§ 404A.2 — Historic preservation tax credit

Iowa § 404A.2

• Jurisdiction: Iowa
• Title IX: LOCAL GOVERNMENT
• Ch. 404A: HISTORIC PRESERVATION TAX CREDIT

Text

1. An eligible taxpayer who has entered into an agreement under section 404A.3,
subsection 3, is eligible to receive a historic preservation tax credit in an amount equal to
twenty-five percent of the qualified rehabilitation expenditures of a qualified rehabilitation
project that are specified in the agreement. Notwithstanding any other provision of this
chapter or any provision in the agreement to the contrary, the amount of the tax credits shall
not exceed twenty-five percent of the final qualified rehabilitation expenditures verified by
the authority pursuant to section 404A.3, subsection 5, paragraph “c”.
2. The tax credit shall be allowed against the taxes imposed in chapter 422, subchapters
II, III, and V, and in chapter 432. 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. For an individual claiming a tax credit of an estate
or trust, the amount claimed by the individual shall be based upon the pro rata share of the
individual’s earnings from the estate or trust. For an individual claiming a tax credit of a
partnership, limited liability company, or S corporation, the amount claimed by the partner,
member, or shareholder, respectively, shall be based upon the amounts designated by the
eligible partnership, S corporation, or limited liability company, as applicable.
3. a. Taxcreditcertificatesissuedundersection404A.3maybetransferredtoanyperson.
Withinninetydaysoftransfer, thetransfereeshallsubmitthetransferredtaxcreditcertificate
to the department of revenue along with a statement containing the transferee’s name, tax
identification number, address, the denomination that each replacement tax credit certificate
is to carry, and any other information required by the department of revenue. However,
tax credit certificate amounts of less than the minimum amount established by rule by the
department of revenue shall not be transferable.
b. Within thirty days of receiving the transferred tax credit certificate and the transferee’s
statement, the department of revenue shall issue one or more replacement tax credit
certificates to the transferee. Each replacement tax credit certificate must contain the
information required for the original tax credit certificate and must have the same expiration
date that appeared on the transferred tax credit certificate.
c. A tax credit shall not be claimed by a transferee under this section until a replacement
tax credit certificate identifying the transferee as the proper holder has been issued. The
transferee may use the amount of the tax credit transferred against the taxes imposed in
chapter 422, subchapters II, III, and V, and in chapter 432, for any tax year the original
transferor could have claimed the tax credit. Any consideration received for the transfer of
the tax credit shall not be included as income under chapter 422, subchapters II, III, and V.
Any consideration paid for the transfer of the tax credit shall not be deducted from income
under chapter 422, subchapters II, III, and V.
4. a. For a tax credit claimed by an eligible taxpayer or a transferee for qualified
3 HISTORIC PRESERVATION TAX CREDIT, §404A.3
rehabilitation projects with agreements entered into on or after July 1, 2014, the following
percentage of any credit in excess of the taxpayer’s tax liability for the tax year may be
refunded:
(1) For the tax year beginning on or after January 1, 2023, but before January 1, 2024,
ninety-five percent.
(2) For the tax year beginning on or after January 1, 2024, but before January 1, 2025,
ninety percent.
(3) For tax years beginning on or after January 1, 2025, one hundred percent.
b. In lieu of claiming a refund, a taxpayer may elect to have the overpayment otherwise
eligible for a refund shown on the taxpayer’s final, completed return credited to the tax
liability for the following five tax years or until depleted, whichever is earlier.
c. A tax credit shall not be carried back to a tax year prior to the tax year in which the
taxpayer redeems the tax credit. As used in this subsection, “taxpayer” includes an eligible
taxpayer or a person transferred a tax credit certificate pursuant to subsection 3.
5. a. To claim a tax credit under this section, a taxpayer shall include one or more tax
credit certificates with the taxpayer’s tax return.
b. The tax credit certificate shall contain the taxpayer’s name, address, tax identification
number, the amount of the credit, the name of the eligible taxpayer, any other information
required by the department of revenue, and a place for the name and tax identification
number of a transferee and the amount of the tax credit being transferred.
c. The tax credit certificate, unless rescinded by the authority, shall be accepted by the
department of revenue as payment for taxes imposed in chapter 422, subchapters II, III, and
V, and in chapter 432, subject to any conditions or restrictions placed by the authority or the
department of revenue upon the face of the tax credit certificate and subject to the limitations
of this program.
6. For purposes of the individual and corporate income taxes and the franchise tax,
the increase in the basis of the rehabilitated property that would otherwise result from the
qualified rehabilitation expenditures shall be reduced by the amount of the credit computed
under this section.