Iowa 2025-2026 Regular Session

Iowa Senate Bill SSB3105

Introduced
2/3/26  

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.(See SF 2292, SF 2492.)

Impact

By implementing this deduction, SSB3105 aims to foster a more favorable business environment in Iowa, particularly for entities that engage with foreign subsidiaries. The state tax code's alignment with federal definitions is expected to simplify tax compliance processes for corporations and possibly incentivize more businesses to invest internationally. The retroactive applicability starting from January 1, 2026, provides businesses with immediate relief and clarity, encouraging corporations to maintain or expand their operations under the state’s jurisdiction without the fear of future tax liabilities arising from federal changes.

Summary

SSB3105 aims to revise Iowa's corporate income tax structure by creating a deduction for net controlled foreign corporation tested income (NCTI). This follows recent federal legislation which replaced the previously used term global intangible low-taxed income (GILTI) under the Internal Revenue Code (IRC). The bill modifies the existing code that currently allows deductions related exclusively to GILTI, thereby expanding the scope to NCTI, which is more inclusive of foreign earnings. This change addresses the need for state law to adapt to federal tax updates, ensuring continued deductions for businesses involved with controlled foreign corporations.

Contention

However, the bill may face scrutiny around its fiscal impact on state revenue, given that creating new tax deductions can lead to reduced income for the state. Legislators and stakeholders may express concerns regarding the balance between supporting corporate interests and ensuring sufficient funding for state services. Additional discussions expected in debates could explore whether the benefits of attracting foreign income sufficiently outweigh potential losses in tax revenue, making it a point of contention among various members of the legislature.

Companion Bills

IA SF2292

Replaced by 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.)

IA SF2492

Replaced by 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 SF2292

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.)

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 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 SB151

Corporate Income Tax Changes

IA SF2085

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, making adjustments to individual and corporate income taxes, providing for fees, and including retroactive applicability provisions.(See SF 2470.)

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 HF1480

Corporate franchise and unitary taxation; unitary group expanded to foreign corporations.

Similar Bills

No similar bills found.