Bill Text: IA SF2342 | 2011-2012 | 84th General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
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-Introduced.html
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-Introduced.html
Senate
File
2342
-
Introduced
SENATE
FILE
2342
BY
COMMITTEE
ON
WAYS
AND
MEANS
(SUCCESSOR
TO
SSB
3204)
A
BILL
FOR
An
Act
relating
to
state
taxation
by
providing
specified
tax
1
credits
for
the
construction
and
installation
of
solar
2
energy
systems
and
geothermal
heat
pumps,
modifying
sales
3
and
use
tax
provisions
related
to
property
purchased
for
4
resale,
and
creating
a
sales
tax
exemption
for
certain
items
5
purchased
for
use
in
providing
vehicle
wash
and
wax
services
6
and
including
effective
date
and
retroactive
and
other
7
applicability
provisions.
8
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
9
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2342
DIVISION
I
1
GEOTHERMAL
HEAT
PUMP
TAX
CREDITS
2
Section
1.
NEW
SECTION
.
422.11I
Geothermal
heat
pump
tax
3
credit.
4
The
taxes
imposed
under
this
division,
less
the
credits
5
allowed
under
section
422.12,
shall
be
reduced
by
a
geothermal
6
heat
pump
tax
credit
equal
to
twenty
percent
of
the
federal
7
residential
energy
efficient
property
tax
credit
allowed
for
8
geothermal
heat
pumps
provided
in
section
25(D)(a)(5)
of
the
9
Internal
Revenue
Code
for
residential
property
located
in
Iowa.
10
Any
credit
in
excess
of
the
tax
liability
is
not
refundable
11
but
the
excess
for
the
tax
year
may
be
credited
to
the
tax
12
liability
for
the
following
ten
years
or
until
depleted,
13
whichever
is
earlier.
The
director
of
revenue
shall
adopt
14
rules
to
implement
this
section.
15
Sec.
2.
Section
427.1,
Code
Supplement
2011,
is
amended
by
16
adding
the
following
new
subsection:
17
NEW
SUBSECTION
.
38.
Geothermal
heating
and
cooling
system.
18
a.
The
value
added
by
any
new
or
refitted
construction
or
19
installation
of
a
geothermal
heating
or
cooling
system
on
or
20
after
July
1,
2012,
on
property
classified
as
residential.
21
The
exemption
shall
be
allowed
for
ten
consecutive
years.
22
The
exemption
shall
apply
to
any
value
added
by
the
addition
23
of
mechanical,
electrical,
plumbing,
ductwork,
or
other
24
equipment,
labor,
and
expenses
included
in
or
required
for
the
25
construction
or
installation
of
the
geothermal
system,
as
well
26
as
the
proportionate
value
of
any
well
field
associated
with
27
the
system
and
attributable
to
the
owner.
28
b.
A
person
claiming
an
exemption
under
this
subsection
29
shall
obtain
the
appropriate
forms
from
the
assessor.
The
30
forms
shall
be
prescribed
by
the
director
of
revenue.
The
31
claim
shall
be
filed
no
later
than
February
1
of
the
first
32
assessment
year
the
exemption
is
requested
and
shall
contain
33
information
pertaining
to
all
costs
and
other
information
34
associated
with
construction
and
installation
of
the
system.
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Once
the
exemption
is
allowed,
the
exemption
shall
continue
to
1
be
allowed
for
ten
consecutive
years
without
further
filing
as
2
long
as
the
property
continues
to
be
classified
as
residential
3
property.
4
c.
The
director
shall
adopt
rules
to
implement
this
5
subsection.
6
Sec.
3.
IMPLEMENTATION.
Section
25B.7
does
not
apply
to
the
7
property
tax
exemption
enacted
in
this
division
of
this
Act.
8
Sec.
4.
EFFECTIVE
UPON
ENACTMENT.
This
division
of
this
9
Act,
being
deemed
of
immediate
importance,
takes
effect
upon
10
enactment.
11
Sec.
5.
RETROACTIVE
APPLICABILITY.
The
following
provision
12
or
provisions
of
this
division
of
this
Act
apply
retroactively
13
to
January
1,
2012,
for
tax
years
beginning
on
or
after
that
14
date:
15
1.
The
section
of
this
division
of
this
Act
enacting
section
16
422.11I.
17
Sec.
6.
APPLICABILITY.
The
following
provision
or
18
provisions
of
this
division
of
this
Act
apply
to
assessment
19
years
beginning
on
or
after
January
1,
2013:
20
1.
The
section
of
this
division
of
this
Act
enacting
section
21
427.1,
subsection
38.
22
DIVISION
II
23
SOLAR
ENERGY
SYSTEM
TAX
CREDITS
24
Sec.
7.
NEW
SECTION
.
422.11L
Solar
energy
system
tax
25
credits.
26
1.
The
taxes
imposed
under
this
division,
less
the
credits
27
allowed
under
section
422.12,
shall
be
reduced
by
a
solar
28
energy
system
tax
credit
equal
to
the
sum
of
the
following:
29
a.
Twenty-five
percent
of
the
federal
residential
energy
30
efficient
property
credit
related
to
solar
energy
provided
in
31
section
25D
of
the
Internal
Revenue
Code,
not
to
exceed
three
32
thousand
dollars.
33
b.
Twenty-five
percent
of
the
federal
energy
credit
related
34
to
solar
energy
systems
provided
in
section
48
of
the
Internal
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2342
Revenue
Code,
not
to
exceed
fifteen
thousand
dollars.
1
2.
Any
credit
in
excess
of
the
tax
liability
is
not
2
refundable
but
the
excess
for
the
tax
year
may
be
credited
3
to
the
tax
liability
for
the
following
ten
years
or
until
4
depleted,
whichever
is
earlier.
The
director
of
revenue
shall
5
adopt
rules
to
implement
this
section.
6
3.
a.
An
individual
may
claim
the
tax
credit
allowed
a
7
partnership,
limited
liability
company,
S
corporation,
estate,
8
or
trust
electing
to
have
the
income
taxed
directly
to
the
9
individual.
The
amount
claimed
by
the
individual
shall
be
10
based
upon
the
pro
rata
share
of
the
individual’s
earnings
of
11
the
partnership,
limited
liability
company,
S
corporation,
12
estate,
or
trust.
13
b.
A
taxpayer
who
is
eligible
to
claim
a
credit
under
this
14
section
shall
not
be
eligible
to
claim
a
renewable
energy
tax
15
credit
under
chapter
476C.
16
4.
The
cumulative
value
of
tax
credits
claimed
annually
17
by
applicants
pursuant
to
this
section
shall
not
exceed
one
18
million
five
hundred
thousand
dollars.
19
5.
On
or
before
January
1,
annually,
the
department
shall
20
submit
a
written
report
to
the
governor
and
the
general
21
assembly
regarding
the
number
and
value
of
tax
credits
claimed
22
under
this
section,
and
any
other
information
the
department
23
may
deem
relevant
and
appropriate.
24
Sec.
8.
Section
422.33,
Code
2011,
is
amended
by
adding
the
25
following
new
subsection:
26
NEW
SUBSECTION
.
29.
a.
The
taxes
imposed
under
this
27
division
shall
be
reduced
by
a
solar
energy
system
tax
credit
28
equal
to
twenty-five
percent
of
the
federal
energy
credit
29
related
to
solar
energy
systems
provided
in
section
48
of
the
30
Internal
Revenue
Code,
not
to
exceed
fifteen
thousand
dollars.
31
b.
The
taxpayer
may
claim
the
credit
pursuant
to
this
32
subsection
according
to
the
same
requirements,
conditions,
and
33
limitations
as
provided
pursuant
to
section
422.11L.
34
Sec.
9.
Section
476C.2,
Code
Supplement
2011,
is
amended
by
35
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2342
adding
the
following
new
subsection:
1
NEW
SUBSECTION
.
3.
A
taxpayer
who
is
eligible
to
claim
2
a
renewable
energy
tax
credit
under
this
chapter
shall
not
3
be
eligible
to
claim
a
solar
energy
system
tax
credit
under
4
section
422.11L
or
422.33.
5
Sec.
10.
EFFECTIVE
UPON
ENACTMENT.
This
division
of
this
6
Act,
being
deemed
of
immediate
importance,
takes
effect
upon
7
enactment.
8
Sec.
11.
RETROACTIVE
APPLICABILITY.
This
division
of
this
9
Act
applies
retroactively
to
tax
years
beginning
on
or
after
10
January
1,
2012.
11
DIVISION
III
12
SALES
TAX
EXEMPTIONS
13
Sec.
12.
Section
423.1,
subsection
39,
paragraphs
b
and
c,
14
Code
Supplement
2011,
are
amended
to
read
as
follows:
15
b.
The
property
is
transferred
to
the
user
of
the
service
16
in
connection
with
the
performance
of
the
service
in
a
form
17
or
quantity
capable
of
a
fixed
or
definite
price
value
,
or
18
the
property
is
entirely
consumed
in
connection
with
the
19
performance
of
an
auto
body
repair
service
purchased
by
the
20
ultimate
user
.
21
c.
The
sale
is
evidenced
by
a
separate
charge
for
the
22
identifiable
piece
of
property
unless
the
property
is
entirely
23
consumed
in
connection
with
the
performance
of
an
auto
body
24
repair
service
purchased
by
the
ultimate
user
.
25
Sec.
13.
Section
423.3,
Code
Supplement
2011,
is
amended
by
26
adding
the
following
new
subsection:
27
NEW
SUBSECTION
.
96.
The
sales
price
from
the
sale
of
water,
28
electricity,
chemicals,
solvents,
sorbents,
or
reagents
to
a
29
retailer
to
be
used
in
providing
a
service
that
includes
a
30
vehicle
wash
and
wax,
which
vehicle
wash
and
wax
service
is
31
subject
to
section
423.2,
subsection
6.
32
Sec.
14.
EFFECTIVE
UPON
ENACTMENT.
This
division
of
this
33
Act,
being
deemed
of
immediate
importance,
takes
effect
upon
34
enactment.
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EXPLANATION
1
This
bill
relates
to
state
taxation
by
providing
specified
2
tax
credits
and
sales
and
use
tax
exemptions.
3
Division
I
provides
an
income
tax
credit
and
property
tax
4
exemption
for
the
construction
or
installation
of
a
geothermal
5
heating
or
cooling
system
in
connection
with
residential
6
property
located
in
Iowa.
7
The
division
provides
for
an
income
tax
credit
for
8
such
installations
equal
to
twenty
percent
of
the
federal
9
residential
energy
efficiency
property
income
tax
credit
10
allowed
for
geothermal
heat
pumps.
The
division
states
that
11
any
credit
in
excess
of
tax
liability
is
not
refundable
but
may
12
be
credited
to
the
tax
liability
for
the
following
10
years
or
13
until
depleted,
whichever
is
earlier.
14
The
division
additionally
provides
for
a
property
tax
15
exemption
equal
to
the
value
added
by
any
new
or
refitted
16
construction
or
installation
of
a
geothermal
heating
or
cooling
17
system
on
or
after
July
1,
2012.
The
division
states
that
18
the
exemption
shall
be
allowed
for
10
consecutive
years,
and
19
shall
apply
to
any
value
added
by
the
addition
of
mechanical,
20
electrical,
plumbing,
ductwork,
or
other
equipment,
labor,
21
and
expenses
included
in
or
required
for
the
construction
or
22
installation
of
the
system,
as
well
as
the
proportionate
value
23
of
any
well
field
associated
with
the
system
and
attributable
24
to
the
owner.
The
division
specifies
procedures
regarding
25
claiming
the
exemption.
26
The
division
provides
for
the
adoption
of
rules
by
the
27
director
of
the
department
of
revenue,
and
states
that
Code
28
section
25B.7,
regarding
full
state
funding
of
property
29
tax
credits
or
exemptions,
shall
not
be
applicable
to
the
30
geothermal
heating
and
cooling
system
property
tax
exemption.
31
The
division
takes
effect
upon
enactment.
Provisions
in
32
the
division
enacting
the
income
tax
credit
for
geothermal
33
heat
pumps
apply
retroactively
to
January
1,
2012,
for
tax
34
years
beginning
on
or
after
that
date.
Provisions
enacting
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the
property
tax
exemption
for
geothermal
heating
and
cooling
1
systems
apply
to
assessment
years
beginning
on
or
after
January
2
1,
2013.
3
Division
II
provides
an
individual
and
corporate
income
tax
4
credit
for
solar
energy
systems.
The
credit
is
equal
to
25
5
percent
of
the
federal
residential
energy
efficient
property
6
credit
related
to
solar
energy
provided
in
section
25D
of
the
7
Internal
Revenue
Code,
not
to
exceed
$3,000,
and
25
percent
8
of
the
federal
energy
credit
related
to
solar
energy
systems
9
provided
in
section
48
of
the
Internal
Revenue
Code,
not
to
10
exceed
$15,000.
The
credit
is
nonrefundable,
but
may
be
11
carried
forward
for
10
years,
or
until
depleted.
12
The
division
provides
that
an
individual
may
claim
the
tax
13
credit
allowed
a
partnership,
limited
liability
company,
S
14
corporation,
estate,
or
trust
based
upon
the
individual’s
pro
15
rata
share
of
the
earnings.
The
division
also
provides
that
16
a
taxpayer
may
not
claim
both
the
solar
energy
systems
tax
17
credit
provided
in
the
bill
and
the
renewable
energy
tax
credit
18
provided
in
Code
chapter
476C.
Further,
the
division
restricts
19
the
cumulative
total
of
solar
energy
systems
tax
credits
issued
20
for
all
taxpayers
to
an
amount
not
exceeding
$1.5
million
21
annually.
22
The
division
contains
reporting
requirements
regarding
23
the
number
and
value
of
tax
credits
claimed,
and
any
other
24
information
the
department
may
deem
relevant
and
appropriate.
25
The
division
takes
effect
upon
enactment,
and
applies
26
retroactively
to
tax
years
beginning
on
or
after
January
1,
27
2012.
28
Division
III
amends
the
definition
of
“property
purchased
29
for
resale
in
connection
with
the
performance
of
a
service”
30
in
Code
section
423.1.
Under
current
law,
property
qualifies
31
as
“property
purchased
for
resale
in
connection
with
the
32
performance
of
a
service”
if,
among
other
things,
it
is
33
transferred
during
the
service
in
a
form
or
quantity
capable
34
of
a
fixed
or
definite
price
value
and
listed
as
a
separate
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2342
charge.
The
division
provides
that
property
which
is
entirely
1
consumed
in
connection
with
the
performance
of
an
auto
body
2
repair
service
will
also
qualify
as
“property
purchased
for
3
resale
in
connection
with
the
performance
of
a
service”,
and
4
provides
that
the
property
entirely
consumed
in
performance
of
5
the
service
need
not
be
listed
as
a
separate
charge.
6
The
division
also
creates
a
sales
tax
exemption
for
sales
of
7
water,
electricity,
chemicals,
solvents,
sorbents,
or
reagents
8
made
to
a
retailer
for
use
in
providing
taxable
vehicle
wash
9
and
wax
services.
By
operation
of
Code
section
423.6,
an
item
10
exempt
from
the
imposition
of
the
sales
tax
is
also
exempt
from
11
the
use
tax
imposed
in
Code
section
423.5.
12
The
division
takes
effect
upon
enactment.
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