An eligible business that has received a renewable chemical
production tax credit certificate from the economic development authority may
claim a tax credit against individual income tax. The credit is equal to the
product of five cents multiplied by the number of pounds of renewable chemicals
produced in Iowa from biomass feedstock by the eligible business during a given
production year, subject to the limitations described in Iowa Code sections
15.315 through
15.322, 261-Chapter 81, and this
rule. The economic development authority's rules on eligibility for the credit
may be found in 261-Chapter 81.
(1)
Application and agreement for the credit. To be eligible for
the tax credit, the eligible business must apply to and enter into an agreement
with the economic development authority. The economic development authority's
rules on the application and agreement process may be found in 261-Chapter
81.
(2)
Computation of the
amount of credit and certificate issuance. Upon establishing that all
requirements of the program and the agreement have been fulfilled and verifying
the taxpayer's eligibility for the tax credit, the economic development
authority calculates the credit. Then the economic development authority issues
the related tax credit certificate to the eligible business stating the amount
of the renewable chemical production tax credit that the eligible business may
claim. A tax credit certificate shall not be issued by the economic development
authority prior to July 1, 2018. The economic development authority's rules on
credit certificate issuance may be found in 261-Chapter 81.
(3)
Claiming the tax credit.
a.
Claiming the credit,
generally. To claim the credit, a taxpayer must include one or more
tax credit certificates with the taxpayer's tax return for the tax year during
which the eligible business was issued the tax credit certificate or
certificates. If the taxpayer claiming the credit has already filed a return
for the tax year for which the credit certificate was issued, the taxpayer may
claim the credit on an amended return. The taxpayer must file the amended
return within the statute of limitations applicable to such amended return. No
tax credit may be claimed under this program by a taxpayer prior to September
1, 2018.
b.
Claiming the
credit of a pass-through entity. To claim the credit of an eligible
business that is a pass-through entity, an individual taxpayer must claim the
credit on the tax return for the tax year during which the eligible business
received the tax credit certificate. Such tax year may be either the tax year
of the eligible business or of the individual.
EXAMPLE: A partnership has a fiscal year of September 2017
through August 2018. The partnership receives a renewable chemical production
tax credit certificate under this program in July 2018, which is during the
partnership's 2017 tax year. A partner in the partnership files individual
returns on a calendar year basis, which means that the credit was issued in the
partner's 2018 tax year. That partner may file an amended 2017 tax return to
claim the credit based on the partnership's tax year, or that partner may claim
the credit on the partner's 2018 tax return based on the partner's own tax
year.
c.
Information
required. The tax credit certificate shall include the taxpayer's
name, address, tax identification number, the amount of the credit, the name of
the eligible business, and any other information required by the department of
revenue.
d.
Allocation to
the individual owners of the entity or beneficiaries of an estate or
trust. An individual may claim the credit of a partnership, limited
liability company, S corporation, cooperative organized under Iowa Code chapter
501 and filing as a partnership for tax purposes, estate, or trust electing to
have income taxed directly to the individual. The amount claimed by the
individual shall be based on the pro rata share of the individual's earnings
from the partnership, limited liability company, S corporation, cooperative,
estate, or trust.
e.
Refundability. Any credit in excess of the tax liability is
refundable. In lieu of claiming a refund, the taxpayer may elect to have the
overpayment shown on the taxpayer's final, completed return credited to the tax
liability for the following tax year.
f.
Transferability. Tax
credit certificates shall not be transferred to any other person.
g.
Rescission and recapture.
The tax credit certificate, unless rescinded by the economic development
authority, shall be accepted by the department of revenue, subject to any
conditions or restrictions placed upon the face of the tax credit certificate
by the economic development authority and subject to the limitations of the
program. Should the economic development authority reduce, terminate, or
rescind any tax credits issued under the program, the eligible business may be
subject to the repayment or recapture of any credits already claimed. The
economic development authority's rules related to the program may be found in
261-Chapter 81. The repayment of tax credits or recapture by the department of
revenue shall be accomplished in the same manner as provided in Iowa Code
section
15.330(2).
This rule is intended to implement Iowa Code section
422.10B.
