$1 Billion Tax Cut Bill Passes Senate
March 1, 2018
The Iowa Senate on Wednesday passed SF 2383, which would cut Iowans’ tax liability by more than a billion dollars annually once fully implemented. Click here for the fiscal note. Last week, the newsletter highlighted a few of the bill's provisions. Notably, the legislation automatically couples with federal deductions beginning in tax year 2019 for most items. The bill also modernizes sales tax and changes the definition of manufacturer. The bill passed on a vote of 29-21. Several amendments were proposed but only one amendment was adopted.
The amendment that was adopted does the following:
- Eliminates the taxation of specified digital products.
- Eliminates the definition and taxation of information services.
- Changes language regarding nexus and online sales.
- Makes changes to tax credits–increases historic by $5 million. Puts some legal language in for tax credits that are sunsetting.
- Has a cause of action, immunity language in the bill
On Thursday, members of a House Ways and Means subcommittee held a meeting on HSB 671, the Governor’s tax policy proposal. Rep. Peter Cownie, Chairman of the Commerce Committee, is the floor manager of the tax bill. Rep. Cownie will also be the guest speaker at Iowa Business Day on the Hill on Tuesday, March 13. During the meeting, several members of the public spoke, and a few items mentioned include: support of increase in Sec. 179 and Qualified Business Income deduction, incorporating corporate into the Governor’s bill, definitions of lodging in the expansion of sales tax, concerns with definition of digital good and budget sustainability.
The Democrat members of the subcommittee raised some concerns with the current budget situation, and referenced more resources for water quality and mental health funding. At the conclusion of the subcommittee, Chairman Cownie mentioned he intends to move the legislation out of committee the week after the second legislative funnel, which is the week after Iowa Business Day on the Hill and the ABI board meeting. If you would like to provide feedback, please contact Nicole Crain.