Bills › 90th General Assembly
Where it is now
- Done: IntroducedJanuary 20, 2023
- Done: SubcommitteeJanuary 20, 2023
- Done: House committeeFebruary 15, 2023
- Skipped: Passes the HouseContinued as HF 352
- Next: Senate committee
- Next: Passes the Senate
- Next: To the Governor
- Next: Signed into law
Became HF 352 → Its progress continues under the new number. Go to HF 352 What’s a funnel?
What’s in it
This bill relates to an entity-level taxation election for pass-through entities and allows a partner or shareholder to claim a credit against the individual income tax.5A imposed against the taxable income of the taxpayer for the taxable year. Currently, the taxable income of a partnership or S corporation passes through to the partners or shareholders of the entity and is subject to the individual income tax at the partner or shareholder level. The bill only applies to tax years as long as the limitation on individual deductions applies under section 164(b)(6) of the Internal Revenue Code.
Read the full explanation
_____ the ratio of the partner’s or shareholder’s share of taxable income over the total taxable income multiplied by the state tax liability of the electing taxpayer. The bill limits the number of credits the taxpayer is eligible for if the taxpayer elects to be subject to tax at the partnership or S corporation level. The bill also prohibits the taxpayer from claiming a net operating loss or electing to carryback or carryforward a loss.11 equal to the amount of franchise tax paid by the taxpayer. If the amount of credit allowed under the bill exceeds the tax liability of the partner or shareholder for the tax year, the excess may be credited to the tax liability of the partner or shareholder for the following five tax years or until depleted, whichever occurs first. The bill specifies that the partners or shareholders shall be jointly and severally liable to pay any unpaid tax.16 do not apply.85, if applicable. However, a taxpayer electing to be taxed at the partnership level or at the S corporation level is not required to make estimated tax payments for a tax year beginning prior to the effective date of the bill.
Changed since by amendment H-1199; see Amendments.
House subcommittee
Named January 24, 2023. On January 25, 2023 it recommended passage. Vote Total: 2-0.
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
The creation of the new PTE tax will result in decreased PTE income passed through to PTE owners, thereby lowering State taxable income and State individual income tax. The revenue generated by the PTE tax will increase State tax revenue, while the new PTE tax credit will return the PTE tax paid at the entity level to the PTE owners.
- Final Fiscal Note — Pass-Through Business Entity Tax and Deduction · May 16, 2023
- Pass-Through Business Entity Tax and Deduction · April 17, 2023
- Pass-Through Business Entity Tax and Deduction · March 15, 2023
Iowa Code it changes
Creates§422.16C
Lobbying
13 for · 0 against · 7 undecided · Who →
Family tree
Study bill
90th General Assembly
Tried before
This idea has been filed in an earlier General Assembly. None got through a chamber.
- HF 2087 Relating to an entity-level taxation election for pass-through entities and allowing a par…89th General Assembly · Subcommittee recommends passage · similarCleared committee
Matched by wording or an identical title.