Posts Tagged ‘Jason Clayworth’

Iowa Property Tax Reform: dead?

Wednesday, May 9th, 2012 by Joe Kristan

The attempts to pass property tax reform and get the Iowa legislature out of town stalled last night when the Iowa Senate failed to pass a reform bill.   The Senate rejected the Republican-supported House bill, but then two Democrats torpedoed their own party’s bill. From the Quad City Times:

Senate Republicans offered the House plan in amendment form during an animated floor debate late Tuesday, but the proposal was turned back by Senate Democrats 21-26. However, Sens. Rob Hogg, D-Cedar Rapids, and Jack Hatch, D-Des Moines, joined the GOP minority in taking down the majority party’s $350 million relief plan by a 24-23 margin, leaving the future of the issue in partisan limbo as the Legislature moved to end the 2012 session as early as today.

“They sunk their own bill,” said Sen. Randy Feenstra, R-Hull, who led the effort to win Senate support of the House-passed bill and criticized Democrats for walking away from an approach that won 71-26 bipartisan support among representatives.

Failure to pass the property tax reform would also doom efforts to increase the Iowa earned income credit. It’s possible that the legislative leaders and the Governor could still throw together a compromise bill, but time is running short, with adjournment possible as soon as today.

Other tax bills also look like they will die before adjournment include:

Good riddance.

Additional coverange of yesterday’s legislative session:

Jason Clayworth (Des Moines Register), Iowa Senate rejects property tax bill; doubts arise that any reform will pass this session

O. Kay Henderson, Democrats’ property tax plan defeated in Iowa Senate

 

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Iowa Senate subcommittee moves huge expansion of sales tax nexus

Wednesday, March 28th, 2012 by Joe Kristan

Amazon LogoThe state legislature is looking to pass a huge expansion of Iowa’s ability to collect sales tax from out-of-state businesses.  The bill is in the guise of “protecting Main Street” from the predations of Amazon, and the Iowans who buy from them, by closing the “Amazon loophole.”   There’s a lot more, though, if you look at the fine print.  From the text of  SF 2309:

(1)  A retailer shall be presumed to be maintaining a place of business in this state, as defined in paragraph “a”, if any person that has substantial nexus in this state, other than a person acting in its capacity as a common carrier, does any of the following:

   (a)  Sells a similar line of products as the retailer and does so under the same or similar business name

   (b)  Maintains an office, distribution facility, warehouse, storage place, or similar place of business in this state to facilitate the delivery of property or services sold by the retailer to the retailer’s customers.

   (c)  Uses trademarks, service marks, or trade names in this state that are the same or substantially similar to those used by the retailer.

   (d)  Delivers, installs, assembles, or performs maintenance services for the retailer’s customers.

   (e)  Facilitates the retailer’s delivery of property to customers in this state by allowing the retailer’s customers to take delivery of property sold by the retailer at an office, distribution facility, warehouse, storage place, or similar place of business maintained by the person in this state.

   (f)  Conducts any other activities in this state that are significantly associated with the retailer’s ability to establish and maintain a market in this state for the retailer’s sales.

In other words, it wouldn’t just get companies that sell in Iowa through Amazon.  It would require anybody whose business has somebody who distributes their stuff in Iowa  to collect sales tax on items shipped directly to customers in Iowa, even by another subsidiary in a controlled group.  This would be a brazen violoation of the Supreme Court’s Quill ruling, which requires physical presence to impose a sales tax.  The KFC case, which expanded Iowa income tax nexis to taxpayers with only “intangibles” in Iowa,  was (lamely)  justified by saying Quill only covered sales taxes; they don’t even have that fig leaf here.  We’ll see if the whole legislature is in for another trip to the Supreme Court.  Ultimately only Congres is in a position to bring some order to interstate Internet sales tax rules.

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So we don’t have a 2010 Iowa tax law after all?

Wednesday, April 6th, 2011 by Joe Kristan

The bill to set Iowa tax rules for last year for the returns we are filing this month — and, not incidentally, to pay public defenders who have been unwillingly pro bono since February — has had a big week. It was amended and passed by the Iowa House last Thursday. The Iowa Senate amended and passed it yesterday, sending it back to the Iowa House, which didn’t like what the Senate did, and sent it back. The Senate backed off and passed the House version. So now we can file our returns and the public defenders can get paid, right?
Not so fast. O Kay Henderson reports:

Senate Democrats have accepted a plan from House Republicans for paying the state

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Branstad: shift tax from corporations to slots players

Friday, January 28th, 2011 by Joe Kristan

20110128-1.jpgNew Iowa Governor Terry Branstad proposed to increase Iowa’s gambling tax while cutting the top corporation income tax rate in half. The Des Moines Register reports on his budget proposals released yesterday:

The proposal would increase casino taxes from 22 percent or 24 percent to 36 percent. The increase would raise an estimated $200 million and set the rate at one even level for all casinos and at a rate the Legislature originally intended, Branstad said.??The extra money collected from casinos would allow the state to lower its sliding-scale corporate income tax, now ranging from 6 percent for companies making $25 million or less in net income to 12 percent for companies that make $250 million or more.*
Branstad, who said all Iowans must take part in budget sacrifice, proposed lowering the corporate tax rate to a flat 6 percent.

*An alert reader points out that the Register’s rate schedule is a bit off. The actual rates:
6% to $25,000;
8%, $25,000-$100,000
10%, $100,000-$250,000
12% over $250,000

A reduction in Iowa’s highest-in-the-nation corporation tax rate is long overdue. So is a comprehensive clean-up of Iowa’s tax law, which is a rats nest of special-interest breaks and corporate welfare tax credits. While the Governor is proposing an improvement over the current system, funding it with a raid on the Polk County Board’s Prairie Meadows pinata passes up an opportunity to combine a corporate rate reduction with a cleanup of the corrupt system of special interest tax breaks. If the legislature is interested, there is another way.
More coverage at Radio Iowa.
Link: Budget Documents from the Governor

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Yes, Jason, Iowa does have a poor business tax climate.

Thursday, October 28th, 2010 by Joe Kristan

Des Moines Register reporter Jason Clayworth is moved by Iowa’s poor ranking in the current Tax Foundation State Business Tax Climate Index to ask: Does Iowa really have a poor business tax climate? He cites a 2005 report by the leftish think tank Economic Policy Institute that criticizes the Tax Foundation’s approach.
The Tax Foundation is perfectly capable of defending their own methodology; I’ll just point out what I see in doing business returns for Iowa and elsewhere for clients operating in most states.
Compared to most other states, Iowa truly does have high tax rates. Our corporate rate is the highest in the entire country — the second highest when the partial deduction for federal taxes is taken into account — and our individual tax rate, even after federal deductibility, is higher than that of all our neighbors except for Minnesota.
Iowa’s taxes are very complex. You have to compute both regular tax and alternative minimum tax for Iowa, and a third computation can apply for low income individuals. There are many differences between Iowa and IRS tax rules. Iowans have to cope with dozens of narrowly-crafted deductions and loopholes, and some weird addbacks, to compute their tax.
Iowa’s taxes are grossly inefficient. Mr. Clayworth reports:

Iowa has a top corporate income tax rate of 12 percent, the highest in the nation. However, the tax applies only to in-state sales and, along with numerous tax breaks, few companies pay the top rate, said Mike Lipsman of the state revenue department. In the fiscal year that ended June 30, the state collected less than $190 million from the tax, less than 4 percent of the state

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Taxes are hard: Iowa policy version

Monday, May 10th, 2010 by Joe Kristan

All three Republican candidates for governor have targeted the Iowa corporation income tax. Two candidates, Bob Vander Plaats and Rod Roberts, would eliminate it. Terry Branstad would cut the top rate in half. To its credit, the Des Moines Register tried to address the effects of the tax in a Sunday article. Unfortunately, the article how difficult it is to address a broken tax system.
Proponents of eliminating the corporate tax overstate their case with visions of an immediate stampede of new employers. Fixing the tax system would definitely be good for business and growth, but it takes time for the full effects to be felt.
Opponents of eliminating the futile Iowa corporation income tax tend to say that “essential” government services would take a hit. The article describes one think-tanker’s views:

…ending corporate taxes would most likely prompt cash-strapped state government to increase fees in some areas or shift costs to local governments. County and city governments and schools in turn would most likely increase property taxes or fees to offset cuts to their budgets.

The candidates themselves deserve some blame for this because they tend to dance around where spending cuts will happen. They don’t like to tell anybody on the corporate welfare dole that their gravy train will stop running. If you look at the math, though, you can find a way home.
- Iowa is likely to collect around $180 million in net corporation income taxes in the current fiscal year.
- Iowa is budgeting over $400 million in corporate welfare tax breaks this year, including the research credit, rehab credit and jobs credits.
- Iowa spends tens of millions more in green jobs pork and economic development pork through the Iowa Office of Energy Independence” and Vision Iowa.
Getting rid of the corporate pork would allow the elimination of the corporation income tax without biting into other parts of the budget. That’s the approach of the Quick and Dirty Iowa Tax Reform. Too bad it’s not also the approach of any of the candidates, yet.
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Will Iowa’s legislature take another shot at the deduction for federal taxes?

Thursday, January 28th, 2010 by Joe Kristan

While Governor Culver’s proposed budget doesn’t propose to repeal Iowa’s deduction for federal taxes paid, a key legislator has quietly put that issue back in play, reports GlobeGazette.com:

Although legislative leaders repeatedly have said they don

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Iowa extends deadline for tax credit review

Thursday, December 3rd, 2009 by Joe Kristan

Governor Culver needs more time to ponder what tax credits are all about. The Des Moines Register reports:

A review of Iowa

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Because you can’t make a movie without an iPod for your son

Tuesday, September 29th, 2009 by Joe Kristan

20090929-3.JPGMaking a movie is more complicated than us Iowa rubes can imagine. Not only do you need lights, cameras, crews, actors, and stuff like that; you also need… iPods and feather beds!.
The Des Moines Register tracked down the Bruce Isacson, the producer who bought the Land Rover with Iowa taxpayer money, and it turns out he really, really needed all kinds of stuff, bought by us of course:

Isacson said former Iowa Film Office manager Tom Wheeler told “South Dakota” movie makers that they could get one new car. An iPod was needed so his 15-year-old son could obtain royalty-free songs that saved the producers tens of thousands of dollars, he said.

Wow. I never knew an iPod was a magical talisman that made copyright royalties go away. And to think I always thought you could find things on the Internet like songs with a computer. Apparently you have to use an iPod. Maybe Iowa should have that bright boy take the vacant Film Office director job.
Isacson said he lived at Stoney Creek Inn in one room and even did his own laundry, noting that most directors have more luxurious places.
“There were no limits at all,” Isacson said of Iowa

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