Senate Democrats release $200 million plan for commercial property tax relief
|Updated: May 20, 2013
Iowa Senate Democrats $200 Million Business Property Tax Relief Proposal
Senate Study Bill 1205 is small business-friendly, permanent property tax relief worth $200 million when fully funded. There is no financial impact on local governments, schools, community colleges, and other institutions which rely on property taxes.
Targeting help towards small businesses
The bill favors small businesses. For example, it is estimated that during the first year of operation, the property tax credit would be worth approximately $600 for all property valued at $30,000 AND HIGHER, providing the biggest impact to small businesses.
The tax credit begins with property taxes due and payable in fiscal years beginning on or after July 1, 2012. The credit will be available for commercial, industrial and railway properties with permanent construction (i.e., no vacant lots).
$50 million in FY 2013; Becomes $200 million in annual, permanent relief
The Senate Democratic proposal creates a Business Property Tax Relief Fund, with an on-going General Fund appropriation of $50 million beginning in fiscal year 2013. This appropriation will grow over time until it equals $200 million annually and is then maintained at $200 million per year.
To reach the permanent level of $200 million per year, the annual appropriation for the fiscal years after 2013 will grow by an additional $50 million every year that the Revenue Estimating Conference certifies that general fund revenues have grown by at least 4 percent compared to the previous fiscal year.
Once the annual appropriation has increased, it does not decline. In other words, a decrease in state revenue will not affect this appropriation.
The Business Property Tax Credit would be similar to the Homestead Tax exemption. Property owners would file once for an on-going credit at their county assessor’s office.
The Iowa Department of Revenue will determine the amount of value of the property subject to the credit. That amount will then be subject to a rollback equal to the Residential Rollback in that fiscal year.
Counties will be paid twice a year from the fund to cover the lost revenue due to the credit. As a result, there will be no financial impact on local governments, schools, community colleges, and other institutions which rely on property taxes.