Cedar Rapids’s largest employer made one-fifth of the claims for Iowa’s research-and-development tax credit in 2017, a new report shows.
Rockwell Collins claimed more than $13.9 million in the Research Activities Credit last year, making it the largest claimant of a state incentive that awards companies for conducting research in Iowa.
There were about $66.1 million worth of claims for the credit in 2017, meaning Rockwell claimed 21 percent of all of the R&D tax credits last year.
Seventy-five percent of the claims were made by just 21 entities, according to the report from the Iowa Department of Revenue.
The tax credit has come under fire in recent years as Iowa has had to tighten its purse strings and make budget cuts. The R&D credit is refundable, meaning companies and individuals who qualify and have no state income tax liability receive a check from the state.
Critics of the credit have said it was designed to serve smaller start-ups, not large corporations that are the biggest recipients, and have suggested capping the program’s refundability.
Supporters, including Rockwell, have insisted the credit keeps high-quality, high-paying research work by companies in Iowa. Rockwell has said it spends about $1 billion on R&D each year, 60 percent of which is conducted in Iowa.
The Department of Revenue does not report how much individual companies receive in refunds.
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Overall, though, the state paid $46.2 million in refunds to 1,153 taxpayers in 2017. Ninety percent of those refunds went to 227 corporations.
Moline, Ill.-based Deere and Co. was the second-highest user of the tax credit in 2017, claiming about $7.56 million.
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