Rural Iowa projects could qualify for larger investment tax credits

The authority may approve either credits for up to two businesses at up to 5% of qualifying investments, or a credit for one rural-county business at up to 10%. A rural county is an Iowa county with 50,000 or fewer people in the latest federal census. A qualifying investment is described as over $1 billion in the bill explanation. The authority must find the site suitable. For the rural option, the business must have a controlling interest in a site over 250 acres, a certified site over 250 acres, or document a site evaluation comparable to a certified site. The project, or a designated part, must be in service, and at least half of its agreed jobs paying at least 140% of the qualifying wage threshold must be on payroll before a credit certificate may issue. The authority may approve the credit; the text does not require approval. The project, or a designated part of it, must be in service and have at least half of its agreed qualifying jobs on payroll before the credit certificate may issue.

A rural-project credit certificate may be refundable and transferred, subject to authority approval and checks on the proposed recipient. These rules apply to certificates for the rural-county credit option. Before approving a transfer, the authority must verify that the recipient is not associated with a foreign adversary or foreign adversary entity. The recipient must submit the certificate and required information within 90 days. The department must issue a replacement certificate within 30 days; the recipient cannot claim the credit until then. This transfer provision does not apply to agreements made after December 31, 2027. The transfer rules do not apply to agreements made after December 31, 2027.

A business receiving the rural-project credit would have its tax liability increased if it sells, disposes of, tears down, or makes covered project property unusable within ten years. This applies to a business receiving the rural-county credit and the land, buildings, or other structures for which a taxpayer claimed that credit. The increase depends on when the property stops qualifying: the listed amounts range from 100% of the claimed credit in the first year to 10% in the tenth year. The ten-year period runs from the authority’s issuance of the credit; the tax increase applies in the year the property is sold, disposed of, torn down, or made unusable.