Bill Text: IA HF2504 | 2023-2024 | 90th General Assembly | Introduced


Bill Title: A bill for an act providing a deduction from the individual and corporate income taxes for the amount of certain income derived from indigent representation by an attorney, and including retroactive applicability provisions.(See HF 2679.)

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2024-04-04 - Withdrawn. H.J. 737. [HF2504 Detail]

Download: Iowa-2023-HF2504-Introduced.html
House File 2504 - Introduced HOUSE FILE 2504 BY LOHSE A BILL FOR An Act providing a deduction from the individual and corporate 1 income taxes for the amount of certain income derived 2 from indigent representation by an attorney, and including 3 retroactive applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5550YH (7) 90 jm/jh
H.F. 2504 Section 1. Section 422.7, Code 2024, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 44. a. A taxpayer who is a partner, 3 member, or shareholder of a law firm may subtract, to the 4 extent included, the aggregated amount calculated in paragraph 5 “c” for the tax year. 6 b. As used in this subsection, “law firm” means a law firm 7 in this state consisting of two or more attorneys that has not 8 entered into a contract authorized pursuant to section 13B.4, 9 subsection 3, when an attorney from the law firm who has been 10 licensed to practice law in this state or any other state for 11 less than five years is appointed by the court to represent a 12 person in a case pursuant to section 814.11 or 815.10 on or 13 after July 1, 2024. 14 c. An amount equal to the difference between the total 15 hours billed by the attorney in the case multiplied by one 16 hundred fifty dollars or the total hours billed in the case 17 multiplied by the actual hourly rate charged by the law firm 18 for that attorney for such a case, whichever is less, and the 19 total hours billed in the case multiplied by the hourly rate in 20 effect for the case in section 815.7. 21 d. A taxpayer who is a partner of a partnership or a 22 shareholder of a subchapter S corporation, or a member of a 23 limited liability company, may deduct the portion of the amount 24 calculated pursuant to paragraph “c” based on the taxpayer’s 25 pro rata share of the profits or losses from the partnership, 26 subchapter S corporation, or limited liability company. 27 Sec. 2. Section 422.35, Code 2024, is amended by adding the 28 following new subsection: 29 NEW SUBSECTION . 14. a. A taxpayer who is a partner, 30 member, or shareholder of a law firm may subtract, to the 31 extent included, the aggregated amount calculated in paragraph 32 “c” for the tax year. 33 b. As used in this subsection, “law firm” means a law firm 34 in this state consisting of two or more attorneys that has not 35 -1- LSB 5550YH (7) 90 jm/jh 1/ 3
H.F. 2504 entered into a contract authorized pursuant to section 13B.4, 1 subsection 3, when an attorney from the law firm who has been 2 licensed to practice law in this state or any other state for 3 less than five years is appointed by the court to represent a 4 person in a case pursuant to section 814.11 or 815.10 on or 5 after July 1, 2024. 6 c. An amount equal to the difference between the total 7 hours billed by the attorney in the case multiplied by one 8 hundred fifty dollars or the total hours billed in the case 9 multiplied by the actual hourly rate charged by the law firm 10 for that attorney for such a case, whichever is less, and the 11 total hours billed in the case multiplied by the hourly rate in 12 effect for the case in section 815.7. 13 Sec. 3. RETROACTIVE APPLICABILITY. This Act applies 14 retroactively to January 1, 2024, for tax years beginning on 15 or after that date. 16 EXPLANATION 17 The inclusion of this explanation does not constitute agreement with 18 the explanation’s substance by the members of the general assembly. 19 This bill provides a deduction from the individual income or 20 corporate income tax for the amount of certain income derived 21 from indigent representation by an attorney. 22 The bill defines “law firm” to mean a law firm in this state 23 consisting of two or more attorneys that has not entered into a 24 contract authorized pursuant to Code section 13B.4(3) when an 25 attorney from the law firm who has been licensed to practice 26 law in this state or any other state for less than five years 27 is appointed by the court to represent an indigent person on 28 or after July 1, 2024. 29 The amount of the deduction for each case, which may be 30 deducted by a partner, member, or shareholder of the law firm, 31 shall be equal to the difference between the total hours billed 32 in the case multiplied by $150, or the total hours billed in 33 the case multiplied by the actual hourly rate charged by the 34 law firm for such a case, whichever is less, and the total 35 -2- LSB 5550YH (7) 90 jm/jh 2/ 3
H.F. 2504 hours billed in the case multiplied by the hourly rate in 1 effect for the case in Code section 815.7. The current hourly 2 rate is $83 per hour for a class “A” felony, $78 per hour for a 3 class “B” felony, and $73 per hour for all other cases. 4 A taxpayer who is a partner of a partnership, a shareholder 5 of a subchapter S corporation, or a member of a limited 6 liability corporation may deduct the portion of the amount of 7 the deduction calculated under the bill based on the taxpayer’s 8 pro rata share of the profits or losses from the partnership or 9 subchapter S corporation. 10 The bill applies retroactively to tax years beginning on or 11 after January 1, 2024. 12 -3- LSB 5550YH (7) 90 jm/jh 3/ 3
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