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State sales tax holiday is Friday and Saturday

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Iowans can save some money if they’re doing back-to-school shopping this weekend — or for themselves if they don’t have kids — with the annual Sales Tax Holiday.

John Fuller, spokesman for the Iowa Department of Revenue, says this is the 20th year for the holiday, which runs Friday and Saturday. “A couple of things to keep in mind are, it basically covers clothing and footwear that are less than $100,” Fuller says. “So, if you buy an article of clothing or a pair of shoes that costs less than $100, that’s tax-free during those two days.”

There is often some confusion about what is — and isn’t — covered during the holiday. “There’s a lot of items that people wonder sometimes is that considered clothing,” Fuller says. “For instance, a work uniform would be considered clothing, but a shoulder pad for your son’s football team would not be considered clothing.”

There’s an online resource that should clear up all questions. Fuller says, “If your listeners go to tax.iowa.gov and look for the bright shopping bags, that webpage has a lot of information as well as a big list that says what is exempt and what is taxable.”

Decorah Area Chamber of Commerce executive director Kristina Wiltgen says this holiday is particularly important for communities on Iowa’s northern border. Wiltgen says, “Anytime you can give retail store customers an incentive to stay local to do their shopping that’s obviously a huge benefit, especially with our proximity to Minnesota, which is always tax-free on their clothing.”

Iowa’s Sales Tax Holiday begins at 12:01 A.M. Friday and ends at 11:59 P.M. on Saturday.

(Darin Svenson, KDEC, Decorah and Pat Powers, KQWC, Webster City contributed to this story)

 

Raising wages — three approaches from three candidates in third district

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Pete D’Alessandro

The three candidates seeking the Democratic Party’s nomination in Iowa’s third congressional district are proposing different methods for raising incomes for low-wage workers. The topic was discussed tonight during a 90-minute forum sponsored by The Des Moines Register and KCCI television.

Pete D’Alessandro of Des Moines supports immediately raising the minimum wage to 15-dollars-an-hour.

“We should be fighting for a minimum wage that guarantees that you’re not living in poverty,” D’Alessandro said. “…That’s why I say the debate starts at $15 an hour. I won’t compromise on that.”

Cindy Axne of West Des Moines would establish an inflation factor that will keep raising the minimum wage periodically in the future and she suggests raising the wage too high too fast can have a negative effect.

“My concern is always about making sure that an individual has an opportunity for a life of dignity…and we certainly aren’t going to get there if people are laid off because businesses can’t afford it,” Axne said.

Eddie Mauro of Des Moines said rather than raising the minimum wage, he’d raise the earned income tax credit instead.

“I think we need a bolder, better and more progressive plan,” Mauro said. “…At $36,000 to $40,000 a year, you can improve your skills and then you make your wages higher, your salary’s higher and then that credit comes down some.”

The three candidates are competing to the Democrat who faces off against Republican Congressman David Young in November.

In final TV forum of primary season, Democrats debate GOP tax law

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The five Democrats competing for their party’s nomination for governor met in their final televised debate tonight, each offering a critique of the tax plan Republican Governor Kim Reynolds signed into law this afternoon.

All the candidates argue the plan will provide little, if any tax relief for low and middle income Iowans. However, three of the candidates expressed support for some elements of the new law, like assessing the state sales tax on a wider variety of electronic purchases. John Norris has called for a full repeal of the plan, though, and Norris offered this “advice” to rival Fred Hubbell.

“Be cautious about being against that tax cut before you were for it,” Norris said. “That will be a difficult position to both criticize it and defend it in this election, if you get there.”

Hubbell, who called the bill “risky and irresponsible” as legislators debated it, says the reality is the tax plan is now state law and the person who’s elected in November must deal with it.

“When you’re a governor, you have to recognize that you’re governor of everybody, not just a few people,” Hubbell said. “You have to recognize the pieces that are good and get rid of all the rest.”

Earlier in the day, Governor Reynolds told reporters the tax issue will be a clear dividing line between Republicans and Democrats this fall.

“Iowans will have to make that choice,” Reynolds said.

The Democratic candidates on stage tonight suggested the choice Reynolds and her fellow Republicans made will bankrupt the state. Ross Wilburn, the former mayor of Iowa City, said after the state budget cuts Republican lawmakers were forced to make over the past two years, tax cuts aren’t wise.

“During a time like this, when we’ve got a whole in the budget, it’s not something that we can afford to do.”

Andy McGuire, a medical doctor, said Republicans legislators and Governor Reynolds have failed to providing enough for education, health care and other important government functions.

“When you’re cutting right now for the services, the math doesn’t add up to then cut your revenue,” McGuire said.

Norris, who was chief of staff for former Governor Tom Vilsack, accused the Reynolds Administration of being run by corporate lobbyists.

“And look at these tax cuts and tax breaks that are carved out, that are eroding our capacity to invest in education and health care in this state,” Norris said.

Hubbell, a Des Moines businessman, suggested the GOP was employing the “trickle-down theory.”

“Just cut everything that you can. Reduce your revenues and hope that all of a sudden revenues go up,” Hubbell said. “It’s been proven many times not to work.”

Cathy Glasson of Coralville, a nurse and union organizer, called for taxing the wealthy “a little bit more” and the poor “a little bit less.” She’d also legalize marijuana for personal use — and tax it.

“We know that there are other states in this country, particularly Oregon that generated $85 million by doing that,” Glasson said.

The candidate forum was sponsored by The Des Moines Register and KCCI Television in Des Moines, which broadcast the event live.

Reynolds to approve largest tax cut in state history today

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Governor Kim Reynolds. (file photo)

Governor Kim Reynolds is signing a bill into law this afternoon that’s designed to eventually cut Iowans’ income taxes by about $400 million a year.

“Generational tax reform — I’m really excited about that,” Reynolds said during an interview with Radio Iowa this morning.

The bill would cut individual income taxes by an average of 10 percent in 2019. In 2020 and beyond, the tax reductions outlined in the law will only take effect if state tax collections grow by at least four percent each year.

“I talked about in the Condition of the State that we have an obligation to pass on the savings from the federal tax reform,” Reynolds said. “Because of our tie to federal deductability, the fact of the matter is if we hadn’t done anything, Iowans were going to see their taxes go up.”

Iowans have had the ability to take a state income tax deduction equal to the amount of federal income taxes they paid. So when federal taxes are lowered, Iowans wind up paying more in state income taxes if lawmakers don’t make adjustments. The bill Reynolds and her Republican colleagues in the legislature crafted would eventually get rid of that deduction, as it makes Iowa’s income tax rates appear higher than they are when compared to other states.

Reynolds unveiled the framework she wanted to see in a tax plan in early February, but it wasn’t until May 5 that Reynolds and Republican lawmakers settled on a compromise plan.

“It’s a process,” Reynolds said this morning, praising key legislative leaders like House Speaker Linda Upmeyer and Senate Majority Leader Jack Whitver by name. “…They stayed at the table. We walked through it. We talked about areas where we had common ground and everybody had to give a little bit and everybody did, but everybody, I think, was very happy with the end result.”

In late February, Senate Republicans proposed nearly a billion dollars in income tax cuts for individuals and corporations. Republicans in the House countered in March with what they called a “more prudent” plan that was closely aligned with the governor’s framework. In the end, elements like cutting Iowa’s corporate income tax rate are included, but do not take effect for two years and only if the state’s economy is growing.

“We were able to bring the House and Senate together and pass historic tax reform,” Reynolds told Radio Iowa this morning.

Reynolds is holding an event at a business in Hiawatha to formally sign the tax bill into law at 2:15 this afternoon.

Democrats say the plan provides a tax windfall the wealthy and special interests, while a third of Iowans get no tax relief or may wind up paying more, since the law imposes sales taxes on Netflix, mobile phone apps and other “e-commerce.”

Democrat Dave Jacoby, a state representative from Coralville, called it a “tax scam that will make the state’s budget crisis even worse.”

Iowa cities now qualified to participate as federal Opportunity Zones

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Sixty-two communities across Iowa are now qualified for the federal government’s new Opportunity Zones program.

The initiative is meant to spark development in certain low-income neighborhoods by deferring taxes for investors. Debi Durham, director of the Iowa Economic Development Authority, says the effort has great potential.

“I think this could really, again, implemented correctly, could really propel forth some pretty transformational projects,” Durham says. The state has seen good outcomes from other tax credit investment deals, according to Durham, but she says a lot depends on how the federal government structures the effort. Under the program, people can defer taxes on certain capital gains if they invest in the opportunity zones, selected tracts that have higher poverty levels or lower family incomes. Alan Kemp, with the Iowa League of Cities, says this kind of targeted investment in disadvantaged neighborhoods is novel.

“And I think that’s the real benefit of it,” Kemp says. “I think cities can see benefit that they could see investment for new businesses or existing businesses that they might not otherwise be able to take advantage of.” Kemp says the success of the new federal program relies on how it’s implemented. The U.S. Treasury Department is still developing rules for investors and local agencies.

(Thanks to Kate Payne, Iowa Public Radio)

 

Governor approves new $30 million ‘telco’ tax break

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Four years from now, telephone companies and cable companies will pay about $30 million less in Iowa property taxes as a result of legislation Governor Kim Reynolds has approved.

Buildings and cell towers will remain subject to local property tax assessments, but property taxes on “transmission equipment” like wires, cables and fiber will be phased out. Republican Representative Chip Baltimore of Boone said that brings property taxation on telecommunications companies in line with how other commercial property is taxed.

“This is an important bill in terms of trying to free up dollars to encouarge these telecommunications companies to invest in that ‘last mile’ of infrastructure,” Baltimore said during House debate of the plan this spring. “It’s going to be very helpful for those companies to do that, especially in rural Iowa.”

But Democrats like Senator Chaz Allen of Newton complained there’s nothing in the bill that forces companies doing business in Iowa, but headquartered out of state, to use the tax savings to expand broadband service in Iowa.

“I’m just saying if we’re going to give this tax cut, Iowans need to know that this money’s going to stay in here, be reinvested,” Allen said during senate debate this year, “not that this money is going to leave this state.”

Allen called for yearly public reports showing how the cable and telephone companies use the tax savings, but Republicans voted the idea down.

“That’s sort of like us having the Department of Revenue saying: ‘Hey, we want to know how you’re going to spend your tax money when you get a return,” said Senator Randy Feenstra, a Republican from Hull.

Another Republican legislator said telecommunications companies should be able to use the tax savings to do things like pay investors or hire more workers if that’s a higher priority to the business.

Electronic option now available for county property tax notices

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A new state law gives county assessors authority to shift some of their official activity into the digital age.

The legislation will allow property assessments and notices from a county assessor’s office to be sent via e-mail or text message, “provided that the recipient authorizes that the notices be sent from the assessor’s office via electronic communications,” Representative Greg Heartsill of Columbia said during House debate of the measure.

County assessors have been sending paper notices via the mail of property tax assessments for homes, apartments and farms as well as commercial and industrial property. Assessors may continue to do use the U.S. Postal Service, but now have the option of shifting to deliver those documents electronically — if the property owner prefers that method.

“This is a really good, thought-out bill,” Representative Amy Nielsen of North Liberty said during House debate. “It will save our counties some money.”

County assessors determine the value of property every two years. County assessors do not collect property taxes, however. County treasurers do.

According to the American Bankers Association, 40 percent of Americans manage their bank accounts electronically.

State transportation plan features more interstate work, completion of Highway 20

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DOT interstate traffic camera view of I-35/80.

The draft five-year Transportation Improvement Plan that covers spending on all forms of transportation was presented to the Iowa Transportation Commission at their meeting Tuesday.

Three-point-four billion dollars of the program goes for the state roadways and DOT spokesman Stuart Anderson says that includes a lot of ongoing work on the interstates. “Probably the most significant projects on the interstates right now are what we would call modernization projects — so its totally reconstructing the interstate systems in Council Bluffs and Sioux City to meet modern design standards and to address increased traffic,” Anderson says.

Another interstate project adds a segment to the work on the highway between Ankeny and Ames. “This draft program does include the addition of reconstruction and improving I-35 from the north end of Ankeny up to Iowa 210 as you head towards Ames,” Anderson says.

There are also several projects on non-interstate highway. “We expect to complete the 4 lanes of U.S. 20 in western Iowa by this fall,” according to Anderson. “So that’ll complete the four-lane construction of U.S. 20 across the entire state. That’s been a project that’s been underway for many years.” Other state highway corridors are also in the plan.

“This five-year program continues work on four-lane improvements on U.S. 30 in Tama and Benton County. And also U.S. 61 down in southeast Iowa. So, significant corridor work will be continuing,” Anderson explains. Anderson says part of the funding comes form the gas tax increase.

He says this program includes a little more than $500 million of the fuel tax increase implemented in March of 2015. The Transportation Commission will take a vote on the program next month. He says the plan is available on the DOT website for any comment and the commission will act on final approval during their business meeting on June 12th.

 

Legislators seek to ban ‘self-promotion’ fueled with tax dollars

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Representative Ashley Hinson.

A new policy the Iowa legislature approved on its final day would force statewide elected officials and members of the legislature to use their campaign funds rather than tax dollars for “self-promotion.”

Representative Ashley Hinson, a Republican from Marion, encouraged her colleagues to pass the policy.

“This would restrict the spending of public money for paid ads or promotions bearing name, likeness or voice of that person from mass mailings; radio, TV, newspaper, internet ads or promotions or an exhibit display at the fair,” Hinson said last Saturday during House debate.

The governor and other elected officials have had booths at the Iowa State Fair for years.

“Currently, I believe they are using taxpayer dollars for the displays and for the space as well,” Hinson told her colleagues.

If the governor approves this new policy, that will end for the 2018 Iowa State Fair. The new policy also is likely to bar Republican Governor Kim Reynolds from appearing in ads planned this fall to promote the “Future Ready Iowa” program.

Democratic State Treasurer Michael Fitzgerald will no longer be able to appear in ads promoting the state’s College Savings Iowa program. Representative Marti Anderson, a Democrat from Des Moines, opposed the idea. “This section would cause these elected officials to have to pay for things that are even part of their duty,” Anderson said. “…People have the right to know and see their elected officials and to hear directly from them.”

Hinson said it’ll be up to the Iowa Ethics and Campaign Disclosure Board to enforce this new policy and it means Secretary of State Paul Pate might have to reimburse the state if any fliers from his office about voter registration contain his name or photo. Democrats say the stickers on every gas pump in the state that have the written name of Iowa’s secretary of agriculture may have to be removed.

Hinson was unmoved by those arguments. “This applies to anybody, regardless of party,” Hinson said during House debate.

The Ethics Committees in the Iowa House and Senate will police members of the legislature who are accused of using tax dollars for self-promotion if the governor approved this new policy. It was inserted in a catch-all budget bill that cleared the legislature last Saturday.

$7.4 billion state budget, $2 billion in tax cuts clear 2018 Iowa legislature

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Republican lawmakers passed a more than $2 billion plan to cut taxes over the next six years and they completed work on next year’s $7.4 billion state budget on Saturday. It was the 118th and final day of the 2018 Iowa legislative session.

With Republican Kim Reynolds in the governor’s office and Republicans in the majority in the House and Senate, the GOP controlled the legislature’s agenda. House Speaker Linda Upmeyer of Clear Lake praised her GOP colleagues on Saturday.

“You all came together and time after time, you chose real change rather than defending the status quo,” Upmeyer said in a closing speech late Saturday afternoon. “…We stood together for the opportunity to improve the future of Iowa and you can go home to your communities proudly sharing our significant achievements.”

A year ago, in Republicans Governor Terry Branstad’s closing month’s in office, Republican legislators dramatically reduced union bargaining rights for public sector workers and passed a ban on abortions after the 20th week of pregnancy. On Friday afternoon, Governor Kim Reynolds signed another bill that will basically ban most abortions in Iowa.

“For me, it’s immoral to stop an innocent, beating heart,” Reynolds said during a bill-signing ceremony in her formal office as protesters shouted outside. “…And, for me, my faith leads me to protect life.”

On Saturday, the Republican-led legislature dropped its plan to block federal funding to Planned Parenthood’s sex education programs for teenagers. The premiere action of the legislature’s last day, though, was passage of a massive tax plan that eventually will cut individual and corporate income taxes by 400-million dollars a year.

“This is a once-in-a-generation opportunity I feel that we have today to ensure a prosperous for the future,” Representative Peter Cownie, a Republican from West Des Moines, said.

Democrats dismissed the GOP’s assertions that tax cuts will stimulate economic growth as make-believe “pixie dust” and Senator Herman Quirmbach of Ames sid there will be a “flood tide of red ink” in the state budget.

“If this bill becomes law it will be the single most fiscally irresponsible bill in Iowa history,” Quirmbach said.

Mark Smith of Marshalltown, the Democratic leader in the Iowa House, faulted Republicans for keeping final details of the tax bill underwraps until the legislature’s closing hours.

“You chose to work behind closed doors with special interests instead,” Smith said late Saturday afternoon in a speech on the House floor. “The Iowans we represent deserve better.”

House Majority Leader Chris Hagenow, a Republican from Windsor Heights, the Republican-led legislature has taken “consequential” actions over the past two years.

“In November, 2016, Iowans entrusted Republicans to lead the House, Senate and the governor’s office,” Hagenow said in a speech on the closing day. “The message the voters sent was clear: they wanted smaller, smarter, more conservative government.”

The debate over that record will now shift out of the statehouse and onto the campaign trail. Voters in November will select 25 senators and 100 state representatives to serve in the legislature for the next two years.