Bill Text: IA HF498 | 2019-2020 | 88th General Assembly | Introduced

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Bill Title: A bill for an act relating to state taxes by eliminating the individual income tax, increasing the sales and use tax rates, making conforming changes, and including effective date and applicability provisions.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2020-01-22 - Subcommittee reassigned: Hagenow, Hein and Jacoby. H.J. 122. [HF498 Detail]

Download: Iowa-2019-HF498-Introduced.html

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House File 498 - Introduced
HOUSE FILE 498
BY WHEELER
A BILL FOR
An Act relating to state taxes by eliminating the individual
income tax, increasing the sales and use tax rates, making
conforming changes, and including effective date and
applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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DIVISION I
REPEAL OF THE INDIVIDUAL INCOME TAX
Section 1. Section 8.57E, subsection 2, Code 2019, is
amended to read as follows:
2. Moneys in the taxpayer relief fund shall only be used
pursuant to appropriations or transfers made by the general
assembly for tax relief , including but not limited to increases
in the general retirement income exclusion under section 422.7,
subsection 31 , or reductions in income tax rates .
Sec. 2. Section 12D.9, subsection 2, Code 2019, is amended
by striking the subsection.
Sec. 3. Section 12I.8, subsection 2, Code 2019, is amended
by striking the subsection.
Sec. 4. Section 12I.10, subsection 2, Code 2019, is amended
by striking the subsection.
Sec. 5. Section 15.293A, subsection 1, paragraph a, Code
2019, is amended to read as follows:
a. A redevelopment tax credit shall be allowed against
the taxes imposed in chapter 422, divisions 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 3 , in a qualifying
redevelopment project.
Sec. 6. Section 15.293A, subsection 1, paragraph b, Code
2019, is amended by striking the paragraph.
Sec. 7. Section 15.293A, subsection 2, paragraphs c and f,
Code 2019, are amended to read as follows:
c. The tax credit certificate, unless rescinded by the
authority, shall be accepted by the department of revenue as
payment for taxes imposed pursuant to chapter 422, divisions
II, III , and V , and in chapter 432 , and for the moneys and
credits tax imposed in section 533.329 , subject to any
conditions or restrictions placed by the authority upon
the face of the tax credit certificate and subject to the
limitations of this section .
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f. A tax credit shall not be claimed by a transferee
under this section until a replacement tax credit certificate
identifying the transferee as the proper holder has been
issued. The transferee may use the amount of the tax credit
transferred against the taxes imposed in chapter 422, divisions
II, III , and V , and in chapter 432 , and against the moneys and
credits tax imposed in section 533.329 , for any tax year the
original transferor could have claimed the tax credit. Any
consideration received for the transfer of the tax credit shall
not be included as income under chapter 422, divisions II, III ,
and V . Any consideration paid for the transfer of the tax
credit shall not be deducted from income under chapter 422,
divisions II, III , and V .
Sec. 8. Section 15.293A, subsection 4, Code 2019, is amended
to read as follows:
4. For purposes of individual and corporate income taxes and
the franchise tax, the increase in the basis of the redeveloped
property that would otherwise result from the qualified
redevelopment costs shall be reduced by the amount of the
credit computed under this part.
Sec. 9. Section 15.319, subsection 2, Code 2019, is amended
to read as follows:
2. The tax credit shall be allowed against taxes imposed
under chapter 422, division II or III .
Sec. 10. Section 15.319, subsection 4, Code 2019, is amended
by striking the subsection.
Sec. 11. Section 15.319, subsection 6, paragraph c, Code
2019, is amended to read as follows:
c. The tax credit certificate, unless rescinded by the
authority, shall be accepted by the department of revenue as
payment for taxes imposed pursuant to chapter 422, divisions
II and division III , subject to any conditions or restrictions
placed by the authority upon the face of the tax credit
certificate and subject to the limitations of the program.
Sec. 12. Section 15.333, subsection 2, Code 2019, is amended
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to read as follows:
2. An eligible business may claim a tax credit equal to a
percentage of the new investment directly related to new jobs
created or retained by the project. The tax credit shall be
amortized equally over five calendar years. The tax credit
shall be allowed against taxes imposed under chapter 422,
division II, III , or V , and against the moneys and credits tax
imposed in section 533.329 . If the business is a partnership,
S corporation, limited liability company, cooperative organized
under chapter 501 and filing as a partnership for federal tax
purposes, or estate or trust electing to have the income taxed
directly to the individual, an individual may claim the tax
credit allowed. The amount claimed by the individual shall
be based upon the pro rata share of the individual’s earnings
of the partnership, S corporation, limited liability company,
cooperative organized under chapter 501 and filing as a
partnership for federal tax purposes, or estate or trust. The
percentage shall be determined as provided in section 15.335A .
Any tax credit in excess of the tax liability for the tax year
may be credited to the tax liability for the following seven
years or until depleted, whichever occurs first.
Sec. 13. Section 15.335, subsection 5, Code 2019, is amended
to read as follows:
5. The credit allowed in this section is in addition to
the credit authorized in section 422.10 and section 422.33,
subsection 5 . However, if the alternative credit computation
method is used in section 422.10 or section 422.33, subsection
5 , the credit allowed in this section shall also be computed
using that method.
Sec. 14. Section 15.335, subsection 6, Code 2019, is amended
by striking the subsection.
Sec. 15. Section 15.355, subsection 3, paragraph b, Code
2019, is amended to read as follows:
b. The tax credit shall be allowed against the taxes imposed
in chapter 422, divisions II, III , and V , and in chapter 432 ,
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and against the moneys and credits tax imposed in section
533.329 .
Sec. 16. Section 15.355, subsection 3, paragraph c, Code
2019, is amended by striking the paragraph.
Sec. 17. Section 15.355, subsection 3, paragraph e,
subparagraphs (3) and (6), Code 2019, are amended to read as
follows:
(3) The tax credit certificate, unless rescinded by the
authority, shall be accepted by the department of revenue as
payment for taxes imposed pursuant to chapter 422, divisions
II, III , and V , and in chapter 432 , and for the moneys and
credits tax imposed in section 533.329 , subject to any
conditions or restrictions placed by the authority upon
the face of the tax credit certificate and subject to the
limitations of this program.
(6) A tax credit shall not be claimed by a transferee
under this section until a replacement tax credit certificate
identifying the transferee as the proper holder has been
issued. The transferee may use the amount of the tax credit
transferred against the taxes imposed in chapter 422, divisions
II, III , and V , and in chapter 432 , and against the moneys and
credits tax imposed in section 533.329 , for any tax year the
original transferor could have claimed the tax credit. Any
consideration received for the transfer of the tax credit shall
not be included as income under chapter 422, divisions II, III ,
and V. Any consideration paid for the transfer of the tax
credit shall not be deducted from income under chapter 422,
divisions II, III , and V .
Sec. 18. Section 15.355, subsection 3, paragraph f, Code
2019, is amended to read as follows:
f. For purposes of the individual and corporate income
taxes and the franchise tax, the increase in the basis of the
property that would otherwise result from the qualifying new
investment shall be reduced by the amount of the tax credit
computed under this subsection .
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Sec. 19. Section 15A.7, subsection 1, Code 2019, is amended
to read as follows:
1. That the project shall be administered in the same
manner as a project under chapter 260E and that a supplemental
new jobs credit from withholding in an amount equal to one
and one-half percent of the gross wages paid by the employer
pursuant to section 422.16 , Code 2019, is authorized to fund
the program services for the additional project.
Sec. 20. Section 15E.43, subsection 1, Code 2019, is amended
to read as follows:
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, divisions 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 under this 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. b. A tax credit shall be allowed only for an investment
made in the form of cash to purchase equity in a qualifying
business.
d. c. For a tax credit claimed against the taxes imposed
in chapter 422, division 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, divisions III and
V , and in chapter 432 , and against the moneys and credits tax
imposed in section 533.329 , any Any tax credit in excess of the
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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.
Sec. 21. Section 15E.43, subsection 2, paragraph b, Code
2019, is amended by striking the paragraph.
Sec. 22. Section 15E.44, subsection 4, Code 2019, is amended
to read as follows:
4. After verifying the eligibility of a qualifying
business, the authority shall issue a tax credit certificate
to be included with the equity investor’s tax return. The tax
credit certificate shall contain the taxpayer’s name, address,
tax identification number, the amount of credit, the name of
the qualifying business, and other information required by the
department of revenue. The tax credit certificate, unless
rescinded by the authority, shall be accepted by the department
of revenue as payment for taxes imposed pursuant to chapter
422, divisions II, III , and V , and in chapter 432 , and for the
moneys and credits tax imposed in section 533.329 , subject to
any conditions or restrictions placed by the authority upon
the face of the tax credit certificate and subject to the
limitations of section 15E.43 .
Sec. 23. Section 15E.52, subsection 2, paragraph a, Code
2019, is amended to read as follows:
a. A tax credit shall be allowed against the taxes imposed
in chapter 422, divisions 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 in the
form of cash in an innovation fund.
Sec. 24. Section 15E.52, subsection 2, paragraph b, Code
2019, is amended by striking the paragraph.
Sec. 25. Section 15E.52, subsection 13, Code 2019, is
amended to read as follows:
13. The transferee may use the amount of the tax credit
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transferred against the taxes imposed in chapter 422, divisions
II, III , and V , and in chapter 432 , and against the moneys and
credits tax imposed in section 533.329 , for any tax year the
original transferor could have claimed the tax credit. Any
consideration received for the transfer of the tax credit shall
not be included as income under chapter 422, divisions II, III ,
and V . Any consideration paid for the transfer of the tax
credit shall not be deducted from income under chapter 422,
divisions II, III , and V .
Sec. 26. Section 15E.62, subsection 8, Code 2019, is amended
to read as follows:
8. “Tax credit” means a contingent tax credit issued
pursuant to section 15E.66 that is available against tax
liabilities imposed by chapter 422, divisions II, III , and
V , and by chapter 432 and against the moneys and credits tax
imposed by section 533.329 .
Sec. 27. Section 15E.66, subsection 1, Code 2019, is amended
to read as follows:
1. The board may issue certificates and related tax credits
to designated investors which, if redeemed for the maximum
possible amount, shall not exceed a total aggregate of sixty
million dollars of tax credits. The certificates shall be
issued contemporaneously with a commitment to invest in the
Iowa fund of funds by a designated investor. A certificate
issued by the board shall have a specific maturity date or
dates designated by the board and shall be redeemable only in
accordance with the contingencies reflected on the certificate
or incorporated therein by reference. A certificate and the
related tax credit shall be transferable by the designated
investor. A tax credit shall not be claimed or redeemed except
by a designated investor or transferee in accordance with the
terms of a certificate from the board. A tax credit shall not
be claimed for a tax year that begins earlier than the maturity
date or dates stated on the certificate. An individual may
claim the credit of a partnership, limited liability company,
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S corporation, estate, or trust electing to have the 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. Any tax credit in
excess of the taxpayer’s tax liability for the tax year may be
credited to the tax liability for the following seven years, or
until depleted, whichever is earlier.
Sec. 28. Section 15E.305, subsection 1, Code 2019, is
amended to read as follows:
1. For tax years beginning on or after January 1, 2003,
a tax credit shall be allowed against the taxes imposed in
chapter 422, divisions II, III , and V , and in chapter 432 , and
against the moneys and credits tax imposed in section 533.329
equal to twenty-five percent of a taxpayer’s endowment gift to
an endow Iowa qualified community foundation. An individual
may claim a tax credit under this 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. A
tax credit shall be allowed only for an endowment gift made to
an endow Iowa qualified community foundation for a permanent
endowment fund established to benefit a charitable cause in
this state. The amount of the endowment gift for which the
tax credit is claimed shall not be deductible in determining
taxable income for state income tax purposes. Any tax credit
in excess of the taxpayer’s tax liability for the tax year may
be credited to the tax liability for the following five years
or until depleted, whichever occurs first. A tax credit shall
not be carried back to a tax year prior to the tax year in which
the taxpayer claims the tax credit.
Sec. 29. Section 16.64, subsection 2, Code 2019, is amended
to read as follows:
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2. Bonds and notes issued by the authority for purposes of
financing the beginning farmer loan program provided in section
16.75 are exempt from taxation by the state, and interest
earned on the bonds and notes is deductible in determining
net income for purposes of the state individual and corporate
income tax under divisions II and division III of chapter 422.
Sec. 30. Section 16.80, subsection 1, Code 2019, is amended
to read as follows:
1. An agricultural assets transfer tax credit is allowed
under this section . The tax credit is allowed against the
taxes imposed in chapter 422, division II , as provided in
section 422.11M , and in chapter 422, division III, as provided
in section 422.33 , to facilitate the transfer of agricultural
assets from a taxpayer to a beginning farmer.
Sec. 31. Section 16.80, subsection 3, Code 2019, is amended
by striking the subsection.
Sec. 32. Section 16.80, subsection 7, Code 2019, is amended
to read as follows:
7. A tax credit in excess of the taxpayer’s liability
for the tax year may be credited to the tax liability for
the following 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. 33. Section 28A.24, Code 2019, is amended to read as
follows:
28A.24 Exemption from taxation.
Since an authority is performing essential governmental
functions, an authority is not required to pay any taxes or
assessments of any kind or nature upon any property required
or used by it for its purposes, or any rates, fees, rentals,
receipts, or incomes at any time received by it, and the
bonds issued by an authority, their transfer, and the income,
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including any profits made on the sale of the bonds, is
deductible in determining net income for the purposes of the
state individual and corporate income tax under chapter 422,
divisions II and division III, and shall not be taxed by any
political subdivision of this state.
Sec. 34. Section 29C.24, subsection 3, paragraph a,
subparagraph (3), Code 2019, is amended to read as follows:
(3) The imposition of income taxes under chapter 422,
divisions II and division III, including the requirement to
file tax returns under sections 422.13 through 422.15 or
section 422.36 , as applicable, and including the requirement
to withhold and remit income tax from out-of-state employees
under section 422.16 . In addition, the performance of disaster
or emergency-related work during a disaster response period
by an out-of-state business or out-of-state employee shall
not require an out-of-state business to be included in a
consolidated return under section 422.37 , and shall not
increase the amount of net income of the out-of-state business
allocated and apportioned to the state under section 422.8 or
422.33 , as applicable .
Sec. 35. Section 29C.24, subsection 3, paragraph b,
subparagraph (2), Code 2019, is amended by striking the
subparagraph.
Sec. 36. Section 35A.13, subsection 2, paragraph b, Code
2019, is amended to read as follows:
b. Moneys credited to the fund pursuant to an income tax
checkoff provided in chapter 422, division II , Code 2019, if
applicable.
Sec. 37. Section 85.61, subsection 6, paragraph b, Code
2019, is amended by striking the paragraph.
Sec. 38. Section 96.3, subsection 4, unnumbered paragraph
2, Code 2019, is amended to read as follows:
The maximum weekly benefit amount, if not a multiple of one
dollar, shall be rounded to the lower multiple of one dollar.
However, until such time as sixty-five percent of the statewide
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average weekly wage exceeds one hundred ninety dollars, the
maximum weekly benefit amounts shall be determined using the
statewide average weekly wage computed on the basis of wages
reported for calendar year 1981. As used in this section
“dependent” means dependent as defined in section 422.12,
subsection 1 , paragraph “a” has the same meaning as provided by
the Internal Revenue Code , as if the individual claimant was
a taxpayer, except that an individual claimant’s nonworking
spouse shall be deemed to be a dependent under this section .
“Nonworking spouse” means a spouse who does not earn more than
one hundred twenty dollars in gross wages in one week.
Sec. 39. Section 99B.8, Code 2019, is amended to read as
follows:
99B.8 Tax on prizes.
All prizes awarded pursuant to a gambling activity under
this chapter are Iowa earned income and are subject to state
and federal income tax laws. A person conducting a game of
skill, game of chance, bingo, or a raffle shall deduct state
income taxes, pursuant to section 422.16, subsection 1 , from a
cash prize awarded to an individual. An amount deducted from
the prize for payment of a state tax shall be remitted to the
department of revenue on behalf of the prize winner.
Sec. 40. Section 99D.16, Code 2019, is amended to read as
follows:
99D.16 Withholding tax on winnings.
All winnings provided in section 99D.11 are Iowa earned
income and are subject to state and federal income tax laws.
An amount deducted from winnings for payment of the state tax,
pursuant to section 422.16, subsection 1 , shall be remitted to
the department of revenue on behalf of the individual who won
the wager.
Sec. 41. Section 99F.18, Code 2019, is amended to read as
follows:
99F.18 Tax on winnings.
All winnings derived from slot machines operated pursuant to
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this chapter are Iowa earned income and are subject to state
and federal income tax laws. An amount deducted from winnings
for payment of the state tax, pursuant to section 422.16,
subsection 1 , shall be remitted to the department of revenue
on behalf of the winner.
Sec. 42. Section 99G.31, subsection 2, paragraph i, Code
2019, is amended to read as follows:
i. The proceeds of any lottery prize shall be subject to
state and federal income tax laws. An amount deducted from the
prize for payment of a state tax, pursuant to section 422.16,
subsection 1 , shall be transferred by the authority to the
department of revenue on behalf of the prize winner.
Sec. 43. Section 100B.13, subsection 2, paragraph a, Code
2019, is amended to read as follows:
a. Moneys credited to the fund pursuant to an income tax
checkoff provided in chapter 422, division II , Code 2019, if
applicable.
Sec. 44. Section 173.22, subsection 2, Code 2019, is amended
to read as follows:
2. A foundation fund is created within the state treasury
composed of moneys appropriated or available to and obtained or
accepted by the foundation. The foundation fund shall include
moneys credited to the fund as provided in section 422.12D .
Sec. 45. Section 190B.103, Code 2019, is amended to read as
follows:
190B.103 From farm to food donation tax credit.
A from farm to food donation tax credit is allowed against
the taxes imposed in chapter 422, divisions II and division
III, as provided in this chapter .
Sec. 46. Section 216B.3, subsection 15, Code 2019, is
amended to read as follows:
15. Develop a plan to provide telephone yellow pages
information without charge to persons declared to be blind
under the standards in section 422.12, subsection 2 , paragraph
“a” , subparagraph (5) , Code 2019 . The department may apply for
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federal funds to support the service. The program shall be
limited in scope by the availability of funds.
Sec. 47. Section 217.39, Code 2019, is amended to read as
follows:
217.39 Persecuted victims of World War II —— reparations ——
heirs.
Notwithstanding any other law of this state, payments paid
to and income from lost property of a victim of persecution for
racial, ethnic, or religious reasons by Nazi Germany or any
other Axis regime or as an heir of such victim which is exempt
from state income tax as provided in section 422.7, subsection
35 , Code 2019, shall not be considered as income or an asset
for determining the eligibility for state or local government
benefit or entitlement programs. The proceeds are not subject
to recoupment for the receipt of governmental benefits or
entitlements, and liens, except liens for child support, are
not enforceable against these sums for any reason.
Sec. 48. Section 235A.2, subsection 1, Code 2019, is amended
to read as follows:
1. A child abuse prevention program fund is created in
the state treasury under the control of the department of
human services. The fund is composed of moneys appropriated
or available to and obtained or accepted by the treasurer of
state for deposit in the fund. The fund shall include moneys
transferred to the fund pursuant to an income tax checkoff
provided in chapter 422, division II , Code 2019 , if applicable.
All interest earned on moneys in the fund shall be credited to
and remain in the fund. Section 8.33 does not apply to moneys
in the fund.
Sec. 49. Section 257.19, subsection 2, Code 2019, is amended
to read as follows:
2. Certification of a board’s intent to participate for
a budget year, the method of funding, and the amount to be
raised shall be made to the department of management not later
than April 15 of the base year. Funding for the instructional
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support program shall be obtained from instructional support
state aid and from local funding using either an instructional
support property tax or a combination of an instructional
support property tax and an instructional support income
surtax .
Sec. 50. Section 257.19, subsection 3, Code 2019, is amended
by striking the subsection.
Sec. 51. Section 257.21, Code 2019, is amended to read as
follows:
257.21 Computation of instructional support amount.
1. The department of management shall establish the amount
of instructional support property tax to be levied and the
amount of instructional support income surtax to be imposed
by a district in accordance with the decision of the board
under section 257.19 for each school year for which the
instructional support program is authorized. The department
of management shall determine these amounts based upon the
most recent figures available for the district’s valuation of
taxable property , individual state income tax paid, and budget
enrollment in the district, and shall certify to the district’s
county auditor the amount of instructional support property
tax , and to the director of revenue the amount of instructional
support income surtax to be imposed if an instructional support
income surtax is to be imposed levied .
2. The instructional support income surtax shall be imposed
on the state individual income tax for the calendar year during
which the school’s budget year begins, or for a taxpayer’s
fiscal year ending during the second half of that calendar year
and after the date the board adopts a resolution to participate
in the program or the first half of the succeeding calendar
year, and shall be imposed on all individuals residing in the
school district on the last day of the applicable tax year.
As used in this section , “state individual income tax” means
the taxes computed under section 422.5 , less the amounts of
nonrefundable credits allowed under chapter 422, division II .
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Sec. 52. Section 257.29, subsections 3 and 4, Code 2019, are
amended to read as follows:
3. The educational improvement program shall be funded
by either an educational improvement property tax or by a
combination of an educational improvement property tax and an
educational improvement income surtax . The method of raising
the educational improvement moneys shall be determined by the
board. Subject to the limitation in section 298.14 , if the
board uses a combination of an educational improvement property
tax and an educational improvement income surtax, the board
shall determine the percent of income surtax to be imposed,
expressed as full percentage points, not to exceed twenty
percent.
4. The department of management shall establish the amount
of the educational improvement property tax to be levied or
the amount of the combination of the educational improvement
property tax to be levied and the amount of the school district
income surtax to be imposed for each school year that the
educational improvement amount is authorized. The educational
improvement property tax and income surtax, if an income
surtax is imposed, shall be levied and imposed , collected,
and paid to the school district in the manner provided for
the instructional support program in sections section 257.21
through 257.26 . Moneys received by a school district under the
educational improvement program are miscellaneous income.
Sec. 53. Section 260E.2, subsection 6, Code 2019, is amended
to read as follows:
6. “Employee” means the person employed in a new job.
“Employee” does not include a person who would not be subject
to the withholding of Iowa income pursuant to a reciprocal
agreement under section 422.8, subsection 5 , Code 2019 .
Sec. 54. Section 260E.5, subsections 2 and 6, Code 2019, are
amended to read as follows:
2. An amount equal to one and one-half percent of the gross
wages paid by the employer to each employee participating in a
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project shall be credited from the payment made by an employer
pursuant to section 422.16 , Code 2019 . If the amount of the
withholding by the employer is less than one and one-half
percent of the gross wages paid to the employees covered by the
agreement, then the employer shall receive a credit against
other withholding taxes due by the employer. The employer
shall remit the amount of the credit quarterly in the same
manner as withholding payments are reported to the department
of revenue, to the community college to be allocated to and
when collected paid into a special fund of the community
college to pay the principal of and interest on certificates
issued by the community college to finance or refinance, in
whole or in part, the project. When the principal and interest
on the certificates have been paid, the employer credits shall
cease and any money received after the certificates have
been paid shall be remitted to the treasurer of state to be
deposited in the general fund of the state.
6. An employee participating in a project will receive full
credit for the amount withheld as provided in section 422.16 ,
Code 2019 .
Sec. 55. Section 260G.4A, subsections 2 and 5, Code 2019,
are amended to read as follows:
2. Eligibility for program job credits shall be based on
certification of program job positions and program job wages
by the employer at the time established in the agreement. An
amount up to ten percent of the gross program job wage as
certified by the employer in the agreement shall be credited
from the total payment made by an employer pursuant to section
422.16 , Code 2019 . The employer shall receive a credit against
all withholding taxes due by the employer regardless of whether
or not the withholding from the employer of current program
job wages is less than ten percent. The employer shall remit
the amount of the credit quarterly in the same manner as
withholding payments are reported to the department of revenue,
to the community college to be allocated to and when collected
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paid into a special fund of the community college to pay, in
part, the program costs. When the program costs have been
paid, the employer credits shall cease and any moneys received
after the program costs have been paid shall be remitted to the
treasurer of state to be deposited in the general fund of the
state.
5. Employees from an employer participating in an agreement
shall receive full credit for the amount withheld as provided
in section 422.16 , Code 2019 .
Sec. 56. Section 279.63, subsection 2, paragraph a, Code
2019, is amended to read as follows:
a. All property tax levies , income surtaxes, and local
option sales taxes in place in the school district, listed by
type of levy, rate, amount, duration, and notification of the
maximum rate and amount limitations permitted by statute.
Sec. 57. Section 298.2, subsection 1, paragraph a, Code
2019, is amended to read as follows:
a. A physical plant and equipment levy of not exceeding
one dollar and sixty-seven cents per thousand dollars of
assessed valuation in the district is established except as
otherwise provided in this subsection . The physical plant
and equipment levy consists of the regular physical plant
and equipment levy of not exceeding thirty-three cents per
thousand dollars of assessed valuation in the district and
a voter-approved physical plant and equipment levy of not
exceeding one dollar and thirty-four cents per thousand
dollars of assessed valuation in the district. However, the
voter-approved physical plant and equipment levy may consist
of a combination of a physical plant and equipment property
tax levy and a physical plant and equipment income surtax as
provided in subsection 4 with the maximum amount levied and
imposed limited to an amount that could be raised by a one
dollar and thirty-four cent property tax levy.
Sec. 58. Section 298.2, subsection 4, Code 2019, is amended
to read as follows:
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4. a. The board may on its own motion, and upon the
written request of not less than one hundred eligible electors
or thirty percent of the number of eligible electors voting
at the last regular school election, whichever is greater,
shall, direct the county commissioner of elections to provide
for submitting the proposition of levying the voter-approved
physical plant and equipment levy for a period of time
authorized by the voters at the election, not to exceed ten
years. The election shall be held on a date specified in
section 39.2, subsection 4 , paragraph “c” . The proposition is
adopted if a majority of those voting on the proposition at the
election approves it. The voter-approved physical plant and
equipment levy shall be funded either by a physical plant and
equipment property tax or by a combination of a physical plant
and equipment property tax and a physical plant and equipment
income surtax, as determined by the board . However, if the
board intends to enter into a rental or lease arrangement under
section 279.26 , or intends to enter into a loan agreement under
section 297.36 , only a property tax shall be levied for those
purposes. Subject to the limitations of section 298.14 , if
the board uses a combination of a physical plant and equipment
property tax and a physical plant and equipment surtax, for
each fiscal year the board shall determine the percent of
income surtax to be imposed expressed as full percentage
points, not to exceed twenty percent.
b. If a combination of a property tax and income surtax
is used, by April 15 of the previous school year, the board
shall certify the percent of the income surtax to be imposed
and the amount to be raised to the department of management
and the department of management shall establish the rate of
the property tax and income surtax for the school year. The
physical plant and equipment property tax and income surtax
shall be levied or imposed , collected, and paid to the school
district in the manner provided for the instructional support
program in sections section 257.21 through 257.26 .
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Sec. 59. Section 403.19A, subsection 3, paragraphs b and i,
Code 2019, are amended to read as follows:
b. An amount equal to three percent of the gross wages paid
by an employer to each employee under a withholding agreement
shall be credited from the payment made by the employer
pursuant to section 422.16 , Code 2019 . If the amount of the
withholding by the employer is less than three percent of the
gross wages paid to the employees covered by the withholding
agreement, the employer shall receive a credit against other
withholding taxes due by the employer or may carry the credit
forward for up to ten years or until depleted, whichever is
the earlier. The employer shall remit the amount of the
credit quarterly, in the same manner as withholding payments
are reported to the department of revenue, to the pilot
project city to be allocated to and when collected paid into
a designated withholding project fund for the project. All
amounts so deposited shall be used or pledged by the pilot
project city for a project related to the employer pursuant to
the withholding agreement.
i. An employee whose wages are subject to a withholding
agreement shall receive full credit for the amount withheld as
provided in section 422.16 , Code 2019 .
Sec. 60. Section 404A.2, subsection 2, Code 2019, is amended
to read as follows:
2. The tax credit shall be allowed against the taxes imposed
in chapter 422, divisions II, III , and V , and in chapter
432 . An individual may claim a tax credit under this section
of a partnership, limited liability company, S corporation,
estate, or trust electing to have income taxed directly to the
individual. For an individual claiming a tax credit of an
estate or trust, the amount claimed by the individual shall be
based upon the pro rata share of the individual’s earnings from
the estate or trust. For an individual claiming a tax credit
of a partnership, limited liability company, or S corporation,
the amount claimed by the partner, member, or shareholder,
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respectively, shall be based upon the amounts designated by
the eligible partnership, S corporation, or limited liability
company, as applicable.
Sec. 61. Section 404A.2, subsection 3, paragraph c, Code
2019, is amended to read as follows:
c. A tax credit shall not be claimed by a transferee
under this section until a replacement tax credit certificate
identifying the transferee as the proper holder has been
issued. The transferee may use the amount of the tax credit
transferred against the taxes imposed in chapter 422, divisions
II, III , and V , and in chapter 432 , for any tax year the
original transferor could have claimed the tax credit. Any
consideration received for the transfer of the tax credit shall
not be included as income under chapter 422, divisions II, III ,
and V . Any consideration paid for the transfer of the tax
credit shall not be deducted from income under chapter 422,
divisions II, III , and V .
Sec. 62. Section 404A.2, subsection 5, paragraph c, Code
2019, is amended to read as follows:
c. The tax credit certificate, unless rescinded by the
authority, shall be accepted by the department of revenue
as payment for taxes imposed in chapter 422, divisions II,
III , and V , and in chapter 432 , subject to any conditions
or restrictions placed by the authority or the department of
revenue upon the face of the tax credit certificate and subject
to the limitations of this program.
Sec. 63. Section 404A.2, subsection 6, Code 2019, is amended
to read as follows:
6. For purposes of the individual and corporate income taxes
tax and the franchise tax, the increase in the basis of the
rehabilitated property that would otherwise result from the
qualified rehabilitation expenditures shall be reduced by the
amount of the credit computed under this section .
Sec. 64. Section 421.60, subsection 2, paragraph c,
subparagraph (1), Code 2019, is amended to read as follows:
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(1) If the notice of assessment or denial of a claim for
refund relates to a tax return filed pursuant to section 422.14
or chapter 450 by the taxpayer which designates an individual
as an authorized representative of the taxpayer with respect to
that return, or if a power of attorney has been filed with the
department by the taxpayer which designates an individual as
an authorized representative of the taxpayer with respect to
any tax that is included in the notice of assessment or denial
of a claim for refund, a copy of the notice together with any
additional information required to be sent to the taxpayer
shall be sent to the authorized representative as well.
Sec. 65. Section 422.1, subsection 2, Code 2019, is amended
to read as follows:
2. Division II Personal net income tax Provisions
related to the business tax on corporations .
Sec. 66. Section 422.11L, subsection 1, unnumbered
paragraph 1, Code 2019, is amended to read as follows:
The taxes imposed under this division , less the credits
allowed under section 422.12 , III shall be reduced by a solar
energy system tax credit equal to the sum of the following:
Sec. 67. Section 422.11L, subsection 3, paragraph a, Code
2019, is amended by striking the paragraph.
Sec. 68. Section 422.11N, subsection 3, unnumbered
paragraph 1, Code 2019, is amended to read as follows:
The taxes imposed under this division , less the credits
allowed under section 422.12 , III shall be reduced by an
ethanol promotion tax credit for each tax year that the
taxpayer is eligible to claim the tax credit under this
section . In order to be eligible, all of the following must
apply:
Sec. 69. Section 422.11N, subsection 9, Code 2019, is
amended by striking the subsection.
Sec. 70. Section 422.11O, subsection 2, unnumbered
paragraph 1, Code 2019, is amended to read as follows:
The taxes imposed under this division , less the credits
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allowed under section 422.12 , III shall be reduced by an
E-85 gasoline promotion tax credit for each tax year that
the taxpayer is eligible to claim the tax credit under this
subsection .
Sec. 71. Section 422.11O, subsection 7, Code 2019, is
amended by striking the subsection.
Sec. 72. Section 422.11P, subsection 3, unnumbered
paragraph 1, Code 2019, is amended to read as follows:
The taxes imposed under this division , less the credits
allowed under section 422.12 , III shall be reduced by a
biodiesel blended fuel tax credit for each tax year that
the taxpayer is eligible to claim a tax credit under this
subsection .
Sec. 73. Section 422.11P, subsection 7, Code 2019, is
amended by striking the subsection.
Sec. 74. Section 422.11S, subsection 1, Code 2019, is
amended to read as follows:
1. The taxes imposed under this division , less the credits
allowed under section 422.12 , III shall be reduced by a
school tuition organization tax credit equal to sixty-five
percent of the amount of the voluntary cash or noncash
contributions made by the taxpayer during the tax year to a
school tuition organization, subject to the total dollar value
of the organization’s tax credit certificates as computed in
subsection 8 . The tax credit shall be claimed by use of a tax
credit certificate as provided in subsection 7 .
Sec. 75. Section 422.11S, subsections 4 and 5, Code 2019,
are amended by striking the subsections.
Sec. 76. Section 422.11S, subsection 8, paragraph a,
subparagraph (2), Code 2019, is amended to read as follows:
(2) “Total approved tax credits” means for the tax year
beginning in the 2006 calendar year, two million five hundred
thousand dollars, for the tax year beginning in the 2007
calendar year, five million dollars, for tax years beginning
on or after January 1, 2008, but before January 1, 2012, seven
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million five hundred thousand dollars, for tax years beginning
on or after January 1, 2012, but before January 1, 2014, eight
million seven hundred fifty thousand dollars, and for tax years
beginning on or after January 1, 2014, but before January 1,
2019, twelve million dollars, and for tax years beginning on or
after January 1, 2019, thirteen million dollars.
Sec. 77. Section 422.11Y, subsection 3, unnumbered
paragraph 1, Code 2019, is amended to read as follows:
The taxes imposed under this division , less the credits
allowed under section 422.12 , III shall be reduced by the
amount of the E-15 plus gasoline promotion tax credit for each
tax year that the taxpayer is eligible to claim a tax credit
under this subsection .
Sec. 78. Section 422.11Y, subsection 8, Code 2019, is
amended by striking the subsection.
Sec. 79. Section 422.15, subsections 2 and 3, Code 2019, are
amended by striking the subsections.
Sec. 80. Section 422.15, subsection 4, Code 2019, is amended
to read as follows:
4. Notwithstanding subsections subsection 1, 2, and 3, or
any other provision of this chapter , withholding of income
tax and any reporting requirement shall not be imposed upon
a person, corporation, or withholding agent or any payor of
deferred compensation, pensions, or annuities with regard to
such payments made to a nonresident of the state.
Sec. 81. Section 422.21, Code 2019, is amended by striking
the section and inserting in lieu thereof the following:
422.21 Form and time of return.
Returns shall be in the form the director prescribes, and
shall be filed with the department on or before the last day
of the fourth month after the expiration of the tax year.
However, cooperative associations as defined in section 6072(d)
of the Internal Revenue Code shall file their returns on or
before the fifteenth day of the ninth month following the
close of the taxable year and nonprofit corporations subject
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to the unrelated business income tax imposed by section
422.33, subsection 1A, shall file their returns on or before
the fifteenth day of the fifth month following the close of
the taxable year. If, under the Internal Revenue Code, a
corporation is required to file a return covering a tax period
of less than twelve months, the state return shall be for the
same period and is due forty-five days after the due date of
the federal tax return, excluding any extension of time to
file. In case of sickness, absence, or other disability, or
if good cause exists, the director may allow further time for
filing returns. The director shall cause to be prepared blank
forms for the returns and shall cause them to be distributed
throughout the state and to be furnished upon application,
but failure to receive or secure the form does not relieve
the taxpayer from the obligation of making a return that is
required. The department may as far as consistent with the
Code draft income tax forms to conform to the income tax
forms of the internal revenue department of the United States
government.
Sec. 82. Section 422.22, Code 2019, is amended to read as
follows:
422.22 Supplementary returns.
If the director shall be of the opinion that any taxpayer
required under this division III to file a return has failed
to file such a return or to include in a return filed, either
intentionally or through error, items of taxable income,
the director may require from such taxpayer a return or
supplementary return in such form as the director shall
prescribe, of all the items of income which the taxpayer
received during the year for which the return is made, whether
or not taxable under the provisions of this division III . If
from a supplementary return, or otherwise, the director finds
that any items of income, taxable under this division III , have
been omitted from the original return, the director may require
the items so omitted to be added to the original return. Such
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supplementary return and the correction of the original return
shall not relieve the taxpayer from any of the penalties to
which the taxpayer may be liable under any provisions of this
division III , whether or not the director required a return or
a supplementary return under this section .
Sec. 83. Section 422.32, Code 2019, is amended to read as
follows:
422.32 Definitions.
1. For the purpose of this division and unless otherwise
required by the context:
a. 1. “Affiliated group” means a group of corporations as
defined in section 1504(a) of the Internal Revenue Code.
b. 2. a. “Business income” means income arising from
transactions and activity in the regular course of the
taxpayer’s trade or business; or income from tangible and
intangible property if the acquisition, management, and
disposition of the property constitute integral parts of the
taxpayer’s regular trade or business operations; or gain or
loss resulting from the sale, exchange, or other disposition of
real property or of tangible or intangible personal property,
if the property while owned by the taxpayer was operationally
related to the taxpayer’s trade or business carried on in
Iowa or operationally related to sources within Iowa, or the
property was operationally related to sources outside this
state and to the taxpayer’s trade or business carried on in
Iowa; or gain or loss resulting from the sale, exchange, or
other disposition of stock in another corporation if the
activities of the other corporation were operationally related
to the taxpayer’s trade or business carried on in Iowa while
the stock was owned by the taxpayer. A taxpayer may have more
than one regular trade or business in determining whether
income is business income.
(1) b. It is the intent of the general assembly to treat as
apportionable business income all income that may be treated
as apportionable business income under the Constitution of the
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United States.
(2) c. The filing of an Iowa income tax return on a
combined report basis is neither allowed nor required by this
paragraph “b” .
c. 3. “Commercial domicile” means the principal place from
which the trade or business of the taxpayer is directed or
managed.
d. 4. “Corporation” includes joint stock companies, and
associations organized for pecuniary profit, and partnerships
and limited liability companies taxed as corporations under the
Internal Revenue Code.
e. 5. “Domestic corporation” means any corporation
organized under the laws of this state.
6. “Fiduciary” means a guardian, trustee, executor,
administrator, receiver, conservator, or any person, whether
individual or corporate, acting in any fiduciary capacity for
any person, trust, or estate.
7. “Fiscal year” means an accounting period of twelve
months, ending on the last day of any month other than
December.
f. 8. “Foreign corporation” means any corporation other
than a domestic corporation.
9. “Foreign country” means any jurisdiction other than one
embraced within the United States. The words “United States” ,
when used in a geographical sense, include the states, the
District of Columbia, and the possessions of the United States.
g. 10. “Income from sources within this state” means income
from real, tangible, or intangible property located or having
a situs in this state.
11. “Income year” means the calendar year or the fiscal year
upon the basis of which the net income is computed under this
division.
12. “Individual” means a natural person.
h. 13. “Internal Revenue Code” means one of the following:
(1) a. For tax years beginning during the 2019 calendar
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year, “Internal Revenue Code” means the Internal Revenue Code of
1954, prior to the date of its redesignation as the Internal
Revenue Code of 1986 by the Tax Reform Act of 1986, or means
the Internal Revenue Code of 1986 as amended and in effect on
March 24, 2018. This definition shall not be construed to
include any amendment to the Internal Revenue Code enacted
after the date specified in the preceding sentence, including
any amendment with retroactive applicability or effectiveness.
(2) b. For tax years beginning on or after January 1,
2020, “Internal Revenue Code” means the Internal Revenue Code of
1954, prior to the date of its redesignation as the Internal
Revenue Code of 1986 by the Tax Reform Act of 1986, or means the
Internal Revenue Code of 1986, as amended.
i. 14. “Nonbusiness income” means all income other than
business income.
15. “Paid” , for the purposes of the deductions under this
division, means “paid or accrued” or “paid or incurred”, and
the terms “paid or incurred” and “paid or accrued” shall be
construed according to the method of accounting upon the basis
of which the net income is computed under this division. The
term “received” , for the purpose of the computation of net
income under this division, means “received or accrued”, and
the term “received or accrued” shall be construed according to
the method of accounting upon the basis of which the net income
is computed under this division.
16. “Resident” applies only to individuals and includes, for
the purpose of determining liability to the tax imposed by this
division upon or with reference to the income of any tax year,
any individual domiciled in the state, and any other individual
who maintains a permanent place of abode within the state.
j. 17. “State” means any state of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, any
territory or possession of the United States, and any foreign
country or political subdivision thereof.
18. a. “Tax year” means the calendar year, or the fiscal
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year ending during such calendar year, upon the basis of which
the net income is computed under this division.
b. If a taxpayer has made the election provided by section
441(f) of the Internal Revenue Code, “tax year” means the annual
period so elected, varying from fifty-two to fifty-three weeks.
c. If the effective date or the applicability of a provision
of this division is expressed in terms of a tax year beginning,
including, or ending with reference to a specified date which
is the first or last day of a month, a tax year described in
paragraph “a” of this subsection shall be treated as beginning
with the first day of the calendar month beginning nearest to
the first day of the tax year or as ending with the last day of
the calendar month ending nearest to the last day of the tax
year.
k. 19. “Taxable in another state”. For purposes of
allocation and apportionment of income under this division , a
taxpayer is “taxable in another state” if:
(1) a. In that state the taxpayer is subject to a net
income tax, a franchise tax measured by net income, a franchise
tax for the privilege of doing business, or a corporate stock
tax; or
(2) b. That state has jurisdiction to subject the taxpayer
to a net income tax regardless of whether, in fact, the state
does or does not.
l. 20. “Unitary business” means a business carried on
partly within and partly without a state where the portion
of the business carried on within the state depends on or
contributes to the business outside the state.
2. The words, terms, and phrases defined in section 422.4,
subsections 4 through 6, 8, 9, 13, and 15 through 17 , when used
in this division , shall have the meanings ascribed to them
in said section except where the context clearly indicates a
different meaning.
Sec. 84. Section 422.33, subsection 28, Code 2019, is
amended to read as follows:
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28. The taxes imposed under this division shall be reduced
by a school tuition organization tax credit allowed under
section 422.11S . The maximum amount of tax credits that
may be approved under this subsection for a tax year equals
twenty-five percent of the school tuition organization’s tax
credits that may be approved pursuant to section 422.11S,
subsection 8 , for a tax year.
Sec. 85. Section 422.35, subsection 2, Code 2019, is amended
to read as follows:
2. Add interest and dividends from foreign securities, from
securities of state and other political subdivisions, and from
regulated investment companies exempt from federal income tax
under the Internal Revenue Code, except for those securities
the interest and dividends from which are exempt from taxation
by the state of Iowa as otherwise provided by law, including
those set forth in section 422.7, subsection 2 . :
a. Vision Iowa program bonds pursuant to section 12.71,
subsection 8.
b. School infrastructure program bonds pursuant to section
12.81, subsection 8.
c. Iowa jobs program revenue bonds pursuant to section
12.87, subsection 8.
d. Iowa utility board and Iowa consumer advocate building
project bonds pursuant to section 12.91, subsection 9.
e. Iowa finance authority beginning farmer loan program
bonds pursuant to section 16.64, subsection 2.
f. Water pollution control works and drinking facilities
financing program bonds pursuant to section 16.131, subsection
5.
g. Iowa prison infrastructure revenue bonds pursuant to
section 12.80, subsection 3, and section 16.177, subsection 8.
h. Quad cities interstate metropolitan authority bonds
pursuant to section 28A.24.
i. Iowa finance authority E911 program bonds pursuant to
section 34A.20, subsection 6.
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j. Soil and water conservation subdistrict bonds pursuant
to section 161A.22.
k. Community college residence hall and dormitory bonds
pursuant to section 260C.61.
l. Community college bond program bonds pursuant to section
260C.71, subsection 6.
m. Higher education loan authority bonds pursuant to section
261A.27.
n. State board of regents bonds pursuant to sections 262.41,
262.51, 262.60, 262A.8, and 263A.6.
o. Interstate bridges bonds pursuant to section 313A.36.
p. Aviation authority bonds pursuant to section 330A.16.
q. County health center bonds pursuant to section 331.441,
subsection 2, paragraph “c” , subparagraph (7).
r. Rural water district bonds pursuant to section 357A.15.
s. Urban renewal bonds pursuant to section 403.9, subsection
2.
t. Municipal housing project bonds pursuant to section
403A.12.
u. Comprehensive petroleum underground storage tank fund
bonds pursuant to section 455G.6, subsection 14.
v. Honey creek premier destination park bonds pursuant to
section 463C.12, subsection 8.
Sec. 86. Section 422.39, Code 2019, is amended to read as
follows:
422.39 Statutes applicable to corporation tax.
All the provisions of sections 422.24 to 422.27 422.26 of
division II, respecting payment and collection, shall apply in
respect to the tax due and payable by a corporation taxable
under this division .
Sec. 87. Section 422.73, Code 2019, is amended to read as
follows:
422.73 Correction of errors —— refunds, credits, and
carrybacks.
1. If it appears that an amount of tax, penalty, or interest
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has been paid which was not due under division II, III or V
of this chapter , then that amount shall be credited against
any tax due on the books of the department by the person who
made the excessive payment, or that amount shall be refunded
to the person or with the person’s approval, credited to tax
to become due. A claim for refund or credit that has not been
filed with the department within three years after the return
upon which a refund or credit claimed became due, or within one
year after the payment of the tax upon which a refund or credit
is claimed was made, whichever time is the later, shall not be
allowed by the director. If, as a result of a carryback of a
net operating loss or a net capital loss, the amount of tax
in a prior period is reduced and an overpayment results, the
claim for refund or credit of the overpayment shall be filed
with the department within the three years after the return
for the taxable year of the net operating loss or net capital
loss became due. Notwithstanding the period of limitation
specified, the taxpayer shall have six months from the day of
final disposition of any income tax matter between the taxpayer
and the internal revenue service with respect to the particular
tax year to claim an income tax refund or credit.
2. Notwithstanding subsection 1 , a claim for refund or
credit of the individual income tax paid which resulted from a
reduction in a person’s federal adjusted gross income due to
section 1106 of the FAA Modernization and Reform Act of 2012 ,
Pub. L. No. 112-95 , shall be considered timely if the claim is
filed with the department on or before June 30, 2013.
3. The department shall enter into an agreement with the
internal revenue service for the transmission of federal income
tax reports on individuals required to file an Iowa income tax
return who have been involved in an income tax matter with
the internal revenue service. After final disposition of
the income tax matter between the taxpayer and the internal
revenue service, the department shall determine whether the
individual is due a state income tax refund as a result of
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final disposition of such income tax matter. If the individual
is due a state income tax refund, the department shall notify
the individual within thirty days and request the individual to
file a claim for refund or credit with the department.
Sec. 88. Section 422.110, Code 2019, is amended to read as
follows:
422.110 Income tax credit in lieu of refund.
1. In lieu of the fuel tax refund provided in section
452A.17 , a person or corporation subject to taxation under
division II or III of this chapter may elect to receive an
income tax credit. The person or corporation which elects to
receive an income tax credit shall cancel its refund permit
obtained under section 452A.18 within thirty days after the
first day of its tax year or the permit becomes invalid at that
time. For the purposes of this section , “person” includes a
person claiming a tax credit based upon the person’s pro rata
share of the earnings from a partnership, limited liability
company, or corporation which is not subject to a tax under
division II or III of this chapter as a partnership, limited
liability company, or corporation “corporation” means the same
as defined in section 422.32 . If the election to receive
an income tax credit has been made, it remains effective for
at least one tax year, and for subsequent tax years unless
a change is requested and a new refund permit applied for
within thirty days after the first day of the person’s or
corporation’s tax year. The income tax credit shall be the
amount of the Iowa fuel tax paid on fuel purchased by the
person or corporation and is subject to the conditions provided
in section 452A.17 with the exception that the income tax
credit is not available for refunds relating to casualty
losses, transport diversions, pumping credits, blending
errors, idle time, power takeoffs, reefer units, and exports by
distributors.
2. The right to a credit under this section is not
assignable and the credit may be claimed only by the person or
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corporation that purchased the fuel.
Sec. 89. Section 422D.1, Code 2019, is amended to read as
follows:
422D.1 Authorization —— election —— imposition and repeal ——
use of revenues.
1. a. A county board of supervisors may offer for voter
approval any of the following taxes or a combination of the
following taxes:
(1) Local option income surtax.
(2) An an ad valorem property tax.
b. Revenues generated from these taxes the ad valorem
property tax shall be used for emergency medical services as
provided in section 422D.6 .
2. a. The taxes property tax for emergency medical services
shall only be imposed after an election at which a majority of
those voting on the question of imposing the tax or combination
of taxes specified in subsection 1 , paragraph “a” , subparagraph
(1) or (2), vote in favor of the question. However, the tax
or combination of taxes specified in subsection 1 shall not
be imposed on property within or on residents of a benefited
emergency medical services district under chapter 357F . The
question of imposing the tax or combination of the taxes may
be submitted at the regular city election, a special election,
or the general election. Notice of the question shall be
provided by publication at least sixty days before the time of
the election and shall identify the tax or combination of taxes
and the levy rate or rates, as applicable . If a majority of
those voting on the question approve the imposition of the tax
or combination of taxes , the tax or combination of taxes shall
be imposed as follows:
(1) A local option income surtax shall be imposed for tax
years beginning on or after January 1 of the fiscal year in
which the favorable election was held.
(2) An ad valorem property tax shall be imposed levied for
the fiscal year in which the election was held.
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b. Before a county imposes an income surtax as specified
in subsection 1 , paragraph “a” , subparagraph (1), a benefited
emergency medical services district in the county shall be
dissolved, and the county shall be liable for the outstanding
obligations of the benefited district. If the benefited
district extends into more than one county, the county imposing
the income surtax shall be liable for only that portion of the
obligations relating to the portion of the benefited district
in the county.
3. Revenues received by the county from the taxes imposed
tax levied under this chapter shall be deposited into the
emergency medical services trust fund created pursuant to
section 422D.6 and shall be used as provided in that section.
4. Any tax or combination of taxes imposed levied under this
chapter shall be for a maximum period of five years.
Sec. 90. Section 423.14A, subsection 3, paragraph f,
subparagraph (2), subparagraph division (c), subparagraph
subdivision (ii), Code 2019, is amended to read as follows:
(ii) “Resident” includes an individual who is a resident
of this state, as defined in section 422.4 422.32 , and any
business that owns any tangible or intangible property with
a situs in this state, or that has one or more employees
performing or providing services for the business in this
state.
Sec. 91. Section 425.17, subsection 7, Code 2019, is amended
to read as follows:
7. “Income” means the sum of Iowa net income as defined
in section 422.7 , Code 2019, plus all of the following to
the extent not already included in Iowa net income: capital
gains, alimony, child support money, cash public assistance
and relief, except property tax relief granted under this
subchapter , amount of in-kind assistance for housing expenses,
the gross amount of any pension or annuity, including but not
limited to railroad retirement benefits, payments received
under the federal Social Security Act, except child insurance
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benefits received by a member of the claimant’s household, and
all military retirement and veterans’ disability pensions,
interest received from the state or federal government or
any of its instrumentalities, workers’ compensation and the
gross amount of disability income or “loss of time” insurance.
“Income” does not include gifts from nongovernmental sources,
or surplus foods or other relief in kind supplied by a
governmental agency. In determining income, net operating
losses and net capital losses shall not be considered.
Sec. 92. Section 425.23, subsection 4, paragraph b, Code
2019, is amended to read as follows:
b. The annual adjustment factor for the 1998 base year is
one hundred percent. For each subsequent base year, the annual
adjustment factor equals the annual inflation factor for the
calendar year, in which the base year begins, as computed in
section 422.4 for purposes of the individual income tax , Code
2019 .
Sec. 93. Section 476.20, subsection 2, Code 2019, is amended
to read as follows:
2. The board shall establish rules requiring a regulated
public utility furnishing gas or electricity to include in
the utility’s notice of pending disconnection of service a
written statement advising the customer that the customer
may be eligible to participate in the low income home energy
assistance program or weatherization assistance program
administered by the division of community action agencies of
the department of human rights. The written statement shall
list the address and telephone number of the local agency
which is administering the customer’s low income home energy
assistance program and the weatherization assistance program.
The written statement shall also state that the customer
is advised to contact the public utility to settle any of
the customer’s complaints with the public utility, but if a
complaint is not settled to the customer’s satisfaction, the
customer may file the complaint with the board. The written
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statement shall include the address and phone number of the
board. If the notice of pending disconnection of service
applies to a residence, the written statement shall advise
that the disconnection does not apply from November 1 through
April 1 for a resident who is a “head of household”, as
defined in section 422.4 , head of household and who has been
certified to the public utility by the local agency which is
administering the low income home energy assistance program and
weatherization assistance program as being eligible for either
the low income home energy assistance program or weatherization
assistance program, and that if such a resident resides within
the serviced residence, the customer should promptly have
the qualifying resident notify the local agency which is
administering the low income home energy assistance program and
weatherization assistance program. The board shall establish
rules requiring that the written notice contain additional
information as it deems necessary and appropriate.
Sec. 94. Section 476.20, subsection 3, paragraph b, Code
2019, is amended to read as follows:
b. A qualified applicant for the low income home energy
assistance program or the weatherization assistance program who
is also a “head of household”, as defined in section 422.4,
subsection 7 , head of household shall be promptly certified
by the local agency administering the applicant’s program to
the applicant’s public utility that the resident is a “head
of household” as defined in section 422.4, subsection 7 , head
of household and is qualified for the low income home energy
assistance program or weatherization assistance program.
Notwithstanding subsection 1 , a public utility furnishing gas
or electricity shall not disconnect service from November 1
through April 1 to a residence which has a resident that has
been certified under this paragraph. For purposes of this
section, “head of household” has the same meaning as provided
by the Internal Revenue Code.
Sec. 95. Section 476B.2, Code 2019, is amended to read as
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follows:
476B.2 General rule.
The owner of a qualified facility shall, for each
kilowatt-hour of qualified electricity that the owner sells
or uses for on-site consumption during the ten-year period
beginning on the date the qualified facility was originally
placed in service, be allowed a wind energy production tax
credit to the extent provided in this chapter against the tax
imposed in chapter 422, divisions II, III , and V, and chapter
432 , and may claim a refund of tax imposed by chapter 423 or
437A for any tax year within the time period set forth in
section 423.47 or 437A.14 .
Sec. 96. Section 476B.6, subsection 5, paragraphs a, b, and
c, Code 2019, are amended to read as follows:
a. If the tax credit application is filed by a partnership,
limited liability company, S corporation, estate, trust, or
other reporting entity all of the income of which is taxed
directly to its equity holders or beneficiaries, for the taxes
imposed under chapter 422, division II or III, the tax credit
certificate shall be issued directly to equity holders or
beneficiaries of the applicant in proportion to their pro rata
share of the income of such entity. The applicant shall, in
the application made under this section , identify its equity
holders or beneficiaries, and the percentage of such entity’s
income that is allocable to each equity holder or beneficiary.
b. If the tax credit applicant under this section is
eligible to receive renewable electricity production credits
authorized under section 45 of the Internal Revenue Code,
as amended, and the tax credit applicant is a partnership,
limited liability company, S corporation, estate, trust, or
other reporting entity all of the income of which is taxed
directly to its equity holders or beneficiaries, for the taxes
imposed under chapter 422, division II or III , the tax credit
certificate may be issued to a partner if the business is a
partnership, a shareholder if the business is an S corporation,
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or a member if the business is a limited liability company
in the amounts designated by the eligible partnership, S
corporation, or limited liability company. In absence of
such designation, the credits under this section shall flow
through to the partners, shareholders, or members in accordance
with their pro rata share of the income of the entity. The
applicant shall, in the application made under this section ,
identify the holders or beneficiaries that are to receive the
tax credit certificates and the percentage of the tax credit
that is allocable to each holder or beneficiary.
c. If an applicant under this section is eligible to
receive renewable electricity production credits authorized
under section 45 of the Internal Revenue Code, as amended, and
the tax credit applicant is a partnership, limited liability
company, S corporation, estate, trust, or other reporting
entity all of the income of which is taxed directly to its
equity holders or beneficiaries, for the taxes imposed under
chapter 422, division II or III , the tax credit certificates
and all future rights to the tax credit in this section may be
distributed to an equity holder or beneficiary as a liquidating
distribution or portion thereof, of a holder or beneficiary’s
interest in the applicant entity. The applicant shall, in the
application made under this section , designate the percentage
of the tax credit allocable to the liquidating equity holder
or beneficiary that is to receive the current and future tax
credit certificates under this section .
Sec. 97. Section 476B.7, subsection 2, Code 2019, is amended
to read as follows:
2. The tax credit shall be freely transferable. The
transferee may use the amount of the tax credit transferred
against the taxes imposed under chapter 422, divisions II, III ,
and V , and chapter 432 for any tax year the original transferor
could have claimed the tax credit. The transferee may claim
a refund under chapter 423 or 437A for any tax year within
the time period set forth in section 423.47 or 437A.14 for
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which the original transferor could have claimed a refund.
Any consideration received for the transfer of the tax credit
shall not be included as income under chapter 422, divisions
II, III , and V . Any consideration paid for the transfer of the
tax credit shall not be deducted from income under chapter 422,
divisions II, III , and V .
Sec. 98. Section 476C.4, subsection 4, paragraph a, Code
2019, is amended to read as follows:
a. If the tax credit application is filed by a partnership,
limited liability company, S corporation, estate, trust, or
other reporting entity all of the income of which is taxed
directly to its equity holders or beneficiaries, for the taxes
imposed under chapter 422, division II or III , the tax credit
certificate shall be issued directly to equity holders or
beneficiaries of the applicant in proportion to their pro rata
share of the income of such entity. The applicant shall, in
the application made under this section , identify its equity
holders or beneficiaries, and the percentage of such entity’s
income that is allocable to each equity holder or beneficiary.
Sec. 99. Section 476C.4, subsection 4, paragraph b,
subparagraph (1), Code 2019, is amended to read as follows:
(1) If the tax credit applicant under this section is
eligible to receive renewable electricity production credits
authorized under section 45 of the Internal Revenue Code,
as amended, and the tax credit applicant is a partnership,
limited liability company, S corporation, estate, trust, or
other reporting entity all of the income of which is taxed
directly to its equity holders or beneficiaries, for the taxes
imposed under chapter 422, division II or III , the tax credit
certificate may be issued to a partner if the business is a
partnership, a shareholder if the business is an S corporation,
or a member if the business is a limited liability company
in the amounts designated by the eligible partnership, S
corporation, or limited liability company. In absence of such
designation, the credits under this section shall flow through
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to the partners, shareholders, or members in accordance with
their pro rata share of the income of the entity.
Sec. 100. Section 476C.4, subsection 4, paragraph c,
subparagraph (1), Code 2019, is amended to read as follows:
(1) If an applicant under this section is eligible to
receive renewable electricity production credits authorized
under section 45 of the Internal Revenue Code, as amended, and
the tax credit applicant is a partnership, limited liability
company, S corporation, estate, trust, or other reporting
entity all of the income of which is taxed directly to its
equity holders or beneficiaries, for the taxes imposed under
chapter 422, division II or III , the tax credit certificates
and all future rights to the tax credit in this section may be
distributed to an equity holder or beneficiary as a liquidating
distribution or portion thereof, of a holder or beneficiary’s
interest in the applicant entity.
Sec. 101. Section 476C.6, subsection 1, paragraph b, Code
2019, is amended to read as follows:
b. The transferee may use the amount of the tax credit
transferred against taxes imposed under chapter 422, divisions
II, III , and V , and chapter 432 for any tax year the original
transferor could have claimed the tax credit. The transferee
may claim a refund under chapter 423 or 437A for any tax
year within the time period set forth in section 423.47 or
437A.14 for which the original transferor could have claimed
the refund. Any consideration received for the transfer of
the tax credit shall not be included as income under chapter
422, divisions II, III , and V . Any consideration paid for the
transfer of the tax credit shall not be deducted from income
under chapter 422, divisions II, III , and V .
Sec. 102. Section 483A.1A, subsection 10, paragraph e, Code
2019, is amended to read as follows:
e. Is a member of the armed forces of the United States
who is serving on active duty , and claims residency in this
state , and has filed a state individual income tax return
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as a resident pursuant to chapter 422, division II , for the
preceding tax year, or is stationed in this state.
Sec. 103. Section 541A.2, subsection 6, unnumbered
paragraph 1, Code 2019, is amended to read as follows:
An individual development account closed in accordance
with this subsection is not subject to the limitations and
benefits provided by this chapter but is subject to state tax
in accordance with the provisions of section 422.7, subsection
28 , and section 450.4, subsection 6 . An individual development
account may be closed for any of the following reasons:
Sec. 104. Section 541A.3, subsection 2, Code 2019, is
amended by striking the subsection.
Sec. 105. Section 541B.2, subsection 10, Code 2019, is
amended to read as follows:
10. “Resident” means the same as defined in section 422.4
422.32 .
Sec. 106. Section 633.479, unnumbered paragraph 2, Code
2019, is amended to read as follows:
An order approving the final report and discharging
the personal representative shall not be required if all
distributees otherwise entitled to notice are adults, under no
legal disability, have signed waivers of notice as provided in
section 633.478 , have signed statements of consent agreeing
that the prayer of the final report shall constitute an
order approving the final report and discharging the personal
representative, and if the statements of consent are dated
not more than thirty days prior to the date of the final
report, and if compliance with sections section 422.27 , Code
2019, and section 450.58 have been fulfilled and receipts,
sworn statements, and certificates, as any of these that are
required, are on file. In those instances final order shall
not be required and the prayer of the final report shall be
considered as granted and shall have the same force and effect
as an order of discharge of the personal representative and an
order approving the final report.
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Sec. 107. Section 635.7, subsection 1, Code 2019, is amended
to read as follows:
1. The personal representative is required to file the
report and inventory for which provision is made in section
633.361 , including all probate and nonprobate assets. This
chapter does not exempt the personal representative from
complying with the requirements of section 422.27 , Code 2019,
450.22 , 450.58 , 633.480 , or 633.481 , and the administration of
an estate whether converted to or from a small estate shall be
considered one proceeding pursuant to section 633.330 .
Sec. 108. Section 904.809, subsection 5, paragraph a,
subparagraph (2), Code 2019, is amended to read as follows:
(2) The inmate’s employer shall provide each employed
inmate with the withholding statement required under section
422.16 , and any other employment information necessary for the
receipt of the remainder of an inmate’s payroll earnings.
Sec. 109. REPEAL. Sections 99B.8, 99D.16, 99F.18,
190B.105, 257.22 through 257.26, 298.14, 422.4 through 422.11D,
422.11F, 422.11H, 422.11J, 422.11M, 422.11Q, 422.11R, 422.11V,
422.11W, 422.11Z, 422.12, 422.12A through 422.12E, 422.12H,
422.12J through 422.12L, 422.13, 422.14, 422.16, 422.17,
422.19, 422.23, 422.27, 422.31, 422D.2 through 422D.4, 456A.16,
541B.6, Code 2019, are repealed.
Sec. 110. EFFECTIVE DATE. This division of this Act takes
effect January 1, 2021.
Sec. 111. APPLICABILITY. This division of this Act applies
to tax years beginning on or after January 1, 2021.
DIVISION II
SALES AND USE TAX
Sec. 112. Section 423.2, subsection 1, unnumbered paragraph
1, Code 2019, is amended to read as follows:
There is imposed a tax of six eleven percent upon the sales
price of all sales of tangible personal property, consisting
of goods, wares, or merchandise, sold at retail in the state
to consumers or users except as otherwise provided in this
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subchapter .
Sec. 113. Section 423.2, subsections 2 and 3, Code 2019, are
amended to read as follows:
2. A tax of six eleven percent is imposed upon the sales
price of the sale or furnishing of gas, electricity, water,
heat, pay television service, and communication service,
including the sales price from such sales by any municipal
corporation or joint water utility furnishing gas, electricity,
water, heat, pay television service, and communication service
to the public in its proprietary capacity, except as otherwise
provided in this subchapter , when sold at retail in the state
to consumers or users.
3. A tax of six eleven percent is imposed upon the
sales price of all sales of tickets or admissions to places
of amusement, fairs, and athletic events except those of
elementary and secondary educational institutions. A tax
of six eleven percent is imposed on the sales price of an
entry fee or like charge imposed solely for the privilege of
participating in an activity at a place of amusement, fair, or
athletic event unless the sales price of tickets or admissions
charges for observing the same activity are taxable under this
subchapter . A tax of six eleven percent is imposed upon that
part of private club membership fees or charges paid for the
privilege of participating in any athletic sports provided club
members.
Sec. 114. Section 423.2, subsection 4, paragraph a, Code
2019, is amended to read as follows:
a. A tax of six eleven percent is imposed upon the sales
price derived from the operation of all forms of amusement
devices and games of skill, games of chance, raffles, and bingo
games as defined in chapter 99B , and card game tournaments
conducted under section 99B.27 , that are operated or conducted
within the state, the tax to be collected from the operator in
the same manner as for the collection of taxes upon the sales
price of tickets or admission as provided in this section .
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Nothing in this subsection shall legalize any games of skill
or chance or slot-operated devices which are now prohibited by
law.
Sec. 115. Section 423.2, subsection 5, Code 2019, is amended
to read as follows:
5. There is imposed a tax of six eleven percent upon the
sales price from the furnishing of services as defined in
section 423.1 .
Sec. 116. Section 423.2, subsection 7, paragraph a,
unnumbered paragraph 1, Code 2019, is amended to read as
follows:
A tax of six eleven percent is imposed upon the sales
price from the sales, furnishing, or service of solid waste
collection and disposal service.
Sec. 117. Section 423.2, subsection 8, paragraph a, Code
2019, is amended to read as follows:
a. A tax of six eleven percent is imposed on the sales
price from sales of bundled transactions. For the purposes of
this subsection , a “bundled transaction” is the retail sale of
two or more distinct and identifiable products, except real
property and services to real property, which are sold for one
nonitemized price. A “bundled transaction” does not include
the sale of any products in which the sales price varies, or
is negotiable, based on the selection by the purchaser of the
products included in the transaction.
Sec. 118. Section 423.2, subsection 9, Code 2019, is amended
to read as follows:
9. A tax of six eleven percent is imposed upon the
sales price from any mobile telecommunications service,
including all paging services, that this state is allowed
to tax pursuant to the provisions of the federal Mobile
Telecommunications Sourcing Act, Pub. L. No. 106-252, 4 U.S.C.
§116 et seq. For purposes of this subsection , taxes on mobile
telecommunications service, as defined under the federal Mobile
Telecommunications Sourcing Act that are deemed to be provided
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by the customer’s home service provider, shall be paid to
the taxing jurisdiction whose territorial limits encompass
the customer’s place of primary use, regardless of where the
mobile telecommunications service originates, terminates,
or passes through and shall in all other respects be taxed
in conformity with the federal Mobile Telecommunications
Sourcing Act. All other provisions of the federal Mobile
Telecommunications Sourcing Act are adopted by the state of
Iowa and incorporated into this subsection by reference. With
respect to mobile telecommunications service under the federal
Mobile Telecommunications Sourcing Act, the director shall, if
requested, enter into agreements consistent with the provisions
of the federal Act.
Sec. 119. Section 423.2, subsection 10, paragraph a, Code
2019, is amended to read as follows:
a. A tax of six eleven percent is imposed on the sales price
of specified digital products sold at retail in the state. The
tax applies whether the purchaser obtains permanent use or less
than permanent use of the specified digital product, whether
the sale is conditioned or not conditioned upon continued
payment from the purchaser, and whether the sale is on a
subscription basis or is not on a subscription basis.
Sec. 120. Section 423.2, subsection 12, Code 2019, is
amended to read as follows:
12. The sales tax rate of six eleven percent is reduced to
five ten percent on January 1, 2030.
Sec. 121. Section 423.2A, subsection 2, paragraph c, Code
2019, is amended to read as follows:
c. Transfer one-sixth nine and four thousand one hundred
eighteen ten-thousandths percent of the remaining revenues to
the secure an advanced vision for education fund created in
section 423F.2 . This paragraph “c” is repealed December 31,
2029.
Sec. 122. Section 423.5, subsection 1, unnumbered paragraph
1, Code 2019, is amended to read as follows:
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Except as provided in paragraph “c” , an excise tax at the
rate of six eleven percent of the purchase price or installed
purchase price is imposed on the following:
Sec. 123. Section 423.5, subsection 4, Code 2019, is amended
to read as follows:
4. The use tax rate of six eleven percent is reduced to five
ten percent on January 1, 2030.
Sec. 124. Section 423.43, subsection 1, paragraph b, Code
2019, is amended to read as follows:
b. Subsequent to the deposit into the general fund of
the state and after the transfer of such revenues collected
under chapter 423B , the department shall transfer one-sixth
one-eleventh of such remaining revenues to the secure an
advanced vision for education fund created in section 423F.2 .
This paragraph is repealed December 31, 2029.
Sec. 125. EFFECTIVE DATE. This division of this Act takes
effect January 1, 2021.
DIVISION III
FUTURE INDIVIDUAL INCOME TAX CHANGES —— REPEAL
Sec. 126. REPEAL. 2018 Iowa Acts, chapter 1161, sections 99
through 127, 131, and 132, are repealed.
Sec. 127. EFFECTIVE DATE. This division of this Act takes
effect January 1, 2021.
DIVISION IV
CORRESPONDING AMENDMENTS LEGISLATION
Sec. 128. IMPLEMENTATION OF ACT. Additional legislation
is required to fully implement this Act. The director of the
department of revenue shall, in compliance with section 2.16,
prepare draft legislation for submission to the legislative
services agency, as necessary, to implement the repeal of the
individual income tax under this Act and under other provisions
of law.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
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This bill relates to state taxes by repealing the individual
income tax and increasing the state sales and use tax rates.
Division I repeals the individual income tax and makes
numerous conforming changes to the Code to remove references
to the individual income tax and to update or move provisions
of the individual income tax that are also applicable by
reference to the corporate income tax and the franchise tax.
The division also repeals the emergency medical services income
surtax in Code chapter 422D, the instructional support income
surtax in Code section 257.21, the educational improvement
income surtax in Code section 257.29, and the physical plant
and equipment income surtax in Code section 298.2, because
income surtax revenues will no longer be generated without the
state individual income tax.
The repeal of the individual income tax will also affect the
industrial new jobs training program in Code chapter 260E, the
accelerated career education program in Code chapter 260G, and
the targeted jobs withholding credit in Code section 403.19A,
because those programs rely on income tax amounts withheld from
employee wages by employers.
The division provides that additional legislation is
required to fully implement the division and requires the
director of the department of revenue to prepare draft
legislation in compliance with Code section 2.16 for submission
to the legislative services agency to implement the repeal of
the individual income tax.
The division takes effect January 1, 2021, and applies to tax
years beginning on or after that date.
Division II increases the state sales and use tax rate to
11 percent from 6 percent. By operation of law as provided in
Article VII, section 10 of the Iowa Constitution, a portion
(0.375 percent) of the state sales tax generated and collected
from the rate increase provided in this division will be
transferred to the natural resources and outdoor recreation
trust fund in Code section 461.31. The division amends the
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transfer of state sales tax revenues to the secure an advanced
vision for education fund (SAVE) in Code section 423.2A from
one-sixth (approximately 16.66 percent) of the revenues to
9.4118 percent of the revenues to ensure that SAVE receives
approximately the same amounts of sales tax revenue as it did
prior to the sales tax rate increase provided in the division.
The division takes effect January 1, 2021.
Division III strikes future contingent individual income tax
changes in 2018 Iowa Acts, chapter 1161, due to the repeal of
the individual income tax in the bill. Currently, the future
individual income tax changes are set to begin in tax year 2023
or in a later tax year, contingent upon the satisfaction of
certain net general fund revenue amount and growth targets.
The division takes effect January 1, 2021, and applies to tax
years beginning on or after that date.
Division IV requires the director of the department of
revenue to prepare draft legislation for submission to the
legislative services agency, as necessary, to implement the
repeal of the individual income tax.
The division takes effect July 1, 2019.
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