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July 01, 2008

Claim: Governor Culver has declared that flood victims in Iowa must pay income tax on debit cards received from the American Red Cross.

Status: False.

Roger McEowen says he has received several calls from attorneys in Cedar Rapids asking if this rumor is true. It isn't.

The debit cards will normally be not subject to income tax under Internal Revenue Code Section 139. Iowa income tax rules follow federal law unless the legislature specifies otherwise, and they haven't. Even if the Governor wanted to tax disaster cards (and why would any politician be that stupid?), he doesn't have the authority do do so.

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