Iowa 2025-2026 Regular Session

Iowa Senate Bill SF2292

Introduced
2/12/26  

Caption

A bill for an act creating a state corporate income tax deduction for net controlled foreign corporation tested income, and including retroactive applicability provisions.(Formerly SSB 3105; See SF 2492.)

Impact

The impact of SF2292 is significant as it aims to maintain consistency between state and federal tax frameworks concerning foreign corporate income. By allowing the deduction for NCTI, Iowa ensures that corporations are not at a disadvantage compared to federal regulations, which could encourage investment and economic activity within the state. This adjustment is particularly relevant for companies engaged in international business, as it broadens the scope of eligible income for tax deductions at the state level.

Summary

Senate File 2292 proposes the creation of a state corporate income tax deduction for net controlled foreign corporation tested income (NCTI). This move comes in response to recent federal legislation that replaced global intangible low-taxed income (GILTI) with NCTI under the Internal Revenue Code (IRC). By amending section 422.35 of Iowa's tax code, the bill seeks to ensure that Iowa's corporate income tax system remains aligned with federal law, providing deductions for income that is now categorized as NCTI rather than GILTI.

Contention

One notable point of contention surrounding this bill is the retroactive applicability of the tax deduction, set to take effect from January 1, 2026. This means that corporations could claim deductions for past earnings that fall under the new classification as NCTI, which could lead to substantial fiscal implications for the state budget. Critics may argue about the budgetary consequences of such retroactive measures, suggesting that it could negatively impact state revenue streams. Supporters of the bill will likely contend that the fiscal benefits gained from encouraging foreign investment and corporate compliance will outweigh these concerns.

Companion Bills

IA SSB3105

Related A bill for an act creating a state corporate income tax deduction for net controlled foreign corporation tested income, and including retroactive applicability provisions.(See SF 2292, SF 2492.)

IA SF2492

Similar To A bill for an act creating a state corporate income tax deduction for net controlled foreign corporation tested income, and including retroactive applicability provisions. (Formerly SF 2292, SSB 3105.) Effective date: 07/01/2026. Applicability date: 01/01/2026.

Previously Filed As

IA SSB3105

A bill for an act creating a state corporate income tax deduction for net controlled foreign corporation tested income, and including retroactive applicability provisions.(See SF 2292, SF 2492.)

IA SF2492

A bill for an act creating a state corporate income tax deduction for net controlled foreign corporation tested income, and including retroactive applicability provisions. (Formerly SF 2292, SSB 3105.) Effective date: 07/01/2026. Applicability date: 01/01/2026.

IA HF30

A bill for an act providing a deduction from the individual and corporate income taxes for the amount of certain income derived from indigent representation by an eligible law firm, and including retroactive applicability provisions.

IA HF624

A bill for an act relating to the farm tenancy net income exclusion available against the individual income tax, and including effective date and retroactive applicability provisions.(Formerly HF 56.)

IA HSB687

A bill for an act relating to medical cannabidiol by providing deductions from the individual and corporate income taxes for expenses incurred by medical cannabidiol manufacturers and dispensaries, and including retroactive applicability provisions.

IA HSB229

A bill for an act relating to deducting excess business losses for purposes of the individual income tax, and including retroactive applicability provisions.

IA HF1533

Corporate franchise tax; certain foreign corporations treated as unitary.

IA SF2470

A bill for an act relating to event-driven contracts traded on dedicated contract markets by requiring a permit to conduct business in the state, imposing a tax on adjusted revenues or amounts traded, making adjustments to individual and corporate income taxes, providing for fees, and including contingent effective date, applicability, and retroactive applicability provisions. (Formerly SF 2085.)

IA SB151

Corporate Income Tax Changes

IA HF2017

A bill for an act creating a state work opportunity tax credit available against the individual and corporate income taxes, and including retroactive applicability provisions.

Similar Bills

No similar bills found.