Another Historic Year for Iowa Small Businesses!
On May 25, 2022, the Iowa legislature reached Sine Die, which means the end of the session! At 12:16am the 89th General Assembly came to agreements on final legislation and adjourned.
Although it took a few extra weeks to conclude this year’s session was another historic one for small business!! We accomplished historic personal income tax reductions as well as game changing unemployment benefit reforms. We should all be proud of the work we put in during the months leading up to and during this years session.
Here’s a recap of our small business victories!
HF 2317 – Income Tax Reform
This legislation provides significant tax reductions for many small business owners and their employees. The bill reduces the current 8.53% top personal income tax rate to a single 3.9% flat rate by 2026. This bill also eliminates taxes on retirement income starting in tax year 2023 and begins to reduce the corporate tax rate from 9.8% to 5.5% as certain revenue triggers are met over time. Passed the House 61-34. Passed the Senate 32-16.
Other Key Highlights:
- Eliminates the capital gains tax on the sale of shares of qualified ESOP businesses.
- Exempts farmer retirement income on either cash rent or capital gains tax
Governor Kim Reynolds signed bill into law on March 1, 2022
HF 2355 – Unemployment Insurance Reform
This legislation reforms Iowa’s current unemployment insurance system and transforms it into a re-employment system. The bill accomplishes many things including minimizing the maximum amount of time an individual can be on unemployment from 6 months to 4 months. This provision alone will save employers $70-80 million dollars per year in unemployment taxes. Passed the House 58-37. Passed the Senate 30-14.
Other Key Highlights:
- Enhances suitable work requirements by accelerating the timeframe and wage at which someone must accept a job.
- Defines the term “misconduct,” allowing both parties to know the rules of the game when a dispute is brought before a judge.
Governor Kim Reynolds will sign bill into law soon
