Bill Text: IA SF2194 | 2013-2014 | 85th General Assembly | Introduced
Bill Title: A bill for an act creating an Iowa woman-owned business tax credit available against the individual and corporate income tax, providing for penalties, and including effective date and applicability provisions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-02-18 - Subcommittee, Jochum, Bertrand, and Dotzler. S.J. 285. [SF2194 Detail]
Download: Iowa-2013-SF2194-Introduced.html
Senate
File
2194
-
Introduced
SENATE
FILE
2194
BY
JOCHUM
A
BILL
FOR
An
Act
creating
an
Iowa
woman-owned
business
tax
credit
1
available
against
the
individual
and
corporate
income
tax,
2
providing
for
penalties,
and
including
effective
date
and
3
applicability
provisions.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
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Section
1.
FINDINGS.
The
general
assembly
finds
that
1
business
ownership
by
women
is
essential
to
the
economic
2
growth
and
vitality
of
Iowa,
but
that
women
in
Iowa
continue
3
to
experience
barriers
to
entry
into
business
ownership.
4
The
general
assembly
recognizes
that
the
existence
of
these
5
barriers
has
resulted
in
a
very
low
rate,
in
number
and
growth,
6
of
women-owned
businesses
in
Iowa
compared
to
the
rest
of
the
7
nation.
Therefore,
it
is
the
intent
and
goal
of
the
general
8
assembly
to
encourage
and
increase
business
ownership
by
9
women
in
Iowa
and
to
reduce
the
gender
disparity
in
business
10
ownership
in
Iowa
and,
to
that
end,
the
general
assembly
11
finds
that
lowering
financial
barriers
by
creating
the
Iowa
12
woman-owned
business
tax
credit
is
an
appropriate
means
to
13
accomplish
this
goal.
14
Sec.
2.
NEW
SECTION
.
422.10A
Iowa
woman-owned
business
tax
15
credit.
16
1.
As
used
in
this
section:
17
a.
“Commercial
domicile”
means
the
same
as
defined
in
18
section
422.32.
19
b.
“Eligible
person”
means
a
woman
who
is
a
resident
of
20
this
state.
For
purposes
of
determining
whether
a
woman
is
an
21
eligible
person,
an
equity
interest
that
is
sold
to
or
owned
22
by
a
corporation,
limited
liability
company,
joint
venture,
23
association,
or
partnership
whose
commercial
domicile
is
in
24
this
state
or
an
estate
or
trust
with
a
situs
in
this
state
25
shall
be
considered
as
proportionately
sold
to
or
owned
by
the
26
entity’s
owners
or
beneficiaries,
as
applicable.
27
c.
“Iowa
business”
means
a
business
that
has
been
in
28
existence
and
actively
doing
business
in
this
state
for
at
29
least
three
years
and
whose
commercial
domicile
is
in
this
30
state.
“Iowa
business”
includes
a
sole
proprietorship,
joint
31
venture,
partnership,
limited
liability
company,
corporation,
32
association,
or
any
other
business
entity
operated
for
profit.
33
d.
“Purchase
price”
means
the
total
amount
of
consideration
34
received
as
cash,
credit,
property,
or
other
thing
of
value
for
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which
an
equity
interest
is
sold,
valued
in
money.
1
2.
The
taxes
imposed
under
this
division,
less
the
credits
2
allowed
under
section
422.12,
shall
be
reduced
by
an
Iowa
3
woman-owned
business
tax
credit
to
a
taxpayer
who
sells
an
4
equity
interest
in
an
Iowa
business
to
an
eligible
person.
The
5
amount
of
the
credit
shall
be
equal
to
fifty
percent
of
the
6
purchase
price
of
the
equity
interest.
In
order
for
a
taxpayer
7
to
qualify
for
the
credit,
all
of
the
following
requirements
8
must
be
satisfied:
9
a.
The
sale
of
the
equity
interest
must
occur
on
or
after
10
January
1,
2015,
but
before
January
1,
2020.
11
b.
Upon
completion
of
the
sale,
eligible
persons
must
own
12
at
least
fifty-one
percent
of
the
equity
interests
in
the
Iowa
13
business.
14
c.
The
eligible
person
who
purchases
the
equity
interest
15
must
retain
ownership
of
the
equity
interest
for
at
least
16
twelve
consecutive
months
following
the
date
of
the
sale
and
17
must
provide
a
written
statement
to
the
department
and
the
18
taxpayer,
in
the
manner
and
form
prescribed
by
the
department,
19
certifying
that
the
requirement
in
this
paragraph
is
satisfied.
20
An
eligible
person
who
willfully
makes
a
false
statement
under
21
this
paragraph
is
guilty
of
a
simple
misdemeanor.
22
3.
A
taxpayer
shall
not
claim
a
tax
credit
until
a
tax
year
23
following
the
tax
year
in
which
the
sale
of
the
equity
interest
24
occurs.
Any
tax
credit
in
excess
of
the
taxpayer’s
liability
25
for
the
tax
year
may
be
credited
to
the
tax
liability
for
the
26
following
seven
years
or
until
depleted,
whichever
is
earlier.
27
4.
a.
If
any
amount
of
the
equity
interest
sold
by
the
28
taxpayer
is
later
reacquired
by
the
taxpayer,
the
department
29
shall
seek
repayment
of
the
value
of
any
such
tax
credit
30
already
claimed
to
the
extent
it
was
calculated
using
the
31
reacquired
equity
interest.
32
b.
If
any
amount
of
the
purchase
price
used
to
calculate
33
the
tax
credit
is
in
the
form
of
a
promissory
note,
loan,
34
or
other
similar
form
of
indebtedness
owed
to
the
taxpayer,
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and
the
taxpayer
later
discharges
or
otherwise
forgives
1
all
or
a
portion
of
that
indebtedness,
the
department
shall
2
seek
repayment
of
the
value
of
any
such
tax
credit
already
3
claimed
to
the
extent
it
was
calculated
using
the
amount
of
4
indebtedness
discharged,
unless
the
discharge
of
indebtedness
5
is
excludable
from
gross
income
under
section
108
of
the
6
Internal
Revenue
Code.
7
c.
The
failure
by
the
taxpayer
to
make
a
repayment
required
8
under
this
subsection
may
be
treated
by
the
department
in
the
9
same
manner
as
a
failure
to
pay
the
tax
shown
due
or
required
to
10
be
shown
due
with
the
filing
of
a
return
or
deposit
form.
11
5.
An
individual
may
claim
the
tax
credit
allowed
a
12
partnership,
limited
liability
company,
S
corporation,
estate,
13
or
trust
electing
to
have
the
income
taxed
directly
to
the
14
individual.
The
amount
claimed
by
the
individual
shall
be
15
based
upon
the
pro
rata
share
of
the
individual’s
earnings
of
16
the
partnership,
limited
liability
company,
S
corporation,
17
estate,
or
trust.
18
Sec.
3.
Section
422.33,
Code
2014,
is
amended
by
adding
the
19
following
new
subsection:
20
NEW
SUBSECTION
.
15.
The
taxes
imposed
under
this
division
21
shall
be
reduced
by
an
Iowa
woman-owned
business
tax
credit
22
allowed
under
section
422.10A.
23
Sec.
4.
EFFECTIVE
DATE.
This
Act
takes
effect
January
1,
24
2015.
25
Sec.
5.
APPLICABILITY.
26
1.
This
Act
applies
to
tax
years
beginning
on
or
after
27
January
1,
2015.
28
2.
This
Act
applies
to
sales
of
equity
interests
in
Iowa
29
businesses
occurring
on
or
after
January
1,
2015.
30
EXPLANATION
31
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
32
the
explanation’s
substance
by
the
members
of
the
general
assembly.
33
This
bill
creates
an
Iowa
woman-owned
business
tax
credit
34
available
against
the
individual
and
corporate
income
tax.
The
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credit
is
available
to
a
taxpayer
who
sells
an
equity
interest
1
in
an
Iowa
business
to
an
eligible
person.
The
credit
is
equal
2
to
50
percent
of
the
purchase
price.
3
“Eligible
person”
is
defined
as
a
woman
who
is
a
resident
4
of
this
state.
However,
for
purposes
of
determining
whether
5
a
woman
is
an
eligible
person,
equity
interests
sold
to
or
6
owned
by
a
corporation,
limited
liability
company
(LLC),
joint
7
venture,
association,
or
partnership
with
a
commercial
domicile
8
in
this
state,
or
an
estate
or
trust
with
a
situs
in
this
state,
9
shall
be
considered
as
being
sold
to
or
owned
by
the
entity’s
10
owners
or
beneficiaries,
as
applicable.
11
“Iowa
business”
is
defined
as
a
business
that
has
been
in
12
existence
and
actively
doing
business
in
this
state
for
at
13
least
three
years
and
whose
commercial
domicile
is
in
this
14
state,
and
includes
any
business
entity
operated
for
profit.
15
Several
requirements
must
be
satisfied
before
a
taxpayer
16
is
eligible
for
the
credit.
First,
the
sale
must
occur
on
or
17
after
January
1,
2015,
but
before
January
1,
2020.
Second,
18
upon
completion
of
the
sale,
eligible
persons
must
own
at
19
least
51
percent
of
the
equity
interests
in
the
Iowa
business.
20
Third,
the
eligible
person
who
purchases
the
equity
interest
21
must
retain
ownership
of
the
equity
interest
for
at
least
12
22
consecutive
months
following
the
date
of
the
sale
and
must
23
provide
a
written
statement
to
the
department
of
revenue
and
24
the
taxpayer
certifying
that
the
ownership
requirement
was
25
met.
An
eligible
person
who
willfully
makes
a
false
statement
26
is
guilty
of
a
simple
misdemeanor.
A
simple
misdemeanor
is
27
punishable
by
confinement
for
no
more
than
30
days
or
a
fine
of
28
at
least
$65
but
not
more
than
$625
or
by
both.
29
A
taxpayer
shall
not
claim
the
credit
until
the
tax
year
30
following
the
completion
of
the
sale.
Any
credit
in
excess
of
31
the
taxpayer’s
tax
liability
may
be
carried
forward
for
seven
32
years
or
until
depleted,
whichever
occurs
earlier.
33
A
woman-owned
business
tax
credit
must
be
repaid
by
a
34
taxpayer
under
two
circumstances.
First,
any
amount
of
credit
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that
was
calculated
using
an
equity
interest
that
is
later
1
reacquired
by
the
taxpayer
must
be
repaid
to
the
extent
the
2
credit
was
calculated
using
that
reacquired
equity
interest.
3
Second,
if
any
amount
of
credit
was
calculated
using
an
amount
4
of
the
purchase
price
that
is
represented
by
a
promissory
note,
5
loan,
or
other
form
of
indebtedness
owed
to
the
taxpayer,
and
6
the
taxpayer
later
discharges
or
forgives
all
or
a
portion
7
of
that
indebtedness,
the
credit
shall
be
repaid
unless
the
8
discharge
of
indebtedness
was
excludable
from
gross
income
9
under
section
108
of
the
Internal
Revenue
Code,
which,
for
10
purposes
of
this
credit,
generally
covers
situations
where
11
the
debtor
is
in
bankruptcy
or
is
otherwise
insolvent.
The
12
department
of
revenue
is
permitted
to
treat
the
failure
to
make
13
a
repayment
of
a
credit
in
the
same
manner
as
a
failure
to
pay
a
14
tax
due
on
a
return
or
deposit
form.
15
An
individual
may
claim
the
tax
credit
allowed
a
16
partnership,
LLC,
S
corporation,
estate,
or
trust
electing
17
to
have
the
income
taxed
directly
to
the
individual,
based
18
upon
the
pro
rata
share
of
the
individual’s
earnings
of
the
19
applicable
entity.
20
The
bill
takes
effect
January
1,
2015,
and
applies
to
tax
21
years
beginning
on
or
after
that
date,
and
to
sales
of
equity
22
interests
in
Iowa
businesses
occurring
on
or
after
that
date.
23
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