Bills › 91st General Assembly
Creating a state corporate income tax deduction for net controlled foreign corporation tested income, and including retroactive applicability provisions
Sponsored by the Senate Commerce Committee
Where it is now
- Done: IntroducedFebruary 3, 2026
- Done: SubcommitteeFebruary 3, 2026
- Done: Senate committeeFebruary 11, 2026
- Skipped: Passes the SenateContinued as SF 2492
- Next: House committee
- Next: Passes the House
- Next: To the Governor
- Next: Signed into law
Became SF 2492 → Its progress continues under the new number. Go to SF 2492 What’s a funnel?
What’s in it
AI summary Iowa businesses that earn money from foreign companies would be able to take a deduction on their state taxes. This change updates the law to match new federal rules that renamed a specific type of foreign income. By making this update, the state ensures companies can still use the tax deduction even though the name of the income has changed.1
Read the official explanation
This bill creates a state corporate income tax deduction for net controlled foreign corporation tested income (NCTI).35(12) specifically references global intangible low-taxed income (GILTI) under section 951A of the Internal Revenue Code (IRC) for purposes of a state corporate income tax deduction allowed under that Code section. Recent federal legislation replaced GILTI with NCTI under section 951A of the IRC. NCTI is the aggregate amount of net income subject to federal tax that is earned by a taxpayer from controlled foreign corporations of the taxpayer, and is applied more broadly to foreign income than GILTI. 35(12) specifically references GILTI income under section 951A of the IRC. The bill strikes the specific reference to GILTI but continues to allow the deduction for income under section 951A of the IRC which is now recharacterized as NCTI.
Senate subcommittee
Named February 18, 2026. On March 4, 2026 it recommended passage.
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
1 written public comment to its subcommittee: February 9, 2026 (1) · on the Legislature’s site
Fiscal note
AI summary This bill creates a new state corporate income tax deduction for certain foreign corporation income to replace an existing deduction. It is expected to decrease revenue to the state's General Fund by $2.1 million in fiscal year 2026, $9.2 million in fiscal year 2027, $11.4 million in fiscal year 2028, $11.7 million in fiscal year 2029, $11.9 million in fiscal year 2030, and $12.1 million in fiscal year 2031.3
From the note: Senate File 2492 is expected to decrease revenue to the General Fund by the following amounts: • FY 2026 = $2.1 million • FY 2027 = $9.2 million • FY 2028 = $11.4 million • FY 2029 = $11.7 million • FY 2030 = $11.9 million • FY 2031 = $12.1 million 2
- Final Fiscal Note — Corporate Income Tax, Section 951A Income · May 14, 2026 · $12.1M
- Corporate Income Tax, Section 951A Income · April 20, 2026 · $12.1M
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91st General Assembly