15.335 - RESEARCH ACTIVITIES CREDIT.
15.335 RESEARCH ACTIVITIES CREDIT.
1. An eligible business may claim a corporate tax credit for
increasing research activities in this state during the period the
eligible business is participating in the program. For purposes of
this section, "research activities" includes the development and
deployment of innovative renewable energy generation components
manufactured or assembled in this state. For purposes of this
section, "innovative renewable energy generation components" does
not include a component with more than two hundred megawatts of
installed effective nameplate capacity. The tax credits for
innovative renewable energy generation components shall not exceed
two million dollars.
a. (1) The credit equals the sum of the following:
(a) Six and one-half percent of the excess of qualified research
expenses during the tax year over the base amount for the tax year
based upon the state's apportioned share of the qualifying
expenditures for increasing research activities.
(b) Six and one-half percent of the basic research payments
determined under section 41(e)(1)(A) of the Internal Revenue Code
during the tax year based upon the state's apportioned share of the
qualifying expenditures for increasing research activities.
(2) The state's apportioned share of the qualifying expenditures
for increasing research activities is a percent equal to the ratio of
qualified research expenditures in this state to total qualified
research expenditures.
b. In lieu of the credit amount computed in paragraph
"a", subparagraph (1), an eligible business may elect to compute
the credit amount for qualified research expenses incurred in this
state in a manner consistent with the alternative incremental credit
described in section 41(c)(4) of the Internal Revenue Code. The
taxpayer may make this election regardless of the method used for the
taxpayer's federal income tax. The election made under this
paragraph is for the tax year and the taxpayer may use another or the
same method for any subsequent year.
c. For purposes of the alternate credit computation method in
paragraph "b", the credit percentages applicable to qualified
research expenses described in clauses (i), (ii), and (iii) of
section 41(c)(4)(A) of the Internal Revenue Code are one and
sixty-five hundredths percent, two and twenty hundredths percent, and
two and seventy-five hundredths percent, respectively.
2. The credit allowed in this section is in addition to the
credit authorized in section 422.10 and section 422.33, subsection 5.
However, if the alternative credit computation method is used in
section 422.10 or section 422.33, subsection 5, the credit allowed in
this section shall also be computed using that method.
3. If the eligible business is a partnership, S corporation,
limited liability company, or estate or trust electing to have the
income taxed directly to the individual, an individual may claim the
tax credit allowed. The amount claimed by the individual shall be
based upon the pro rata share of the individual's earnings of the
partnership, S corporation, limited liability company, or estate or
trust.
4. a. For purposes of this section, "base amount",
"basic research payment", and "qualified research expense"
mean the same as defined for the federal credit for increasing
research activities under section 41 of the Internal Revenue Code,
except that for the alternative incremental credit such amounts are
for research conducted within this state.
b. For purposes of this section, "Internal Revenue Code"
means the Internal Revenue Code in effect on January 1, 2009.
5. Any credit in excess of the tax liability for the taxable year
shall be refunded with interest computed under section 422.25. In
lieu of claiming a refund, a taxpayer may elect to have the
overpayment shown on its final, completed return credited to the tax
liability for the following year.
6. The department of revenue shall by February 15 of each year
issue an annual report to the general assembly containing the total
amount of all claims made by employers under this section, and the
portion of the claims issued as refunds, for all claims processed
during the previous calendar year. The report shall contain the name
of each claimant for whom a tax credit in excess of five hundred
thousand dollars was issued and the amount of the credit received.
Section History: Recent Form
94 Acts, ch 1008, §12; 94 Acts, ch 1165, §44; 96 Acts, ch 1199,
§4; 97 Acts, ch 135, §1, 9; 98 Acts, ch 1078, §1, 10, 14; 99 Acts, ch
95, §1, 12, 13; 2000 Acts, ch 1146, §1, 9, 11; 2000 Acts, ch 1194,
§1, 21; 2001 Acts, ch 127, §1, 9, 10; 2002 Acts, ch 1069, §1, 10, 14;
2003 Acts, ch 139, §1, 11, 12; 2004 Acts, ch 1073, §1; 2005 Acts, ch
24, §1, 10, 11; 2005 Acts, ch 150, §70; 2006 Acts, ch 1140, §1, 10,
11; 2007 Acts, ch 12, §1, 7, 8; 2008 Acts, ch 1011, § 1, 9; 2008
Acts, ch 1032, § 201; 2009 Acts, ch 171, §1; 2009 Acts, ch 179, §102,
153, 232
Referred to in § 15.119, 15.335A, 15E.196, 422.10, 422.33, 469.10
Internal Revenue Code definition is updated regularly; for
applicable definition in a prior tax year, refer to Iowa Acts and
Code for that year
For aggregate limitations on amount of tax credits, see §15.119 Footnotes
2009 amendment to subsection 1 applies to projects approved on or
after April 23, 2009; 2009 Acts, ch 171, §3