SF 300 – Endow Iowa tax credit
SF 421 – Wireless and wire line surcharges to fund E911 emergency communications systems
SF 422 – Earned Income Tax Credit
HF 199 – Streamlined sales tax update
FLOOR ACTION:
SF 300 increases the cap on the Endow Iowa tax credit program from $3.5 million to $6 million and makes the increase retroactive to January 1, 2012. The bill also eliminates the additional amount that was received from the tax on gaming receipts. The Endow Iowa tax credit is available for donations to endowment funds of qualified community foundations. [3/11: 48-0 (Courtney, Greiner absent)]
HF 199 adds “beverage-grade carbon dioxide gas” to the list of food and food ingredients that are exempt from Iowa’s sales tax. This change is being made as part of the Iowa’s participation in the streamlined sales and use tax agreement, which aligns administration policies for sales and use tax among states. This aids in the collection of sales tax from remote retailers. Iowa must update its sales and use tax policies as part of its responsibilities for participating in this group. [3/11: 48-0 (Courtney and Greiner absent)]
COMMITTEE ACTION:
SF 421 makes changes to wireless and wire line surcharges used to help fund E911 emergency communications systems in the state. Currently, counties use these surcharges along with property tax dollars to fund their E911 systems. Under this bill, the wire line surcharge would be set at a uniform $1 for each county around the state. This has the effect of raising the wire line surcharge for consumers in 13 counties in Iowa. However, the bill also eliminates existing language that allowed counties to adopt wire line surcharges up to $2.50 for E911 services. Counties that will have their wire line surcharges raised under this provision would be able to reduce the share of property taxes they use to fund E911 services in their county. Also under the bill, the statewide wireless E911 surcharge would be raised from $.65 to $1, equalizing it with the wire line surcharge. Along with this increase, wireless carriers would be allowed to recover their costs for administering E911 services from the surcharge. Also, local public service access points would be required to detail how they are using the surcharge money to be eligible to receive funding from the $.35 cent increase in wireless surcharges. If they fail to report, they will not be able to collect the funds they would have received from the increase. [3/10: short for (Chapman, Smith “no”)]
SF 422 increases the state’s Earned Income Tax Credit (EITC) from 7 percent to 20 percent of the federal credit, retroactive to January 1, 2013. This increases the cost of the EITC from an estimated $30.2 million in FY 13 to $86.2 million in FY 14, an increase of $56 million. The average increase in credit for approximately 210,000 eligible taxpayers would be $264. The EITC is available to lower-income working Iowans earning less than $45,000, with the majority of the benefit going to those earning $21,000. Iowans eligible for the credit represent households that are home to 37 percent of Iowa’s children. Iowans earning less than $21,000 represent 20 percent of the taxpayers in Iowa, and those taxpayers pay the highest proportion of their income in state and local taxes versus all other income groups. [3/10: 9-5 (Feenstra, Behn, Chapman, Schneider, Smith “no”; Bertrand absent)]