Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 304 - Adjustments to Computed Tax and Tax Credits › Rule 701-304.53 - Workforce Housing Tax Incentives Program

Current through Register Vol. 47, No. 3, July 24, 2024
A business which qualifies under the workforce housing tax
				  incentives program is eligible to receive tax incentives for individual income
				  tax. The workforce housing tax incentives program replaced the eligible housing
				  business enterprise zone program. An eligible business under the workforce
				  housing tax incentives program must be approved by the economic development
				  authority. The administrative rules for the workforce housing tax incentives
				  program for the economic development authority may be found at 261-Chapter 48.
				  The general assembly has mandated that the economic development authority and
				  the department of revenue adopt rules to jointly administer Iowa Code sections
				  15.351 to
				  15.356. In general, the economic
				  development authority is responsible for evaluating whether projects meet the
				  requirements for a workforce housing tax incentives program while the
				  department of revenue administers tax credit claims and transfers.
(1)
Definitions.
"Costs directly related"
means the same as
				  defined in rule 261-48.3 (15).
"Qualifying new investment"
means the same
				  as defined in rule 261-48.3 (15).
(2)
Workforce housing tax
				incentives.
The economic development authority will allocate no more
				than $20 million in tax incentives for this program for any fiscal year, $5
				million of which shall be reserved for allocation to qualified housing projects
				in small cities, as defined in Iowa Code section
				15.352(10),
				that are registered on or after July 1, 2017. A housing business that has
				entered into an agreement with the economic development authority is eligible
				to receive the tax incentives described in the following paragraphs:
a.
Sales tax refund.
A
				housing business may claim a refund of the sales and use tax described in rule
				701-258.1(15).
b.
Investment tax credit.
(1)
				Computation of the credit. A housing business may claim a tax credit in an
				amount not to exceed 10 percent of the qualifying new investment in a housing
				project not located in a small city, or 20 percent of the qualifying new
				investment in a housing project located in a small city.
(2) Allocation of the tax credit to the
				individual owners of the entity or beneficiaries of an estate or trust. An
				individual may claim a tax credit if the housing business is 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) Refundability. Any tax
				credit in excess of the taxpayer's liability for the tax year is not
				refundable.
(4) Carryforward. Any
				tax credit in excess of the taxpayer's liability may be credited to the tax
				liability for the following five years or until depleted, whichever is
				earlier.