Budget & Taxes (Tax Incentives)

in committee · Iowa · House Apr 24, 2025

HSB 226: A bill for an act making a rural water district a designated exempt entity for purposes of the sales and use tax.

HSB 226 designates rural water districts, organized under specific state chapters, as exempt entities for sales and use tax purposes. This allows these districts to apply for refunds of sales and use tax paid on building materials, supplies, equipment, and services provided by contractors for written contracts. A key change is that construction services furnished to the water district also become exempt from sales tax. To avoid overlapping provisions, the bill removes a current sales tax exemption that applies only to building materials sold to rural water districts.

Topics ✓ Budget & TaxesSupports Budget & TaxesProvides tax exemptions for rural water districts, reducing their tax burden on construction materials and services under sales/use tax policy.95% confidence

Sub-Topics Sales Tax Tax Incentives

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in committee · Iowa · House Mar 19, 2025

HF 131: A bill for an act relating to the redevelopment tax credit program, the nuisance property remediation assistance fund, and assistance for communities to address abandoned buildings.

HF 131 creates new incentives for communities to address large abandoned buildings and underutilized commercial properties. It allows cities with populations under 30,000 to receive a two-year redevelopment tax credit for grayfield sites over 50,000 square feet, and provides cities with up to $500,000 in forgivable loans (with 25% forgiven upon successful remediation) for cleaning, repurposing, or selling properties of 50,000+ square feet. The bill also expands funding for communities to address abandoned buildings, enabling cities with 5,000-30,000 residents to receive up to $10 per square foot (capped at $1 million) for waste abatement, recycling, and renovation. These provisions directly affect small and mid-sized Iowa communities seeking to revitalize neglected properties.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill creates tax credits and forgivable loans for community redevelopment, advancing fiscal incentives to address abandoned properties through targeted funding.95% confidence ✓ HousingSupports HousingBill provides tax credits and forgivable loans to redevelop abandoned buildings, promoting housing development and addressing a barrier to housing stock.85% confidence

Sub-Topics Tax Incentives Community Development

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in committee · Iowa · Senate Feb 18, 2025

SF 270: A bill for an act relating to tax credits awarded by the economic development authority for specific capital contributions made to certified rural business growth funds for investment in qualified businesses.

SF 270 creates the "Iowa Rural Development Tax Credit Program," offering tax credits to investors who make cash contributions to certified rural business growth funds. These funds must invest in qualified businesses (small rural businesses with under 250 employees, outside Iowa's 12 most populous counties) and demonstrate a positive revenue impact for the state. The bill requires growth funds to undergo a certification process, including a third-party revenue analysis showing their investments will generate more state revenue than the tax credits issued. Investors receive tax credits based on their contributions, with the program starting accepting applications in 2026.

Topics ✓ Budget & TaxesSupports Budget & TaxesCreates tax credits for rural business investments, providing tax relief to incentivize economic development and revenue growth per bill's certification requirements.92% confidence

Sub-Topics Revenue Tax Incentives

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introduced · Iowa · Legislature

1186XD: Economic Development Programs and Credits (1186XD) - Economic Development Authority

This bill reorganizes Iowa's economic development tax credit programs. It creates five new programs (business incentives for growth, seed investor credits, film production incentives, R&D credits, and sustainable aviation fuel credits) while eliminating seven existing ones (including high quality jobs and employer childcare credits). The bill sets a $170 million annual limit for most tax credits, with specific allocations like $68 million for high quality jobs (though this program is being eliminated), $40 million for R&D credits, and $50 million for the new business incentives program. It also requires the Economic Development Authority to report annual credit allocations to the Department of Revenue.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill reorganizes tax credits within $170M annual cap, promoting fiscal responsibility by capping total spending on credits while creating new targeted incentives.85% confidence ✓ EnergySupports EnergyCreates sustainable aviation fuel credits, a renewable energy incentive, advancing clean energy infrastructure95% confidence ✗ Labor & EmploymentOpposes Labor & EmploymentEliminates high quality jobs and employer childcare credits, defunding labor-related support programs directly tied to employment standards.85% confidence

Sub-Topics Tax Incentives Tags Economic Development

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died · Iowa · Senate May 13, 2025

SF 652: A bill for an act relating to economic development and housing by modifying provisions concerning economic development programs and modifying provisions concerning Iowa’s urban renewal law, and including applicability provisions.

SF 652 modifies Iowa's economic development programs and urban renewal laws, primarily focusing on housing initiatives. It broadens the definition of "economic development" to include workforce housing and allows urban renewal funds to be used for low and moderate-income family housing. The bill adjusts how certain property taxes, including some school district levies, are allocated in urban renewal areas. It also introduces limitations on the amount of tax revenue municipalities can retain from urban renewal areas over time and sets specific requirements for housing projects within these areas, including a minimum for low and moderate-income housing.

Topics ✓ Budget & TaxesSupports Budget & TaxesRedirects urban renewal tax revenues toward affordable housing, aligning with fiscal management for public services and housing initiatives.85% confidence ✓ HousingSupports HousingBill explicitly broadens economic development to include workforce housing and allocates urban renewal funds for low/moderate-income housing, directly advancing affordable housing initiatives.90% confidence

Sub-Topics Revenue Tax Incentives Affordable Housing Community Development Housing Finance Tags Economic Development

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in committee · Iowa · Senate Jan 22, 2025

SF 29: A bill for an act relating to property tax exemptions by changing the homestead tax exemption to a credit for owners attaining sixty-five years of age and increasing the military service tax exemption, and including effective date and retroactive applicability provisions.

This Iowa bill (SF 29) changes property tax benefits for specific groups. It replaces the existing homestead exemption for homeowners aged 65+ with a credit equal to $6,500 in actual property taxes paid, available to those with household incomes under 250% of the federal poverty level. It also increases military veterans' property tax exemption to a credit equivalent to $4,000 (based on actual tax rates), applying to honorably discharged veterans. Both changes take effect retroactively for assessment years beginning January 1, 2025. The bill directly affects elderly homeowners and veterans who meet income or service criteria.

Topics ✓ Budget & TaxesSupports Budget & TaxesProvides tax credits for seniors (65+) and veterans under 250% poverty level, reducing property tax burden for lower-income groups.95% confidence ✓ VeteransSupports VeteransIncreases military veterans' property tax exemption credit to $4,000, expanding benefits for honorably discharged veterans.95% confidence

Sub-Topics Property Tax Tax Incentives

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in committee · Iowa · House Jan 29, 2025

HSB 96: A bill for an act relating to permissible local sales and services tax expenditures.

This bill (HSB 96) clarifies that cities and counties in Iowa may use local sales and services tax revenue to fund nonprofit organizations (specifically those exempt under IRS 501(c)(3)) that provide public services within their communities. It directly affects local governments and qualifying nonprofits by expanding eligible recipients for these tax funds beyond previous interpretations. The key change adds explicit language to the tax code, allowing payments to 501(c)(3) nonprofits for services like emergency medical support or other public programs. This does not create new taxes or change tax rates but specifies existing tax money can now be directed to these nonprofits for public service delivery.

Topics ✓ Budget & TaxesSupports Budget & TaxesExpands eligible recipients for local tax revenue to fund public services via 501(c)(3) nonprofits, strengthening fiscal management of existing tax funds.90% confidence

Sub-Topics Revenue Sales Tax Tax Incentives

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in committee · Iowa · House Jan 29, 2025

HF 31: A bill for an act creating the new resident and new graduate tax credits, available against the individual income tax, and including retroactive applicability provisions.

HF 31 creates two new Iowa tax credits: one for "new residents" (individuals who moved to Iowa for full-time employment with no prior residency in the state) and one for "new graduates" (Iowa-educated individuals under 30 working full-time in Iowa). Both credits reduce state income tax by 100% for up to four consecutive tax years, starting with the first or second year of eligibility. The credits are non-refundable if they exceed tax liability, expire if recipients receive public assistance after the first claimed year, and apply retroactively to tax years beginning January 1, 2025. Eligibility is limited to one-time lifetime use per individual.

Topics ✓ Budget & TaxesSupports Budget & TaxesCreates 100% income tax credits for new residents and graduates, providing direct tax relief to targeted groups and reducing state tax liability.95% confidence

Sub-Topics Business Taxes Tax Credits Tax Incentives

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in committee · Iowa · Senate Feb 11, 2025

SF 200: A bill for an act relating to the distribution of water exempt from taxation and the use of tax exemption certificates, and providing civil penalties.

This bill requires water utilities in Iowa to accept and retain valid exemption certificates that allow certain water users to avoid sales or water service taxes. It directly affects water utilities and customers who possess these certificates, preventing utilities from forcing customers to seek tax refunds instead of applying the exemption directly. Utilities that refuse valid certificates must pay a civil penalty equal to the tax amount plus interest to the state revenue department. The bill also defines key terms and mandates the revenue department to create rules for implementation.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill enforces tax exemption certificates, closing a loophole that prevented direct tax relief for water users, aligning with fiscal responsibility.85% confidence

Sub-Topics Revenue Tax Incentives

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in committee · Iowa · House Feb 12, 2025

HF 360: A bill for an act excluding overtime from the individual income tax, and including applicability provisions.

HF 360 would exclude overtime pay from Iowa's individual income tax calculation. Specifically, it removes from taxable income the portion of compensation earned for hours worked beyond 40 in a workweek, paid at rates of 1.5 to 2 times the regular wage under federal law (29 U.S.C. §207). This change directly affects Iowa workers who earn overtime pay, reducing their taxable income for those hours. The policy takes effect for tax years beginning January 1, 2026. The bill does not alter federal overtime rules but changes how Iowa taxes that specific income.

Topics ✓ Budget & TaxesSupports Budget & TaxesExcludes overtime pay from taxable income, reducing tax burden for workers and aligning with tax relief indicators for middle/lower income earners.90% confidence ✓ Labor & EmploymentSupports Labor & EmploymentExcludes overtime pay from taxable income, increasing workers' net earnings for hours beyond 40 without altering federal overtime standards.95% confidence

Sub-Topics Business Taxes Income Tax Tax Incentives Labor Standards

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