#IApolitics Statehouse leaders announce tentative deal on taxes

Written statements were issued by the legislature’s top two leaders this morning. Read them below in the order they were received.

Statement by Senate Majority Leader Mike Gronstal regarding agreement with House Republican leaders 

“This agreement between Senate and House leaders is another step forward in our efforts to find common ground.

 “The framework of this bipartisan agreement with House leaders includes tax cuts for many Iowans.   The agreement with House leaders includes:

• Coupling Iowa’s tax code with a recent change in the federal tax code, including Section 179 expensing or bonus depreciation for only tax year 2015.
• Approving sales tax exemptions related to the purchase of items used in manufacturing and other activities (also known as “consumables”) that were included in legislation approved in 2014 by the House (House File 2443).

 “Iowa’s future depends on growing our middle class. As the details of the next state budget are developed, Senate Democrats will push hard for a budget that helps our state reach that goal.”

House and Senate Reach Agreement on Key Issues

(DES MOINES) – Today, House Republicans announced agreements on key issues before the Legislature.

“This agreement provides certainty to thousands of Iowa taxpayers and ensures that Iowans are not faced with an unexpected tax increase,” said House Speaker Linda Upmeyer (R-Clear Lake).  “At the end the day, the taxpayers are the real winners with this agreement.”

The agreement has led to the creation of House Study Bill 642, which includes provisions related to coupling as well as consumables.

House Study Bill 642 includes House File 2092, the tax coupling bill, which prevents a $95 million tax increase on Iowans.  Coupling with the federal tax code benefitted more than 177,000 taxpayers in 2014 including small businesses, farmers, teachers, homeowners, and college students.

House Study Bill 642 also includes provisions to codify the sales tax exemption for supplies used in manufacturing, which passed the House in 2014.  For too long, ambiguity in the code led to inconsistent interpretations by the Department of Revenue based on the state’s revenue needs.  By codifying this exemption, manufacturers are given a clear and consistent definition of what is subject to sales tax.