February 12, 2016

Iowa Supreme Court rules in Wellmark property tax case

Iowa Supreme Court building.

Iowa Supreme Court building.

The Iowa Supreme Court has ruled a Des Moines-based insurance company will have to pay more in property taxes for it headquarters in downtown Des Moines.

Wellmark completed its nearly 600,000 square foot headquarters in March of 2010 at a cost of around $150 million.

The outside of the building is finished with limestone, sandblasted precast concrete, and glass, with a large U-shaped, recessed, curved glass wall on the southern exposure. It features among its amenities, a convenience store, an art gallery, a full-service restaurant, and a conference center, as well as office space.

The Polk County Assessor valued the building at $99 million for property tax purposes. Wellmark appealed that valuation, arguing the sales data in Des Moines showed the building would not likely be resold to another company as a corporate headquarters. It said it is more likely part of the building would be a headquarters and the rest would be rented out as office space.

The district court and Iowa Court of Appeals agreed with Wellmark, and set the valuation for property taxes at 78 million dollars. The Iowa Supreme Court overturned the lower courts, saying there may be a lack of sales of corporate office buildings in Des Moines, the court does not believe that there is no market for the building, just no active market.

“It is true, of course, that the market for the Wellmark property for use as a single-tenant office building may be limited. But we think the fact that the property is currently being successfully used as a single-tenant corporate headquarters cannot go unnoticed. Current use is an indicator that there is demand for such a structure,” according to the ruling.

The ruling also says it is ironic that a taxpayer would build a 150 million dollar building and then say it is worth less than half that amount for tax purposes. “We further note that under the approach advocated by Wellmark, very expensive and costly properties such as large manufacturing concerns could escape fair taxation on the ground of lack of a local market for a specific use.”

The High Court says “a substantial discount in market value because of the lack of an active market strikes us as unjustified by the current record.” The Supreme Court says the $99 million evaluation for property taxes should stand.

The full ruling: Wellmark ruling PDF

 

Senator Grassley says president’s proposed oil tax will die quickly

Sen. Chuck Grassley

Senator Chuck Grassley.

Gasoline prices are dropping almost daily in Iowa, as reports are surfacing about how plummeting oil prices are costing thousands of jobs in the U.S. petroleum industry.

Iowa Senator Chuck Grassley says the low pump prices are saving motorists a bundle, which means they’ll have more money to spend.

“Seventy percent of our economy is based upon consumer spending,” Grassley says, “so when the consumers have more money in their pockets and they spend more money, won’t there be an enhancement of the economy?”

Last week, President Obama proposed a $10 a barrel tax on oil to pay for various green infrastructure projects and transportation system reforms. Grassley says that proposal will die a quick death in Congress.

“I tweeted yesterday that it’s just like a tax on the consumer,” Grassley says. “It’s going to be passed on and it’s not going to go anyplace and it shouldn’t.” Grassley, a Republican, disagrees with what he says is the common mindset among Democrats. “Whether it’s this president or whether it’s any of the three that were running for president on the same ticket that Obama is, the answer to every problem that this country faces is higher taxes, higher spending and more regulation,” Grassley says.

Congressman Bill Flores, a Republican from Texas, says: “It’s clear in his last year in office, the president is more concerned with his radical climate policies and pleasing special interest groups than providing economic stability for hardworking American families.” Grassley says the proposed tax would only bring more government and more power for Washington D.C. He calls the nation’s capital “an island surrounded by reality.”

Grassley says, “I think the president’s trying to say through a $10 a barrel increase in imported oil, which is like a 25-cent per gallon tax on gasoline, that the government can accumulate this money and solve some of our problems, but it just isn’t so.”

Gas prices in Iowa are now averaging $1.63 a gallon, after peaking last June at $2.78. Iowa’s highest-ever gas prices came in July of 2008 at just over $4 a gallon.

House Republicans propose alternative to GOP governor’s water quality plan

capitolHouse Republicans have unveiled their own plan for using million of dollars in sales taxes that are currently reserved for school infrrastructure.

Governor Terry Branstad wants to tap into that fund to pay for millions of dollars in water quality projects. House Republicans propose letting schools keep all the infrastructure money, for use on a variety of other school-related needs.

“I’m an education individual and I know what the needs are of the education community,” says Representative Ron Jorgensen, a Republican from Sioux City who is a former school board member.

Jorgensen is now chairman of the education committee in the Iowa House and he is advancing a bill that would extend the one-cent sales tax for schools that’s set to expire in 2029 for another 20 years and all the money would still be dedicated to some sort of school use. Jorgensen doesn’t sound convinced by Branstad’s idea to divert some of that money to water quality projects.

“It just has come up on us so quickly. There’s just a lot of information that we need to have before we could warm up to something like that,” Jorgensen says. “…With the governor’s proposal, there’s still a lot of information we would need to understand before you could even say: ‘Yeah, let’s do this.'”

The governor says he looks forward to working with legislators on their ideas.

(Reporting by Iowa Pubic Radio’s Joyce Russell; additional reporting by Radio Iowa’s O. Kay Henderson)

IRS reminds Iowans to check for Earned Income Tax Credit eligibility

IRS-logothmbThe Internal Revenue Service is making its annual appeal to taxpayers to sign up for the Earned Income Tax Credit.

The director of the program for the IRS, Ken Corbin, says if you made money working in 2015, you may be eligible. “Any person who has earned income from employment — whether you are running a business, farming or self employed — could potentially qualify for EITC,” Corbin says. He says taxpayers all across the country take advantage of the tax credit.

“Nationwide last year, over 27 million families received more than 66 billion in Earned Income Tax Credit dollars,” according to Corbin. “The average EITC refund to those families was over $2,400.” He says there are still one in five people who may be eligible, who don’t know about the credit, or don’t file for it.

“Meaning that more than one million of the taxpayers are not putting EITC dollars to work for them,” Corbin says. “Anyone with earnings of $54,000 or less should see if they qualify at IRS.gov, search word: EITC.” Corbin says many Iowans do take advantage of the credit.

“Over 200,000 Iowans claimed the EITC last year, bringing in a combined refund amount of over $450 million back into the economy of Iowa. With an average refund of more than $2,200,” he says. You may’ve checked in the past and found you weren’t eligible for the credit. Corbin says you should check again, especially if you’ve had some major changes in your life.

“Marital status changes, they might have children, employment changes, changes in their income,” Corbin says. He says you should check each tax year to see if changes might make you eligible.

Corbin says you can still file and claim the EITC tax credit even if you are not required to file a tax return.

 

Deadline extended for contributing to College Savings Iowa plans

Mike Fitzgerald.

Mike Fitzgerald.

If the end of the year came up too fast and you didn’t put any money in your child’s College Savings Iowa account, you can still do so and get a break when you file your state taxes.

State Treasurer Michael Fitzgerald says the rules that required you to get the contributions to the state program by the end of the year have changed.

“It was a made scramble, December 31st was the cutoff, had to be done by that date. But the legislature changed it just this past year — so now Iowans have the benefit of being able to wait until May 2nd this year when the tax filing deadline ends,” Fitzgerald says. “They can still make a contribution to their College Savings Iowa account and take that off their 2015 taxes.”

You don’t have to have an existing account to take advantage of the tax break. You can open a new account before the May 2nd deadline and deduct whatever you put in on your 2015 taxes.

College-savings-Iowa-logo“It only takes 25 dollars to start a College Savings Iowa account. So, you can put money in and deduct it from your taxes this year,” Fitzgerald says. The maximum tax break for 2015 is $3,163. Fitzgerald says you can double that if both parents have an account for their kids.

“A married couple with two children putting in the maximum amount could put in $12,752 for their children and deduct that from their Iowa taxes this year,” Fitzgerald says. “So, it’s just a phenomenal tax break to help families send these kids to college.” The maximum amount you can deduct is adjust each year based on inflation — so you will be able to deduct a little more from your 2016 taxes.

“Next year it will be $3,188. It’s not much, but inflation hasn’t been much,” Fitzgerald says.

Fitzgerald says you can easily create an account online. “Just log on to CollegeSavingsIowa.com. It’s very simple, just your name, your Social Security number, the child’s name the child’s Social Security number that you are saving for, and you’re in,” according to Fitzgerald. He says you can start an account for a child as soon as they are born and let it build until they are ready for college.

You can withdraw the funds from the account for qualified college expenses, such as tuition, books, supplies and room and board at any eligible college, university, community college or accredited technical training school in the United States or abroad.

 

IRS says plenty of free tax help available for Iowans

IRS-logothmbEager Iowans who are hoping for a tax refund can start filing their returns as soon as next week.

Filing season officially opens January 19th and ends this year on April 18th. Christopher Miller, the Iowa spokesman for the Internal Revenue Service, says there’s plenty of free filing help available.

“You can do it online for free by going to our website (www.irs.gov), or you can go to a volunteer income tax assistance site,” Miller says. “These are organizations within your community, like AARP, that do tax counseling for the elderly.” He says electronic filing remains the best way for Iowans to complete their returns.

“That insures that you’re getting all of the credits and deductions that you have coming to you and it insures that all the math is done correctly,” Miller says. “Generally speaking, it’s a more accurate return.” Plus, he says e-filing will speed up a refund, if you have one coming. He suggests Iowans should start getting their financial documents together now, like charitable donation receipts and health care information.

Miller says one -new- document you’ll need this year is the 1095-A, B or C, which you should have received if you’re getting health insurance under the Affordable Care Act.

 

Program offering federal tax break for home buyers enters 4th year

David Jamison

David Jamison

Just under 800 home buyers in Iowa are expected to benefit from a program launched today.

Lieutenant Governor Kim Reynolds says the “Take Credit” program allows first-time home buyers to reduce their federal income tax liability by up to $2,000 a year for the life of their mortgage.

“Through the program, 50-percent of an eligible home owner’s mortgage interest becomes a tax credit that can be deducted, dollar for dollar, from their federal tax income liability,” Reynolds said at a statehouse news conference.

Iowa Finance Authority Executive Director Dave Jamison says this is the fourth year the Take Credit program has been offered in Iowa.

“In the previous three years we have offered this program, it has assisted more than 2,000 families in Iowa on their federal taxes,” Jamison said. Those families, combined, saved an estimated $3.4 million in the 2015 tax season, according to Jamison. He estimates 780 Iowa home buyers will participate in the program this year. Reynolds noted that the mortgage credit certificate funding is available on a first-come, first-serve basis until the funds run out.

“Eligibility for the tax credit program requires home buyers to meet household income and purchase price limitations and meet the definition of a first-time home buyer. That varies from county to county,” Reynolds said.