House Study Bill 306 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON KAUFMANN) A BILL FOR An Act modifying the research activities tax credit available 1 against the individual and corporate income taxes, and 2 including effective date and retroactive applicability 3 provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2304YC (5) 91 jm/jh
H.F. _____ Section 1. Section 422.10, subsection 1, paragraph b, 1 subparagraph (1), unnumbered paragraph 1, Code 2025, is amended 2 to read as follows: 3 For Except as provided in subsection 5A, for individuals, 4 the credit equals the sum of the following: 5 Sec. 2. Section 422.10, Code 2025, is amended by adding the 6 following new subsection: 7 NEW SUBSECTION . 5A. a. Notwithstanding any other provision 8 of law to the contrary, an individual that has claimed a 9 tax credit pursuant to this section and that has incurred an 10 aggregate amount of mass layoffs and business closings that 11 equal the sum of the following amount of laid-off persons 12 during the taxable year for which the credit is claimed shall 13 have the credit claimed in that taxable year reduced by the 14 following percentage: 15 (1) One thousand five hundred or more, fifty percent. 16 (2) At least one thousand but not exceeding one thousand 17 five hundred, twenty-five percent. 18 (3) At least five hundred but not exceeding one thousand, 19 twelve and one-half percent. 20 (4) Less than five hundred, six and twenty-five hundredths 21 percent. 22 b. The department of revenue shall review notices provided 23 pursuant to the department of workforce development under 24 chapter 84C, and any other relevant information available, 25 prior to allowing a credit pursuant to this section. A 26 credit that has already been claimed that is subject to this 27 subsection shall be recaptured by the department of revenue in 28 the same manner as provided in section 15.330, subsection 2. 29 c. As used in this subsection: 30 (1) Business closing means the same as defined in section 31 84C.2. 32 (2) Mass layoff means the same as defined in section 33 84C.2. 34 Sec. 3. Section 422.33, subsection 5, paragraph a, 35 -1- LSB 2304YC (5) 91 jm/jh 1/ 3
H.F. _____ unnumbered paragraph 1, Code 2025, is amended to read as 1 follows: 2 The Except as provided in paragraph 0i , the taxes imposed 3 under this subchapter shall be reduced by a state tax credit 4 for increasing research activities in this state equal to the 5 sum of the following: 6 Sec. 4. Section 422.33, subsection 5, Code 2025, is amended 7 by adding the following new paragraph: 8 NEW PARAGRAPH . 0i. (1) Notwithstanding any other provision 9 of law to the contrary, a corporation that has claimed a tax 10 credit pursuant to this subsection and that has incurred an 11 aggregate amount of mass layoffs and business closings that 12 equal the sum of the following amount of laid-off persons 13 during the taxable year for which the credit is claimed shall 14 have the credit claimed in that taxable year reduced by the 15 following percentage: 16 (a) One thousand five hundred or more, fifty percent. 17 (b) At least one thousand but not exceeding one thousand 18 five hundred, twenty-five percent. 19 (c) At least five hundred but not exceeding one thousand, 20 twelve and one-half percent. 21 (d) Less than five hundred, six and twenty-five hundredths 22 percent. 23 (2) The department of revenue shall review notices provided 24 pursuant to the department of workforce development under 25 chapter 84C, and any other relevant information available, 26 prior to allowing a credit pursuant to this subsection. A 27 credit that has already been claimed that is subject to this 28 paragraph shall be recaptured by the department of revenue in 29 the same manner as provided in section 15.330, subsection 2. 30 (3) As used in this paragraph: 31 (a) Business closing means the same as defined in section 32 84C.2. 33 (b) Mass layoff means the same as defined in section 34 84C.2. 35 -2- LSB 2304YC (5) 91 jm/jh 2/ 3
H.F. _____ Sec. 5. EFFECTIVE DATE. This Act, being deemed of immediate 1 importance, takes effect upon enactment. 2 Sec. 6. RETROACTIVE APPLICABILITY. This Act applies 3 retroactively to January 1, 2024, for tax years beginning on 4 or after that date. 5 EXPLANATION 6 The inclusion of this explanation does not constitute agreement with 7 the explanations substance by the members of the general assembly. 8 This bill modifies the research activities tax credit 9 (credit) available against the individual and corporate income 10 taxes. 11 Under the bill, an individual or corporation that has 12 claimed the credit and has incurred an aggregate amount of 13 mass layoffs and business closings, as defined in Code section 14 84C.2, during the taxable year for which the credit is claimed, 15 shall have the credit claimed in that taxable year reduced by 16 the following percentages: for layoffs of 1,500 or more, 50 17 percent; for layoffs of at least 1,000 but not exceeding 1,500, 18 25 percent; for layoffs of at least 500 but not exceeding 19 1,000, 12.5 percent; and for layoffs of less than 500, 6.25 20 percent. 21 The bill requires the department of revenue to review mass 22 layoff notices provided pursuant to the department of workforce 23 development under Code chapter 84C, and any other relevant 24 information available, prior to allowing the credit. A credit 25 that has already been claimed that is subject to the provisions 26 of the bill shall be recaptured by the department of revenue in 27 the same manner as provided in Code section 15.330(2). 28 The bill takes effect upon enactment and applies 29 retroactively to tax years beginning on or after January 1, 30 2024. 31 -3- LSB 2304YC (5) 91 jm/jh 3/ 3