Tax Reform 2.0

Both the House and Senate are moving separate bills (HF 2583 and SF 2372) with many important pieces of tax policy that were not considered when the larger tax cut bill HF 2317 was passed earlier this year. ABI staff will be working with legislators to make sure that the reconciliation of the measures includes the section important to ABI members.

Included in both bills is language sought by manufacturers of food for human consumption. These manufacturers held that a newly promulgated administrative rule exposed more of their operations to taxation than was the case prior to the adoption of the rule. The language in both bills solves this tax problem.

The franchise tax rate paid by Iowa banks was not addressed when personal and corporate tax rates were reduced under the larger tax bill signed into law in March. Under the pending Senate bill, those rates will be lowered over time to 3.9%, matching the rate paid for personal income going forward. Under the House bill the bank franchise tax rate will move to 3.5% over time and approximate the tax burden of Iowa credit unions.

ABI is supportive of both bills and is working to ensure a reconciled bill heads to the governor.