Republicans on an Iowa House Subcommittee have voted to require that Deere & Co. return half of the lucrative state tax credit it received for research activities in 2024, due to what the bill describes as “mass layoffs.”
President Trump has threatened to slap tariffs on John Deere products if the company moves more production to Mexico. Republican Representative Derek Wulf of Hudson suggested the bill fits with President Trump’s agenda. “In my opinion, this bill is the definition of ‘America First’ and more importantly ‘Iowa First,'” Wulf said.
About 1700 workers at Deere plants in Iowa were laid off in 2024. During a subcommittee hearing on the bill Thursday, Deere & Co. lobbyist Stacey Pellet said layoffs are “a last resort” and not uncommon during market downturns.
“The message that this bill sends to the industries, to companies and also to people looking to invest in Iowa is very concerning,” Pellet said.
Pellet told lawmakers Deere doesn’t earn the credit until the company has spent the money on research and development in Iowa. “Deere invests roughly $2.5 million a day in research and development and half of that is done in Iowa,” Pellet said. “…We invest more in R&D here than in anywhere else in the world and we’re pretty proud of that.”
The bill wouldn’t just penalize Deere. The bill says any company that received the state Research Activities tax credit and laid off workers in 2024 would have to repay at least 6.25% of the credit and as much as 50% if 1500 or more workers are laid off. The repayment requirement also would be imposed in future years when companies layoff workers.
Iowa Taxpayers Association Nate Ristow said coming after businesses facing economic headwinds is the wrong approach. “If they’re doing the research here in Iowa and they earned the credit, we think that should be honored and not reduced,” Ristow said.
The Iowa Association of Business and Industry also opposes the bill.