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AMT: WHERE YOUR COUNTY STANDS

January 10, 2007

Des Moines' western suburbs are outpacing the rest of the state in economic growth. They also have a less-prized honor: they are also the alternative minimum tax capital of Iowa.

The Tax Foundation has just issued a statistical summary of the AMT that ranks states, counties and congressional districts by how many of their taxpayers were subject to AMT for 2004. The AMT applies a 26 or 28% rate to a taxable income computed with fewer deductions - and no deduction for state and local taxes. There is a large personal exemption, but it phases out. Not surprisingly, high-tax states lead the way in the AMT rankings.

Nationally, New York's Westchester County has the highest incidence of AMT; 12.3% of the tony suburban county's taxpayers had AMT in 2004. Following closely are Hunterdon County in New Jersey and Manhattan.

In Iowa, 3.45% of Dallas Countians filing returns had AMT in 2004, making it first in Iowa and 103rd out of 3,142 counties nationwide. The incidence of AMT was 2.6% in the Peoples Democratic Republic of Johnson and 2.22% in Polk County. The three Iowa counties least hit by AMT were Pocohontas (.13%), Decatur (.16%) and Wayne (.24%).

Thirty-one counties nationwide had no AMT taxpayers in 2004, including two in Kansas and one each in Illinois, Missouri, South Dakota and Nebraska.

When AMT incidence is ranked by state, New Jersey edges out New York for the top rank. Iowa falls all the way to 35th in the percentage of tax returns hit by AMT. If you have taxable income from $150,000 to $500,000 in Iowa, or have lots of kids or capital gains, you are probably helping bring our rank up.

Outside the lower 48, both Aleutians East County in Alaska and Kalawao County in Hawaii had no AMT taxpayers. I suspect one of these counties has more moose, and the other has better weather.

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