15E.51 - VENTURE CAPITAL FUND INVESTMENT TAX CREDITS.
15E.51 VENTURE CAPITAL FUND INVESTMENT TAX CREDITS.
1. For purposes of this section, "venture capital fund" means
a private seed and venture capital partnership or entity fund that
has been certified by the Iowa capital investment board created in
section 15E.63, pursuant to subsection 7.
2. A tax credit shall be allowed against the taxes imposed in
chapter 422, divisions II, III, and V, and in chapter 432, and
against the moneys and credits tax imposed in section 533.329, for a
portion of a taxpayer's equity investment in a venture capital fund.
An individual may claim a tax credit under this section of a
partnership, limited liability company, S corporation, estate, or
trust electing to have income taxed directly to the individual. The
amount claimed by the individual shall be based upon the pro rata
share of the individual's earnings from the partnership, limited
liability company, S corporation, estate, or trust.
3. The amount of a tax credit shall not exceed six percent of the
taxpayer's equity investment in venture capital funds.
4. A taxpayer shall not claim a tax credit under this section if
the taxpayer is a venture capital investment fund allocation manager
for the Iowa fund of funds created in section 15E.65 or an investor
that receives a tax credit for the same investment in a qualifying
business as described in section 15E.44 or in a community-based seed
capital fund as described in section 15E.45.
5. a. The Iowa capital investment board created in section
15E.63 shall issue certificates which may be redeemed for tax
credits. The Iowa capital investment board created in section 15E.63
shall issue certificates so that not more than a total of five
million dollars of tax credits may be claimed. The certificates
shall not be transferable.
b. The Iowa capital investment board created in section
15E.63 shall, in cooperation with the department of revenue,
establish criteria and procedures for the allocation and issuance of
tax credits by means of certificates issued by the Iowa capital
investment board created in section 15E.63. The criteria shall
include the contingencies that must be met for a certificate to be
redeemable in order to receive a tax credit. The procedures
established by the Iowa capital investment board created in section
15E.63, in cooperation with the department of revenue, shall relate
to the procedures for the issuance of the certificates and for the
redemption of a certificate and related tax credit.
6. A taxpayer shall not redeem a certificate and related tax
credit prior to the third tax year following the tax year in which
the investment is made. Any tax credit in excess of the taxpayer's
liability for the tax year may be credited to the tax liability for
the following five years or until depleted, whichever is earlier. A
tax credit shall not be carried back to a tax year prior to the tax
year in which the taxpayer claims the tax credit.
7. A venture capital fund shall submit an application for
certification to the Iowa capital investment board created in section
15E.63. The board shall approve the application and certify the
venture capital fund if all of the following criteria are met:
a. The venture capital fund is a private seed and venture
capital partnership or entity fund.
b. The venture capital fund maintains a physical presence
within the state of Iowa.
c. The venture capital fund makes a commitment to consider
equity investments in businesses located within the state of Iowa.
Section History: Recent Form
2002 Acts, ch 1156, §1, 8; 2003 Acts, ch 44, §11; 2003 Acts, ch
145, §286; 2003 Acts, ch 179, §99, 159; 2004 Acts, ch 1148, §4, 7;
2007 Acts, ch 174, §86
Referred to in § 422.11G, 422.33, 422.60, 432.12B, 533.329