HF 1026 updates the adoption tax credit available against individual income tax for taxpayers in Iowa. The bill increases the maximum credit for qualified adoption expenses from $5,000 to $20,000 per adoption. It also specifies that any credit amount exceeding a taxpayer's liability is refundable. This act takes effect upon enactment and applies retroactively to adoptions finalized on or after January 1, 2024, for tax years beginning on or after that date.
HF 1013 establishes a temporary partial property tax exemption for certain residential properties. This bill directly affects individuals who purchase homes from the U.S. Department of Housing and Urban Development (HUD) in areas declared major disaster zones. To qualify, the property must be sold by HUD specifically to provide housing after a disaster, and the new owner must occupy it as their primary residence. The exemption applies for four assessment years, starting with the first full year after the sale, decreasing from 80% of the property's actual value in the first year to 20% in the fourth year.
This bill primarily mandates that individuals and businesses required to file sales and use tax returns must do so electronically. It directly affects all taxpayers subject to sales and use tax filing requirements. A key provision states that any return not filed electronically, when required, will not be considered valid by the department unless an exception is granted. Taxpayers unable to file electronically can request permission from the director to use an alternative filing method. The bill also allows the department to adopt rules to administer these new electronic filing requirements and takes effect immediately upon enactment.
SF 604 modifies how units of cigarettes and tobacco products are measured for state regulation and taxation purposes. This bill directly affects businesses involved in the sale of these products and the government agencies responsible for their oversight and tax collection. It changes the specific criteria or definitions used to determine the volume of sales for these products.
HF 1022 proposes to exempt the sale of laundry soap and detergent from the state's sales tax. This change would directly affect consumers by reducing the cost of purchasing these household items. The bill amends existing state code to specifically remove sales tax from laundry soap and detergent, an exemption that would also apply to use tax.
This bill modifies how criminal case fines collected within a county are distributed, reducing the percentages allocated to the state court administrator and county treasurer. It establishes a new "victim restitution fund" in the state treasury, which will receive 7% of these collected fines. The fund is dedicated to providing restitution for crime victims, covering "pecuniary damages" and restitution for the death of a victim, as defined by existing law. Monies in this fund will remain available for expenditure year-to-year and will not revert at the close of a fiscal year.
HF 1019 is a bill that exempts the sale of toilet paper from sales tax in Iowa. This means that consumers purchasing toilet paper would no longer pay the state's sales tax on these items. The bill amends Section 423.3 of the Code 2025 to add toilet paper to the list of sales tax exemptions. Due to existing state law, this exemption also applies to the use tax on toilet paper.
This bill establishes a new property tax assessment limitation specifically for commercial properties primarily used as licensed child care facilities. It allows the portion of a commercial property dedicated to child care to be assessed for tax purposes at the same rate as residential property, rather than the standard commercial rate. To qualify, facility owners must apply to their local assessor by July 1st of the assessment year, providing proof of their child care license and property details. This assessment limitation, effective for valuations beginning January 1, 2025, is also factored into state appropriations that help compensate local governments for certain assessment limitations.
HF 1020 modifies the child and dependent care tax credit available to individual income taxpayers in Iowa. The bill revises the structure of the credit by reducing the number of income thresholds from seven to four. It removes the previous maximum income threshold of $90,000, making all taxpayers eligible, with those earning $25,000 or more now able to claim 50% of the federal credit. These changes apply retroactively to tax years beginning on or after January 1, 2025.
HF 988 establishes catastrophic savings accounts for Iowa residents who own homes, effective January 1, 2026. This bill allows account holders to deduct contributions to these accounts from their state income tax, with lifetime limits tied to their homeowner's insurance premiums or the home's assessed value for self-insured individuals. Interest earned on these accounts is also tax-deductible. Funds can be withdrawn tax-free to pay deductibles for homeowner's insurance related to defined catastrophic events like floods or windstorms. However, withdrawals for non-qualified expenses are subject to state income tax and a 2.5% penalty.
