A bipartisan initiative passed the Legislature on March 15, providing a tax cut to thousands of Iowans.
House File 2433, which aligns Iowa’s tax code with many federal tax changes for 2015, includes these highlights:
- Farmers and small business owners – Section 179 expensing allows them to take a larger deduction for equipment purchased in 2015 as an investment in their operations.
- Teachers – Those who purchase supplies for their classrooms with their own money can deduct up to $250 from their income for these expenses.
- College students or their families – Those who itemize their income taxes may deduct more education expenses.
The effort to bring Iowa’s tax laws into alignment with federal tax changes was delayed by the U.S. Congress. It then became the subject of bipartisan negotiations at the Iowa Statehouse. Taxpayers with questions should contact the Iowa Department of Revenue at 800-367-3388 or https://tax.iowa.gov/contact-us.
The legislation also provides a sales tax exemption for supplies and replacement parts used in manufacturing, research and development, data processing and recycling. These “consumables” include drill bits, punches, saw blades, lubricants, sanding belts, air filters and more. Computers, machinery and equipment used by manufacturers and those engaged in processing are already exempt from sales tax.
HF 2433 is a fiscally responsible agreement in our efforts to find common ground. We now look forward to working out the rest of the state budget in a way that supports, expands and strengthens Iowa’s middle class.