Lawmakers Approve Pro-Small Biz Legislation
Small business owners in Iowa are grateful to lawmakers in Des Moines for advancing several pro-small business bills that will keep the economy strong. Here’s a quick summary:
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 signed bill into law on June 16, 2022
