Senate Unveils Tax Plan
February 22, 2018
Sen. Randy Feenstra (R-Hull) on Wednesday released SSB 3197, a tax reform bill that will lower individual and corporate income tax rates. Click here to read the Senate Republicans' summary of the legislation. The legislation will result in more than $1 billion in tax relief annually. A few key provisions of the bill include:
- Elimination of Federal Deductibility
- Automatically couples with federal taxes
- Allows for complete deduction of the new qualified business income 199A
- Reduces the corporate tax rate from 12% to 7%
- Sunsets many tax credits
- Modernizes the sales tax code and puts Iowa in a position to collect online sales tax
- Changes how Iowa’s financial institutions are taxed
- Increases pension exemption
- Changes the definition of manufacturer in the Iowa code
A subcommittee was held on the legislation Thursday morning, and we expect the bill to move through the full Senate Ways and Means Committee meeting this afternoon. During the subcommittee, many business and economic development groups spoke favorably about the bill. Labor groups and some individuals affected by tax credit elimination raised concerns. Some Democratic Senators raised questions about the fiscal impact of the bill on the state budget. We expect a lot of debate during the committee meeting and conversation about the state budget and how the tax reductions would affect state revenue and state-funded programs and services.
The ABI Tax Committee will have a conference call on Monday, February 26, to review and gather feedback on both the Senate and Governor’s proposed tax reform bills. If you’re on the Tax Committee, you’ve received a brief bill summary in an email from Nicole Crain. If you’re an ABI member and would like to join the Monday Tax Committee call, contact Michelle Vollstedt at firstname.lastname@example.org to RSVP. You can also provide any feedback you have on the legislation to Nicole Crain at email@example.com.