House File 625 - Introduced HOUSE FILE 625 BY SIECK , SMITH , THOMPSON , MOMMSEN , SHIPLEY , DUNWELL , KURTH , SIEGRIST , WENGRYN , GUSTOFF , and JENEARY A BILL FOR An Act providing for the future repeal of tax credits. 1 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 2 TLSB 2108YH (9) 91 jm/jh
H.F. 625 DIVISION I 1 FUTURE REPEAL OF EXISTING TAX CREDITS 2 Section 1. Section 15.322, Code 2025, is amended to read as 3 follows: 4 15.322 Future repeal. 5 Sections 15.315 , 15.316 , 15.317 , 15.318 , 15.319 , 15.320 , 6 15.321 , and this section , are repealed July 1, 2039 January 1, 7 2031 . 8 Sec. 2. NEW SECTION . 15.337 Future repeal. 9 Sections 15.331A, 15.331C, 15.333, 15.333A, and 15.335, are 10 repealed January 1, 2029. 11 Sec. 3. NEW SECTION . 15E.47 Future repeal. 12 Sections 15E.41, 15E.42, 15E.43, 15E.44, 15E.46, and this 13 section are repealed January 1, 2031. 14 Sec. 4. Section 15E.52, Code 2025, is amended by adding the 15 following new subsection: 16 NEW SUBSECTION . 14. This section is repealed on January 1, 17 2027. 18 Sec. 5. Section 15E.305, Code 2025, is amended by adding the 19 following new subsection: 20 NEW SUBSECTION . 5. This section is repealed January 1, 21 2027. 22 Sec. 6. Section 16.81, Code 2025, is amended by adding the 23 following new subsection: 24 NEW SUBSECTION . 7. This section is repealed on January 1, 25 2028. 26 Sec. 7. Section 237A.31, Code 2025, is amended by adding the 27 following new subsection: 28 NEW SUBSECTION . 5. This section is repealed January 1, 29 2029. 30 Sec. 8. Section 260E.5, Code 2025, is amended by adding the 31 following new subsection: 32 NEW SUBSECTION . 7. This section is repealed on January 1, 33 2027. 34 Sec. 9. Section 260G.4A, Code 2025, is amended by adding the 35 -1- LSB 2108YH (9) 91 jm/jh 1/ 8
H.F. 625 following new subsection: 1 NEW SUBSECTION . 7. This section is repealed on January 1, 2 2031. 3 Sec. 10. Section 260J.1, unnumbered paragraph 1, Code 2025, 4 is amended to read as follows: 5 In order to promote the creation of additional high-quality 6 new jobs within the state, an agreement under section 260E.3 7 may include a provision for a supplemental new jobs credit from 8 withholding from jobs created under the agreement. A This 9 section is repealed January 1, 2027; however, until such time a 10 provision in an agreement for which a supplemental credit from 11 withholding is included shall provide for the following: 12 Sec. 11. Section 403.19A, Code 2025, is amended by adding 13 the following new subsection: 14 NEW SUBSECTION . 4. This section is repealed on January 1, 15 2028. 16 Sec. 12. NEW SECTION . 404A.7 Future repeal. 17 This chapter is repealed January 1, 2029. 18 Sec. 13. Section 422.10, Code 2025, is amended by adding the 19 following new subsection: 20 NEW SUBSECTION . 7. This section is repealed on January 1, 21 2027. 22 Sec. 14. Section 422.10B, Code 2025, is amended to read as 23 follows: 24 422.10B Renewable chemical production tax credit. 25 The taxes imposed under this subchapter , less the credits 26 allowed under section 422.12 , shall be reduced by a renewable 27 chemical production tax credit allowed under section 15.319 . 28 This section is repealed January 1, 2041 2031 . 29 Sec. 15. Section 422.11A, Code 2025, is amended by adding 30 the following new subsection: 31 NEW SUBSECTION . 4. This section is repealed January 1, 32 2027. 33 Sec. 16. Section 422.11L, Code 2025, is amended by adding 34 the following new subsection: 35 -2- LSB 2108YH (9) 91 jm/jh 2/ 8
H.F. 625 NEW SUBSECTION . 8. This section is repealed on January 1, 1 2028. 2 Sec. 17. Section 422.11S, Code 2025, is amended by adding 3 the following new subsection: 4 NEW SUBSECTION . 10. This section is repealed on January 1, 5 2029. 6 Sec. 18. Section 422.11W, Code 2025, is amended by adding 7 the following new subsection: 8 NEW SUBSECTION . 5. This section is repealed on January 1, 9 2029. 10 Sec. 19. Section 422.12, Code 2025, is amended by adding the 11 following new subsection: 12 NEW SUBSECTION . 4. This section is repealed January 1, 13 2031. 14 Sec. 20. Section 422.12A, Code 2025, is amended by adding 15 the following new subsection: 16 NEW SUBSECTION . 6. This section is repealed January 1, 17 2027. 18 Sec. 21. Section 422.12B, Code 2025, is amended by adding 19 the following new subsection: 20 NEW SUBSECTION . 3. This section is repealed January 1, 21 2028. 22 Sec. 22. Section 422.12C, Code 2025, is amended by adding 23 the following new subsection: 24 NEW SUBSECTION . 5. This section is repealed January 1, 25 2029. 26 Sec. 23. Section 422.12N, subsection 7, Code 2025, is 27 amended to read as follows: 28 7. This section is repealed January 1, 2034 2030 . 29 Sec. 24. Section 422.12P, Code 2025, is amended by adding 30 the following new subsection: 31 NEW SUBSECTION . 7. This section is repealed January 1, 32 2031. 33 Sec. 25. Section 422.33, subsection 5, Code 2025, is amended 34 by adding the following new paragraph: 35 -3- LSB 2108YH (9) 91 jm/jh 3/ 8
H.F. 625 NEW PARAGRAPH . j. This subsection is repealed on January 1 1, 2027. 2 Sec. 26. Section 422.33, subsection 9, Code 2025, is amended 3 by adding the following new paragraph: 4 NEW PARAGRAPH . d. This subsection is repealed on January 5 1, 2028. 6 Sec. 27. Section 422.33, subsection 25, Code 2025, is 7 amended by adding the following new paragraph: 8 NEW PARAGRAPH . d. This subsection is repealed on January 9 1, 2029. 10 Sec. 28. Section 425.1, Code 2025, is amended by adding the 11 following new subsection: 12 NEW SUBSECTION . 7. This section is repealed January 1, 13 2030. 14 Sec. 29. Section 425.16, Code 2025, is amended by adding the 15 following new subsection: 16 NEW SUBSECTION . 3. This section is repealed January 1, 17 2031. 18 Sec. 30. NEW SECTION . 426.11 Future repeal. 19 This chapter is repealed January 1, 2031. 20 Sec. 31. NEW SECTION . 476B.11 Future repeal. 21 This chapter is repealed effective January 1, 2027. 22 Sec. 32. NEW SECTION . 476C.8 Future repeal. 23 This chapter is repealed effective January 1, 2028. 24 Sec. 33. PRESERVATION OF EXISTING RIGHTS. 25 1. This division of this Act is not intended to and shall 26 not limit, modify, or otherwise adversely affect any amount 27 of tax credit issued, awarded, or allowed prior to January 1, 28 2031, nor shall it limit, modify, or otherwise adversely affect 29 a taxpayers right to claim or redeem a tax credit issued, 30 awarded, or allowed prior to January 1, 2031, including but not 31 limited to any tax credit carryforward amount. 32 2. The repeal of a provision of law pursuant to this 33 division of this Act shall not constitute grounds for 34 rescission or modification of agreements entered into under 35 -4- LSB 2108YH (9) 91 jm/jh 4/ 8
H.F. 625 those provisions of law, if any. Any agreement entered into 1 prior to January 1, 2031, under a provision of law repealed 2 in this division of this Act, shall remain in effect until 3 it expires under its own terms, and shall be governed by the 4 applicable provisions of law as they existed immediately prior 5 to January 1, 2031. 6 Sec. 34. CORRESPONDING AMENDMENTS LEGISLATION. Additional 7 legislation is required to fully implement this division of 8 this Act. The director of the department of revenue shall, in 9 compliance with section 2.16, prepare draft legislation for 10 submission to the legislative services agency, as necessary, to 11 implement the repeal of the tax credits under this division of 12 this Act and under other provisions of law. 13 DIVISION II 14 FUTURE REPEAL OF FUTURE TAX CREDIT PROGRAMS 15 Sec. 35. NEW SECTION . 422.3A Future tax credit repeal. 16 1. For purposes of this section, tax credit program means 17 any provision of law enacted by the general assembly that 18 provides for an amount of money against the taxes imposed in 19 this chapter, chapter 432, or in section 533.329. 20 2. Notwithstanding any other provision of law to the 21 contrary, any tax credit program enacted by the general 22 assembly that takes effect on or after January 1, 2026, is 23 repealed on January 1 of the sixth year following the effective 24 date of the tax credit program, unless another provision of the 25 Code provides for an earlier repeal date. 26 3. The repeal of a tax credit program pursuant to subsection 27 2 is not intended to and shall not limit, modify, or otherwise 28 adversely affect any amount of tax credit issued, awarded, or 29 allowed prior to the effective date of the tax credit program 30 repeal pursuant to subsection 2, nor shall it limit, modify, 31 or otherwise adversely affect a taxpayers right to claim or 32 redeem a tax credit issued, awarded, or allowed prior to the 33 effective date of the tax credit program repeal pursuant to 34 subsection 2, including but not limited to any tax credit 35 -5- LSB 2108YH (9) 91 jm/jh 5/ 8
H.F. 625 carryforward amount. 1 4. The repeal of a tax credit program pursuant to subsection 2 2 shall not constitute grounds for rescission or modification 3 of agreements entered into under the tax credit program, if 4 any. Any agreement entered into under a tax credit program 5 prior to the effective date of the repeal of the tax credit 6 program under subsection 2 shall remain in effect until it 7 expires under its own terms, and shall be governed by the tax 8 credit program as it existed prior to its repeal pursuant to 9 subsection 2. 10 EXPLANATION 11 The inclusion of this explanation does not constitute agreement with 12 the explanations substance by the members of the general assembly. 13 This bill provides for the future repeal of certain existing 14 state income and property tax credits, and provides for the 15 future repeal of tax credits enacted by the general assembly 16 in the future. 17 DIVISION I FUTURE REPEAL OF EXISTING TAX CREDITS. 18 Division I repeals tax credits on a rolling basis over a 19 five-year period beginning January 1, 2027, through January 20 1, 2031. The bill repeals the following tax credits that 21 currently have no repeal date: the accelerated career 22 education program job tax credit; the beginning farmer tax 23 credit; the assistive device corporate tax credit; the sales 24 and use tax refund, corporate tax credit for certain sales 25 taxes paid by third-party developers, investment tax credit, 26 insurance premiums tax credit, and supplemental research 27 activities tax credit available under the high quality jobs 28 program; the school tuition organization tax credit; the solar 29 energy system tax credit; the innovation fund investment 30 tax credit; the tax credit for investments in a qualifying 31 business; the wind energy production tax credit; the charitable 32 conservation contribution tax credit; the new jobs credits 33 from withholding available under the Iowa industrial new 34 job training program; the research activities credits; the 35 -6- LSB 2108YH (9) 91 jm/jh 6/ 8
H.F. 625 renewable energy tax credit; the targeted jobs withholding 1 tax credit; employer child care tax credit; endow Iowa tax 2 credit; historic preservation tax credit; new jobs tax credit; 3 emergency personnel and tuition textbook tax credits; adoption 4 tax credit; earned income tax credit; child and dependent care 5 or early childhood development tax credit; geothermal heat pump 6 tax credit; public safety officer moving expense tax credit; 7 homestead tax credit; elderly and disabled property tax credit 8 or reimbursement; and the agricultural land credit. 9 The bill amends the repeal date of the renewable chemical 10 production tax credit from January 1, 2039, to January 1, 2031. 11 The bill provides that the repeal of a tax credit shall 12 not affect tax credits issued, awarded, or allowed prior to 13 January 1, 2031, or affect a taxpayers ability to claim or 14 redeem such tax credits, including but not limited to any tax 15 credit carryforward amount, and further provides that the bill 16 shall not constitute grounds for rescission or modification 17 of agreements entered into for a tax credit, and that such 18 agreements shall remain in effect until they expire under their 19 own terms and shall be governed by the applicable provisions of 20 law as they existed immediately prior to January 1, 2031. 21 The bill provides that additional legislation is required to 22 fully implement the repeal of these tax credits and requires 23 the director of the department of revenue to prepare draft 24 legislation in compliance with Code section 2.16 for submission 25 to the legislative services agency to implement the repeal of 26 the tax credits. 27 DIVISION II FUTURE REPEAL OF FUTURE TAX CREDIT PROGRAMS. 28 Division II provides that any tax credit program available 29 against the individual or corporate income tax, the franchise 30 tax, the insurance premiums tax, or the moneys and credits tax, 31 enacted by the general assembly on or after January 1, 2026, 32 is repealed after five years, unless another provision of law 33 provides for an earlier repeal date. 34 The bill provides that the repeal of a tax credit program 35 -7- LSB 2108YH (9) 91 jm/jh 7/ 8
H.F. 625 pursuant to this provision shall not affect the tax credits or 1 tax credit agreements entered into prior to the repeal of the 2 tax credit program in the same manner as described above for 3 the repeal of the existing tax credits. 4 -8- LSB 2108YH (9) 91 jm/jh 8/ 8