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Bill > SF2292
IA SF2292
IA SF2292A 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.)
summary
Introduced
02/12/2026
02/12/2026
In Committee
02/16/2026
02/16/2026
Crossed Over
Passed
Dead
Introduced Session
91st General Assembly
Bill Summary
This bill creates a state corporate income tax deduction for net controlled foreign corporation tested income (NCTI). Currently, Code section 422.35(12) specifically references global intangible low-taxed income (GILTI) under section 951A of the Internal Revenue Code (IRC) for purposes of a state corporate income tax deduction allowed under that Code section. Recent federal legislation replaced GILTI with NCTI under section 951A of the IRC. NCTI is the aggregate amount of net income subject to federal tax that is earned by a taxpayer from controlled foreign corporations of the taxpayer, and is applied more broadly to foreign income than GILTI. Since the federal legislation replaced GILTI with NCTI in the same section of the IRC (951A), the state corporate income tax deduction no longer applies because Code section 422.35(12) specifically references GILTI income under section 951A of the IRC. The bill strikes the specific reference to GILTI but continues to allow the deduction for income under section 951A of the IRC which is now recharacterized as NCTI.
AI Summary
This bill creates a state corporate income tax deduction for net controlled foreign corporation tested income (NCTI), which is the total net income earned by a taxpayer from its controlled foreign corporations that is subject to federal tax. Previously, a deduction was allowed for global intangible low-taxed income (GILTI), a similar but narrower category of foreign income, under a specific section of the Internal Revenue Code (IRC). However, recent federal legislation replaced GILTI with NCTI in that same IRC section. Because the state law specifically referenced GILTI, the deduction no longer applied to the newly defined NCTI. This bill amends the state law to remove the specific reference to GILTI and instead allows the deduction for income under the relevant IRC section, which now encompasses NCTI, ensuring that businesses can still claim this deduction for their foreign earnings. The bill also makes this change retroactive to January 1, 2026, meaning it applies to tax years beginning on or after that date.
Committee Categories
Budget and Finance
Sponsors (0)
No sponsors listed
Other Sponsors (1)
Commerce (Senate)
Last Action
Subcommittee: Bousselot, Reichman, and Winckler. S.J. 314. (on 02/18/2026)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.legis.iowa.gov/legislation/BillBook?ga=91&ba=SF2292 |
| BillText | https://www.legis.iowa.gov/docs/publications/LGI/91/attachments/SF2292.html |
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