SF 2340 – Solar energy system tax credit increase and update
SF 2343 – Renewable energy tax credit qualification dates and eligibility
SF 2344 – Renewable fuels tax credits and providing for biobutanol
HF 2273 – County Treasurers’ technical bill
HF 2438 – Department of Revenue technical update bill
HF 2444 – Department of Revenue efficiency bill
FLOOR ACTION:
SF 2340 lifts the total amount of solar tax credits available for residential or business installations from $1.5 million to $4.5 million. The bill also increases the maximum business tax credit to 60 percent of the federal credit instead of the current 50 percent and raises the $15,000 tax credit cap per project to $20,000. The bill also increases the maximum residential tax credit to 60 percent of the federal credit instead of the current 50 percent and raises the $3,000 cap per project to $5,000.
Additionally, the bill would allow a single taxpayer to claim multiple credits for multiple installations. Currently, a taxpayer is limited to one credit. This change would allow a business with multiple locations to install a solar energy system at more than one location and receive a credit for each installation. The bill would also allow the unused allotment of tax credits for a fiscal year to carry forward and be used the following year if there are not sufficient projects eligible. [3/27: 46-0 (Bertrand, Boettger, Ernst, Houser excused)]
SF 2343 provides a two-year extension for the in-service date and the end of the tax credit for wind energy and other renewable energy facilities that have been awarded production tax credits under 476C. This will allow facilities that have qualified for the tax credit sufficient time to complete the construction of their facility. The bill also makes changes regarding the 10 megawatts of credits that are reserved for a cogeneration facility that is associated with an ethanol plant. Currently, the only allowed fuel source for the cogeneration facility is natural gas. The bill would allow the facility to use biogas, landfill gas or methane as well. [3/27: 46-0 (Bertrand, Boettger, Ernst, Houser excused)]
SF 2344 extends the existing tax credit for the sale of 15 percent ethanol-blended gasoline (E15) and the tax credit for the production of biodiesel. The E15 tax credit is currently 3 cents per gallon sold until the end of 2014. It would drop to 2 cents per gallon for 2015 through 2017. Under the bill, the tax credit will remain at 3 cents per gallon except for the summer blend period, which extends from June 1 through September 15. During this period, the per-gallon credit will increase to 10 cents per gallon to help with the higher cost of fuel and reducing air pollution during the hotter months. The bill also extends the existing biodiesel production tax credit of 2 cents per gallon, which was set to expire January 1, 2015. It is extended five years to January 1, 2020.
The Senate adopted an amendment on the floor that also extends by two years the end date for the E15, E85 and biodiesel promotion tax credits for retailers. They will end December 31, 2019, instead of December 31, 2017. [4/1: 48-0 (Houser, Petersen excused)]
HF 2273 covers several actions requested by the county treasurers:
• Clearing up inconsistencies with the Department of Revenue’s (DOR) interpretation of use tax exemption on rental trailers (UT05 Exemption). Under DOR’s direction, all 99 county treasurers have said that rental trailers qualify for the use tax exemption. In 2013, rental companies in Iowa began receiving audits stating they owe back use tax, penalties and interest on their rental trailers. This legislation would codify the treasurers’ practice under direction of DOR.
• Cleaning up Code language on destroying drainage and special assessment records in the treasurers’ offices after 10 years. In recent years, legislation took care of how long to keep other kinds of records, but drainage and special assessment records slipped through the cracks.
• Cleaning up Code language for the requirement of cash payment for assessments of less than $20 and for fixing a time within which all assessments in excess of $100 may be paid in cash. [4/1: 49-0 (Houser excused)]
HF 2438 makes several technical changes to state laws on taxes. These changes include:
• Allowing the director of the Department of Revenue to adopt rules to ensure that a geographic area that participates in more than one sales tax increment financing district does not receive more sales tax remittances than the area collects in any given year.
• Updating language to more clearly allow for electronic filing of tax credit information with a taxpayer’s taxes.
• Allowing banks to receive the solar tax credit.
• Removing language regarding alcohol beverage control bonds that had been issued by the Alcoholic Beverages Division from the list of double tax-exempt bonds. Those bonds no longer exist.
• Removing tax-exempt Social Security benefits from the calculation of income when determining whether a taxpayer 65 or older needs to file a tax return.
• Updating language regarding a sales tax exemption for health centers so that the terms match language adopted as part of the Health Care Consolidation Act of 1996.
• Striking language enacted in 2008 regarding the excise tax on heavy highway equipment that had the unintended consequence of negating the tax the language was added to. [3/27: 26-21, party-line (Bertrand, Ernst, Houser excused)]
COMMITTEE ACTION:
HF 2444 is the Department of Revenue’s efficiency bill. The bill eliminates unnecessary notice provisions in the Code regarding interest calculations for motor fuel taxes and the inheritance tax, and provides the director authority to retain records in an electronic format rather than in paper form. [3/31: short form]