Bills › 88th General Assembly
Creating a Hoover presidential library tax credit available against the individual and corporate income taxes, the franchise tax, the insurance premiums tax, and the moneys and credit tax
Where it is now
- Done: IntroducedJanuary 28, 2020
- Done: SubcommitteeJanuary 29, 2020
- Stopped: House committeeDied when the General Assembly ended
- Next: Passes the House
- Next: Senate committee
- Next: Passes the Senate
- Next: To the Governor
- Next: Signed into law
Died when the session ended The 2020 session adjourned on June 14, 2020, the General Assembly’s last regular session. Bills that didn’t pass both chambers died. What’s a funnel?
What’s in it
This bill creates a Hoover presidential library tax credit available against the individual, corporate, franchise, insurance premium, and moneys and credits taxes. The amount of the credit shall equal percent of a person’s donation to the Hoover presidential foundation for the Hoover presidential library and museum renovation project fund, an organization exempt from federal taxation. The bill specifies that the amount of the donation for which the tax credit is claimed shall not be deductible for state income tax purposes.
Read the full explanation
A credit provided in the bill in excess of tax liability is not refundable but the excess for the tax year may be credited to a person’s tax liability for the following five years or until depleted, whichever occurs first. The tax credit shall not be carried back to a tax year prior to the tax year in which the person claims the tax credit. The aggregate amount of tax credits authorized pursuant to the bill shall not exceed $4 million. The maximum amount of tax credits granted to a person shall not exceed five percent of the aggregate amount of tax credits authorized under the bill. The bill provides that percent of the aggregate amount of tax credits authorized shall be reserved for those donations in amounts of $30,000 or less. If any portion of the reserved tax credits have not been distributed by September 1, 2023, the remaining reserved tax credits shall be available to any other eligible person. The bill prohibits the transfer of the credit to any other person. The bill requires the economic development authority to develop a system for authorization of tax credits and shall control the distribution of all tax credits to persons providing a donation subject to this Code section. The bill applies to tax years beginning on or after January 1, 2021, but before January 1, 2024. The tax credit is repealed December 31, 2029, to account for the carryforward of any excess credit that may be credited to the person’s tax liability for up to five years.
House subcommittee
Named January 29, 2020. It hasn’t reported yet.
Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part
Fiscal note
Cost: up to $100,000 Compare with other bills
AI summary This bill creates a tax credit for people and businesses that donate to the Hoover Presidential Library and Museum Renovation Project Fund. The credit is projected to reduce net General Fund revenue by $1.7 million in fiscal year 2022, $1.2 million in fiscal year 2023, $0.2 million in fiscal year 2024, $0.1 million in fiscal year 2025, $0.1 million in fiscal year 2026, and $0.1 million in fiscal year 2027. Additionally, the credit is estimated to reduce local option income surtax revenue by $100,000 over six fiscal years and result in $90,000 in administrative expenditures.2
Read the fiscal note
Description
House File 2158 creates a Hoover Presidential Library Tax Credit. The new income tax credit is available to Iowa taxpayers who donate to the Hoover Presidential Library and Museum Renovation Project Fund. The tax credit equals 25.0% of the donated amount. The total amount of tax credits awarded is limited to $4.0 million in aggregate. The maximum credit a taxpayer may earn is $200,000. Any donation to the Fund that earns a credit may not also be used as an itemized deduction for Iowa income tax purposes.
The credit is applicable to individual, corporate, franchise, insurance premium, and moneys and taxes. The credit is not refundable or transferable. The credit is available for tax years 2021 through 2023 or until the full $4.0 million has been awarded. Unused credits may be carried forward for up to five additional tax years.
Assumptions
- Sufficient demand exists to fully utilize the $4.0 million aggregate award amount during the first tax year available (tax year 2021).
- Tax credits awarded for tax year 2021 will first impact FY 2022.
- The tax credit redemption pattern for the Hoover Presidential Library Tax Credit will be similar to the redemption pattern for the Endow Iowa Tax Credit. The Department of Revenue reports that the redemption pattern for the Endow Iowa Tax Credit is:
- Year one = 43.0%
- Year two = 31.0%
- Year three = 5.0%
- Year four = 3.0%
- Year five = 1.5%
- Year six = 1.5%
- Expiring without redemption = 15.0%
- As a tax credit that is not refundable, the new tax credit will impact the calculation of any local option income surtax. Surtaxes are estimated to average 3.0% of State income tax liability.
Fiscal Impact
The new Hoover Presidential Library Tax Credit is projected to reduce net General Fund revenue by the amounts in the following table.
The new tax credit is also projected to reduce the amount of revenue raised by any local option income surtax. The reduction over six fiscal years is estimated to be $100,000. The Department of Revenue estimates that the new tax credit will result in $90,000 in expenditures for administrative rulemaking, computer programming, and tax form updates.
Sources
- Hoover Presidential Foundation
- Department of Revenue
- Hoover Presidential Library Tax Credit · February 12, 2020 · $100,000
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88th General Assembly
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