Tax reform was the dominant topic at the Capitol this week. A public hearing for Governor Reynolds’ plan was held Monday evening. Late Wednesday afternoon, the Iowa House unveiled their proposal. Thursday afternoon, the Iowa Senate introduced a revised reform plan. Based information released publicly, here is how they compare:
|Governor's Plan||House GOP's Plan||Senate GOP's New Plan|
|Top Individual Income Tax Rate Reduction||8.98% to 6.9%||8.98% to 8.89%||8.98% to 6.3%|
|Top Corporate Income Tax Rate||Remains at 12%||Remains at 12%||Reduced from 12% to 7%|
|Tax Relief Over Five Years||$1.7 billion||$1.3 billion||$2.5 billion|
|Retirement Income Exemption||Remains|
|Increases from $10,000 to $20,000|
|Standard Deduction Increase||$2,070 to $4,000 single |
$5,090 to $8,000 married
|$2,070 to $3,000 single |
$5,090 to $7,500 married
|$2,070 to $12,000 single
$5,090 to $24,000 married
|Tax Credit Adjustments||No||No||Yes|
|Modernizes Sales Tax||Yes||Yes||Yes|
|Qualified Business Income Deduction||25%||25%||100%|
|Section 179 Expensing Increased Limits||$100,000||2019 - $100,000|
2020 - $250,000
The goal of tax reform is to protect the pocketbooks of hard-working Iowa families and businesses, not to protect spending increases for state government.
Legislators need to hear from you!
Before any tax reform reaches the Governor’s desk, the House and Senate will have to reach agreement on a compromise plan. Even though this legislative session was scheduled to end Tuesday, April 17, it appears it will take a few more weeks to wrap everything up. Keep an eye on your inbox for new Tax Action Alerts.