Bill Text: IA SF143 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A bill for an act relating to an electric or natural gas vehicle facility tax credit and including effective date and retroactive applicability provisions. (See SF 483 and SF 2319.)
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2015-03-26 - Fiscal note. SCS. [SF143 Detail]
Download: Iowa-2015-SF143-Introduced.html
Senate File 143 - Introduced SENATE FILE BY McCOY and KAPUCIAN A BILL FOR 1 An Act relating to an electric or natural gas vehicle facility 2 tax credit and including effective date and retroactive 3 applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 1380XS (5) 86 da/sc PAG LIN 1 1 Section 1. Section 422.7, Code 2015, is amended by adding 1 2 the following new subsection: 1 3 NEW SUBSECTION. 51. a. A taxpayer taking a depreciation 1 4 allowance under section 168 of the Internal Revenue Code for 1 5 property described in section 422.11G is not allowed to take 1 6 the allowance for purposes of this division to the extent that 1 7 a tax credit is taken for the purchase and installation of 1 8 the property under section 422.11G. If a credit is taken for 1 9 the purchase and installation of the property under section 1 10 422.11G, the taxpayer shall add the amount of the allowance 1 11 taken on such property to the extent of the amount of the 1 12 credit. 1 13 b. A taxpayer taking an expensing allowance under section 1 14 179 of the Internal Revenue Code for property described in 1 15 section 422.11G is not allowed to take the allowance for 1 16 purposes of this division to the extent that a tax credit 1 17 is taken for the purchase and installation of such property 1 18 under section 422.11G. If a credit is taken for the purchase 1 19 and installation of the property under section 422.11G, the 1 20 taxpayer shall add the amount of the allowance taken on such 1 21 property to the extent of the amount of the credit. 1 22 c. This subsection is repealed on January 1, 2020. 1 23 Sec. 2. NEW SECTION. 422.11G Electric or natural gas 1 24 vehicle facility tax credit. 1 25 1. As used in this section, "motor vehicle" means the same 1 26 as defined in section 322.2. 1 27 2. The taxes imposed under this division, less the credits 1 28 allowed under section 422.12, shall be reduced by an electric 1 29 or natural gas vehicle facility tax credit. In order to be 1 30 eligible to claim the tax credit, the taxpayer must comply with 1 31 this section and rules adopted by the director pursuant to 1 32 chapter 17A necessary to administer and enforce this section. 1 33 3. a. The taxpayer claiming the tax credit on an 1 34 agricultural basis as provided in subsection 9 must construct, 1 35 install, and place in service any of the following: 2 1 (1) An electric vehicle facility that serves a motor vehicle 2 2 designed by a manufacturer to operate using electricity. 2 3 (2) A natural gas vehicle facility that serves a motor 2 4 vehicle that is any of the following: 2 5 (a) Designed by the manufacturer to operate using 2 6 compressed natural gas. 2 7 (b) Converted as an aftermarket alternative fuel vehicle 2 8 to operate using compressed natural gas if the conversion 2 9 equipment is certified by the United States environmental 2 10 protection agency, including as provided in 40 C.F.R. pt. 85. 2 11 b. The taxpayer claiming the tax credit on a commercial 2 12 basis as provided in subsection 9 must construct, install, and 2 13 place in service any of the following: 2 14 (1) An electric vehicle facility that serves a motor vehicle 2 15 designed by a manufacturer to operate using electricity. 2 16 (2) A natural gas vehicle facility that serves a motor 2 17 vehicle that is any of the following: 2 18 (a) Designed by the manufacturer to operate using 2 19 compressed natural gas. 2 20 (b) Converted as an aftermarket alternative fuel vehicle 2 21 to operate using compressed natural gas if the conversion 2 22 equipment is certified by the United States environmental 2 23 protection agency, including as provided in 40 C.F.R. pt. 85. 2 24 c. The taxpayer claiming the tax credit on a residential 2 25 basis as provided in subsection 9 must construct, install, 2 26 and place in service an electric vehicle facility that serves 2 27 a motor vehicle designed by a manufacturer to operate using 2 28 electricity. 2 29 4. a. After verifying the eligibility for an electric or 2 30 natural gas vehicle facility tax credit as provided in this 2 31 section, the department of revenue shall issue the taxpayer an 2 32 electric or natural gas vehicle facility tax credit certificate 2 33 which must be attached to the taxpayer's tax return. An 2 34 electric or natural gas vehicle facility tax credit certificate 2 35 shall include all of the following: 3 1 (1) The taxpayer's name, address, tax identification 3 2 number, and any other information required by the department 3 3 of revenue. 3 4 (2) A description of the infrastructure, equipment, or 3 5 machinery being purchased and installed which is eligible for 3 6 the tax credit to be claimed on the taxpayer's tax return. 3 7 (3) The amount of the tax credit being claimed. 3 8 b. The director shall adopt rules establishing criteria 3 9 for the receipt of applications for electric or natural gas 3 10 vehicle facility tax credit certificates and the issuance of 3 11 those certificates. A tax credit certificate shall be issued 3 12 in the taxpayer's name and shall expire on or after the last 3 13 day of the taxable year for which the taxpayer is claiming the 3 14 tax credit. A tax credit certificate is nontransferable. 3 15 5. The aggregate amount of electric or natural gas vehicle 3 16 facility tax credit certificates that may be issued pursuant 3 17 to this section shall not exceed five million dollars for all 3 18 tax years that the tax credit is available under this section. 3 19 The department shall issue the tax credit certificates on a 3 20 first=come, first=served basis to qualified applicants as 3 21 follows: 3 22 a. Two million dollars for electric vehicle facilities. 3 23 b. Two million dollars for natural gas vehicle facilities. 3 24 (1) Except as provided in subparagraph (2), a person is not 3 25 entitled to apply for tax credit certificates for all natural 3 26 gas vehicle facilities equal to more than two hundred thousand 3 27 dollars. 3 28 (2) A person is not entitled to apply for tax credit 3 29 certificates equal to more than four hundred thousand dollars 3 30 for all natural gas vehicle facilities that are part of a 3 31 business or businesses selling qualified compressed natural gas 3 32 on a retail basis. A person is not eligible to apply for a tax 3 33 credit under both this subparagraph and subparagraph (1). 3 34 c. One million dollars for electric vehicle facilities or 3 35 natural gas vehicle facilities. 4 1 d. Any moneys allocated under paragraph "a" or "b" that are 4 2 unobligated or unexpended on July 1, 2017, for either electric 4 3 vehicle facilities or natural gas vehicle facilities. 4 4 6. An electric or natural gas vehicle facility is limited 4 5 to infrastructure, equipment, or machinery used to store, 4 6 dispense, dry, and meter electricity or compressed natural 4 7 gas. For electricity, it may include charging equipment, 4 8 infrastructure, or batteries. For compressed natural gas, it 4 9 may include pipes, compressors, dryers, or vaporizers. 4 10 7. The amount of the electric or natural gas vehicle 4 11 facility tax credit equals thirty percent of the total cost to 4 12 the taxpayer of purchasing the infrastructure, equipment, or 4 13 machinery and thirty percent of the total cost to the taxpayer 4 14 of installing the infrastructure, equipment, or machinery. 4 15 8. The electric or natural gas vehicle facility must comply 4 16 with any applicable federal and state standards and the latest 4 17 applicable and available ASTM international specifications. 4 18 9. The electric or natural gas vehicle facility tax credit 4 19 may be claimed by a person on an agricultural, commercial, or 4 20 residential basis as follows: 4 21 a. A person may claim the tax credit on an agricultural 4 22 basis if the electric or natural gas vehicle facility is 4 23 located on land primarily used in the production of a crop as 4 24 defined in section 202.1 or livestock as defined in section 4 25 717.1. The electric or natural gas vehicle facility must be 4 26 used by an agricultural producer as defined in section 15E.202 4 27 or a person under the management of the agricultural producer. 4 28 The tax credit must be taken in equal installments in three 4 29 consecutive tax years, beginning with the tax year in which the 4 30 electric or natural gas vehicle facility is placed in service. 4 31 If any part of the electric or natural gas vehicle facility 4 32 is taken out of service and not immediately replaced, the tax 4 33 credit expires and the taxpayer cannot take any remaining 4 34 installment of the tax credit. 4 35 b. A person may claim the tax credit on a commercial basis 5 1 if the electric or natural gas vehicle facility is part of a 5 2 business selling qualified electricity or compressed natural 5 3 gas on a retail basis, or may claim the tax credit if the 5 4 electric or natural gas vehicle facility is used by a business 5 5 for its own vehicle fleet or employees. The tax credit must 5 6 be taken in equal installments in three consecutive tax years, 5 7 beginning with the tax year in which the electric or natural 5 8 gas vehicle facility is placed in service. If any part of 5 9 the electric or natural gas vehicle facility is taken out of 5 10 service and not immediately replaced, the tax credit expires 5 11 and the taxpayer cannot take any remaining installment of the 5 12 tax credit. 5 13 c. A person may claim the tax credit on a residential basis 5 14 only for an electric vehicle facility that is for personal, 5 15 family, or household use. The entire amount of the tax credit 5 16 must be claimed in the tax year in which the electric vehicle 5 17 facility is first placed in service. 5 18 10. Any tax credit in excess of the taxpayer's tax liability 5 19 shall be refunded. In lieu of claiming a refund, the taxpayer 5 20 may elect to have the overpayment shown on the taxpayer's 5 21 final, completed return credited to the tax liability for the 5 22 following tax year. 5 23 11. An individual may claim the tax credit allowed a 5 24 partnership, limited liability company, S corporation, estate, 5 25 or trust electing to have the income taxed directly to the 5 26 individual. The amount claimed by the individual shall be 5 27 based upon the pro rata share of the individual's earnings of 5 28 the partnership, limited liability company, S corporation, 5 29 estate, or trust. 5 30 12. A person shall not claim a tax credit under this section 5 31 for an electric or natural gas vehicle facility that was placed 5 32 in service on or after January 1, 2018. However, a person 5 33 claiming the tax credit on an agricultural or commercial basis 5 34 who placed the electric or natural gas vehicle facility in 5 35 service prior to January 1, 2018, may continue to claim the tax 6 1 credit for tax years ending on or after January 1, 2018, as 6 2 provided in subsection 9, paragraph "a" or "b", as applicable. 6 3 13. This section is repealed on January 1, 2020. 6 4 Sec. 3. Section 422.33, Code 2015, is amended by adding the 6 5 following new subsection: 6 6 NEW SUBSECTION. 11. The taxes imposed under this division 6 7 shall be reduced by an electric or natural gas vehicle facility 6 8 tax credit for each tax year that the taxpayer is eligible to 6 9 claim the tax credit under this subsection. 6 10 a. The taxpayer must claim the tax credit on an agricultural 6 11 or commercial basis in the same manner as provided in section 6 12 422.11G. The taxpayer must claim the tax credit according 6 13 to the same requirements, for the same amount, and for the 6 14 same period as provided in section 422.11G. The amount of the 6 15 tax credit shall be calculated in the same manner as provided 6 16 in section 422.11G. A taxpayer claiming a tax credit on an 6 17 agricultural or commercial basis is subject to the same penalty 6 18 for taking the electric or natural gas vehicle facility out of 6 19 service as provided in section 422.11G. 6 20 b. This subsection is repealed on January 1, 2020. 6 21 Sec. 4. Section 422.35, Code 2015, is amended by adding the 6 22 following new subsection: 6 23 NEW SUBSECTION. 15. a. A taxpayer taking a depreciation 6 24 allowance under section 168 of the Internal Revenue Code for 6 25 property described in section 422.33, subsection 11, is not 6 26 allowed to take the allowance for purposes of this division 6 27 to the extent that a tax credit is taken for the purchase and 6 28 installation of the property under section 422.33, subsection 6 29 11. If a credit is taken for the purchase and installation of 6 30 the property under section 422.33, subsection 11, the taxpayer 6 31 shall add the amount of the allowance taken on such property to 6 32 the extent of the amount of the credit. 6 33 b. A taxpayer taking an expensing allowance under section 6 34 179 of the Internal Revenue Code for property described in 6 35 section 422.33, subsection 11, is not allowed to take the 7 1 allowance for purposes of this division to the extent that a 7 2 tax credit is taken for the purchase and installation of such 7 3 property under section 422.33, subsection 11. If a credit 7 4 is taken for the purchase and installation of the property 7 5 under section 422.33, subsection 11, the taxpayer shall add the 7 6 amount of the allowance taken on such property to the extent of 7 7 the amount of the credit. 7 8 c. This subsection is repealed on January 1, 2020. 7 9 Sec. 5. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 7 10 immediate importance, takes effect upon enactment. 7 11 Sec. 6. RETROACTIVE APPLICABILITY. This Act applies 7 12 retroactively to January 1, 2015, for tax years beginning on 7 13 or after that date. 7 14 EXPLANATION 7 15 The inclusion of this explanation does not constitute agreement with 7 16 the explanation's substance by the members of the general assembly. 7 17 This bill creates an electric or natural gas vehicle 7 18 facility tax credit for persons who construct, install, and 7 19 place in service an electric vehicle facility or a natural 7 20 gas vehicle facility. The amount of the tax credit is 30 7 21 percent of the total cost of purchasing and of installing the 7 22 facility. A person may claim the tax credit on an agricultural 7 23 (farmer), commercial (business), or residential (personal, 7 24 family, or household) basis. The bill provides that $5 million 7 25 is dedicated for the issuance of tax credit certificates which 7 26 must be attached to a person's tax return in order to claim 7 27 the tax credit. The bill establishes limits upon the amount 7 28 of credit that a person may claim for either electric vehicle 7 29 facilities or natural gas facilities. A person claiming the 7 30 tax credit on an agricultural or commercial basis may claim 7 31 the tax credit for the installation of an electric or natural 7 32 gas facility. The person must claim one=third of the tax 7 33 credit for each of three tax years. A person claiming the tax 7 34 credit on a residential basis may claim the tax credit for the 7 35 installation of an electric vehicle facility. The person must 8 1 claim the tax credit in the tax year in which the electric 8 2 vehicle facility was first placed in service. Any tax credit 8 3 in excess of the taxpayer's tax liability is refundable or may 8 4 be used in calculating a future tax liability. 8 5 The taxpayer must place the facility in service before 8 6 January 1, 2018, but those taxpayers claiming on an 8 7 agricultural or commercial basis may claim the tax credit for a 8 8 previous installation after that date. 8 9 The aggregate amount of electric or natural gas vehicle 8 10 facility tax credit certificates that may be issued cannot 8 11 exceed $5 million for all tax years that the tax credit 8 12 is available. Two million dollars is allocated to support 8 13 electric vehicle facilities, $2 million is allocated to support 8 14 natural gas facilities, and $1 million is allocated to support 8 15 either electric vehicle facilities or natural gas vehicle 8 16 facilities. As of July 1, 2017, any remaining encumbered or 8 17 expended moneys are also allocated to support either type of 8 18 facility. 8 19 The tax credit applies retroactively to tax years beginning 8 20 on and after January 1, 2015. The bill's provisions are 8 21 repealed on January 1, 2020. The bill takes effect upon 8 22 enactment. LSB 1380XS (5) 86 da/sc
