Gimme a break, Iowa's Tax Credits - KWWL - Eastern Iowa Breaking News, Weather, Closings

Gimme a break, Iowa's Tax Credits

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DES MOINES (KWWL) - The Iowa Department of Revenue estimates the total value of the state's 28 different tax credits is nearly half a billion dollars.

From textbook credits to job training, the Iowa Department of Cultural Affairs and community colleges, give out many of the credits. Iowa's 2009 tax credit report finds tax credit spending actually decreased.

Description of Iowa's Tax Credit Programs

Accelerated Career Education Program (ACE) (260G): This withholding credit is administered by Iowa's

Community Colleges and provides credits for employers that sponsor training slots at community colleges.

Section 260G, Code of Iowa.

Agricultural Assets Transfer Tax Credit: This credit is awarded by the Iowa Agricultural Development

Authority to taxpayers that lease agricultural assets to qualified beginning farmers. Section 175.37, Code of

Iowa.

Assistive Device Tax Credit: This credit is awarded by the Iowa Department of Economic Development (DED)

to taxpayers who make investments in assistive devices that allow for disability workplace accommodation.

Section 422.11E, Code of Iowa.

Biodiesel Blended Fuel Tax Credit: This credit is available to retail dealers who sell biodiesel blended fuel

equal to over 50 percent of their total diesel sales. Section 422.11P, Code of Iowa.

Charitable Conservation Contribution Tax Credit: This credit is available to taxpayers who make an

unconditional charitable donation of a qualified real property interest located in the State of Iowa to a qualified

organization exclusively for conservation purposes. Section 422.11V, Code of Iowa.

Child and Dependent Care Tax Credit: This credit is available to individual taxpayers who have eligible child

and dependent care expenses. Section 422.12C, Code of Iowa.

Cow-Calf Tax Credit: Eligible individual and corporation income taxpayers who operate cow-calf beef

operations in Iowa are eligible for a cow-calf credit. This credit was repealed effective for any claims made on or

after November 1, 2008. Section 422.120, Code of Iowa.

Disaster Recovery Housing Project Tax Credit: The credit is available to taxpayers investing in a qualifying

disaster recovery housing project. The amount of the credit is equal to 75 percent of the qualifying investment.

Section 16.191 through 16.192, Code of Iowa.

E85 Gasoline Promotion Tax Credit: An income tax credit, on a rate per gallon sold basis, is available to retail

dealers of gasoline who sell E85 gasoline. Section 422.11O, Code of Iowa.

Early Childhood Development Tax Credit: The Early Childhood Development tax credit is equal to 25% of

the first $1,000 of expenses paid for early childhood development expenses for each dependent from the ages

of three to five. Section 422.12C(1A), Code of Iowa.

Earned Income Tax Credit: This credit is available to individual taxpayers who qualify for the federal earned

income tax credit. The credit is equal to 7% of the federal earned income credit. Section 422.12B, Code of

Iowa.

Economic Development Region Revolving Fund Tax Credit: This credit is awarded by DED and is equal to

20% of the contribution made to an economic development region revolving fund. Section 15E.232, Code of

Iowa.

Endow Iowa Tax Credit: This credit is awarded by DED and is equal to 20% of a taxpayer's endowment gift

(up to $100,000 for a single taxpayer) to a qualified community foundation. Section 15E.305, Code of Iowa.

Enterprise Zone Program (EZ): This program, administered by DED, encourages investment in Iowa's

economically distressed areas by providing local and state tax credits, refunds and exemptions to qualifying

companies that expand or locate in designated Enterprise Zones. Section 15E.191 through 15E.196, Code of

Iowa.

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Ethanol Blended Gasoline Tax Credit: A tax credit is available to service stations at which more than 60

percent of the total gasoline sold is ethanol blended gasoline. The credit is equal to two and a half cents for

each gallon sold in excess of 60 percent. This credit was replaced in 2009 by the Ethanol Promotion Tax Credit.

Section 422.11C (2), Code of Iowa.

Ethanol Promotion Tax Credit: This credit replaced the ethanol blended gasoline credit beginning in 2009. It

is based on the amount of pure ethanol gallons sold. Section 422.11N, Code of Iowa.

Film, Television, and Video Project Promotion Program: This program, administered by DED, provides a 25

percent tax credit for investments and a 25 percent tax credit for qualified expenditures in film projects produced

in the State of Iowa. Section 15.391 through 15.393, Code of Iowa.

High Quality Jobs Program (HQJP): This program, administered by DED, provides tax benefits to eligible

companies that create high-paying jobs and make capital investments. The program was created in 2005 and

replaced the New Jobs and Income Program (NJIP) and the New Capital Investment Program (NCIP) beginning

in FY 2006. Section 15.326 through 15.337, Code of Iowa.

Historic Preservation and Cultural and Entertainment District Tax Credit: This tax credit, administered by

the Iowa Department of Cultural Affairs, provides a 25 percent tax credit for investments made in the

rehabilitation of eligible historic properties. Section 404A, Code of Iowa.

I

owa Industrial New Jobs Training Program (260E): This program, administered by Iowa's Community

Colleges, assists businesses that are creating new positions with new employee training. Participating

companies divert withholding taxes that would be remitted to the Department of Revenue to a community

college to pay for training for company employees. Section 260E, Code of Iowa.

New Capital Investment Program (NCIP): This program, administered by DED, was replaced by the High

Quality Job Creation Program, beginning in FY 2006. Section 15.381 through 15.387, Code of Iowa.

New Jobs and Income Program (NJIP): This program, administered by DED, was replaced by the High

Quality Job Creation Program, beginning in FY 2006. Section 15.326 through 15.337, Code of Iowa.

Redevelopment Tax Credit: This credit is available to taxpayers that invest in redeveloping a brownfield or

grayfield site. Section 15.291 and 15.293, Code of Iowa.

Renewable Energy Tax Credit: This credit is available for a producer or purchaser of energy from a renewable

energy facility approved as eligible by the Iowa Utilities Board (IUB). The Department of Revenue determines

the amount of the tax credits and issues tax credit certificates, which authorize credits to be claimed, to eligible

applicants. Section 476C, Code of Iowa.

Research Activities Tax Credit: This credit is 6.5 percent of Iowa's apportioned share of qualifying

expenditures for increasing research activities. The Iowa research credit is based on the federal research

activities credit, with the Iowa credit based on the ratio of Iowa research expenditures over total research

expenditures. Section 15.335, Code of Iowa.

School Tuition Organization Tax Credit: This credit, administered by IDR, is for 65% of the amount of a

voluntary cash contribution made by a taxpayer to a school tuition organization. Section 422.11S, Code of Iowa.

Soy-Based Cutting Tool Oil Tax Credit: A manufacturer is eligible to take a credit equal to the costs incurred

for the purchase and replacement costs relating to the transition from using nonsoy-based cutting tool oil to

using soy-based cutting tool oil. This program was repealed effective December 31, 2006. Section 422.11I,

Code of Iowa.

Soy-Based Transformer Fluid Tax Credit: Electric utilities may claim this credit, administered by IDR, for the

costs incurred by the utility for the purchase and replacement costs relating to the transition from using nonsoybased

transformer fluid to using soy-based transformer fluid. This program was repealed effective December

31, 2008. Section 476D, Code of Iowa.

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Targeted Jobs Tax Credit from Withholding: This pilot program, administered by DED and four pilot project

cities, provides for a withholding credit equal to 3% of the gross wages paid by the employer to each employee

under the withholding agreement. These funds are to be used by the pilot city for an urban renewal project

related to the employer. Section 403.19A, Code of Iowa.

Tuition and Textbook Tax Credit: This credit is available to individual taxpayers who have one or more

dependents attending grades K-12 in an Iowa school. The credit percentage is 25% of the first $1,000 paid for

each dependent for tuition and textbooks. Section 422.12 (2), Code of Iowa.

Venture Capital Tax Credit - Iowa Fund of Funds: This contingent tax credit, administered by the Iowa

Capital Investment Board (ICIB), is allowed for investments made into the Iowa fund of funds. The tax credit is

only allowed to the extent that the actual rate of return on these investments does not meet the rate of return

guaranteed to investors. Section 15E.61 through 15E.69, Code of Iowa.

Venture Capital Tax Credit - Qualified Business or Community-Based Seed Capital Fund: This credit,

administered by ICIB, is 20 percent of the equity investment made into a qualifying business or communitybased

seed capital fund. Section 15E.41 through 15E.46, Code of Iowa.

Venture Capital Tax Credit - Venture Capital Funds: This credit, administered by ICIB, is 6 percent of the

equity investment made in a venture capital fund. Section 15E.51, Code of Iowa.

Wage-Benefit Tax Credit: This credit, administered by IDR, is based on creating new jobs with good wages

and benefits. The credit is either 5 percent or 10 percent of wages (depending on total wages and benefits

relative to county average wage) for up to five years, as long as the job is retained. Section 15I.1 though 15I.5,

Code of Iowa.

Wind Energy Production Tax Credit: This credit is for electrical production facilities that produce electricity

from wind and are approved as eligible by the local board of supervisors and the IUB. The Department of

Revenue determines the amount of the tax credits and issues tax credit certificates, which authorize credits to

be claimed, to eligible applicants. Section 476B, Code of Iowa.

 

Online Producer: Maria Magner

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