Radio Iowa

Iowa's Radio News Network

You are here: Home / Archives for Taxes

Plentiful puzzle analogies from GOP, describing shutdown plan

By

Jenga, energy drinks and microwave popcorn — just some of the items being used to explain the path to shutting down the 2018 Iowa legislature.

Senate Republican Leader Jack Whitver had a silver can of Monster Ultra Energy in his hand as he spoke with reporters earlier this week. Whitver joked he’s buying the stuff by the case these days as key legislators meet over and over, in private, to hammer out a tax plan.

“The concepts are all the same,” Whitver said. “How they fit together is big thing, but all the parts are similar and so it’s just putting that puzzle together.”

Speaking of puzzles, Republican House Speaker Linda Upmeyer of Clear Lake said crafting the state budget plan and the tax bill has been like Jenga — the game where players stack and remove wooden blocks from a teetering tower.

“The pieces that we’re working with are not new, right? So we’ve had lots of conversations about all of these things,” Upmeyer said today. “It’s how it all fits.”

As for when the pieces finally slide into place, legislators aren’t making predictions, but Senate President Charles Schneider of West Des Moines is using the same puzzle analogy as his fellow Republican leaders.

“It all fits together,” Schneider said. “The tax bill that we’re talking about fits with the budget, so we need to have conversations with everyone to make sure we’re all on the same page.”

While the Vatican uses white smoke to signal when a decision’s been made about a pope, Schneider joked that that legislators may signal a GOP deal is done with something that’s prompted fire alarms in the capitol.

“That’ll be the sign — burnt popcorn,” Schneider said.

 

Senators pondering tax rebate ‘fix’ for Knoxville Raceway

By

Senator Bill Dotzler

A “fix it” bill is eligible for debate in the Iowa Senate to help the Knoxville Raceway get the money from a tax break it won in 2014.

The legislature and former Governor Terry Branstad agreed the track should get a rebate on some of the state sales taxes paid on a construction project, plus any sales taxes charged on goods and services sold at the facility. Senator Bill Dotzler, a racing fan from Waterloo who is supporting what he calls a “fix it” bill, said state tax officials failed to create a “Raceway Rebate Fund” for the track.

“It was really a Department of Revenue mix-up,” Dotzler said. “It’s still a mystery, but this bill would allow Knoxville to go back and collect the revenue they already submitted.”

A report from the Legislative Services Agency indicates the Iowa Department of Revenue sent the Knoxville Raceway an $18,012 rebate four years ago, but nothing since then. State officials say the Raceway has failed to designate a construction project that’d be eligible for the rebate. The state has kept more than half a million dollars in sales taxes paid on retail sales at the track the last four years.

A bill that has cleared a senate committee would eventually extend up to $1.8 million in sales tax rebates on items and services sold at the track in Knoxville. Over 200,000 people visit facility each year, but Dotzler said it’s facing competition from a sprint car track in Macon, Illinois co-owned by NASCAR driver Tony Stewart.

“The racing industry has gone through some troubled times, in a way, and they want to enhance their fan base, so I’m very supportive of the bill,” Dotzler said. “I think it’s a good bill for Iowa.”

The bill isn’t universally popular, though. Senator Herman Quirmbach of Ames said the state shouldn’t be giving tax breaks to an entertainment business.

“The raceway — everybody tells me how popular it is, how many people come, how successful it is,”Quirmbach said. “All that does is raise a question in my mind: ‘Why do they need a taxpayer subsidy?'”

The Marion County Fair Association owns the Knoxville Raceway. NASCAR owns the Iowa Speedway in Newton. In 2014, Governor Terry Branstad went to the track to sign legislation extending a sales tax rebate to the Speedway.

Tax agreement among 88 Republicans and GOP governor elusive

By

Linda Upmeyer

Republican lawmakers say they are “close” to a deal to cut Iowans’ income taxes, but it’s taken a while to find the method and the depth of cuts that all feel “comfortable with” according to House Speaker Linda Upmeyer of Clear Lake.

“I think the thing we have to remember here is that Republicans have waited a lot time to do some tax reform and some tax cuts and there are 88 Republicans here and so it’s not surprising, perhaps, that there are many ideas on how you might approach this,” she says.

Senate President Charles Schneider, a Republican from West Des Moines, says it’s been two decades since Republicans controlled both the legislative and executive branches of state government and had a “serious discussion” about tax policy.

“So these conversations don’t happen very often and we want to make sure we get the policy right,” Schneider says. “There are a couple of things we agree on even though we don’t have a final plan in place.”

There is universal agreement among Republicans that the state shouldn’t get a windfall after federal tax cuts were enacted in December. Without any changes that would happen, because Iowans get a deduction on their state income taxes for their federal tax bill. Republican Governor Kim Reynolds says she does not have a “timeline” for having a final deal emerge from these private talks. She’s been reluctant to make public pronouncements about what should be in the tax plan, too.

“When you start drawing lines in the sand, that makes it hard to have those conversations,” Reynolds says.

House Republicans have voted for a five-year plan that would cut taxes by $1.3 billion. Republicans in the Senate have proposed $2 billion in cuts over the next five years. Senate Democratic Leader Janet Petersen of Des Moines says “there is room” for a tax cut this year, but the size of the deal that may emerge from the GOP’s closed-door negotiations is worrisome.

“The tax plan is still kind of a mystery to us, as to Iowans, and what we’re actually going to see,” Petersen says. “…Democrats have said all along we’d be willing to work on a tax plan as long as it’s fair and takes into account our current budget situation.”

Petersen and Schneider made their comments during an appearance this weekend on Iowa Public Television’s “Iowa Press” program.

Governor says framework in place, negotiators ‘very close’ to tax deal

By

Republican lawmakers are negotiating the final budget details in the governor’s office.

Republican Governor Kim Reynolds and top Republicans in the House and Senate are continuing their private negotiations today, aiming for an agreement on how deeply to cut state taxes.

“We’re still talking. We’re still working. We’re going to get together again this afternoon,” Reynolds told reporters this morning. “And that’s how you get to consensus.”

Reynolds indicated they’ve been “very close” on the overall framework of the bill for weeks.

“It’s just how we get there, when we get there and what the details look like,” Reynolds said. “…It’s my goal to get a tax bill done this year.”

Reynolds cancelled an economic development trip to New York this week to stay at the capitol to be directly involved in negotiations. Representative Guy Vander Linden, a Republican from Oskaloosa who leads the tax-writing committee in the Iowa House, said the governor’s been a “driving force” in the negotiations, with a simple message to lawmakers.

“Get a tax bill out that I can sign and let’s get this thing going,” Vander Linden told reporters was the basic summary of Reynolds’ direction.

The main sticking point has been how big the tax cut package should be.

“I think the governor’s done a good job of laying out the path that she would like to have us to follow,” House Speaker Linda Upmeyer, a Republican from Clear Lake, told reporters Wednesday afternoon. “…The biggest thing is that we would like to make sure it’s sustainable and responsible…Hopefully we’ll get there very soon.”

Senate Republicans hope to provide a significantly larger series of tax cuts and provide them sooner. The governor has publicly said she’s not going to draw any “lines in the sand” about what must be in or out of the final package. Senate President Charles Schneider, a Republican from West Des Moines, is equally reluctant to talk details in public. Schneider indicated this week that Reynolds is offering “insight” to the process.

“I think it’s good that people are keeping open minds and wanting to work together to find something that’s good for the taxpayers of Iowa,” Schneider told reporters.

There have been some hints as to how large next year’s tax cuts may be. The budget plans released by Republicans in the House and Republicans in the Senate reflect a roughly 100-million dollar reduction in tax revenue.

Senator Grassley says federal tax cuts helping middle class

By

Senator Chuck Grassley.

On this federal tax deadline day, some Iowans are considering changing their withholding allowances.

Federal tax cuts enacted late last year put more money into our checks, but the higher take-home pay could end up being a tax liability. Iowa Senator Chuck Grassley says the tax cuts were “absolutely” worthwhile and are a benefit.

“I would look at it from the big picture of economic growth,” Grassley says. “For eight years, we had economic growth of 1.4% and we’ve gotta’ have 3% economic growth and one way to do it is to cut taxes.” Grassley says that money can be better spent by the people who earned it than by Uncle Sam, as he says politicians in Washington too often let politics influence how those tax dollars are allotted.

“This tax cut is really helping middle class America who, probably between 2000 and right now, has not had any pay increase. Maybe today, their salary’s purchasing power is even less than it was in 2000.” Grassley says the 150-million-some taxpayers nationwide should have more say in how the money they earn is spent — or saved — and the tax cuts return more of that money to the people where he says, “it does more economic good.”

“Jobs, growing the economy, more economic freedom — is what tax cuts are all about,” he says. Grassley, a Republican, says there needs to be less regulation and Congress needs to “be more careful how we spend the taxpayers’ money.”

 

House Republicans unveil $7.4 billion state spending plan

By

Pat Grassley (file photo)

Republicans in the Iowa House have unveiled a plan to increase spending by more than three percent for the next state budgeting year.

Republican Representative Pat Grassley of New Hartford suggests the plan’s overall $7.4 billion spending target is similar to what Senate Republicans have in mind.

“As far as the size of the pie would be, I would say we’re fairly close in those conversation and it just really is getting down to this point in the session, we need to get things moving,” Grassley told reporters yesterday.

There is no limit on how long an Iowa legislative session may last, but this is the 100th day of the 2018 and the final day members of the House and Senate get daily expense money. Jack Whitver, the Republican leader in the Iowa Senate, said he’s optimistic Republicans in the Senate and House are close to striking a final deal.

“Hopefully in the next few days we can get to some agreement on taxes and then we can get moving on the budget,” Whitver told reporters.

Yesterday, Governor Reynolds said she is not making any public demands about what her fellow Republicans in the legislature should include in their tax bill. Democrats like Senator Joe Bolkcom say the state is “flat broke” and cannot afford to cut taxes.

Aiming for consensus, Reynolds to avoid tax plan ultimatums (AUDIO)

By

Governor Kim Reynolds.

Republican Governor Kim Reynolds says she does not plan to dictate which components of her tax plan must be included in the final version she negotiates with Republicans who control the legislative branch of government.

“I’m not going to do that because that’s not how you build consensus,” Reynolds says.

For example, the governor’s original plan included a form of “speed bumps” so a yearly tax cut would not go into effect if there’s a downturn in Iowa’s economy. Those “triggers” are not included in two of the three tax plans that have emerged in the Republican-led legislature. Plus, the plan that cleared a House committee last Thursday did not include the governor’s proposal to end a state tax break for federal taxes. It’s a tax deduction that makes Iowa’s individual income tax rates look higher than they are when compared to other states.

“It’s part of the negotiation,” Reynolds says. “I believe it’s important that we do something with federal deductability because we have federal tax reform and so the timing seems appropriate.”

Because of that deduction and because federal taxes were cut, Iowans will wind up paying more income taxes to the State of Iowa if policymakers fail to do something to cut Iowa individual income tax rates.

As for the size of the tax cut, House Republicans are aligned with the governor at about $300 million a year, while Senate Republicans are proposing about three-quarters of a billion dollars. Reynolds told reporters today the final tally of tax cuts may wind up “somewhere in the middle.”

“But what I’ve said from the word go is that I want to make sure that it’s comprehensive, it’s significant, but sustainable,” Reynolds said during her weekly news conference.

A “sustainable” plan will leave the state with enough tax revenue to meet on-going commitments to the state’s education system, the Medicaid program and other priorities, according to the governor.

AUDIO of Reynolds’ weekly news conference

 

Requiring ‘lodging facilitators’ to collect state sales tax on rentals

By

Much of the tax policy debate at the statehouse has focused on tax cuts, but there are tax increases under consideration — including a tax increase in the travel industry that’s included in Governor Kim Reynolds’ proposal. Christopher Rants, a lobbyist who represents an online travel association known as Travel Tech, brought the issue up with lawmakers during a hearing late last week.

“There is a definition of a lodging facilitator and a new definition of what the sales price is for lodging,” he says. “Both of these pieces seek to change the relationship between a customer and either a hotel or a person who may be leasing or renting out their home, maybe it’s through VRBO, HomeAway or something like that.”

VRBO stands for “Vacation Rentals By Owner.” According to Rants, the way the new definition is written, the state sales tax must be paid by the “lodging facilitator” — even though that person, maybe a realtor, or an entity like Facebook — may not be taking the payment for the rental.

“If you’ve ever been up at the (Great) Lakes and you see the little pamphlet that’s put out that lists all the places that are for rent this summer, they’re now a lodging facilitator,” Rants says. “If it’s a social network that somebody puts their house up for rent at the lake for the summer, they put it on a social network — the social network is now the lodging facilitator or it can be someone who does this for a living, like a travel agent. The travel agent is now the lodging facilitator.”

People who book through AirBNB are to pay the Iowa sales tax as well as any city lodging taxes as part of their on-line reservation.

New dueling GOP tax plans emerge in Iowa House and Senate

By

Senator Randy Feenstra.

The statehouse showdown among Republicans over competing tax plans entered a new phase Thursday afternoon.

As a House committee debated a plan with the top-line promise of cutting individual state income tax rates by nearly nine percent, Republicans in the Senate promised to cut those rates by eight percent next year — and eventually cut corporate income taxes, too.

Senator Randy Feenstra, a Republican from Hull, was the principle architect of the billion dollar tax cut proposal that cleared the Senate in February. Feenstra didn’t have a printed version of the new plan available for review.

“The first two years we want to give $733 million back,” Feenstra told reporters. “And then, after that, it just depends on how our economy grows and, if it grows well, we’ll continue to rachet down rates and do other things.”

Feenstra indicated the Senate Ways and Means Committee he leads will vote on this new plan next week.

Representative Guy Vander Linden, a Republican from Oskaloosa, leads a similar committee in the Iowa House. Republicans on that panel approved a $300 million tax-cutting plan Thursday afternoon.

“The Senate has always had a bill. The governor had a bill. We’ve got a bill,” Vander Linden said. “Now our bill is remarkable close to the governor, I think, so we’ll see.”

Senator Feenstra called the new Senate GOP plan “bold and prudent.”

“The bottom line is I want to make sure Iowa taxpayers get a significant reduction and that we can grow our economy and that’s what this bill is trying to do,” Feenstra said

Vander Linden, a retired Marine Corps Brigadier General, flew Marine One during Ronald Reagan’s presidency and he referred to that background as he spoke with reporters yesterday.

“‘We used to stay that there are old pilots and bold pilots, but no old, bold pilots,” Vander Linden said. “And I think that may apply to tax relief as well.”

Vander Linden said Republicans in the House are aiming for “responsible” tax cuts.

“We have to keep in mind that we still have obligations for the state to fund education and Medicaid and all of those things,” Vander Linden said. “And we are a little bit more cautious.”

Representative Dave Jacoby, a Democrat from Coralville, told reporters Thursday morning none of the ideas Republicans have floated are reasonable.*

“The budget is such a mess, how can we afford now to take another $300 million chunk out of the budget?” Jacoby asked. “The math just does not add up.”

Jacoby used some coarse language to suggest the tug-of-war among Republicans won’t be resolved quickly. Vander Linden, the Republican chairman of the House Ways and Means Committee, said it’ll be “at least next week” before a final resolution.

“We always get these things worked out,” Vander Linden said. “And we will.”

Senator Feenstra offered similar sentiments.

“There is a lot of common ground,” Feenstra said. “…We’re hoping that in the next five to 10 days we can get to a resolution.”

The daily expense money legislators get runs out next Tuesday.

 

House GOP unveils its first offer on tax cuts

By

Linda Upmeyer and Guy Vander Linden.

A nearly 9%t reduction in most Iowans personal income tax rates. That’s the counter-offer Republicans in the Iowa House publicly released late Wednesday.

It’s the latest wrinkle in discussions among statehouse Republicans over how deeply to cut state taxes.

Speaker Linda Upmeyer, a Republican from Clear Lake, characterized the House GOP’s plan as middle class tax relief.

“Over 90 percent of the taxpayers will benefit,” Upmeyer said during a news conference on the House floor. “…It’s important for us to have families across this state see the benefit of putting tax dollars back in their pocket. I think this meets that goal.”

Senate Republicans have voted for a plan that would ultimately cut state taxes by $1 billion annually. Republican Governor Kim Reynolds has proposed what would amount to a $300 million a year reduction in taxes. The House Republicans’ plan is a $140 million cut in the first year and a reduction of $300 million in the second year.

Upmeyer called it a “starting point” in negotiations and she said it was intentionally released late on a Wednesday afternoon to give House members a chance to hear from constituents this weekend.

“They’re having forums or they’re going to different events in their communities,” Upmeyer told reporters. “We can get a lot of good feedback and then we can build the bill even more, if we wish to, based on that feedback.”

Unlike Senate Republicans, House Republicans are not proposing a cut in the corporate income tax rate. Representative Guy Vander Linden, a Republican from Oskaloosa who is chairman of the House Ways and Means tax-writing Committee, told reporters corporate tax cuts can come “at a later date.”

“The important thing is to get a tax cut to individual Iowans,” Vander Linden said, “so that they get the full benefit of the federal tax cut.”

The House GOP plan does call for taxing Uber, Lyft, Netflix, Apple TV and other emerging services in what Vander Linden called the “modern economy.”

The plan does not raise taxes on some credit unions, as Senate Republicans proposed, nor does it get rid of the state income tax deduction for an individual’s federal tax payment. Critics say that deduction makes Iowa’s income tax rates look higher than they are and Governor Reynolds called for getting rid of it.

Vander Linden’s committee is scheduled to begin debating the plan at 10 a.m. Thursday morning. The head of the Iowa Freedom of Information Council said the lack of advance notice of the meeting to the public violates the spirit of Iowa’s open meetings law. A top House Democrat warned the House GOP tax plan “means more state budget cuts in the future.”