Freshman Sen. Zach Whiting (R-Spirit Lake) introduced three pieces of legislation that would’ve created tax credits for new workers to the state.
Senate File 75 would’ve allowed new remote workers to be eligible for a grant for qualifying remote worker expenses in an amount not to exceed $5,000 per year. A new remote worker would be eligible for a maximum of two years.
That bill is modeled after the Vermont remote worker bill signed into law in 2018.
“The purpose of the grant is to help offset the cost of moving to Iowa, computer software and hardware, broadband access or upgrade, and/or membership in a co-working office space,” Whiting said. ”
Senate File 81 establishes a new resident homestead rebate for certain individuals who relocate to Iowa, maintain a homestead and meet certain employment requirements. A claimant may annually claim a rebate for a portion of the property taxes paid on the homestead during the base year.
Senate File 133 creates a new resident tax credit available against the individual income tax.
“(Senate File 81 and Senate File 133) are designed to incentivize workers to move to Iowa by offering a rebate or credit on their property and income taxes, respectively,” Whiting said. “The bill would require an individual to pay their property or income taxes in full, but at the end of each eligible year they would be able to claim a rebate or credit which increases by 20 percent each year for five years.”
Whiting said the pieces of legislation are intended to address a couple of issues.
“Two related issues that are at the top of mind of many of my constituents are economic development and workforce needs,” he said. “Iowa has had one of the lowest unemployment rates in the nation for some time, and our employers and communities have identified a need for more workers.”
There are two groups of people Iowa can add to its workforce, Whiting said. Able-bodied individuals who live in Iowa who aren’t working and people living outside the state of Iowa.
“The Iowa Senate passed several welfare reform bills designed to address the former,” Whiting said. “I hope the Iowa House takes up those bills next year. SF 75, SF 81 and SF 133 are my contribution to the latter — an attempt to find creative ways to attract more people to Iowa to live, work and raise their families. Iowa in general, but northwest Iowa in particular, offers a tremendous quality of life, low cost of living and good school systems. Tapping into that to help retain and attract a skilled workforce will be key for Iowa’s future economic growth.”
Whiting said he’s hopeful the proposed legislation expands conversation to find creative ways to address the identified workforce and economic development needs in Iowa.
Senate File 75 passed out of an Appropriations subcommittee. Senate Files 81 and 133 did not receive subcommittee hearings.
“I have heard many positive comments from folks in city government, economic development and tourism,” he said. “My mission for next year is to work with my colleagues on these committees to better explain my intent in introducing these bills and how we can improve them to ensure they are doing what they are designed to do — to incentivize and attract more people to Iowa to live, work and raise their families.”
In addition to Vermont, the city of Tulsa, Okla. also implemented similar programs to attract remote workers.
“While the bill authorizes several hundred thousand dollars of taxpayer money towards these grants over several years, I want to learn more about the secondary impact this bill could have,” he said. “For example, people that move here will rent or buy a home, buy groceries, gasoline, clothing and electricity, pay taxes, contributed to their communities and send their children to school. They may also bring a spouse or other family members who are able to find jobs in the community. Those impacts are likely much larger in the long run, although perhaps a bit more difficult to quantify right now — than a $10,000 grant to get them to move here.”
