The Iowa House approved tax credit reform legislation (SF 2380) today that will expand support for small businesses and bring accountability and common sense to Iowa’s tax credit spending.
“We are shifting dollars away from large Wall Street companies and moving some of those dollars to support struggling Main Street businesses whose success will benefit more Iowans,” said State Representative Paul Shomshor of Council Bluffs, who chairs the House Ways & Means Committee. “In these tough times, we must give continue to support small businesses.”
The reforms include the suspension of the film tax credit program for two years; lowering the cap from $185 million to $120 million on business tax credits; cutting the Iowa Fund of Funds contingent tax credits from $100 million to $60 million; an overall cut of 10 percent for many other tax credit programs and an on-going oversight process which will regularly evaluate all tax credits for results. Credits which do not produce results will be fixed or eliminated. In addition, the Supplemental Research Activities Tax Credit will be cut in half for large corporations and increased to help small businesses.