Budget & Taxes (Business Taxes)

signed · Iowa · Senate May 15, 2026

SF 2492: A bill for an act creating a state corporate income tax deduction for net controlled foreign corporation tested income, and including retroactive applicability provisions.

This Iowa bill updates the state corporate income tax code to allow a deduction for net controlled foreign corporation tested income, replacing a previous reference to the now-repealed global intangible low-taxed income. The change directly affects Iowa businesses with foreign income by ensuring they can still claim a tax break for this specific category of earnings despite recent federal tax law updates. By removing the outdated terminology and keeping the deduction mechanism active, the legislation maintains the state's alignment with current federal tax definitions. The law applies retroactively to tax years beginning on or after January 1, 2026.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill creates a tax deduction for businesses, reducing their tax liability and promoting economic activity.85% confidence

Sub-Topics Business Taxes Income Tax Tax Incentives

introduced · Iowa · House Apr 17, 2026

HF 2774: A bill for an act exempting sales and use taxes incurred for constructing a regional water trail system by a nonprofit corporation, and including effective date and retroactive applicability provisions.

This bill exempts sales and use taxes on building materials, supplies, equipment, and services used to construct a regional water trail system by a specific type of nonprofit corporation. To qualify for this tax exemption, the nonprofit must be organized under Iowa law, have a majority of its board members appointed by state political subdivisions, and be responsible for implementing a regional recreational and dam safety plan. The tax relief applies retroactively to January 1, 2025, covering purchases made on or after that date for projects involving written construction contracts.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill provides tax exemptions for construction materials, reducing costs for a nonprofit water trail project.90% confidence

Sub-Topics Business Taxes Sales Tax Tax Incentives

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in committee · Iowa · House Feb 23, 2026

HF 2688: A bill for an act relating to investment requirements for data center businesses that claim certain sales tax exemptions and sales and use tax refunds.

HF 2688 requires data centers in Iowa that claim sales tax exemptions or refunds to invest 5% of the value of those exemptions/refunds from the previous year into qualifying businesses or innovation funds. This applies directly to data center businesses using specific tax exemptions under sections 423.3 and 423.4. If they fail to meet this investment requirement, the state cancels their tax exemption eligibility and requires them to repay all claimed exemptions/refunds as regular tax payments. The bill also updates annual reporting requirements for data centers to include details on exempt purchases and tax refunds starting in 2027.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill closes tax loophole by requiring data centers to invest 5% of claimed exemptions, ensuring fiscal responsibility and preventing tax avoidance.95% confidence

Sub-Topics Business Taxes Sales Tax Tax Incentives

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in committee · Iowa · House Jan 22, 2026

HF 2017: A bill for an act creating a state work opportunity tax credit available against the individual and corporate income taxes, and including retroactive applicability provisions.

HF 2017 creates a new Iowa tax credit equal to 100% of the federal work opportunity tax credit (from IRS Section 51) for individual and corporate income taxes. It applies to tax years beginning January 1, 2026, and affects Iowa employers who hire individuals facing barriers to employment, as defined by the federal program. The credit reduces tax liability but is non-refundable; any unused portion can be carried forward to offset taxes in the following year. The bill includes retroactive application starting January 1, 2026.

Topics ✓ Budget & TaxesSupports Budget & TaxesCreates 100% tax credit against income taxes for employers hiring targeted groups, reducing tax liability and incentivizing hiring - direct tax relief aligning with fiscal support indicators.95% confidence ✓ Criminal JusticeSupports Criminal JusticeTax credit incentivizes hiring individuals with employment barriers (including formerly incarcerated people via federal program), reducing recidivism through employment opportunities.85% confidence ✓ Labor & EmploymentSupports Labor & EmploymentBill creates tax credit for employers hiring workers facing employment barriers, directly promoting job creation and aligning with labor & employment goals of expanding opportunities for disadvantaged workers.90% confidence ✓ VeteransSupports VeteransFederal WOTC (Section 51) includes veterans as eligible; bill extends credit to employers hiring individuals facing barriers, directly supporting veteran employment through tax incentives.85% confidence

Sub-Topics Business Taxes Tax Credits Tax Incentives

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in committee · Iowa · Senate Jan 22, 2025

SF 19: A bill for an act relating to the farm tenancy net income exclusion available against the individual income tax, and including effective date and retroactive applicability provisions.

SF 19 expands Iowa's farm tenancy net income exclusion for individual income tax, allowing eligible farmers to exclude income from farm tenancy agreements received through certain business entities (like partnerships, S-corporations, trusts, or disregarded entities) rather than only direct payments. It specifically clarifies that net income accruing to these entities is treated as distributed to the farmer-owner if they can withdraw or compel distribution, matching the exclusion's current treatment for direct income. The bill applies retroactively to tax years beginning January 1, 2024, meaning farmers may qualify for tax adjustments on 2024 returns. This change directly affects Iowa farmers operating through pass-through business structures who previously couldn't claim this exclusion for their farm tenancy income.

Topics ✓ Budget & TaxesSupports Budget & TaxesExpands farm income tax exclusion, reducing taxable income for farmers - direct tax relief aligning with 'support' indicators for tax policy advancement.90% confidence

Sub-Topics Business Taxes

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in committee · Iowa · House Mar 6, 2025

HSB 229: A bill for an act relating to deducting excess business losses for purposes of the individual income tax, and including retroactive applicability provisions.

This Iowa bill (HSB 229) allows individual taxpayers to deduct business losses previously disallowed due to federal tax rules for state income tax purposes. Specifically, it permits deductions for business losses that were excluded under federal Section 461(l) limitations during tax years 2021-2022. The bill applies retroactively to those years, meaning taxpayers can now adjust their state tax filings for 2021 and 2022 to include these previously disallowed losses. It directly affects Iowa residents who filed business tax returns during 2021-2022 and had federal business losses exceeding the $305,000 (single) or $610,000 (married) federal thresholds. The change modifies Iowa’s tax code to align with federal carryforward rules for disallowed business losses during that period.

Topics ✓ Budget & TaxesSupports Budget & TaxesAllows tax deductions for business losses, reducing state tax liability for affected individuals, providing direct tax relief under income tax policy.95% confidence

Sub-Topics Business Taxes

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in committee · Iowa · House Feb 13, 2025

HF 370: A bill for an act establishing a solar installation tax credit available against the individual and corporate income taxes, the moneys and credits tax, and the franchise tax, and including effective date and retroactive applicability provisions.

HF 370 establishes a solar installation tax credit in Iowa for individuals and businesses that install solar energy systems on or after January 1, 2025. The credit equals 50% of two federal solar energy credits (capped at $5,000 for residential systems and $20,000 for commercial systems), applicable against income, franchise, and moneys and credits taxes. Unused credits can be carried forward for up to 10 years, and applicants must submit applications by May 1 each year. The bill limits annual credits to $5 million total, with at least $1 million reserved specifically for residential installations, and prevents double-dipping with other solar tax credits.

Topics ✓ Budget & TaxesSupports Budget & TaxesProvides tax credits reducing tax liability for solar installations, aligning with tax relief indicators under Budget & Taxes.95% confidence ✓ EnergySupports EnergyDirectly provides 50% tax credit for solar installations, promoting renewable energy adoption through financial incentives for individuals and businesses.95% confidence ✓ EnvironmentSupports EnvironmentProvides tax credit for solar installations, directly promoting clean energy adoption and reducing fossil fuel dependence per bill's explicit purpose.95% confidence

Sub-Topics Business Taxes Solar

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in committee · Iowa · House Feb 20, 2025

HSB 232: A bill for an act relating to the historic preservation tax credit available against the individual and corporate income taxes, the franchise tax, and the insurance premiums tax.

This bill extends the deadline for claiming historic preservation tax credits from January 1, 2023, to July 1, 2023, for credits issued before that date. It directly affects Iowa taxpayers who claimed or were awarded these credits prior to July 1, 2023, ensuring they can still fully utilize the credits against income, corporate, franchise, and insurance premiums taxes. The key provision expands an existing "preservation of rights" clause to cover credits earned through July 1, 2023, preventing earlier reductions in refundability from impacting those specific claims. This adjustment aligns with prior legislation (House File 2317) that gradually reduced credit refundability but preserves existing rights for credits issued before the new date.

Topics ✓ Budget & TaxesSupports Budget & TaxesExtends deadline for historic preservation tax credits, enabling taxpayers to utilize existing credits against income/corporate/franchise/insurance taxes, providing direct tax relief.92% confidence

Sub-Topics Business Taxes

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in committee · Iowa · House Feb 28, 2025

HF 661: A bill for an act relating to child care, including the child and dependent care tax credit, a child care workforce matching grant program, a small business child care tax credit, and state child care assistance, and including applicability provisions.

HF 661 creates a comprehensive child care package in Iowa. It expands the state's child and dependent care tax credit to match the federal credit amount (retroactive to 2025), establishes a state grant program to raise wages and provide health insurance/benefits for child care workers, and introduces a new small business tax credit for employers offering on-site or nearby child care (capping at $3,000 per employee annually, with a total $2 million annual limit). The bill also adjusts state child care assistance eligibility, raising required work hours for parents and increasing income thresholds to 265% (basic care) and 290% (special needs) of the federal poverty level, while requiring state reimbursement rates to match private-pay rates. These changes directly affect child care workers, small employers providing child care benefits, and low-income families seeking state assistance.

Topics ✓ Budget & TaxesSupports Budget & TaxesExpands tax credits for families (matching federal) and small businesses, funds child care workforce through grants, aligning with tax relief and public service funding indicators.95% confidence ✓ HealthcareSupports HealthcareBill explicitly provides health insurance benefits for child care workers via state grant program, expanding coverage for a workforce segment.90% confidence ✓ Labor & EmploymentSupports Labor & EmploymentEstablishes state grant program to raise wages and provide health benefits for child care workers, directly advancing worker compensation and benefits.95% confidence

Sub-Topics Business Taxes Tax Credits

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in committee · Iowa · Senate May 9, 2025

SF 170: A bill for an act relating to the historic preservation tax credit available against the individual and corporate income taxes, the franchise tax, and the insurance premiums tax.

SF 170 amends a prior law related to the historic preservation tax credit for individuals and corporations. The bill extends the date for preserving existing rights for these tax credits from January 1, 2023, to July 1, 2023. This means that historic preservation tax credits issued or awarded before July 1, 2023, will not be subject to the reduced refundability changes enacted in 2022. Taxpayers holding these credits will retain their original rights to claim or redeem them, including any carryforward amounts.

Topics ✓ Budget & TaxesSupports Budget & TaxesExtends historic preservation tax credit validity, preserving existing taxpayer benefits and preventing reduced refundability for credits issued before July 1, 2023.95% confidence

Sub-Topics Business Taxes

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