A bill on its way to the governor will align state tax law with changes made at the federal level in December.
It’s the first bill to pass the Iowa Senate and House this year and Representative Chris Hagenow, a Republican from Windsor Heights, says it will ultimately save Iowa taxpayers an estimated $98.98 million this year.
“I believe that it’s almost always a good thing to let Iowans keep more of their money, which is what this bill does,” Hagenow says.
The bill would extend a tax break to Iowa business owners, allowing them to claim the first half a million dollars worth of new equipment purchases as a tax deduction for the business. It also allows Iowa teachers to claim a tax credit for up to $250 for the supplies, equipment and materials used in their classroom. That’s a positive for Representative Dave Jacoby, Democrat from Coralville, but he has some concerns about the bill.
“What it means is $100 million will not go to K-12 education, will not go to environmental concerns and will not go to roads and bridges — critical infrastructure in Iowa,” Jacoby said. “But, in my humble view, the good outweighs the bad.”
The bill applies to tax year 2014, so Hagenow says that means it affects the tax returns Iowans are filing now.
“This bill is good for tax preparers. If any of you have had a chance to visit with a local CPA or tax preparer, I know they were up here a week or so ago and indicated this is a priority for them,” Hagenow says. “They need some certainty so that they can go ahead and get started on this tax season.”
The bill cleared the Iowa House this morning by a unanimous vote. It passed the Iowa Senate last week on a 49-0 vote. It now goes to Governor Branstad, who is expected to sign the bill into law.