Current through Register Vol. 47, No. 6, September 18, 2024
Tax credits for investments in qualifying businesses may be
claimed as provided in this rule and any applicable rules of the department of
revenue.
(1)
Tax credits
allowed only after a certain date. A taxpayer may claim a tax credit
under this rule for equity investments in certain qualifying businesses. Only
equity investments made on or after January 1, 2011, qualify for a tax credit
under this rule. Equity investments made before that date must be claimed under
123-Chapter 2.
(2)
Investments in qualifying businesses.
a. A taxpayer may claim a tax credit under
this subrule for a portion of the taxpayer's equity investment in a qualifying
business if that investment was made on or after January 1, 2011.
b. The tax credit may be claimed against the
taxpayer's tax liability for any of the following taxes:
(1) The personal net income tax imposed under
Iowa Code chapter 422, division II.
(2) The business tax on corporations imposed
under Iowa Code chapter 422, division III.
(3) The franchise tax on financial
institutions imposed under Iowa Code chapter 422, division V.
(4) The tax on the gross premiums of
insurance companies imposed under Iowa Code chapter 432.
(5) The tax on moneys and credits imposed
under Iowa Code section
533.329.
c. Investments made in qualifying
businesses on or after January 1, 2011, and before July 2, 2015, are governed
by 2015 Iowa Code sections
15E.41 to
15E.46,
422.11F,
422.33,
422.60,
432.12C,
and 533.329.
d. Investments made in
qualifying businesses on or after July 2, 2015, are governed by 2016 Iowa Code
sections
15E.41 to
15E.46,
422.11F,
422.33,
422.60,
432.12C,
and 533.329.
(3)
Amount of tax credit that may be claimed by taxpayer.
a. In the case of investments made on or
after July 2, 2015, the amount of tax credit available to a taxpayer under this
rule is equal to 25 percent of the taxpayer's equity investment in a qualifying
business.
b. In the case of
investments made on or after July 2, 2015, the maximum amount of tax credit
that may be issued per calendar year to a natural person and the person's
spouse or dependent shall not exceed $100,000 combined. For purposes of this
paragraph, a tax credit issued to a partnership, limited liability company, S
corporation, estate, or trust electing to have income taxed directly to the
individual shall be deemed to be issued to the individual owners based upon the
pro rata share of the individual's earnings from the entity. For purposes of
this paragraph, "dependent" has the same meaning as provided by the Internal
Revenue Code. Applications received by the authority that exceed the maximum
amount of tax credits per calendar year to a natural person and the person's
spouse or dependent will be denied by the board, regardless of whether the
investment was otherwise eligible to receive atax credit award. Any application
that can be partially approved without exceeding the maximum amount in this
paragraph will be approved as to the portion less than the maximum amount and
denied as to the portion greater than the maximum amount. For example, if an
application is eligible for $50,000 of tax credits, but there is only $30,000
of the household maximum amount available, the application will be approved for
$30,000 and denied for $20,000.
c.
The maximum amount of tax credits that may be issued per calendar year for
equity investments in any one qualifying business shall not exceed $500,000.
Applications received by the authority that exceed the maximum amount of tax
credits per calendar year in any one qualifying business will be denied by the
board, regardless of whether the investment was otherwise eligible to receive a
tax credit award. Any application that can be partially approved without
exceeding the maximum amount in this paragraph will be approved as to the
portion less than the maximum amount and denied as to the portion greater than
the maximum amount. For example, if an application is eligible for $50,000 of
tax credits, but there is only $30,000 of the business maximum amount
available, the application will be approved for $30,000 and denied for
$20,000.
(4)
Claiming an investment tax credit. A taxpayer that makes an
investment in a qualifying business and that otherwise meets the requirements
of this chapter will receive a board-approved tax credit certificate from the
authority. To claim the credit, the taxpayer must include the certificate with
a tax return filed with the department of revenue. For more information on
claiming the tax credit, see department of revenue rules
701-42.22 (15E,422),
701-52.21(15E,422), and
701-58.11 (15E,422).
