five percent of the taxpayer’s equity investment.
b. The maximum amount of a tax credit that may be issued per calendar year to a natural person and the person’s spouse or dependent shall not exceed one hundred thousand dollars combined. For purposes of this paragraph, a tax credit issued to a partnership, limited liability company, S corporation, estate, or trust electing to have income taxed directly to the individual shall be deemed to be issued to the individual owners based upon the pro rata share of the individual’s earnings from the entity. For purposes of this paragraph, “dependent” has the same meaning as provided by the Internal Revenue Code.
c. The maximum amount of tax credits that may be issued per calendar year for equity investments in any one qualifying business shall not exceed five hundred thousand dollars.
3. An investment shall be deemed to have been made on the same date as the date of acquisition of the equity interest as determined by the Internal Revenue Code.
4. The authority shall not issue tax credits under this section in excess of the amount approved by the authority for any one fiscal year pursuant to section 15.119.
5. A tax credit shall not be transferred to any other person.
6. The authority shall develop a system for registration and issuance of tax credits authorized pursuant to this subchapter and shall control distribution of all tax credit certificates to investors pursuant to this subchapter. The authority shall develop rules for the qualification and administration of qualifying businesses. The department of revenue shall adopt rules pursuant to chapter 17A as necessary for the administration of this subchapter.