Bill Text: IA SF2342 | 2011-2012 | 84th General Assembly | Enrolled

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Bill Title: A bill for an act relating to state taxation by providing specified tax credits for the construction and installation of solar energy systems and geothermal heat pumps, modifying sales and use tax provisions related to property purchased for resale, and creating a sales tax exemption for certain items purchased for use in providing vehicle wash and wax services and including effective date and retroactive and other applicability provisions. (Formerly SSB 3204.) Effective 5-25-12.

Spectrum: Committee Bill

Status: (Passed) 2012-05-25 - Signed by Governor. S.J. 950. [SF2342 Detail]

Download: Iowa-2011-SF2342-Enrolled.html

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Senate File 2342
AN ACT
RELATING TO STATE TAXATION BY PROVIDING SPECIFIED TAX CREDITS
FOR THE CONSTRUCTION AND INSTALLATION OF SOLAR ENERGY
SYSTEMS AND GEOTHERMAL HEAT PUMPS, MODIFYING SALES AND USE
TAX PROVISIONS RELATED TO PROPERTY PURCHASED FOR RESALE,
AND CREATING A SALES TAX EXEMPTION FOR CERTAIN ITEMS
PURCHASED FOR USE IN PROVIDING VEHICLE WASH AND WAX SERVICES
AND INCLUDING EFFECTIVE DATE AND RETROACTIVE AND OTHER
APPLICABILITY PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
DIVISION I
GEOTHERMAL HEAT PUMP TAX CREDITS
Section 1. NEW SECTION . 422.11I Geothermal heat pump tax
credit.
The taxes imposed under this division, less the credits
allowed under section 422.12, shall be reduced by a geothermal
heat pump tax credit equal to twenty percent of the federal
residential energy efficient property tax credit allowed for
geothermal heat pumps provided in section 25(D)(a)(5) of the

Senate File 2342, p. 2
Internal Revenue Code for residential property located in Iowa.
Any credit in excess of the tax liability is not refundable
but the excess for the tax year may be credited to the tax
liability for the following ten years or until depleted,
whichever is earlier. The director of revenue shall adopt
rules to implement this section.
Sec. 2. Section 427.1, Code Supplement 2011, is amended by
adding the following new subsection:
NEW SUBSECTION . 38. Geothermal heating and cooling system.
a. The value added by any new or refitted construction or
installation of a geothermal heating or cooling system on or
after July 1, 2012, on property classified as residential.
The exemption shall be allowed for ten consecutive years.
The exemption shall apply to any value added by the addition
of mechanical, electrical, plumbing, ductwork, or other
equipment, labor, and expenses included in or required for the
construction or installation of the geothermal system, as well
as the proportionate value of any well field associated with
the system and attributable to the owner.
b. A person claiming an exemption under this subsection
shall obtain the appropriate forms from the assessor. The
forms shall be prescribed by the director of revenue. The
claim shall be filed no later than February 1 of the first
assessment year the exemption is requested and shall contain
information pertaining to all costs and other information
associated with construction and installation of the system.
Once the exemption is allowed, the exemption shall continue to
be allowed for ten consecutive years without further filing as
long as the property continues to be classified as residential
property.
c. The director shall adopt rules to implement this
subsection.
Sec. 3. IMPLEMENTATION. Section 25B.7 does not apply to the
property tax exemption enacted in this division of this Act.
Sec. 4. EFFECTIVE UPON ENACTMENT. This division of this
Act, being deemed of immediate importance, takes effect upon
enactment.
Sec. 5. RETROACTIVE APPLICABILITY. The following provision
or provisions of this division of this Act apply retroactively
to January 1, 2012, for tax years beginning on or after that
date:
1. The section of this division of this Act enacting section
422.11I.

Senate File 2342, p. 3
Sec. 6. APPLICABILITY. The following provision or
provisions of this division of this Act apply to assessment
years beginning on or after January 1, 2013:
1. The section of this division of this Act enacting section
427.1, subsection 38.
DIVISION II
SOLAR ENERGY SYSTEM TAX CREDITS
Sec. 7. NEW SECTION . 422.11L Solar energy system tax
credits.
1. The taxes imposed under this division, less the credits
allowed under section 422.12, shall be reduced by a solar
energy system tax credit equal to the sum of the following:
a. Fifty percent of the federal residential energy efficient
property credit related to solar energy provided in section
25D of the Internal Revenue Code, not to exceed three thousand
dollars.
b. Fifty percent of the federal energy credit related to
solar energy systems provided in section 48 of the Internal
Revenue Code, not to exceed fifteen thousand dollars.
2. Any credit in excess of the tax liability is not
refundable but the excess for the tax year may be credited
to the tax liability for the following ten years or until
depleted, whichever is earlier. The director of revenue shall
adopt rules to implement this section.
3. a. An individual may claim the tax credit allowed a
partnership, limited liability company, S corporation, estate,
or trust electing to have the income taxed directly to the
individual. The amount claimed by the individual shall be
based upon the pro rata share of the individual’s earnings of
the partnership, limited liability company, S corporation,
estate, or trust.
b. A taxpayer who is eligible to claim a credit under this
section shall not be eligible to claim a renewable energy tax
credit under chapter 476C.
4. The cumulative value of tax credits claimed annually
by applicants pursuant to this section shall not exceed one
million five hundred thousand dollars.
5. On or before January 1, annually, the department shall
submit a written report to the governor and the general
assembly regarding the number and value of tax credits claimed
under this section, and any other information the department
may deem relevant and appropriate.
Sec. 8. Section 422.33, Code 2011, is amended by adding the

Senate File 2342, p. 4
following new subsection:
NEW SUBSECTION . 29. a. The taxes imposed under this
division shall be reduced by a solar energy system tax credit
equal to fifty percent of the federal energy credit related to
solar energy systems provided in section 48 of the Internal
Revenue Code, not to exceed fifteen thousand dollars.
b. The taxpayer may claim the credit pursuant to this
subsection according to the same requirements, conditions, and
limitations as provided pursuant to section 422.11L.
Sec. 9. Section 476C.2, Code Supplement 2011, is amended by
adding the following new subsection:
NEW SUBSECTION . 3. A taxpayer who is eligible to claim
a renewable energy tax credit under this chapter shall not
be eligible to claim a solar energy system tax credit under
section 422.11L or 422.33.
Sec. 10. EFFECTIVE UPON ENACTMENT. This division of this
Act, being deemed of immediate importance, takes effect upon
enactment.
Sec. 11. RETROACTIVE APPLICABILITY. This division of this
Act applies retroactively to tax years beginning on or after
January 1, 2012.
DIVISION III
SALES TAX EXEMPTIONS
Sec. 12. Section 423.1, subsection 39, paragraphs b and c,
Code Supplement 2011, are amended to read as follows:
b. The property is transferred to the user of the service
in connection with the performance of the service in a form
or quantity capable of a fixed or definite price value , or
the property is entirely consumed in connection with the
performance of an auto body repair service purchased by the
ultimate user .
c. The sale is evidenced by a separate charge for the
identifiable piece of property unless the property is entirely
consumed in connection with the performance of an auto body
repair service purchased by the ultimate user .
Sec. 13. Section 423.3, Code Supplement 2011, is amended by
adding the following new subsection:
NEW SUBSECTION . 96. The sales price from the sale of water,
electricity, chemicals, solvents, sorbents, or reagents to a
retailer to be used in providing a service that includes a
vehicle wash and wax, which vehicle wash and wax service is
subject to section 423.2, subsection 6.
Sec. 14. EFFECTIVE UPON ENACTMENT. This division of this

Senate File 2342, p. 5
Act, being deemed of immediate importance, takes effect upon
enactment.
______________________________
JOHN P. KIBBIE
President of the Senate
______________________________
KRAIG PAULSEN
Speaker of the House
I hereby certify that this bill originated in the Senate and
is known as Senate File 2342, Eighty-fourth General Assembly.
______________________________
MICHAEL E. MARSHALL
Secretary of the Senate
Approved _______________, 2012
______________________________
TERRY E. BRANSTAD
Governor