Relating to individual and corporate income taxes, the insurance premium tax, and including the contingent repeal of the individual income tax, and including retroactive applicability and effective date provisions

5(3)(b) by the highest existing individual income tax rate until the taxpayer’s tax liability is equal to the tax liability that would have been calculated under the regular income tax calculation method, then after such point the regular income tax calculation with the regular income tax rates are used.00 percent commencing with tax years beginning on or after January 1, 2028.50 percent, the bill establishes a procedure where the individual income tax rate may be adjusted commencing with tax years beginning on or after January 1, 2030. The bill specifies the individual income tax rate shall be adjusted each tax year until the rate is zero, if sufficient funds to make the adjustment are available in the taxpayer relief fund. By November 1, 2029, and by November each year thereafter, the department of management shall determine the amount of moneys available in the taxpayer relief fund, and the net individual income tax receipts at the close of the preceding fiscal year. The department of revenue shall adjust and apply a new individual income tax rate based upon the amount of money available in the taxpayer relief fund. The bill specifies the department of revenue shall adjust and apply a new individual income tax rate in such a way that the rate would have generated an amount equal to the net receipts generated from the rate in the preceding fiscal year less the amount used in the calculation in the taxpayer relief fund. The bill prohibits the rate from being adjusted unless the rate is able to be adjusted at least one-tenth of percent. The rate, when adjusted, shall be rounded down to the nearest one-tenth of percent. The bill requires the moneys in the taxpayer relief fund be transferred to the general fund of the state in the fiscal year the rate is adjusted. If a tax rate is adjusted, the bill requires the director of revenue to cause an advisory notice containing the new individual income tax rate to be published in the Iowa administrative bulletin and on the internet site of the department of revenue. The calculation and publication of the adjusted tax rate by the director of revenue is exempt from Code chapter 17A, and shall be submitted for publication by the first December following the determination date to adjust the tax rates. DIVISION II —— FUTURE CORPORATE INCOME TAX RATE CHANGES.50 percent.75 percent. DIVISION III —— INSURANCE PREMIUMS TAX.90 percent for the 2026 calendar year and subsequent calendar years. DIVISION IV —— SALE OF QUALIFIED STOCK —— CAPITAL GAIN EXCLUSION.7(43), which excludes the net capital gain on the sale of certain qualified stock and was enacted during the 2022 legislative session. Under the bill, the definition of “employee-owner” is modified to include employment at any qualified corporation rather than an individual who owns capital stock in a qualified corporation for at least years while employed and on account of that corporation. The bill modifies the definition of “Iowa affiliated group” within the definition of “qualified corporation” to include an affiliated group that is eligible to make a valid election to file an Iowa consolidated income tax return rather than an affiliated group that has made a valid election to file an Iowa consolidated income tax return. The bill modifies the definition of “member” within the definition of “qualified corporation” to include any entity that is eligible to be included in a consolidated return rather than any entity included in the consolidated return. The division takes effect upon enactment and applies retroactively to January 1, 2023, for tax years beginning on or after that date.