The Iowa Research & Development Tax credit will conform current state tax law with federal R&D tax credit calculations, enhancing incentives for business in Iowa to increase critical research and development activity while encouraging new economic development growth.

"Iowa currently appeals to few in these industries, due in large part to the fact that we consistently rank at or near the bottom when competing for the investment capital needed to attract and develop such high-growth knowledge based companies --- those that will spend the sizable R&D dollars and commit to placing high level technical jobs within our boarders" Iowa Taxpayers Association.

A simple solution, HSB 768 is offered to improve Iowa’s profile and reputation in this area. Federal law allows a choice of two methods to determine the R&D tax credit, the original method and the alternative method.

A taxpayer may choose the most advantageous method in any tax year. Under both methods qualifying R&D expenditures may be for research done within the company and by contract using university or scientific organizational research. HSB 768 passed the Ways & Means Committee on Thursday.

The Iowa Department of Revenue is drafting rules to place a tax on those who receive intangible information over the Internet. This tax would apply to those who download such things as software, list, books and other information. Rep. Van Fossen has proposed legislation to prohibit the Department from implementing this tax. The bill, HSB 780 will start in the House Ways & Means Committee. The debate surrounding HSB 780 will definitely include the first significant discussions by the legislature on the taxation of intangible goods sold over the Internet.

HSB 753 a bill relating to the state’s disposition of unclaimed property law by setting a limit on the retention of abandoned property records, excluding certain property from being considered abandoned property, and setting requirements and conditions for hiring independent auditors.

HSB 768 a bill relating to an alternative method of computing the research activities credit for purposes of state income tax.

HSB 779 a bill relating to the accelerated career education program, providing a tax credit from withholding, creating an accelerated career education grant program and fund, relating to the transfer of job training withholding to the workforce development fund account.

HSB 776 a bill providing for an income tax credit for contributions to certain nonprofit organizations to be used for scholarships or tuition grants.

HSB 780 a bill relating to the treatment of sales and use tax purposes of sales where the substance of the transactions is delivered by electromagnetic waves, digitally, or by way of cable or fiber optics, the exemption from the sales and use taxes of the furnishing, sale, or rental of information services and providing of refunds.