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IOWA LEGISLATURE TAX BILL UPDATE

March 11, 2005

This was "funnel week" at the Iowa legislature. All bills that have failed to pass out of either a House or Senate committee are dead for the session.

Bills that remain alive include:

HF 186. This bill is the most important bill for this tax season, as it is the bill that would bring the Iowa rules for 2004 in line with federal rules. Two items that are affected are the 2004 deduction for Tsunami relief contributions made in January 2005 and the optional deduction for sales taxes. This bill passed the house February 15 and has been languishing in the Senate Ways and Means Committee. It's not like people need to know what the law is for 2004 to file their 2004 returns or anything.

HSB 139 passed the Iowa House Economic Growth Committee, 17-9. This misbegotten bill would allow Iowa cities within 5 miles of the state line opt out of the state income tax. It's a silly idea, but since we charge by the hour, we should probably support anything that makes the tax law more complicated and expensive to comply with. If this passes, we can expect cities like Atlantic and Cherokee to want to opt out of the income tax so they can compete with border towns like Council Bluffs and Sioux City.

DEAD BILLS

SF 158, a bill to completely redo and rationalize the state's tax system, failed to move. It would resolve the problems of border counties (and all of the others) by actually simplifying the system and lowering rates. That's sensible, so it probably was doomed from the start.

SF 132 also died. This was perhaps our favorite bill, as it would have given artists a credit against state income taxes for charitable contributions of their own artwork. If it ever does pass, we have made plans to open an internet art museum to accept contributions of valuable digital works of art. Our museum would enable worthy digital artists to get ~~away with murder~~ well-earned state tax credits for contributions of work like this artfully-composed and incredibly expressive digital photograph:

Tacks Shelter, Volume 2. Copyright Joe Kristan, All Tax Credits Reserved