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A new capital investment program has been adopted and dubbed "NJIP Jr." The capital investment for eligible businesses approved by the Department of Economic Development must be at least $1 million. The rate of investment tax credit on new investment is based upon the number of new high-quality jobs created as follows:

  • 0 jobs, but economic activity in Iowa is advanced: 1% investment tax credit
  • 1-5 jobs created: 2% investment tax credit
  • 6-10 jobs created: 3% investment tax credit
  • 11-15 jobs created: 4% investment tax credit
  • 16 or more jobs created: 5% investment tax credit

The investment tax credit is a nonrefundable credit, with a 7-year carryforward for any unused credit. If the business is a partnership, S corporation, limited liability company or estate or trust where the income is taxed directly to the individual, the individual may claim the tax credit based on the pro rata share of earnings from the pass-through entity. However, any eligible businesses under this program who is engaged in the production of value-added agricultural products or uses biotechnology related processes are eligible for a refund of any unused investment credit, which is subject to the $4 million cap already in place in Code section 15.333(2).

If the eligible business disposes of property for which an investment credit is claimed within 5 years of purchase, the income tax liability of the eligible business will be increased by certain percentages, based on the time period when the property was disposed. In addition, if the eligible business experiences a layoff within Iowa or closes facilities in Iowa, the business may be subject to repayment of these tax credits, subject to the discretion of the Department of Economic Development.

These eligible businesses are also eligible for the sales and use tax refund and Research Activities Credit that is available to businesses under the NJIP.

Also, the waiver provisions of the NJIP program were amended to eliminate the minimum capital investment requirement of $3 million.