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NEW IOWA CREDIT FOR REAL ESTATE TAXES CLEARS HOUSE COMMITTEE

April 25, 2007

The Governor's much-ballyhoed effort to reform Iowa's commercial property tax system has laid its first egg.

The House Ways and Means Committee yesterday voted to send HF 905 on to the full house. The bill provides a refundable income tax credit for commercial property taxes paid of up to $320. Refundable credits generate tax refunds even when no tax is owed to begin with. The bill would apply only to taxpayers with $300,000 or less in improved real property. The Des Moines Register covers this today.

Considering all of the attention paid to commercial property taxes at the start of the session, this is a very lame result. It shows the futility of attempting to deal with property taxes while ignoring the problems with Iowa's income and sales taxes. The problems of state finance are all interrelated. You can't deal with property taxes alone any more than you can deal with a weight problem by reforming milk shakes and ignoring Oreo consumption.

The House also approved the increase in the rehab credit ceiling (SF 566). The bill includes a retroactive giveaway of credits to people who have already committed to projects, but it excludes the provision to allow artists to take fair market value deductions for artwork donations -- once again thwarting my artistic vision. Curses.

Follow all of the 2007 session tax legislaton at our2007 Iowa Tax Legislation page.

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