Iowa Legislature Reaches First Major Deadline - House Passes Tax Bill
February 18, 2022
Two key developments tied to ABI’s public policy priorities emerged under the golden dome this week. Senate lawmakers passed the comprehensive re-employment and tort reform package out of the Senate Commerce Committee this week, and the full Iowa House chamber debated and passed its tax reform bill, HF 2317, with bipartisan support. There were seven amendments proposed, but none were adopted.
Earlier in the week, ABI Vice President of Public Policy JD Davis urged lawmakers during a public hearing to add corporate income tax cuts to this tax proposal. The current bill that passed the Iowa House on a 61-37 vote does not include corporate tax at this time and ABI remains undecided. ABI continues to have conversations with both chambers and the Governor’s Office to ensure a comprehensive tax reform package is beneficial for the diversity of ABI members and their filing status. You can learn more about the tax packages below.
Several other key bills related to ABI’s policy priorities also advanced this week as today marks a key deadline for the Iowa Legislature. Known as the first “funnel”, this is the final date for most bills and joint resolutions to be approved by the Iowa Senate and House Committees. This is a requirement in order for these bills to remain eligible for consideration until the legislature meets its next deadline.
Appropriations and Ways and Means bills are exempted from this funnel deadline. Below is a list of bills ABI’s public policy team has been tracking that are of interest to members.
As stated above, on Wednesday, the Iowa House passed HF 2317, its version of broad-based tax reduction. The bill reduces personal income taxes to a flat 4% over time, eliminates the tax on retirement income, eliminates the capital gains tax on ESOP shares and eliminates the tax on cash rent income for retired farmers. The bill is similar to the Governor’s proposal, but does not include a reduction of corporate taxes to a flat 5.5% over time.
A fiscal note showing the impact and cash flows of the Senate Plan, SF 2206, was also released on Wednesday. The Senate plan includes the provisions of the House plan but also reduces corporate taxes to 7.8% while eliminating or reducing some business tax credits. These include the Research and Activities Credit, the Computer and Computer Peripherals Credit and the credit given to sub-chapter S corporations for income from sales outside of Iowa.
ABI public policy staff is providing member input and is guided by our tax policy statements that ABI is open to the consideration of tax credit reform as long as it is accompanied by overwhelming tax relief.
We remain supportive of the process and are working to see that the public policy meets our goals. For any additional information please reach out to JD Davis.