Posts Tagged ‘Rod Boshart’

Tax Roundup, 1/14/2013: Big webcast today! Meanwhile, outlook bleak for Iowa income tax policy.

Monday, January 14th, 2013 by Joe Kristan

20130114-1New law webcast today!  I will be participating in a webcast today on the new Fiscal Cliff law and other recent tax developments.  The webcast, sponsored by the Iowa Bar Association, will start at noon.  I will join Roger McEowen of the ISU Center for Agricultural Law and Taxation, and IRS Taxpayer Liason Christy Maitre.   Cost:  $35 for IBA tax school attendees and attendees of any 2012 CALT Farm and Urban Tax School; $35; $75 otherwise.  Agenda here, registration page here.  2 hours of timely CPE and Tax Update fun!


No good will come of this.  The 2013 session of the 85th Iowa General Assembly begins today, and the outlook for improvement in Iowa’s tax system is bleak.  Iowa business groups have firmly embraced a state tax incentive policy based on taking money from all of us to bribe well-connected businesses to do things they would do anyway.  From the Sioux City Journal:

Business groups like the Iowa Chamber Alliance, a non-partisan coalition representing 16 chambers of commerce and economic development organizations, are supporting a variety of tax credits to retain, grow and attract investments in the state. Those credits include restoring the $185 million cap on economic development tax credits that currently stands at $125 million for fiscal 2013.

Jason Hutcheson, chief executive officer of the Greater Burlington Partnership, said tax credits are a highly effective tool that deliver a high return on investment and are essential to retain, expand and recruit businesses and to attract technology and research. ICA members also are lobbying legislators to spend at least $25 million for business development incentives after the line item was shrunk to $15 million for the current fiscal year.

The politicians shed crocodile tears about just being forced to go along with a system based on them granting special favors:

Senate GOP Leader Bill Dix of Shell Rock said there is opposition to government choosing winners and losers with taxpayer-funded incentives, but he added, “There’s no question in my mind that an incentive policy is the world we live in. I don’t appreciate that and wish it wasn’t the case, but we do need a policy that includes incentives.”

You know what would be a real incentive to grow a business in Iowa?  A much simpler tax system with lower rates, one eliminating the corporate income tax altogether.  Something like The Tax Update’s Quick and Dirty Iowa Tax Reform Plan.

Instead, Iowa has a horrible system built around complexity and high rates, made less painful — even lucrative — for those with the connections and lobbyists to score targeted tax credits.  The legislators hear from those people — not from the more numerous businesses  who quietly set up shop in South Dakota or other more friendly tax climates.


The Iowa Research Credit is refundable, so Iowa writes a check when the credit exceeds the computed tax. The $45.2 million in corporate research credits claimed in 2010 resulted in $43 million in refunds.

The best we can hope for from the legislature is prompt action on “coupling” legislation to conform Iowa’s 2012 tax law to the federal changes passed earlier this month.  The 2012 filing of many Iowa returns is on hold until they do so.  We’ll see if they can even accomplish that much.


What does the Worst IRS Commissioner Ever do for an encore?  He becomes a guest scholar at the Brookings Institution, which may never recover (TaxProf)

Scott Drenkard, Governor Jindal’s Bold New Tax Plan  (TaxPolicy Blog).  Could you live with a higher state sales tax if the income tax goes away?  Even if it taxes accounting services?  Tempting.

Paul Neiffer, Good News – Certain Credits Offset AMT

Jack Townsend, The Big Boys Get Better Treatment in Our Tax System Than Do Minnows

Joseph Thorndike, Peggy Noonan and the Beleaguered 1 Percent

TaxGrrrl, Ask the taxgirl: Filing Your Tax Return Early

News you can use: States to seniors: Good times may be ending, and more (Patrick Temple-West, Tax Break)

The Critical Question: Your Money Or Your Life – Which Can You Deduct ? (Peter Reilly)

That’s what they say, anyway.  White House says no to Death Star.  (Kay Bell)

At least she knows her constitution.  Miss Iowa takes fifth! (  UPDATE!!!  Miss America Contestant Says Marijuana Should Only Be Legal For “Recreational Use and Health Care” (Mike Riggs,  So don’t smoke at the office.



Filmmaker pleads not guilty; shows budget inflexibility

Wednesday, November 16th, 2011 by Joe Kristan

The producer of the recent “Children of the Corn” remake pleaded not guilty in Polk County District Court to charges of theft and fraudulent practice. The charges arise out of defendant Donald Borcher’s participation in the Iowa Film Tax Credit program, which collapsed two years ago in scandal following revelations that Mr. Borchers and another filmmaker each purchased a luxury vehicle with help from Iowa taxpayers.
Mr. Borchers stoutly asserts his innocence, reports Rod Boshart at

Donald Borchers, 55, a Beverly Hills producer/director who represented himself at Tuesday


Iowa film credit program has only $20 million of bleeding left to do

Wednesday, August 10th, 2011 by Joe Kristan reports that the Iowa’s remaining exposure to the disastrous Iowa Film Tax Credit program is down to $20 million. Before the program was shut down, it was estimated as high as $330 million.
The state has been negotiating settlements with film producers who lost their credits when the program collapsed. From the report:

The latest settlement was over $265,000 in state tax credits and nearly $60,000 in cash paid to the producers of a feature-length film called


Conference on 2010 depreciation rules for Iowa drags on

Friday, March 18th, 2011 by Joe Kristan

The conference committee attempting to determine whether to conform Iowa to federal rules for fixed asset cost recovery failed to reach agreement again yesterday. The committee is hung up on a plan to put any leftover money at the end of the fiscal year into a “tax relief fund.” Rod Boshart reports:

Talks stalled when House Republicans insisted on creating a tax relief fund with 100 percent of the state


Returns held hostage by conference committee, day 4

Thursday, March 17th, 2011 by Joe Kristan

The third meeting of the conference committee to determine Iowa’s depreciation rules for last year broke up without agreement yesterday. They plan to get together again today.
The Iowa House of Representatives passed a bill that would adopt the federal bonus depreciation rules and Section 179 rules for 2010. The Iowa Senate passed a bill that would adopt Section 179 for 2010, but put off bonus depreciation on Iowa returns until 2011. That means we still don’t know what rules will apply to recover the cost of fixed assets on Iowa returns that we are trying to prepare now.
Why the hang-up? The sticking point is a special fund to earmark budget savings for tax relief. Rod Boshart reports:

Under the Democratic offer, the Legislature would create a new tax relief fund to receive 25 percent of excess money in the state


Conference committee ‘nears compromise,’ but no deal yet on Iowa’s 2010 tax rules

Wednesday, March 16th, 2011 by Joe Kristan

The conference committee trying to reconcile the 2010 coupling bill passed by the two houses of the Iowa legislature failed to close the deal yesterday. They are meeting again this morning. Rod Boshart reports:

Sen. Joe Bolkcom, D-Iowa City, said he was pleased the House was receptive to the Senate approach to conform the state tax code to federal changes — which would provide $152 million in tax relief but would not implement most changes retroactively for the 2010 tax year as Republicans had proposed.

I understand that the current offer would couple Iowa’s law with the federal law’s $500,000 Section 179 deduction limit would be retroactive to 2010, but bonus depreciation would not apply for Iowa tax purposes until 2011. The Section 179 deduction enables taxpayers to immediately deduct expenses that would otherwise be capitalized and deducted over multiple years through depreciation or amortization.
The remaining issues apparently are non-tax related:

[House Republican negotiator Scott] Raecker countered that providing an extra $20 million in state funding for mental-health service but setting a deadline to revamp the current system would help spur legislative action, noting that “without the repeal, I don’t think you get people to the table to get something done.” He also said Republicans were insisting on the tax relief fund as a way to “put the taxpayer at the table” whenever lawmakers make state budget decisions.

The federal 2010 corporation return deadline has come and gone, and we still don’t know what Iowa’s tax rules are for last year. Get on the stick, guys.
Related: The Tax Update’s Quick and Dirty Iowa Tax Reform


Iowa House Ways and Means passes coupling with $500K 2010 Section 179 limit AND bonus depreciation

Tuesday, February 22nd, 2011 by Joe Kristan

The Iowa House Ways and Means Committee has given Iowa businesses another reason to take their time finishing their 2010 returns. Rod Boshart reports at Eastern Iowa

The House Ways and Means Committee voted 17-7 to


Iowa Film Fiasco felonies? Wheeler charges upgraded, more film figures charged

Tuesday, January 11th, 2011 by Joe Kristan

Things got much more serious yesterday for former Iowa Film Office Director Tom Wheeler. The Attorney General’s office dropped the former misdemeanor malfeasance charge against the besieged bureaucrat and replaced it with three seven felony misconduct charges related to the now-suspended Film Tax Credit program.
The Attorney General also charged film credit broker Chad Witter with scandal-related charges — the first brought against an industry middleman. Two film industry figures — Bruce Heppner-Elgin and Dennis Brouse — also were hit with felony charges. Rod Boshart reports:

In the five felony counts brought against Witter and Brouse, prosecutors allege they knowingly made false statements for the purpose of procuring state economic development assistance for the Changing Horse film entity and did take possession of property exceeding $10,000 in value belonging to the state by unlawfully reporting fraudulent or inflated spending claims for tax credits.

The five felony charges against Heppner-Elgin allege he knowingly made false statements for the purpose of procuring state economic development assistance for


Fall film follies roundup

Tuesday, October 19th, 2010 by Joe Kristan

There’s a lot of action in the last few days on the Iowa film fiasco front. The scandal, which broke about 13 months ago, brought Iowa’s richly-subsidized film industry to a standstill. What’s happening now?
The Des Moines Register reports “New charges likely in film scandal.” The charges are likely to arise out of work done by the State Auditor’s office investigating the credits.
In a development that should surprise no one, The Des Moines Register also reports:

Nearly all the filmmakers who sought state tax credits since the program was shut down last year have been awarded less – some far less – than they claimed they should receive, after Department of Revenue audits.

You mean you can’t trust Hollywood to only ask for the corporate welfare allowed by law? Wow.
Meanwhile, charges have been dropped against filmmaker Zach LeBeau in return for cooperating with the prosecution of his former partners in the film “The Scientist.” The Des Moines Register reports that one of the remaining defendants has asked for her charges to be dismissed on the grounds that it’s all former Film Office Director Tom Wheeler’s fault:
The moviemaker, Wendy Weiner Runge, president of Polynation Pictures, also should be cleared because of missteps made by former Iowa film chief Tom Wheeler, the motion to dismiss said.
In addition, the motion accuses the state of entrapment and takes a political stab at Gov. Chet Culver. Among other things, it says Runge was accused criminally for expense estimates on anticipated film projects that never resulted in the issuance of state tax credits.

On the “put it on the taxpayer’s tab” front, the bill for Iowa’s film subsidies has been whittled down to “only” $136 million, down from the $330 million originally estimated, reports Rod Boshart at That’s about $45 per Iowan, if you’re keeping track.
The first film scandal trials are slated to begin in January.
Look – a talking goat!
Let them eat canapes
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Gronstal: forget coupling

Thursday, March 11th, 2010 by Joe Kristan

It looks like Iowa isn’t going to bother to couple with 2008 or 2009 changes in the federal tax law, reports the Quad City Times:



Film Credits: putting Hollywood before your kids.

Tuesday, March 9th, 2010 by Joe Kristan

Iowa’s legislators may not be able to bring themselves to kill the scandal-ridden film tax credit program, reports the Quad City Times:

A three-member subcommittee of the Senate Ways and Means Committee will consider a bill this afternoon that was introduced by Sen. Herman Quirmbach, D-Ames, seeking to end the controversial tax credit program for film, television and video projects.
However, full committee chairman, Sen. Joe Bolkcom, D-Iowa City, said he expects lawmakers will move to suspend rather than eliminate the program before the legislature adjourns.
“My judgment is that there will be an attempt that will get support to suspend the credit, either to a year from now or potentially for a longer period of time than that,” Bolkcom said. “I think there


It depends on whether you’re a ‘glass half-full’ kind of reporter

Tuesday, March 2nd, 2010 by Joe Kristan

One story, two headlines:
O. Kay Henderson: State tax collections down 6.5 percent
Rod Boshart: Iowa tax collections better than expected
The differences aren’t just in the headlines. See if you can match the reporting with the reporter:


Iowa releases list of research credit winners

Wednesday, February 17th, 2010 by Joe Kristan

The Iowa Department of Revenue yesterday quietly released the list of taxpayers claiming over $500,000 of Iowa research credits between July 1 and December 31, 2009. The credit piggybacks the federal research credit, but only applies to research performed in Iowa. It also has a twist that the federal credit lacks: it is “refundable.” If your Iowa research credit exceeds your Iowa tax, the state writes you a check for the difference. In other words, Iowa is making cash grants to businesses.
How much of the research credit is actually a cash subsidy to businesses, rather than a reduction in taxes otherwise due? It looks like the great majority of it. For the six month reporting period, $6.7 million of the $8.8 million in credits claimed — approximately 75% — were pure cash subsidies to the recipients. If that holds for all of the approximately $40 million of research credits claimed each year in Iowa, that means the state is issuing cash grants of $30 million to private businesses each year.
The chief lobbyist for the research credit is unhappy that we know this now:

Ed Wallace, president of the Iowa Taxpayers Association, said the report could place Iowa at a competitive disadvantage if companies fear the information will tip off competitors. The nonpartisan research group in Des Moines represents more than 150 businesses.
“In a globalized economy, many companies can do research and development in other parts of the world like India and China,” Wallace said. “We have to balance the desire of economic development with the desire to provide greater amounts of transparency.”

The desire for secrecy can arise from a need to protect secrets, but it can also stem from a desire to keep the rubes from finding out how much they are being taken for. If you are willing to accept cash grants out of taxes paid by your competitors and their employees, you may not get much sympathy for the ensuing loss of privacy.
Whatever benefits come from these credits — and the state hasn’t been able to show that they do any good — the state would surely be better off with no corporate tax and a simpler system with much lower rates. Something like the Quick and Dirty Iowa Tax Reform plan.
Report: ax the film credit, cap others.
State of Iowa Tax Credit Review Report
Quad City Times: Iowa issues report on research tax credits
Iowa Fiscal Partnership press release.
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Will Iowa re-couple with federal deductions?

Monday, January 25th, 2010 by Joe Kristan

The article says the issue of linking Iowa’s income tax rules to the latest federal legislation is “complicated,” but it’s really pretty simple:


What passes for optimism nowadays

Tuesday, November 3rd, 2009 by Joe Kristan

A headline written by a “half-full” kind of editor:

Iowa revenue down, but not by double-digits

Great news! It could have been even worse!

The Legislative Service Agency’s monthly revenue report Monday indicated that state net tax receipts are running $151.4 million behind the same four-month period last fiscal year. That represents are drop of 7.8 percent so far this fiscal year compared to the July-through-October period of fiscal 2009.
“It’s great not to see double digits, even if it is for one small month,” said Jeff Robinson, a fiscal analyst at the nonpartisan legislative agency. October’s 2.7 percent decline, while “not terrible,” still represented 11 months of slumping revenues, he added.

“Not Terrible!” All right, then.


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