Bill Text: IA HF2301 | 2023-2024 | 90th General Assembly | Introduced

Iowa House Bill 2301

Introduced

Bill Title: A bill for an act repealing the school tuition organization tax credit available against the individual and corporate income taxes and including effective date provisions.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Introduced) 2024-02-05 - Introduced, referred to Ways and Means. H.J. 191. [HF2301 Detail]

Download: Iowa-2023-HF2301-Introduced.html

House File 2301 - Introduced HOUSE FILE 2301 BY CROKEN , ABDUL-SAMAD , and STECKMAN A BILL FOR An Act repealing the school tuition organization tax credit 1 available against the individual and corporate income taxes 2 and including effective date provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5473YH (5) 90 jm/jh

H.F. 2301 DIVISION I 1 SCHOOL TUITION ORGANIZATION TAX CREDITS —— REPEAL 2 Section 1. Section 422.11S, subsection 1, Code 2024, is 3 amended to read as follows: 4 1. The taxes imposed under this subchapter , less the credits 5 allowed under section 422.12 , shall be reduced by a school 6 tuition organization tax credit equal to seventy-five percent 7 of the amount of the voluntary cash or noncash contributions 8 made by the taxpayer during the tax year to a school tuition 9 organization before July 1, 2024 , subject to the total dollar 10 value of the organization’s tax credit certificates as computed 11 in subsection 8 . The tax credit shall be claimed by use of a 12 tax credit certificate as provided in subsection 7 . 13 Sec. 2. Section 422.11S, subsection 7, paragraph b, Code 14 2024, is amended to read as follows: 15 b. The department shall authorize a school tuition 16 organization to issue tax credit certificates for contributions 17 made to the school tuition organization before July 1, 18 2024 . The aggregate amount of tax credit certificates 19 that the department shall authorize for a school tuition 20 organization for a calendar year shall be determined for that 21 organization pursuant to subsection 8 . However, a school 22 tuition organization shall not be authorized to issue tax 23 credit certificates unless the organization is controlled by a 24 board of directors consisting of at least seven members. The 25 names and addresses of the members shall be provided to the 26 department and shall be made available by the department to the 27 public, notwithstanding any state confidentiality restrictions. 28 Sec. 3. Section 422.11S, subsection 8, paragraph a, 29 subparagraph (2), Code 2024, is amended to read as follows: 30 (2) “Total approved tax credits” means for the 2006 calendar 31 year, two million five hundred thousand dollars, for the 32 2007 calendar year, five million dollars, for calendar years 33 beginning on or after January 1, 2008, but before January 1, 34 2012, seven million five hundred thousand dollars, for calendar 35 -1- LSB 5473YH (5) 90 jm/jh 1/ 3

H.F. 2301 years beginning on or after January 1, 2012, but before January 1 1, 2014, eight million seven hundred fifty thousand dollars, 2 for calendar years beginning on or after January 1, 2014, but 3 before January 1, 2019, twelve million dollars, for calendar 4 years beginning on or after January 1, 2019, but before January 5 1, 2020, thirteen million dollars, for calendar years beginning 6 on or after January 1, 2020, but before January 1, 2022, 7 fifteen million dollars, and for calendar years beginning on 8 or after January 1, 2022, but before January 1, 2024, twenty 9 million dollars , and for calendar years beginning on or after 10 January 1, 2024, but before January 1, 2025, ten million 11 dollars . 12 Sec. 4. Section 422.11S, Code 2024, is amended by adding the 13 following new subsection: 14 NEW SUBSECTION . 10. This section is repealed July 1, 2030. 15 DIVISION II 16 REPEAL OF SCHOOL TUITION ORGANIZATION TAX CREDIT —— FUTURE 17 CHANGES 18 Sec. 5. Section 2.48, subsection 3, paragraph b, 19 subparagraph (4), Code 2024, is amended by striking the 20 subparagraph. 21 Sec. 6. Section 22A.6, subsection 1, paragraph d, Code 2024, 22 is amended by striking the paragraph. 23 Sec. 7. Section 422.33, subsection 28, Code 2024, is amended 24 by striking the subsection. 25 Sec. 8. EFFECTIVE DATE. This division of this Act takes 26 effect July 1, 2030. 27 EXPLANATION 28 The inclusion of this explanation does not constitute agreement with 29 the explanation’s substance by the members of the general assembly. 30 This bill repeals the school tuition organization (STO) tax 31 credit available against the individual and corporate income 32 taxes. 33 DIVISION I. Under the bill, a contribution made by a 34 taxpayer to an STO on or after July 1, 2024, shall not be used 35 -2- LSB 5473YH (5) 90 jm/jh 2/ 3

H.F. 2301 by the taxpayer as a tax credit to reduce the individual or 1 corporate income tax. The bill prohibits an STO from issuing 2 tax credit certificates for contributions made to the STO on 3 or after July 1, 2024. 4 The bill reduces the total amount of approved STO tax credits 5 that may be issued in calendar year 2024 from $20 million to 6 $10 million due to the repeal occurring at the midpoint of the 7 calendar year. The bill strikes the credit occurring each 8 calendar year after calendar year 2024. 9 The bill repeals Code section 422.11S (STO tax credit) on 10 July 1, 2030, due to the carryforward capability of the tax 11 credit in Code section 422.11S(3). 12 DIVISION II. The bill strikes internal references to Code 13 section 422.11S on the date that the Code section is repealed. 14 The division takes effect on July 1, 2030. 15 -3- LSB 5473YH (5) 90 jm/jh 3/ 3