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Bills › 89th General Assembly

HF 588Signed by Governor · June 10, 2021

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

Sponsored by the House Ways and Means Committee

Topics:TaxesTax credits & incentives

Same legislation: SF 94, HF 255, SF 575

Write your legislators about it

Also covers SF 94 and HF 255 and SF 575.

What changed before it passed
Official bill pageLobbyist declarationsOne-pager to print

Where it is now

  1. Done: IntroducedJanuary 19, 2021
  2. Done: SubcommitteeJanuary 28, 2021
  3. Done: House committeeFebruary 17, 2021
  4. Done: Passes the HouseApril 6, 202187–3
  5. Skipped: Senate committeeSkipped
  6. Done: Passes the SenateApril 21, 202146–0
  7. Done: To the GovernorMay 24, 2021
  8. Done: Signed into lawJune 10, 2021

Signed into law What’s a funnel?

What’s in it

AI summary People and businesses can receive a tax credit for donating money to the Hoover Presidential Library and Museum renovation project. This credit can be used to lower several different types of state taxes, but the total amount of credits given out cannot go over $5 million. If a person's credit is larger than the taxes they owe, they can use the leftover amount for the next five years.1

Read the official explanation

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. 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 $5 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.

Full bill text · What changed before it passed2

Fiscal note

Cost: up to $135,000 Compare with other bills

AI summary This bill creates a tax credit for people who donate to the Hoover Presidential Library and Museum Renovation Project Fund. The credit is projected to reduce General Fund revenue by $2.2 million in fiscal year 2022, $1.6 million in fiscal year 2023, $0.3 million in fiscal year 2024, $0.2 million in fiscal year 2025, $0.1 million in fiscal year 2026, and $0.1 million in fiscal year 2027. Additionally, the credit is expected to reduce local option income surtax revenue by $135,000 and result in $90,000 in state expenditures for administrative costs.3

Read the fiscal note

Description

House File 588 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 $5.0 million in aggregate. The maximum credit a taxpayer may earn is $250,000. Any donation to the Fund that earns a credit may not be used as an itemized deduction for Iowa income tax purposes.

The credit is applicable to individual, corporate, franchise, insurance premium, and moneys and credits taxes. The credit is not refundable or transferable. The credit is available for tax years 2021 through 2023, or until the full $5.0 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 $5.0 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 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 $135,000. 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

The estimate held steady

  1. $135,000 February 15, 2021
  2. $135,000 February 18, 2021
  3. $135,000 February 19, 2021
  4. $135,000 March 15, 2021
  5. $135,000 June 28, 2021 · final
4

Reading a fiscal note5

Iowa Code it changes

Creates§15E.364§422.11T§432.12N

Amends§422.33§422.60§533.329

How the Code works6

Lobbying

1 for · 0 against · 3 undecided · Who →

Family tree

Tried before

HF 2158Cleared committee88th GA

89th General Assembly

SF 94RenumberedSenate companionHF 255RenumberedHouse companionHF 588Became lawfrom HF 255SF 575Didn’t advancefrom SF 94

Picked up later

HF 203Cleared committee91st GA

Earlier and later bills are matched by wording or an identical title.

Tried before

This idea has been filed in an earlier General Assembly. None got through a chamber.

  • HF 2158 Creating a Hoover presidential library tax credit available against the individual and cor…
    88th General Assembly · In committee · same title
    Cleared committee

Similar bills this General Assembly

  • HF 203 Creating a Caitlin Clark and Lisa Bluder monument tax credit and fund available against th…
    91st General Assembly · In committee
    Very similar

Matched by wording or an identical title.