I have always had a goal of comprehensive tax reform for the state of the Iowa. For the last several years, we have implemented major reforms to Iowa’s tax code. The tax bill passed in 2018 took the first step in simplifying our tax code, lowering rates for Iowa families and providing millions in tax relief. The following year we passed legislation to provide more truth in taxation and improve transparency for Iowa property taxpayers. In 2021 we delivered additional property tax relief for Iowans and eliminated a property tax levy. This year, we passed historic tax reform, again providing real, permanent tax relief to Iowans and implementing a 3.9 percent flat tax for taxpayers.
To achieve the goal of comprehensive tax reform, work remains to be done. This week, the Senate passed SF 2372. It is the next step in this process and will make a number of changes to modernize the tax code. It updates several sales and use tax changes, like updating the code for digital advances in technology, and also exempts full-time National Guard members from the individual income tax up to $20,000 of their pay.
The Senate also passed a bill, HF 2552, to improve efficiency in government and help the taxpayers of Iowa. What seems to have caught the attention of a few around the state is changes to the Iowa Business Property Tax Credit. When the Iowa Legislature created the tax credit in 2013, the tax credit was designed to primarily reduce property taxes for Iowa’s small businesses. The credit does so by allowing small businesses to have a portion of their property taxed like residential property instead of commercial property.
Current estimates suggest a number of eligible properties have not applied for this credit. Under this legislation, Iowa’s businesses would automatically get the credit without having to apply for it. This bill would help our local small businesses and improve efficiency for both Iowa’s businesses and the department working on the credit calculation and administration.
Also discussed this week was SSB 3064, which would help protect the transformative tax relief measures passed over the last several years. It is a constitutional amendment requiring a two-thirds majority in order to increase taxes on Iowans. This would make it more difficult in the future for politicians at the Capitol who overspend to decide to take that money from hard-working Iowa families. Raising taxes on Iowans should not be easy. Iowa families have to adjust their budget and live within their means every day. If the government cannot do the same, it should take more than just a simple majority to raise taxes on Iowans and take the money from families who earned it.
All of these bills are important while we tackle comprehensive and meaningful tax reform at the Capitol. We have made a lot of progress in simplifying Iowa’s tax code and making it simpler and fairer. It is a commitment we have kept for the last several years and one we will continue to keep.
