Throughout this year’s overhaul of Iowa’s property tax system, Senate Democrats were committed to ensuring our small businesses got a boost. That’s why the reforms we approved include a Main Street business property tax credit that reduces commercial property taxes for all Iowa businesses and helps small businesses the most.
Over the years, Iowa’s property tax system has become a barrier to new job creation and business expansion. Commercial property owners pay taxes on 100 percent of the assessed value of their property—about twice what residential property owners pay.
With Senate File 295, we made Iowa’s property tax system more equitable for small companies with a $125 million commercial property tax cut that starts from the bottom up. Most of the benefit goes to local small business owners, the biggest job creators in our communities.
When fully phased in after three years, almost two-thirds of Iowa commercial properties—those valued at $145,000 or less—will be taxed at the same rate as residential properties. Bigger businesses will also get the same break on the first $145,000 of their property.
One of the best things about this plan is that it protects Iowans from a “tax shift” that could increase their residential property taxes. The state will reimburse local governments for the money they are no longer collecting in local commercial property taxes.
NEW TAX BREAKS HELP EXPAND IOWA’S MIDDLE CLASS
Iowa’s growing economy has allowed us to cut taxes while balancing the state budget and protecting local services and schools.
The changes we made during the 2013 session will put more money in the pockets of middle-class Iowans and make it easier for businesses to invest and grow. We approved tax cuts that are good for every employer and taxpayer in the state, including:
• Saving Iowans $4.4 billion over 10 years by overhauling our state’s property tax system. Every class of property will get a permanent tax cut—commercial, industrial and agricultural properties, as well as homes, apartment buildings and nursing facilities (SF 295).
• Helping low-income Iowa families work their way out of poverty by increasing the state’s Earned Income Tax Credit from 7 percent to 15 percent of the federal credit (SF 295).
• Putting some of the state’s budget surplus back into the pockets of eligible Iowa income taxpayers with a $30 to $60 tax credit any year the Iowa Taxpayers’ Trust Fund exceeds $30 million (SF 295).
• Encouraging rehabilitation of Iowa’s historic commercial properties and business districts by expanding eligibility for State Historic Tax Credits (SF 436).
• Attracting more businesses to locate and expand in Iowa by providing an additional $50 million in tax credits for this purpose (HF 620).
• Helping promising startup businesses get off the ground through a tax credit for investment in early-stage, innovative companies (HF 615).
• Cleaning up abandoned, blighted or contaminated industrial and commercial properties with $10 million in tax credits for so-called “brownfields” and “grayfields” (HF 620).
• Financing economic development by allowing municipalities to establish reinvestment districts where a portion of the sales tax revenue helps boost local projects (HF 641).
• Feeding hungry Iowans with healthy food through a tax credit for growers who donate produce to Iowa food banks and other emergency feeding organizations (SF 452).
• Ensuring a strong future for Iowa farming by expanding a tax credit program in which retiring farmers lease or rent land to beginning farmers (HF 599).
• Expanding the definition of agricultural property for tax purposes to include land used for the cultivation and production of algae for animal feed, nutrition or biofuels (HF 632).
PRESERVING IOWA HISTORY DRAWS BIG INVESTMENT
Efforts to fix up Iowa’s historic properties and business districts got a boost this year. During the 2013 session, the Legislature expanded opportunities for Iowans to use State Historic Tax Credits.
This program attracts private investment to neighborhoods, creates jobs, enhances property values and develops affordable housing by providing an income tax credit worth 25 percent of qualified rehabilitation costs for historic buildings. To date, State Historic Tax Credits have leveraged more than $1 billion in rehabilitation costs by private investors in Iowa communities.
We’ve improved this popular program with Senate File 436, which:
1. Changes the definition of commercial property. Previously, Iowa law categorized property as residential, barn or commercial. We now have only two categories: commercial and other than commercial property. This will allow more properties that do not earn income to qualify for the tax credit.
2. Helps more small projects qualify for tax credits by decreasing the dollar amount for the project cost. For commercial property projects, the amount to qualify for the tax credit is now 50 percent of the value of the building or $50,000, whichever is less. Buildings other than commercial—historic churches and other nonprofits—qualify for the tax credit if the project is 25 percent of the value or $25,000.
3. Raises the cap on projects that qualify for the Small Project Fund. Projects with expenses as high as $750,000 now qualify as “small” and may be submitted and funded at any time of year.
4. Increases the length of time available to complete a project by offering a 12-month extension if more than half of the qualifying rehabilitation funds have been spent within the first 60 months of the project.
We had hoped to make the State Historic Tax Credit Program even better when the Legislature gave bipartisan approval to increase the amount of historic tax credits by $50 million (SF 452). Unfortunately, Governor Branstad vetoed that effort to encourage rehabilitation of our historic properties and business districts.
For complete details on State Historic Preservation Tax Credits, visit http://tinyurl.com/SHPTIP or call the Iowa Department of Cultural Affairs at 515-281-5111.
NEWS YOU CAN USE
Video contest for teens
Through July 31, the Iowa Department of Public Health is sponsoring a video contest as part of Health Insurance for Teens Week, August 11-17. Teens aged 13 to 19 who live in Iowa can participate in the contest by submitting a 90-second video about why health insurance is important to them. The video can be a testimonial, scene that is acted out, music video or rap. For more information and contest rules, visit www.iamincontrol.org/hit-week-2013-video-contest.
Become an outdoors woman
Registration is open for the Becoming an Outdoors-Woman (BOW) workshop Sept. 20-22 at Springbrook Conservation Education Center in Guthrie County.
The workshop is an opportunity for anyone 18 or older to learn outdoor skills. Classes include basic fishing, fly fishing, bird watching, archery, beginning shotgun shooting, basic motor boat skills, geocaching, canoeing, stand-up paddling, Dutch oven cooking and more. The cost is $150, which covers food, lodging and all materials.
Complete details and registration forms are available at www.iowadnr.gov/Education/CampsWorkshops/BecominganOutdoorsWoman.aspx or by calling Julie Sparks at 515-281-6159.
Hunter education course available online
Adults wanting to satisfy their hunter education requirement to purchase a hunting license have a new option. Iowans 18 and older may take the Iowa hunter education course from two approved online providers: www.Huntercourse.com/usa/iowa or www.hunter-ed.com/iowa. The courses use videos, animations and interactive exercises.
To learn more about hunter education, begin an online course, or to sign up for a field day or traditional classroom course, visit www.iowadnr.gov/huntered.
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