Creating the manufacturer activities tax credit available against the individual and corporate income taxes, and including effective date and applicability provisions

This bill creates the manufacturer activities tax credit available against individual and corporate income taxes. The amount of the credit equals the product of the following: percent; and net income derived from the sale, lease, rental, license, exchange, or other disposition of tangible personal property manufactured on property classified and taxed as industrial property in Iowa. The bill defines “manufacturer” to mean a business that primarily purchases, receives, or holds tangible personal property of any description for the purpose of adding to its value by a process of manufacturing with a view to selling the property for gain or profit. A manufacturer includes a contract manufacturer. Manufacturing includes activities commonly understood within the meaning of the term, including refining, purifying, combining different materials, packing of meats, and activities subsequent to the extractive process of quarrying or mining. The following activities are not considered manufacturing under the bill: producing, transmitting, or distributing electricity, natural gas, or water; agricultural production; construction contracting; repair of tangible personal property or real property; sale of property taxed as industrial property; and transporting for hire. The bill also excludes the following from manufacturing: activities occurring on premises primarily used to make retail sales, professions, occupations, and nonprofit organizations. The bill takes effect January 1, 2022, and applies to tax years beginning on or after that date.