Bill Text: IA HF2454 | 2013-2014 | 85th General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: A bill for an act relating to the beginning farmer tax credit program, including the agricultural assets transfer tax credit and the custom farming contract tax credit, by extending the carryforward period, and including effective date and retroactive applicability provisions. Divisions I, II, and VI effective 5-23-14, Divisions III and VII effective 1-1-15, and Divisions IV and V effective 1-1-18.

Spectrum: Committee Bill

Status: (Passed) 2014-05-23 - Signed by Governor. H.J. 897. [HF2454 Detail]

Download: Iowa-2013-HF2454-Introduced.html

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House File 2454 - Introduced
HOUSE FILE 2454
BY COMMITTEE ON WAYS AND MEANS
(SUCCESSOR TO HF 2401)
(SUCCESSOR TO HF 2006)
A BILL FOR
An Act relating to the beginning farmer tax credit program,
including the agricultural assets transfer tax credit
and the custom farming contract tax credit, by extending
the carryover period, and including effective date and
retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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DIVISION I
PAST VERSIONS OF THE AGRICULTURAL ASSETS TRANSFER TAX CREDIT
Section 1. APPLICABILITY OF CARRYOVER PROVISIONS.
1. This section shall apply, notwithstanding the directive
to strike subsequent amendments to section 175.37, as provided
in 2013 Iowa Acts, chapter 125, section 25, subsection 3.
2. A tax credit issued, awarded, or allowed to a taxpayer
under section 175.37, Code 2013, that was first claimed in a
tax year beginning on or after January 1, 2009, and ending by
December 31, 2012, and that was in excess of the taxpayer’s
liability, may be credited to the tax liability of that
taxpayer for the following ten tax years, beginning with the
tax year the tax credit was first claimed, or until depleted,
whichever is earlier.
3. The carryover provisions of this section shall continue
to be effective until no longer applicable, included by
application to tax years beginning on or after January 1, 2018.
Sec. 2. EFFECTIVE UPON ENACTMENT. This division of this
Act, being deemed of immediate importance, takes effect upon
enactment.
Sec. 3. RETROACTIVE APPLICABILITY. This division of
this Act applies retroactively to a tax credit first issued,
awarded, or allowed to a taxpayer for a tax year beginning on
or after January 1, 2009, and ending by December 31, 2012.
DIVISION II
CURRENT VERSION OF THE AGRICULTURAL ASSETS TRANSFER TAX
Sec. 4. Section 175.37, subsection 6, Code 2014, is amended
to read as follows:
6. A tax credit in excess of the taxpayer’s liability
for the tax year may be credited to the tax liability for
the following five ten 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. A tax credit shall not be transferable to any other
person other than the taxpayer’s estate or trust upon the
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H.F. 2454
taxpayer’s death.
Sec. 5. APPLICABILITY OF CARRYOVER PROVISIONS.
1. This section shall apply, notwithstanding the directive
to strike subsequent amendments to section 175.37, as provided
in 2013 Iowa Acts, chapter 125, section 25, subsection 3.
2. A tax credit issued, awarded, or allowed to a taxpayer
under section 175.37, as enacted in 2013 Iowa Acts, chapter
125, division I, that was first claimed in a tax year beginning
on or after January 1, 2013, and ending by December 31, 2017,
that was in excess of the taxpayer’s liability, may be credited
to the tax liability of that taxpayer for the following ten tax
years, beginning with the tax year the tax credit was first
claimed, or until depleted, whichever is earlier.
3. The carryover provisions of this section shall continue
to be effective until no longer applicable, including by
application to tax years beginning on or after January 1, 2018.
Sec. 6. EFFECTIVE UPON ENACTMENT. This division of this
Act, being deemed of immediate importance, takes effect upon
enactment.
Sec. 7. RETROACTIVE APPLICABILITY. This division of
this Act applies retroactively to a tax credit first issued,
awarded, or allowed to a taxpayer for a tax year beginning on
or after January 1, 2013, and ending by December 31, 2017.
DIVISION III
FUTURE VERSION OF THE AGRICULTURAL ASSETS TRANSFER TAX
Sec. 8. APPLICABILITY OF CARRYOVER PROVISIONS.
Upon the repeal of amendments to section 175.37, as enacted in
2013 Iowa Acts, chapter 125, section 25, the following shall
apply: Section 175.137, subsection 7, Code 2013, is amended by
striking the words “five years” and inserting in lieu thereof
the words “ten tax years”.
Sec. 9. EFFECTIVE DATE. This division of this Act, takes
effect January 1, 2018.
Sec. 10. APPLICABILITY. This division of this Act applies
to tax years beginning on or after January 1, 2018.
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DIVISION IV
CUSTOM FARMING CONTRACT TAX CREDIT
Sec. 11. Section 175.38, subsection 9, Code 2014, is amended
to read as follows:
9. A custom farming contract tax credit in excess of the
taxpayer’s liability for the tax year may be credited to the
tax liability for the following five ten tax 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. A tax credit shall not be
transferable to any other person other than the taxpayer’s
estate or trust upon the taxpayer’s death.
Sec. 12. APPLICABILITY OF CARRYOVER PROVISIONS.
1. A tax credit issued, awarded, or allowed to a taxpayer
under section 175.38, that was first claimed in a tax year
beginning on or after January 1, 2013, and ending by December
31, 2017, that was in excess of the taxpayer’s liability, may
be credited to the tax liability of that taxpayer for the
following ten tax years, beginning with the tax year the tax
credit was first claimed, or until depleted, whichever is
earlier.
2. The carryover provisions of this section shall continue
to be effective until no longer applicable, including by
application to tax years beginning on or after January 1, 2018.
Sec. 13. EFFECTIVE UPON ENACTMENT. This division of this
Act, being deemed of immediate importance, takes effect upon
enactment.
Sec. 14. RETROACTIVE APPLICABILITY. This division of
this Act applies retroactively to a tax credit first issued,
awarded, or allowed to a taxpayer for a tax year beginning on
or after January 1, 2013, and ending by December 31, 2017.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
BILL’S PROVISIONS —— GENERAL. This bill extends from five
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to 10 years the period when a taxpayer may carry over a tax
credit under the agricultural assets transfer tax credit (Code
section 175.37) and the custom farming contract tax credit
(Code section 175.38). Both provisions are referred to as
part of the beginning farmer tax credit program (Code section
175.36A). A tax credit carryover provision allows a taxpayer
who has satisfied a tax liability in one tax year to save any
unused amount of the tax credit for use in a subsequent tax
year or tax years until no amount remains or a specific number
of years has elapsed.
BILL’S PROVISIONS —— AGRICULTURAL ASSETS TRANSFER TAX
CREDIT. For the agricultural assets transfer tax credit, the
bill allows the extended 10-year carryover period to apply
to a taxpayer filing under three different versions of Code
section 175.37: (1) a tax credit which was first claimed in a
tax year beginning on or after January 1, 2009, and ending by
December 31, 2012; (2) a tax credit which was or may be first
claimed in a tax year beginning on or after January 1, 2013,
and ending by December 31, 2017; and (3) a tax credit which may
be first claimed on or after January 1, 2018. In each case, the
taxpayer may continue to apply the remaining amount of a tax
credit that was then applicable under Code section 175.37 for
the following 10 tax years notwithstanding that the section may
have been replaced by a subsequent version.
BILL’S PROVISIONS —— CUSTOM FARMING CONTRACT TAX CREDIT.
For the custom farming contract tax credit, the bill allows
the extended 10-year carryover period to apply to a tax credit
first claimed in a tax year beginning on or after January
1, 2013, and ending by December 31, 2017. The taxpayer may
continue to use any remaining amount of the tax credit in
future tax years, regardless of the fact that the tax credit is
to be eliminated on December 31, 2017.
BILL’S PROVISIONS —— APPLICABILITY AND EFFECTIVE DATES. The
bill applies to each taxpayer differently depending on the
version of the applicable law under which the taxpayer first
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H.F. 2454
claimed the tax credit. It applies retroactively to the tax
year beginning January 1, 2009, for a taxpayer who claimed
an agricultural assets transfer tax credit under the first
version of Code section 175.37. It applies retroactively to
the tax year beginning January 1, 2013, for a taxpayer who
claimed the same tax credit under the second version of Code
section 175.37. It also applies retroactively to the tax year
beginning January 1, 2013, for a taxpayer who claimed a custom
farming contract tax credit. The bill applies prospectively
to a tax year beginning on and after January 1, 2018, for a
taxpayer who will claim a tax credit under the third version of
the agricultural assets transfer tax credit. Those provisions
applying retroactively take effect upon enactment. The
provision applying prospectively takes effect on January 1,
2018.
BACKGROUND. In 2006, the general assembly enacted SF 2268
(2006 Iowa Acts, chapter 1161) establishing an agricultural
assets transfer tax credit, administered by the agricultural
development authority, to assist beginning farmers to acquire
agricultural assets by lease or rental arrangements. In 2013,
the general assembly enacted HF 599 (2013 Iowa Acts, chapter
125), creating the program which included the second version
of the agricultural assets transfer tax credit and the new
custom farming contract tax credit. HF 599 also increased from
$6 million to $12 million the ceiling limit used to support
the program through the issuance of tax credit certificates
(Code section 175.39). The program and the dollar amount
limit applied retroactively to tax years beginning on or after
January 1, 2013, and is to expire on December 31, 2017. The
Code editor is directed to codify the third version of the Code
section by restoring the tax credit with its $6 million ceiling
limit to that existing immediately prior to the enactment
of HF 599. The custom farming contract tax credit is to be
eliminated on that same date.
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