The Iowa Senate outdid itself yesterday in bad tax policy.
- It passed a bill (SF 2329) to allow a private business to keep sales taxes it collects for ten years. This bill is a subsidy to a developer of an athletic complex at the site where “Field of Dreams” was filmed. Soon everyone will want their own break, either making big winners out of those with the best lobbyists or gutting the sales tax base. Government by special favor is alive and well in Iowa.
- It passed an “Amazon Tax” (SF 2330) with a breathtaking, and likely unconstitutional, extension of state tax liability to out-of-state companies that have business relationships or common ownership with companies selling into Iowa. These taxes may cause* Amazon to drop affiliates in Iowa, making it harder on entrepreneurs here. Colorado’s version was declared unconstitutional just yesterday. (Disclosure: The Tax Update is available on Kindle. Subscribe while you can!).
Iowans can find some consolation in the House, which passed a bill to outlaw traffic cameras (HF 2450). Unfortunately the Senate is likely to protect their pickpocket friends in municipal government, who just love that sweet sweet camera revenue.
*I worngly said “have caused” in the original version of this post. Amazon has dumped affiliates in other states with “Amazon Taxes,” but not in Iowa yet. My apologies.