Taxes - Iowa Chamber Alliance

Taxes

Iowa’s poor ranking for business climate in the Tax Foundation’s 2019 State Business Tax Climate Index (45th) is not an accurate measure as the income tax reforms of 2018 are not yet reflected in the study. That said, Iowa’s future top corporate rate of 9.8% is lower than only Pennsylvania and New Jersey. Iowa must continue lower corporate income tax rates in order to be viewed as competitive for business investment.

Iowa’s property taxes remain overly complex and burdensome. The Tax Foundation ranks Iowa’s business property taxes at 39th in the nation for competitiveness. The reforms of 2013 have largely been erased through increased assessments, and the structural problems that result from the different treatment of the four main classes of property taxpayers have been present for forty years.

The Iowa Chamber Alliance will utilize the following principles to guide its analysis and advocacy for 2019 tax reform proposals for both continued income tax reforms that include rate reductions for corporate income tax and comprehensive property tax reform that treats commercial and industrial property tax payers fairly and equitably:

  1. Competitive. Tax reform ought to be geared to make Iowa more competitive: fewer brackets, targeted exemptions, effective credits, and lower rates for personal, small business, and corporate income taxes, and less complex and burdensome for commercial and industrial property taxes.
  2. Invest in Growth. Programs, credits, and incentives should be focused on spurring economic growth across diverse industry categories. These incentives have a demonstrated return on investment and need to be encouraged and treated differently than other tax credits.
  3. Simple. Iowa’s tax code is unnecessarily complex and any changes must make it simpler. Iowa’s tax code must be understandable to taxpayers and attractive to outside investment.
  4. Permanent, Predictable and Certain. A well-crafted tax policy will have permanence, avoid short-term changes, and ensure the predictability of Iowa’s tax landscape so businesses can make long-term investments in Iowa. Any changes ought to require minimal interpretation by the Department of Revenue. Clarity and certainty need to be in the Code.
  5. Fair and Responsible. Tax policy should be equitable and not favor one classification of business over another. Any changes to the tax code should not inflict harm on the overall fiscal health of state or local governments.
  6. Transition Path. How we transition from the tax code of today to the tax code of tomorrow is equally as important as the reform itself and, if done correctly, ensures the “responsible” condition in principle #5.
     
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