Iowa Administrative Code › Agency 701 - Revenue Department › Title VI - Corporation Income Tax › Chapter 501 - Filing Returns, Payment of Tax, Penalty and Interest, and Tax Credits › Rule 701-501.20 - Eligible Development Business Investment Tax Credit

Current through Register Vol. 47, No. 3, July 24, 2024
Effective for tax years beginning on or after January 1,
				  2001, a business which qualifies as an eligible development business may
				  receive a tax credit of up to 10 percent of the new investment which is
				  directly related to the construction, expansion or rehabilitation of building
				  space to be used for manufacturing, processing, cold storage, distribution, or
				  office facilities.
An eligible development business must be approved by the Iowa
				  department of economic development prior to March 17, 2004, and meet the
				  qualifications of Iowa Code section
				  15E.193C. Effective March 17,
				  2004, the eligible development business program is repealed.
New investment includes the purchase price of land and the
				  cost of improvements made to real property. The tax credit may be claimed by an
				  eligible development business in the tax year in which the construction,
				  expansion or rehabilitation is completed.
Any credit in excess of the tax liability for the tax year
				  may be credited to the tax liability for the following seven years or until
				  used, whichever is the earlier.
If the business is a partnership, S corporation, limited
				  liability company, or an estate or trust electing to have the income taxed
				  directly to the individual, an individual may claim the credit. The amount
				  claimed by an individual must be based on the individual's pro rata share of
				  the individual's earnings of the partnership, S corporation, limited liability
				  company, or estate or trust.
If the eligible development business fails to meet and
				  maintain any one of the requirements to be an eligible business, the business
				  shall be subject to repayment of all or a portion of the amount of tax
				  incentives received. For example, if within five years of project completion
				  the development business sells or leases any space to any retail business, the
				  development business shall proportionally repay the value of the investment
				  credit. The proportion of the investment credit that would be due for repayment
				  by an eligible development business for selling or leasing space to a retail
				  business would be determined by dividing the square footage of building space
				  occupied by the retail business by the square footage of the total building
				  space.
An eligible business, which is not a development business,
				  which operates in an enterprise zone cannot claim an investment tax credit if
				  the property is owned, or was previously owned, by an approved development
				  business that has already received an investment tax credit. An eligible
				  business, which is not a development business, can claim an investment tax
				  credit only on additional, new improvements made to real property that was not
				  included in the development business's approved application for the investment
				  tax credit.
This rule is intended to implement Iowa Code section
				  15E.193C.