Senate approves 2nd tax cut; Helps families, small businesses, and farmers | Families

IOWA--On Monday, February 4, State Senators Joe Seng (Davenport), Rita Hart (Wheatland), and Chris Brase (Muscatine) helped the Iowa Senate approve a cut in state taxes for families, small businesses and farmers. “These tax cuts will help working families and encourage growth by Iowa small businesses and farmers,” Seng said. “I hope the House and Governor Branstad quickly follow the Senate’s lead.  We need to settle these issues in order to prevent any snafu that could delay tax filings and tax refunds.”

Senate File 106 would prevent a cut in the Iowa Earned Income Tax Credit through 2017.  It also makes permanent child and dependent care tax credits for expenses of up to $3,000 for one child and $6,000 for two or more.  Also, the student loan interest deduction is made permanent.  The deduction of up to $250 of out-of-pocket expenses by Iowa teachers is extended for another two years.

Another provision would provide a nearly $20 million boost to the Iowa economy through a tax cut to small businesses and farmers.

“I think it would be smart policy to allow small businesses and farmers to immediately write off up to $500,000 in new equipment, rather than spreading that deduction over several years through depreciation,” Hart said.  “This provision would save those taxpayers $10.2 million next year and $8.5 million the year after that.  It will help grow our economy at a time when we need it.”

The three Senators have already helped the Senate approve legislation that protects local property taxpayers from any tax increase related to a proposed 4 percent increase in basic school funding. 

“We are looking for areas where we can work together to help Iowa families and kick start the Iowa economy, Brase said.  “Tax policy appears to be a good place to start.”

For more information, you can watch the opening statement by Senate President Pam Jochum, read the bill, or read a one-page memo on the changes.

Submitted Press Release