State officials are asking the legislature to correct an error in the formula that determines some property tax rates.
Each year, the Iowa Department of Revenue makes a statewide calculation that affects property tax rates. The error is connected to what’s called multi-residential property. A 2013 law said apartment buildings, nursing homes and mobile home parks were no longer to be taxed as commercial property, but as multi-residential property. Then, a 2021 law called for taxing those multi-residential properties at the same rate as single-family homes and condominiums. However, the law failed to adjust the statewide formula used to determine how much cities, counties and schools can collect in property taxes.
The error means local governments would get less than expected from residential property taxes. A bill the governor’s office and the Iowa Department of Revenue submitted to the Iowa Senate would fix the error.