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IOWA BONUS DEPRECIATION FAILS FUNNEL

March 07, 2008

The "funnel day" for the Iowa Legislature has passed, and with passes the best chance to avoid a repeat of a costly mistake they made in 2002.

Bills that fail to pass a committee of either the Iowa House or Senate by funnel day are pretty much dead for the session. The legislators have failed to conform Iowa's rules to the recently passed federal "bonus depreciation" and Section 179 changes. Unless they fix this by amending a bill that has already cleared the funnel, Iowa businesses will have to maintain separate depreciation records at their own expense. That won't be the only cost to businesses; the Department of Revenue still is generating notices because it doesn't seem to understand what happened in 2002; tax people have to charge their clients to set the Department straight.

The legislature is doing this because it doesn't want to part with about $30 million of revenue. This is the same legislature that has given tax breaks to both Google and Microsoft. Meanwhile, tax collections are running about $400 million ahead of last year. If they are spending so much that they can't spare $30 million to be shared by every Iowa business, they should all resign and go home before they do any more damage.

Related: GOVERNER GIVES MONEY TO MICROSOFT WHILE HOUSE STIFFS OTHER BUSINESSES

Tags: corporate welfare.Depreciation.iowa tax policy.

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