After an extended weekend of negotiations, the Iowa Legislature officially adjourned sine die at 7:07 p.m. on Sunday, May 3, concluding the 2026 legislative session.

The final days of session were dominated by tax policy, budget considerations, and long-debated structural reforms impacting both individuals and businesses across the state.

Constitutional Tax Reform Heads to Voters

One of the most significant long-term policy developments this session was passed.

In November, Iowans will consider a constitutional amendment that would:

–  Require a two-thirds majority in the legislature to raise individual income taxes

–  Codify Iowa’s flat income tax structure into the state constitution

Property Tax Reform Agreement Reached

After months of negotiation, lawmakers reached a final agreement on property tax reform in the closing hours of session.

According to the Iowa Department of Management, the legislation is projected to deliver approximately $4 billion in property tax relief over the next six years.

NFIB analysis, focusing on city, county, and school levies, estimates the following impacts over a 10-year period compared to the status quo:

–  $4.3 billion in relief for homeowners

–  $1.2 billion in relief for businesses

–  $480 million in relief for farmers

–  $220 million increase in taxes paid by multi-residential properties

Key Consideration for Businesses

While the overall package delivers meaningful relief, some business property owners should be aware of near-term impacts:

–  Beginning in FY2028, commercial, industrial, agricultural, and non-homestead residential properties may experience modest increases

–  Estimated at a statewide average of 6–8% year-over-year, or roughly 3% above what would have occurred under current law

–  These increases are largely driven by a tax shift associated with the expanded homestead exemption