Iowa Legislative Session Starts Next Week

January 5, 2023

Iowa Legislative Session Starts Next Week

Key Republican lawmakers are making it clear property tax reform will be a priority for the 2023 Iowa legislature, which starts January 9th. Senate Republican Leader Jack Whitver says that all options are on the table when it comes to property taxes. House Speaker Pat Grassley says the property tax is among the hardest taxes to cut. More than 40 percent of the property taxes collected in Iowa go to public schools. In 1992, Branstad signed a law that limited annual city and county property tax growth to the rate of inflation through 1995. Iowans for Tax Relief has called for a two-year freeze on property taxes, to give legislators time to come up with comprehensive changes to the system. NFIB has fought to reduce taxes, specifically property taxes, for the last several legislative sessions. Last year, the legislature passed income tax reform, key legislation that gives small business owners significant tax reductions. 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

NFIB continues to advocate for further tax deductions in 2023. “Over the past 21 years, property taxes have skyrocketed in Iowa by over 120 percent, becoming a giant financial burden for small business owners and their employees. Now is the time to address this unsustainable growth and begin to reign in the uncontrollable spending habits by many cities ad counties around the state. NFIB applauds the Iowa Senate and House for their leadership in making this a top legislative priority in 2023,” said Matt Everson, NFIB State Director in Iowa. Here is what NFIB is asking lawmakers to accomplish during the 2023 legislative session:

Property Tax Reform

Property taxes in Iowa are too high, uncompetitive and have increased by more than 120% in the last twenty years.

Out of control city and county budget increases along with unfair tax exemptions have created an unsustainable property tax climate that continues to shift the burden of paying for essential public services onto the backs of small businesses and their employees.

NFIB is urging Iowa Legislators to look at ways to rein in city and county budgets, limit property tax exemptions and equalize the playing field for ALL property taxpayers in Iowa.

Income Tax Reform

One of the top priorities for NFIB small business members continues to be the lowering of Iowa’s personal income tax rates.

The best and most fair way to give every small business and their employees more of their hard-earned money while ensuring continued economic growth in Iowa is through personal income tax cuts.

NFIB is urging Iowa legislators to maintain a fiscally responsible budget, ensure that future income tax reductions remain on track and continue to find ways to lower and eliminate Iowa’s personal income tax rate.

Topics:

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State:

Iowa

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