The Iowa House has voted to extend a state tax break for some Iowans who own livestock and get at least half of their annual income from farming.
It’s a capital gains tax break for the sale of dairy cattle, work horses and racing horses as well as livestock, like cows and bulls and sows and boars, used for breeding. The tax break expired at the end of 2022. If it isn’t revived, officials estimate the state will collect $2.5 million in capital gains this year from cattle and horse sales.
Representative Derek Wulf, who has a cow-calf operation near Hudson, said the capital gains tax break for livestock was established in the late 1990s.
“Our tax code should promote livestock production, which we know is often how beginning farmers get their start in agriculture. We know that livestock production supports rural communities and drives our rural economic activity,” Wulf said. “…We want to make sure that we don’t increase taxes on our livestock producers and farmers here in thie state.”
The repeal of this capital gains cut for some livestock sales was part of a wide ranging tax bill that became law in 2018. The House bill that would restore the tax break is now under consideration in the Senate.