Bill Text: IA HF2359 | 2011-2012 | 84th General Assembly | Introduced
Bill Title: A bill for an act relating to economic development by providing an adjustment to net income for certified suppliers of anchor manufacturers for purposes of state taxation and including retroactive applicability provisions. (Formerly HSB 604) (See Cmte. Bill HF 2471)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2012-04-23 - Withdrawn. H.J. 870. [HF2359 Detail]
Download: Iowa-2011-HF2359-Introduced.html
House
File
2359
-
Introduced
HOUSE
FILE
2359
BY
COMMITTEE
ON
ECONOMIC
GROWTH/REBUILD
IOWA
(SUCCESSOR
TO
HSB
604)
A
BILL
FOR
An
Act
relating
to
economic
development
by
providing
an
1
adjustment
to
net
income
for
certified
suppliers
of
anchor
2
manufacturers
for
purposes
of
state
taxation
and
including
3
retroactive
applicability
provisions.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
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Section
1.
NEW
SECTION
.
15.226
Definitions.
1
For
purposes
of
this
part:
2
1.
“Anchor
manufacturer”
means
a
business
that
meets
all
of
3
the
following:
4
a.
Manufactures
tangible
personal
property
at
a
facility
in
5
Iowa.
6
b.
Exports
at
least
fifty
percent
of
the
tangible
personal
7
property
produced
at
the
facility
to
markets
outside
of
the
8
state.
9
2.
“Certified
supplier”
means
a
business
certified
pursuant
10
to
section
15.227.
11
3.
“Facility”
means
a
building
or
buildings
located
in
the
12
state
at
which
tangible
personal
property
is
manufactured
for
13
sale
within
or
without
the
state
of
Iowa.
14
4.
“Manufactured”
or
“Manufactures”
means
adding
value
to
15
personal
property
through
a
process
of
manufacturing,
refining,
16
purifying,
combining
of
different
materials,
the
packaging
of
17
meats,
extracting
and
recovering
natural
resources,
and
all
18
processes
of
fabricating
and
curing,
with
a
view
to
selling
the
19
property
for
gain
or
profit.
20
5.
“Tangible
personal
property”
means
the
same
as
defined
in
21
section
422.33,
subsection
2,
unnumbered
paragraph
2.
22
Sec.
2.
NEW
SECTION
.
15.227
Certification
of
suppliers.
23
1.
A
business
meeting
the
requirements
of
subsection
2
may
24
apply
to
the
authority,
no
later
than
ninety
days
after
the
25
end
of
a
tax
year
of
the
business,
for
certification
under
26
this
section.
If
a
business
applying
to
the
authority
meets
27
the
requirements
of
subsection
2,
the
authority
shall
issue
28
a
certificate
to
the
business
stating
that
the
business
is
a
29
certified
supplier.
30
2.
To
receive
certification
as
a
certified
supplier,
a
31
business
must
meet
all
of
the
following
for
the
tax
year
32
immediately
preceding
the
tax
year
for
which
the
requested
33
certificate
will
be
valid:
34
a.
The
business
manufactures
tangible
personal
property
at
a
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facility
in
Iowa.
1
b.
The
business
derives
more
than
ten
percent
of
its
gross
2
sales
of
tangible
personal
property
manufactured
at
a
facility
3
in
Iowa
from
sales
to
anchor
manufacturers.
For
purposes
of
4
the
requirement
in
this
paragraph,
a
business
may
aggregate
5
gross
sales
to
more
than
one
anchor
manufacturer.
6
c.
The
business
provides
a
statement
from
an
anchor
7
manufacturer,
signed
by
an
officer
or
authorized
representative
8
of
the
anchor
manufacturer,
attesting
that
the
anchor
9
manufacturer
meets
the
definition
of
anchor
manufacturer
under
10
section
15.226,
and
provides
supporting
documentation
in
a
form
11
prescribed
by
the
authority.
12
d.
The
business
meets
one
of
the
following
criteria:
13
(1)
At
least
ten
percent
of
the
total
payroll
of
the
14
business
is
located
in
the
state.
15
(2)
The
business
employs
at
least
fifty
employees
at
a
16
facility
in
the
state.
17
e.
The
business
agrees
to
annually
provide
to
the
authority
18
information
and
data
on
jobs
created
and
capital
investments
19
made
in
the
state
by
the
business.
The
information
and
data
20
shall
be
in
a
form
prescribed
by
the
authority.
21
3.
A
certificate
is
valid
for
one
tax
year
and
shall
include
22
an
expiration
date.
Reapplication
may
be
made
each
year
for
23
certification
under
this
part.
The
department
of
revenue
shall
24
accept
a
validly
issued,
unexpired
certificate
issued
under
25
this
section.
26
4.
The
authority
shall
not
issue
certificates
pursuant
27
to
this
section
for
tax
years
beginning
on
or
after
January
28
1,
2015.
On
or
after
January
1,
2015,
the
authority
and
the
29
department
of
revenue
shall
coordinate
with
the
chairpersons
30
of
the
senate
and
house
standing
committees
on
economic
31
growth
and
rebuild
Iowa
to
evaluate
the
effectiveness
of
this
32
certification
process
and
the
related
adjustments
to
net
income
33
provided
in
chapter
422,
and
the
feasibility
of
continuing
both
34
into
the
future.
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Sec.
3.
NEW
SECTION
.
15.228
Eligibility
for
adjustment
to
1
net
income
of
certified
suppliers.
2
1.
A
certified
supplier
shall
be
eligible
to
make
the
3
adjustment
to
net
income
in
section
422.35,
subsection
26,
for
4
a
tax
year
if
all
the
following
apply:
5
a.
The
certified
supplier’s
net
business
income
for
the
tax
6
year,
allocated
and
apportioned
to
this
state
under
section
7
422.33,
subsection
2,
paragraph
“b”
,
computed
without
regard
8
to
section
422.35,
subsection
26,
increased
by
more
than
five
9
percent
over
the
certified
supplier’s
net
business
income
in
10
the
prior
year,
allocated
and
apportioned
to
this
state
under
11
section
422.33,
subsection
2,
paragraph
“b”
.
12
b.
The
certified
supplier
attaches
a
copy
of
a
valid,
13
unexpired
certificate
issued
under
section
15.227
to
the
14
certified
supplier’s
tax
return
required
under
chapter
422.
15
2.
A
taxpayer
who
is
a
shareholder
in
a
subchapter
S
16
corporation
that
is
a
certified
supplier
shall
be
eligible
to
17
make
the
adjustment
to
net
income
in
section
422.7,
subsection
18
57,
for
a
tax
year
if
all
the
following
apply:
19
a.
The
certified
supplier’s
net
business
income
for
the
tax
20
year,
allocated
and
apportioned
to
this
state
under
section
21
422.33,
subsection
2,
paragraph
“b
”,
computed
without
regard
22
to
section
422.35,
subsection
26,
increased
by
more
than
five
23
percent
over
the
certified
supplier’s
net
business
income
in
24
the
prior
year,
allocated
and
apportioned
to
this
state
under
25
section
422.33,
subsection
2,
paragraph
“b”
,
computed
with
26
regard
to
section
422.35,
subsection
26,
if
the
subchapter
S
27
corporation
was
a
certified
supplier
in
the
previous
tax
year
28
and
met
the
eligibility
requirements
in
this
paragraph
“a”
.
29
b.
The
shareholder
attaches
a
copy
of
a
valid,
unexpired
30
certificate
issued
under
section
15.227
to
the
shareholder’s
31
tax
return
required
under
chapter
422.
32
Sec.
4.
NEW
SECTION
.
15.229
Rules.
33
The
authority
and
the
department
of
revenue
may
adopt
rules
34
for
the
implementation
of
this
part.
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Sec.
5.
Section
422.7,
Code
Supplement
2011,
is
amended
by
1
adding
the
following
new
subsection:
2
NEW
SUBSECTION
.
57.
If
the
adjusted
gross
income
includes
3
income
from
a
subchapter
S
corporation
for
which
the
taxpayer
4
is
a
shareholder,
which
subchapter
S
corporation
is
a
certified
5
supplier
that
meets
the
requirements
in
section
15.228,
6
subsection
2,
paragraph
“a”
,
the
taxpayer
may
subtract
an
amount
7
based
on
the
taxpayer’s
pro
rata
share
of
the
profits
or
losses
8
from
the
subchapter
S
corporation
equal
to
the
difference
9
between
the
subchapter
S
corporation’s
net
business
income
for
10
the
tax
year,
allocated
and
apportioned
to
this
state
under
11
section
422.33,
subsection
2,
paragraph
“b”
,
computed
without
12
regard
to
section
422.35,
subsection
26,
and
one
hundred
five
13
percent
of
the
subchapter
S
corporation’s
net
business
income
14
for
the
prior
tax
year,
allocated
and
apportioned
under
section
15
422.33,
subsection
2,
paragraph
“b”
,
computed
with
regard
to
16
section
422.35,
subsection
26,
if
the
subchapter
S
corporation
17
was
a
certified
supplier
in
the
previous
tax
year
and
met
the
18
requirements
in
section
15.228,
subsection
2,
paragraph
“a”
.
19
A
taxpayer
who
is
a
resident
shall
not
make
the
subtraction
20
provided
in
this
subsection
unless
the
taxpayer
also
makes
an
21
election
pursuant
to
section
422.5,
subsection
1,
paragraph
22
“j”
,
subparagraph
(2).
23
Sec.
6.
Section
422.35,
Code
Supplement
2011,
is
amended
by
24
adding
the
following
new
subsection:
25
NEW
SUBSECTION
.
26.
If
the
taxpayer
is
a
certified
supplier
26
that
meets
the
requirements
in
section
15.228,
subsection
27
1,
subtract
an
amount
equal
to
the
difference
between
the
28
taxpayer’s
net
business
income
for
the
tax
year,
allocated
and
29
apportioned
under
section
422.33,
subsection
2,
paragraph
“b”
,
30
computed
without
regard
to
this
subsection,
and
one
hundred
31
five
percent
of
the
taxpayer’s
net
business
income
for
the
32
prior
tax
year,
allocated
and
apportioned
under
section
422.33,
33
subsection
2,
paragraph
“b”
.
34
Sec.
7.
RETROACTIVE
APPLICABILITY.
This
Act
applies
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retroactively
to
January
1,
2012,
for
tax
years
beginning
on
1
or
after
that
date.
2
EXPLANATION
3
This
bill
creates
an
economic
development
program
that
4
allows
a
certified
supplier
to
make
an
adjustment
to
net
income
5
for
state
individual
and
corporate
income
tax
purposes.
The
6
adjustment
is
available
for
corporations
and
shareholders
of
7
subchapter
S
corporations.
8
To
qualify
as
a
certified
supplier
under
the
bill,
a
business
9
must
manufacture
tangible
personal
property
in
Iowa,
derive
10
more
than
10
percent
of
its
gross
sales
from
sales
to
anchor
11
manufacturers,
supply
the
authority
with
a
signed
statement
12
from
the
anchor
manufacturer
attesting
that
the
anchor
13
manufacturer
qualifies
as
an
anchor
manufacturer,
and
must
14
either
maintain
at
least
10
percent
of
its
payroll
in
Iowa
or
15
employ
at
least
50
employees
in
Iowa.
“Anchor
manufacturer”
16
is
defined
as
a
business
that
manufactures
tangible
personal
17
property
in
Iowa
and
exports
at
least
50
percent
of
the
18
tangible
personal
property
produced
in
Iowa
outside
of
the
19
state.
20
A
business
that
meets
all
of
the
qualifications
of
a
21
certified
supplier
may
annually
apply
to
the
authority
to
22
receive
a
certificate
labeling
the
business
as
a
certified
23
supplier.
A
business
must
apply
for
a
certificate
no
later
24
than
90
days
after
the
end
of
its
tax
year.
The
certificate
is
25
valid
for
one
year
and
shall
include
an
expiration
date.
26
The
certified
supplier
will
be
entitled
to
make
an
27
adjustment
to
its
net
income
if
it
attaches
the
valid,
28
unexpired
certificate
to
its
tax
return,
and
if
its
net
29
business
income
allocated
and
apportioned
to
this
state,
30
computed
without
regard
to
the
adjustment
to
net
income
31
provided
in
the
bill,
increased
by
more
than
5
percent
over
32
its
prior
year
net
business
income
allocated
and
apportioned
33
to
this
state.
34
If
both
requirements
are
met,
the
certified
supplier
is
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entitled
to
subtract
from
its
net
income
an
amount
equal
to
1
the
difference
between
its
current
year
net
business
income
2
allocated
and
apportioned
to
this
state,
computed
without
3
regard
to
the
adjustment
to
net
income
provided
in
the
bill,
4
and
105
percent
of
its
prior
year
net
business
income
allocated
5
and
apportioned
to
this
state.
The
economic
development
6
authority
shall
not
issue
certificates
for
tax
years
beginning
7
on
or
after
January
1,
2015.
After
that
date,
the
economic
8
development
authority
and
the
department
are
both
required
to
9
coordinate
with
the
chairpersons
of
each
committee
on
economic
10
growth/rebuild
Iowa
to
evaluate
the
certification
program.
11
The
bill
provides
the
authority
and
department
of
revenue
12
with
rulemaking
authority.
13
The
bill
applies
retroactively
to
January
1,
2012,
for
tax
14
years
beginning
on
or
after
that
date.
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