Members of a religious advocacy group want state lawmakers to close a loophole in Iowa’s corporate income tax law in which out-of-state corporations are not required to pay income taxes on profits they make in the state. Des Moines business owner Sheena Thomas is a member of “A Mid-Iowa Organizing Strategy,” or AMOS, which says the loophole is unfair.
Thomas says they’re seeking a level playing field in which they believe the corporate income tax they pay in Iowa should be the same for large corporations on the profits they make in Iowa. Thomas owns a designer jewelry studio and gallery.
Eddie Mauro owns Universal Insurance of Des Moines. Mauro says there are thousands of small business owners in the state that don’t understand that this is taking place, and he says the more those business owners learn about it, the more pressure they will put on their legislators. Under the loophole, big retailers like Wal-Mart and Best Buy are not required to pay income taxes on profits in Iowa.
Iowa State University professor Chris Rehman, an AMOS member, says with the tight state budget situation, the legislature should seriously consider the issue. Rehman says closing the loophole will not raise taxes on ordinary Iowans, but it will level the playing field for Main Street businesses and raise tens of millions of dollars in new revenue.
ISU sociology professor Jan Flora says the current policy creates an inequity that’s bad for Iowa. Flora says it may be legal, “But it’s wrong and we should stop it.” This is the second time the Governor Chet Culver has arranged to have an outside group pressure lawmakers on the issue that is one of his failing legislative priorities. Democratic leaders have said they will not debate the issue this session, and say they aren’t swayed by the lobbying.