Iowa Leaders Pledge to Pass Small Business Tax Reform
As part of NFIB, or the National Federation of Independent Business’ Small Business Day, NFIB members here in Iowa engaged with lawmakers about issues that will help them recover from the COVID-19 pandemic. At top of mind was passing important legislation that would lower taxes for hard working small business owners across Iowa. As small businesses focus on keeping their employees and customers safe from the pandemic, the most important thing our Iowa legislators can do is to lower the tax burden on our entrepreneurs and job creators. Our small business owners were encouraged to hear both House and Senate Leaders pledge to help pass important income and inheritance tax reform.
You can watch Iowa Tax Relief and NFIB’s Small Business Day here.
“Our small business owners would love to see lower taxes. Whether you’re a small business owner or an employee, people make decisions based on economics,” said Matt Everson, NFIB State Director in Iowa. “We’ve seen that over the past year, with our small business owners struggling during the shut down in high taxed states, Iowa is giving small business owners in other states the opportunity to relocate to places with fewer taxes. I think we would see a boon here in Iowa if we can lower our tax rates because although Iowa is one of the highest taxed states in the country, it is also a great place to live and raise a family.”
Here in Iowa, NFIB has two top priorities: income tax reform, and eliminating Iowa’s inheritance tax. When it comes to income tax reform, despite the reforms implemented in 2018, Iowa still has one of the highest income tax rates in the country. Eliminating all triggers to the 2018 tax cuts here in Iowa and decreasing the income tax rate would help many of small business owners recover from this unprecedented COVID-19 pandemic.
“I have never liked those triggers to begin with in the first place. It’s based on revenue target and growth target and while those might be logical in a bubble, once we go outside the bubble, we have to realize that businesses need predictability out there. We can hit revenue targets, but if we hit those revenue targets and are low on growth then we are kicking the can down the road another year, said Senator Dan Dawson. “So small businesses are paying forward on taxes and what predictability do they have in that?”
NFIB’s other 2021 legislative priority is eliminating Iowa’s inheritance tax. Small business owners should not be penalized for the death of a previous owner. In Iowa, if a small business or family farm is left to a family member, they are forced to pay between a 5-15% tax rate. That amounts to hundred of thousands, if not a million-dollar tax bill, which most cannot afford. Currently, there are a few bills floating around the Iowa statehouse. Rep. Jane Bloomingdale is a sponsor of one of those bills.
“The bill I introduced with a couple of colleagues is to phase the inheritance tax out. Right now, we have a $25,000 threshold and we don’t even have an exemption. So, what I’d like to do in this bill is to go to a $300,000 exemption, then a $600,000 exemption, then up to $1 million and then phase it out completely,” said Rep. Bloomingdale.
NFIB’s other 2021 legislative priorities include medical malpractice reform and property tax reductions.