Bill Text: IA SSB3154 | 2021-2022 | 89th General Assembly | Introduced
Bill Title: A bill for an act relating to state taxation and administration by modifying sales and use taxes, individual and corporate income taxes, the automobile rental excise tax, the franchise tax, and the insurance premiums tax, and including effective date, applicability, and retroactive applicability provisions.(See SF 2372.)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2022-03-08 - Committee report approving bill, renumbered as SF 2372. [SSB3154 Detail]
Download: Iowa-2021-SSB3154-Introduced.html
Senate
Study
Bill
3154
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
WAYS
AND
MEANS
BILL
BY
CHAIRPERSON
DAWSON)
A
BILL
FOR
An
Act
relating
to
state
taxation
and
administration
by
1
modifying
sales
and
use
taxes,
individual
and
corporate
2
income
taxes,
the
automobile
rental
excise
tax,
the
3
franchise
tax,
and
the
insurance
premiums
tax,
and
including
4
effective
date,
applicability,
and
retroactive
applicability
5
provisions.
6
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
7
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DIVISION
I
1
SALES
AND
USE
TAX
ON
SERVICES
AND
EXEMPTIONS
2
Section
1.
Section
423.2,
subsection
6,
paragraph
bu,
Code
3
2022,
is
amended
to
read
as
follows:
4
bu.
Software
as
a
service
Cloud
computing
.
5
Sec.
2.
Section
423.2,
subsection
6,
Code
2022,
is
amended
6
by
adding
the
following
new
paragraphs:
7
NEW
PARAGRAPH
.
bv.
Web
hosting.
8
NEW
PARAGRAPH
.
bw.
Digital
automated
services.
9
NEW
PARAGRAPH
.
bx.
Scooter
rentals.
10
Sec.
3.
Section
423.3,
subsection
8,
paragraph
d,
11
subparagraph
(1),
Code
2022,
is
amended
by
adding
the
following
12
new
subparagraph
division:
13
NEW
SUBPARAGRAPH
DIVISION
.
(e)
A
specified
digital
14
product.
15
Sec.
4.
Section
423.3,
subsection
47,
paragraph
a,
16
subparagraph
(4),
Code
2022,
is
amended
by
striking
the
17
subparagraph.
18
Sec.
5.
Section
423.3,
subsection
68,
paragraph
c,
19
subparagraph
(1),
subparagraph
division
(a),
Code
2022,
is
20
amended
to
read
as
follows:
21
(a)
“Clothing”
includes
but
is
not
limited
to
the
22
following:
aprons,
household
and
shop;
athletic
supporters;
23
baby
receiving
blankets;
bathing
suits
and
caps;
beach
capes
24
and
coats;
belts
and
suspenders;
boots;
coats
and
jackets;
25
costumes;
diapers
(children
and
adults,
including
disposable
26
diapers);
earmuffs;
footlets;
formal
wear;
garters
and
garter
27
belts;
girdles;
gloves
and
mittens
for
general
use;
hats
28
and
caps;
hosiery;
insoles
for
shoes;
lab
coats;
neckties;
29
overshoes;
pantyhose;
rainwear;
rubber
pants;
sandals;
30
scarves;
shoes
and
shoelaces;
slippers;
sneakers;
socks
and
31
stockings;
steel-toed
shoes;
underwear;
uniforms,
athletic
and
32
nonathletic;
and
wedding
apparel.
33
Sec.
6.
Section
423.3,
subsection
104,
paragraph
a,
Code
34
2022,
is
amended
to
read
as
follows:
35
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a.
The
sales
price
of
specified
digital
products
and
of
1
prewritten
computer
software
sold,
and
of
enumerated
services
2
described
in
section
423.2,
subsection
1
,
paragraph
“a”
,
3
subparagraph
(5),
or
section
423.2,
subsection
6
,
paragraphs
4
“bq”
,
“br”
,
“bs”
,
and
“bu”
,
“bv”
,
and
“bw”
furnished,
to
a
5
commercial
enterprise
for
use
exclusively
by
the
commercial
6
enterprise.
The
use
of
prewritten
computer
software,
a
7
specified
digital
product,
or
service
fails
to
qualify
as
a
8
use
exclusively
by
the
commercial
enterprise
if
its
use
for
9
noncommercial
purposes
is
more
than
de
minimis.
10
Sec.
7.
Section
423.3,
subsection
104,
paragraph
b,
11
subparagraph
(1),
Code
2022,
is
amended
to
read
as
follows:
12
(1)
“Commercial
enterprise”
means
the
same
as
defined
in
13
section
423.3,
subsection
47
,
paragraph
“d”
,
subparagraph
(1),
14
but
also
includes
professions
and
occupations
and
includes
15
public
utilities
as
defined
in
section
476.1,
subsection
3
.
16
Sec.
8.
Section
423.3,
Code
2022,
is
amended
by
adding
the
17
following
new
subsections:
18
NEW
SUBSECTION
.
107.
The
sales
price
from
the
sale
of
19
period
products.
For
purposes
of
this
subsection,
“period
20
products”
means
sanitary
napkins
or
pads,
tampons,
menstrual
21
cups,
or
other
similar
items
used
in
connection
with
the
22
menstrual
cycle.
23
NEW
SUBSECTION
.
108.
The
sales
price
from
the
sale
of
a
24
child
or
adult
diaper,
whether
cloth
or
disposable.
25
Sec.
9.
EFFECTIVE
DATE.
This
division
of
this
Act
takes
26
effect
January
1,
2023.
27
DIVISION
II
28
AUTOMOBILE
RENTAL
EXCISE
TAX
29
Sec.
10.
Section
423.14A,
subsection
1,
paragraph
b,
30
subparagraph
(3),
Code
2022,
is
amended
by
striking
the
31
subparagraph.
32
Sec.
11.
Section
423C.2,
subsection
7,
Code
2022,
is
amended
33
by
striking
the
subsection.
34
Sec.
12.
Section
423C.3,
subsection
3,
paragraph
b,
Code
35
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2022,
is
amended
by
striking
the
paragraph.
1
Sec.
13.
EFFECTIVE
DATE.
This
division
of
this
Act
takes
2
effect
January
1,
2023.
3
DIVISION
III
4
MANUFACTURED
FOOD
——
SALES
TAX
EXEMPTION
5
Sec.
14.
Section
423.3,
subsection
49,
Code
2022,
is
amended
6
to
read
as
follows:
7
49.
a.
The
sales
price
from
the
sale
of
carbon
dioxide
8
in
a
liquid,
solid,
or
gaseous
form,
electricity,
steam,
and
9
other
taxable
services
and
the
lease
or
rental
of
tangible
10
personal
property
when
used
by
a
manufacturer
of
food
products
11
to
primarily
produce
marketable
food
products
for
human
12
consumption
food
or
food
ingredients
,
including
but
not
13
limited
to
treatment
of
material
to
change
its
form,
context,
14
or
condition,
in
order
to
produce
the
food
product
or
food
15
ingredients
,
maintenance
of
quality
or
integrity
of
the
16
food
product
or
food
ingredients
,
changing
or
maintenance
of
17
temperature
levels
necessary
to
avoid
spoilage
or
to
hold
the
18
food
product
or
food
ingredients
in
marketable
condition,
19
maintenance
of
environmental
conditions
necessary
for
the
safe
20
or
efficient
use
of
machinery
and
material
used
to
produce
21
the
food
product
or
food
ingredients
,
sanitation
and
quality
22
control
activities,
formation
of
packaging,
placement
into
23
shipping
containers,
and
movement
of
the
material
or
food
24
product
or
food
ingredients
until
shipment
from
the
building
25
of
manufacture.
26
b.
For
purposes
of
this
subsection,
“food
or
food
27
ingredients”
means
the
same
as
“food
and
food
ingredients”
as
28
defined
in
subsection
57,
paragraph
“d”
,
and
includes
tangible
29
personal
property
that
could
be
sold
for
ingestion
or
chewing
30
by
humans
but
is
sold
for
another
use.
31
Sec.
15.
REFUNDS.
Refunds
of
taxes,
interest,
or
penalties
32
which
arise
from
the
enactment
of
this
division
of
this
Act,
33
for
sales
or
services
occurring
between
January
1,
2019,
and
34
the
effective
date
of
this
division
of
this
Act,
shall
be
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limited
to
one
hundred
thousand
dollars
in
the
aggregate
for
1
any
calendar
year
in
which
claims
are
eligible
for
a
refund
and
2
shall
not
be
allowed
unless
refund
claims
are
filed
by
October
3
1,
2022,
notwithstanding
any
other
law
to
the
contrary.
If
the
4
amount
of
claims
totals
more
than
one
hundred
thousand
dollars
5
in
the
aggregate
for
any
calendar
year
in
which
claims
are
6
eligible
for
a
refund,
the
department
of
revenue
shall
prorate
7
the
one
hundred
thousand
dollars
in
the
aggregate
among
all
the
8
claimants
for
that
particular
calendar
year
in
relation
to
the
9
amounts
of
the
claimants’
valid
claims.
10
Sec.
16.
EFFECTIVE
DATE.
This
division
of
this
Act,
being
11
deemed
of
immediate
importance,
takes
effect
upon
enactment.
12
Sec.
17.
RETROACTIVE
APPLICABILITY.
This
division
of
this
13
Act
applies
retroactively
to
January
1,
2019.
14
DIVISION
IV
15
NATIONAL
GUARD
PAY
16
Sec.
18.
Section
422.7,
Code
2022,
is
amended
by
adding
the
17
following
new
subsection:
18
NEW
SUBSECTION
.
42B.
Subtract,
to
the
extent
included,
up
19
to
twenty
thousand
dollars
of
pay
received
by
the
taxpayer
for
20
service
pursuant
to
32
U.S.C.
§502.
21
Sec.
19.
APPLICABILITY.
This
division
of
this
Act
applies
22
to
tax
years
beginning
on
or
after
January
1,
2023.
23
DIVISION
V
24
NET
OPERATING
LOSS
DEDUCTION
25
Sec.
20.
2018
Iowa
Acts,
chapter
1161,
section
120,
is
26
amended
by
striking
the
section
and
inserting
in
lieu
thereof
27
the
following:
28
SEC.
120.
Section
422.9
,
Code
2018,
is
amended
by
striking
29
the
section
and
inserting
in
lieu
thereof
the
following:
30
422.9
Calculation
of
Iowa
net
operating
loss
——
deduction.
31
1.
Any
available
net
operating
loss
carryforward
amount
as
32
described
in
subsection
3
shall
be
deducted
from
the
Iowa
net
33
income
of
the
taxpayer.
34
2.
The
deduction
allowed
under
subsection
1
shall
not
exceed
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eighty
percent
of
the
Iowa
net
income
as
determined
under
1
section
422.7
computed
without
regard
to
the
deductions
under
2
this
section
and,
to
the
extent
included
in
the
Iowa
net
income
3
calculation,
sections
199A
and
250
of
the
Internal
Revenue
4
Code.
5
3.
If,
after
applying
all
of
the
adjustments
provided
for
in
6
section
422.7
and
the
allocation
provisions
of
section
422.8,
7
and
subject
to
the
modifications
provided
in
section
172(d)
8
of
the
Internal
Revenue
Code,
the
taxable
income
results
in
9
a
net
operating
loss,
such
Iowa
net
operating
loss,
if
any,
10
shall
be
carried
forward
and
such
carryforward
amounts
shall
be
11
available
as
a
deduction
under
this
section
in
future
years.
12
Sec.
21.
2018
Iowa
Acts,
chapter
1161,
section
129,
is
13
amended
by
striking
the
section
and
inserting
in
lieu
thereof
14
the
following:
15
SEC.
129.
Section
422.35,
subsection
11
,
Code
2018,
is
16
amended
by
striking
the
subsection
and
inserting
in
lieu
17
thereof
the
following:
18
11.
a.
Subtract
to
the
extent
available
any
net
operating
19
loss
carryforward
amount
as
described
in
this
subsection
not
20
to
exceed
eighty
percent
of
the
Iowa
net
income
as
determined
21
under
this
section,
computed
without
regard
to
the
deductions
22
under
this
subsection
and,
to
the
extent
included
in
the
Iowa
23
net
income
calculation,
section
250
of
the
Internal
Revenue
24
Code.
25
b.
If
after
applying
all
of
the
adjustments
provided
for
in
26
this
section
and
the
allocation
and
apportionment
provisions
27
of
section
422.33,
the
Iowa
taxable
income
results
in
a
net
28
operating
loss,
such
Iowa
net
operating
loss
shall
be
carried
29
forward
and
such
carryforward
amounts
shall
be
available
as
a
30
deduction
under
this
subsection
in
future
years.
31
c.
Any
portion
of
a
net
operating
loss
which
was
sustained
32
from
that
portion
of
the
trade
or
business
carried
on
outside
33
the
state
of
Iowa
shall
not
be
deducted.
34
d.
The
deductions
described
in
this
subsection
are
allowed
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subject
to
the
requirement
that
a
corporation
affected
by
the
1
allocation
provisions
of
section
422.33
shall
be
permitted
to
2
deduct
only
that
portion
of
the
deductions
for
net
operating
3
loss
that
is
fairly
and
equitably
allocable
to
Iowa,
under
4
rules
prescribed
by
the
director.
5
Sec.
22.
EFFECTIVE
DATE.
This
division
of
this
Act
takes
6
effect
January
1,
2023.
7
Sec.
23.
APPLICABILITY.
This
division
of
this
Act
applies
8
to
tax
years
beginning
on
or
after
January
1,
2023.
9
DIVISION
VI
10
CHANGES
TO
SALE
OF
CERTAIN
QUALIFIED
STOCK
PROVISIONS
11
Sec.
24.
Section
422.7,
subsection
63,
paragraph
c,
12
subparagraph
(2),
as
enacted
by
2022
Iowa
Acts,
House
File
13
2317,
section
1,
is
amended
to
read
as
follows:
14
(2)
“Employee-owner”
means
an
individual
who
owns
capital
15
stock
in
a
qualified
corporation
for
at
least
ten
years,
which
16
capital
stock
was
acquired
by
the
individual
while
employed
and
17
on
account
of
employment
by
such
any
qualified
corporation
for
18
at
least
ten
cumulative
years.
19
Sec.
25.
Section
422.7,
subsection
63,
paragraph
c,
20
subparagraph
(4),
subparagraph
division
(b),
as
enacted
by
2022
21
Iowa
Acts,
House
File
2317,
section
1,
is
amended
to
read
as
22
follows:
23
(b)
“Qualified
corporation”
includes
any
member
of
an
Iowa
24
affiliated
group
if
the
Iowa
affiliated
group
includes
a
member
25
that
has
employed
individuals
in
this
state
for
at
least
ten
26
years.
For
purposes
of
this
subparagraph
division,
“Iowa
27
affiliated
group”
means
an
affiliated
group
that
has
made
is
28
eligible
to
make
a
valid
election
to
file
an
Iowa
consolidated
29
income
tax
return
under
section
422.37
in
the
year
in
which
30
the
deduction
under
this
subsection
is
claimed.
“Member”
31
includes
any
entity
that
is
eligible
to
be
included
in
the
a
32
consolidated
return
under
section
422.37,
subsection
2,
for
the
33
tax
year
in
which
the
deduction
is
claimed.
34
Sec.
26.
EFFECTIVE
DATE.
This
division
of
this
Act
takes
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effect
January
1,
2023.
1
Sec.
27.
APPLICABILITY.
This
division
of
this
Act
applies
2
to
tax
years
beginning
on
or
after
January
1,
2023.
3
DIVISION
VII
4
FRANCHISE
TAX
5
Sec.
28.
Section
422.63,
Code
2022,
is
amended
to
read
as
6
follows:
7
422.63
Amount
of
tax.
8
1.
The
franchise
tax
is
imposed
annually
in
an
amount
equal
9
to
five
the
percent
specified
in
subsection
2
of
the
net
income
10
received
or
accrued
during
the
taxable
year.
If
the
net
income
11
of
the
financial
institution
is
derived
from
its
business
12
carried
on
entirely
within
the
state,
the
tax
shall
be
imposed
13
on
the
entire
net
income,
but
if
the
business
is
carried
on
14
partly
within
and
partly
without
the
state,
the
portion
of
net
15
income
reasonably
attributable
to
the
business
within
the
state
16
shall
be
specifically
allocated
or
equitably
apportioned
within
17
and
without
the
state
under
rules
of
the
director.
18
2.
a.
For
tax
years
beginning
prior
to
January
1,
2023,
19
five
percent.
20
b.
For
tax
years
beginning
on
or
after
January
1,
2023,
but
21
before
January
1,
2024,
four
and
four-fifths
percent.
22
c.
For
tax
years
beginning
on
or
after
January
1,
2024,
but
23
before
January
1,
2025,
four
and
three-fifths
percent.
24
d.
For
tax
years
beginning
on
or
after
January
1,
2025,
but
25
before
January
1,
2026,
four
and
two-fifths
percent.
26
e.
For
tax
years
beginning
on
or
after
January
1,
2026,
but
27
before
January
1,
2027,
four
and
one-fifth
percent.
28
f.
For
tax
years
beginning
on
or
after
January
1,
2027,
29
three
and
nine-tenths
percent.
30
DIVISION
VIII
31
INSURANCE
PREMIUMS
TAX
32
Sec.
29.
Section
432.1,
subsection
2,
Code
2022,
is
amended
33
to
read
as
follows:
34
2.
The
“applicable
percent”
for
purposes
of
subsection
1
of
35
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this
section
and
section
432.2
is
the
following:
1
a.
For
calendar
years
beginning
before
the
2003
calendar
2
year,
two
percent.
3
b.
For
the
2003
calendar
year,
one
and
three-fourths
4
percent.
5
c.
For
the
2004
calendar
year,
one
and
one-half
percent.
6
d.
For
the
2005
calendar
year,
one
and
one-fourth
percent.
7
e.
For
the
2006
and
subsequent
calendar
years
year
through
8
the
2022
calendar
year
,
one
percent.
9
f.
For
the
2023
calendar
year,
ninety-five
hundredths
of
one
10
percent.
11
g.
For
the
2024
and
subsequent
calendar
years,
nine-tenths
12
of
one
percent.
13
Sec.
30.
Section
432.1,
subsection
4,
Code
2022,
is
amended
14
to
read
as
follows:
15
4.
The
“applicable
percent”
for
purposes
of
subsection
3
is
16
the
following:
17
a.
For
calendar
years
beginning
before
the
2004
calendar
18
year,
two
percent.
19
b.
For
the
2004
calendar
year,
one
and
three-fourths
20
percent.
21
c.
For
the
2005
calendar
year,
one
and
one-half
percent.
22
d.
For
the
2006
calendar
year,
one
and
one-fourth
percent.
23
e.
For
the
2007
and
subsequent
calendar
years
year
through
24
the
2022
calendar
year
,
one
percent.
25
f.
For
the
2023
calendar
year,
ninety-five
hundredths
of
one
26
percent.
27
g.
For
the
2024
and
subsequent
calendar
years,
nine-tenths
28
of
one
percent.
29
EXPLANATION
30
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
31
the
explanation’s
substance
by
the
members
of
the
general
assembly.
32
This
bill
relates
to
state
taxation
and
administration
by
33
modifying
sales
and
use
taxes,
individual
and
corporate
income
34
taxes,
the
automobile
rental
excise
tax,
the
franchise
tax,
and
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the
insurance
premium
tax.
1
DIVISION
I
——
SALES
AND
USE
TAX
ON
SERVICES
AND
EXEMPTIONS.
2
The
bill
strikes
“software
as
a
service”
and
substitutes
“cloud
3
computing”
as
a
service
for
purposes
of
imposing
sales
tax.
4
The
bill
makes
the
following
services
subject
to
the
sales
tax:
5
web
hosting,
digital
automated
services,
and
scooter.
However,
6
the
bill
exempts
web
hosting
and
digital
automated
services
7
from
the
sales
tax
when
furnished
to
a
commercial
enterprise
8
for
use
exclusively
by
the
commercial
enterprise.
9
The
bill
exempts
“specified
digital
products”
from
the
sales
10
tax
when
used
in
agricultural
production.
11
The
bill
strikes
the
sales
and
use
tax
exemption
on
the
12
sales
price
from
the
sale
or
rental
of
computer
or
computer
13
peripherals
by
an
insurance
company,
financial
institution,
or
14
commercial
enterprise.
15
The
bill
exempts
from
the
sales
tax
the
sale
of
period
16
products
and
child
and
adult
diapers.
Period
products
are
17
defined
in
the
bill.
18
The
bill
strikes
“professions
and
occupations”
from
19
the
definition
of
“commercial
enterprise”
in
Code
section
20
423.3(104)
thus
making
sales
to
professions
and
occupations
21
related
to
prewritten
software,
specified
digital
services,
22
and
other
services
subject
to
the
sales
tax.
The
bill
expands
23
the
definition
of
“commercial
enterprise”
to
include
a
“public
24
utility”
as
defined
in
Code
section
476.1(3).
As
a
result,
the
25
sales
price
of
specified
digital
products,
prewritten
computer
26
software,
and
other
enumerated
digital
and
computer
services
27
furnished
to
a
public
utility
are
exempt
from
the
sales
tax,
if
28
exclusively
used
by
the
public
utility.
29
This
division
takes
effect
January
1,
2023.
30
DIVISION
II
——
AUTOMOBILE
RENTAL
EXCISE
TAX.
The
bill
31
repeals
an
exception
for
the
collection
of
the
automobile
32
rental
excise
tax
of
a
person
or
an
affiliate
of
a
person
who
33
owns,
operates,
or
controls
an
automobile
peer-to-peer
sharing
34
marketplace.
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This
division
takes
effect
January
1,
2023.
1
DIVISION
III
——
MANUFACTURED
FOOD
——
SALES
TAX
EXEMPTION.
2
The
bill
exempts
from
the
sales
tax
the
sales
of
certain
items
3
and
services
used
by
a
manufacturer
to
primarily
produce
food
4
or
food
ingredients,
including
the
lease
or
rental
of
tangible
5
personal
property
used
to
primarily
produce
such
food
or
food
6
ingredients.
7
The
bill
defines
“food
or
food
ingredients”
to
mean
the
same
8
as
defined
in
Code
section
423.3(57)(d)
and
includes
tangible
9
personal
property
that
could
be
sold
for
ingestion
or
chewing
10
by
humans
but
is
sold
for
another
use.
11
Under
current
law,
in
order
to
receive
the
sales
tax
12
exemption
the
items
or
services
must
be
used
to
produce
13
marketable
food
products
for
human
consumption.
14
By
operation
of
Code
section
423.6,
an
item
exempt
from
the
15
imposition
of
the
sales
tax
is
also
exempt
from
the
use
tax
16
imposed
in
Code
section
423.5.
17
The
bill
requires
refunds
of
taxes,
interest,
or
penalties
18
arising
from
claims
resulting
from
the
enactment
of
the
bill
19
for
sales
or
services
occurring
between
January
1,
2019,
and
20
the
effective
date
of
the
bill
to
be
filed
prior
to
October
21
1,
2022.
Refunds
of
taxes,
interest,
or
penalties
shall
not
22
exceed
$100,000
in
the
aggregate
in
any
calendar
year
in
which
23
claims
are
eligible
for
a
refund.
If
the
amount
of
claims
24
totals
more
than
$100,000
in
the
aggregate
for
any
calendar
25
year
in
which
claims
are
eligible
for
a
refund,
the
department
26
of
revenue
shall
prorate
the
$100,000
in
the
aggregate
among
27
all
the
claimants
for
that
particular
calendar
year.
28
This
division
takes
effect
upon
enactment
and
applies
29
retroactively
to
January
1,
2019.
30
DIVISION
IV
——
NATIONAL
GUARD
PAY.
The
bill
exempts
from
the
31
individual
income
tax
up
to
$20,000
of
pay
received
by
a
member
32
of
the
national
guard
for
any
required
drills,
field
exercises,
33
or
in
the
performance
of
any
other
orders
under
32
U.S.C.
§502.
34
This
division
applies
to
tax
years
beginning
on
or
after
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January
1,
2023.
1
DIVISION
V
——
NET
OPERATING
LOSS
DEDUCTION.
For
tax
years
2
beginning
on
or
after
January
1,
2023,
2018
Iowa
Acts,
chapter
3
1161,
sections
120,
128,
and
129,
are
set
to
go
into
effect,
4
which
provide
that
a
net
operating
loss
will
no
longer
be
5
calculated
at
the
state
level
for
individual
and
corporate
6
income
taxpayers,
as
applicable,
and
requires
such
taxpayers
7
to
add
back
any
federal
net
operating
loss
deduction
carried
8
over
from
a
tax
year
beginning
prior
to
January
1,
2023,
but
9
such
taxpayers
are
allowed
to
deduct
any
remaining
Iowa
net
10
operating
loss
from
a
prior
taxable
year.
The
net
operating
11
loss
deduction
remains
available
to
taxpayers
at
the
federal
12
level.
13
INDIVIDUAL
INCOME
TAXPAYERS.
For
an
individual
income
14
taxpayer
with
an
available
net
operating
loss
carryforward
15
amount
prior
to
January
1,
2023,
the
bill
limits
the
16
carryforward
deduction
amount
to
an
amount
not
to
exceed
80
17
percent
of
Iowa
net
income
without
regard
to
the
net
operating
18
loss
deduction
as
calculated
and,
to
the
extent
included
in
the
19
Iowa
net
income
calculation,
without
regard
to
sections
199A
20
and
250
of
the
Internal
Revenue
Code.
21
For
individual
income
taxpayers,
if
a
net
Iowa
operating
22
loss
is
calculated
for
tax
years
beginning
on
or
after
January
23
1,
2023,
the
bill
allows
such
a
loss
to
be
carried
forward
and
24
be
available
as
a
deduction
in
future
years.
25
CORPORATE
INCOME
TAXPAYERS.
For
a
corporate
income
taxpayer
26
with
an
available
net
operating
loss
carryforward
amount
prior
27
to
January
1,
2023,
the
bill
limits
the
carryforward
deduction
28
amount
to
an
amount
not
to
exceed
80
percent
of
Iowa
net
29
income
without
regard
to
the
net
operating
loss
deduction
as
30
calculated
and,
to
the
extent
included
in
the
Iowa
net
income
31
calculation,
without
regard
to
section
250
of
the
Internal
32
Revenue
Code.
33
For
corporate
income
taxpayers,
if
a
net
Iowa
operating
loss
34
is
calculated
for
tax
years
beginning
on
or
after
January
1,
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2023,
the
bill
allows
such
a
loss
to
be
carried
forward
and
be
1
available
as
a
deduction
in
future
years.
2
EFFECTIVE
DATE
AND
APPLICABILITY.
This
division
takes
3
effect
January
1,
2023,
and
applies
to
tax
years
beginning
on
4
or
after
that
date.
5
DIVISION
VI
——
CHANGES
TO
SALE
OF
CERTAIN
QUALIFIED
STOCK
6
PROVISIONS.
The
bill
makes
changes
to
provisions
related
to
7
the
sale
of
certain
qualified
stock
in
2022
Iowa
Acts,
House
8
File
2317,
as
enacted.
2022
Iowa
Acts,
House
File
2317,
9
grants
an
employee-owner
one
irrevocable
lifetime
election
10
to
exclude
from
state
individual
income
tax
the
net
capital
11
gain
from
the
state
of
the
capital
stock
on
one
qualified
12
corporation.
The
bill
expands
the
definition
of
“qualified
13
corporation”
to
include
any
“member”
of
an
Iowa
affiliate
group
14
if
the
affiliated
group
is
eligible
to
make
a
valid
election
15
to
file
an
Iowa
consolidated
income
tax
return
under
Code
16
section
422.37
in
the
year
the
qualified
stock
sale
deduction
17
is
made.
The
bill
expands
the
definition
of
“member”
under
18
the
definition
of
“qualified
corporation”
in
2022
Iowa
Acts,
19
House
File
2317,
to
include
any
entity
that
is
eligible
to
be
20
included
in
a
consolidated
return
under
Code
section
422.37(2)
21
if
an
election
is
made
to
file
a
consolidated
return.
22
This
division
takes
effect
January
1,
2023,
and
applies
to
23
tax
years
beginning
on
or
after
that
date.
24
DIVISION
VII
——
FRANCHISE
TAX.
The
bill
phases
in
a
25
reduction
of
the
current
franchise
tax
of
5
percent
of
net
26
income
as
follows:
Commencing
with
the
tax
years
beginning
27
during
the
2023
calendar
year,
4.80
percent;
for
tax
years
28
beginning
during
the
2024
calendar
year,
4.60
percent;
for
tax
29
years
beginning
during
the
2025
calendar
year,
4.40
percent;
30
for
tax
years
beginning
during
the
2026
calendar
year,
4.20
31
percent;
and
for
all
tax
years
beginning
on
or
after
January
32
1,
2027,
3.90
percent.
33
DIVISION
VIII
——
INSURANCE
PREMIUMS
TAX.
The
bill
reduces
34
the
insurance
premiums
tax
on
the
gross
amount
of
premiums
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