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MORE FUN WITH TAX CREDITS

March 21, 2007

While tax credits are sweet, they can always be made sweeter. The legislature is trying to do just that.

The state credit for rehabbing old buildings has always been capped at a maximum of $4 million per year, and it has long been badly oversubscribed. SF 556 would increase the annual ceiling to $20 million. But there's more!

If your Iowa rehab tax credit wipes out your tax liability, you can claim it as a tax refund under current law, but the refund gets trimmed under a discounting formula. SF 556 would get rid of the discounting formula for tax credits "applied for or reserved prior to July 1, 2007."

So, think about this. The credit is already generous enough to be oversubscribed years in advance. But now, even though it's already generous enough to be in great demand, it's made more generous. Such a deal! For somebody.

AND FOR THE ARTS...

SF 556 also has the most generous version yet of the artist subsidy that has appeared in two other bills. This version would give artists a 100% dollar-for-dollar credit on donations of their own artwork, at fair market value, and it doesn't have the $25,000 limit included in the other bills. My dream of setting up the Museum of Deductible Art gets ever nearer.

Tacks Shelter, Vol 2. Artist: J. Kristan. Estimated Fair Market Value: $25,000.

And there's still more! This bill piles on the economic development. It includes subsidies for recreational trails, "workforce training" funds, and money for the "main street program." It will be interesting if throwing money to enough groups will assemble enough votes to slide this through the legislature.

You can follow the progress of HF 556 and the rest of this session's tax legislation at our 2007 Iowa Tax Legislation page.

 • Eye on the Legislature: 2007       Bookmark: del.icio.us • Digg • reddit