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to allow a deduction for net controlled foreign corporation tested income, replacing a previous reference to the now-repealed global intangible low-taxed income.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 By removing the outdated terminology and keeping the deduction mechanism active, the legislation maintains the state's alignment with current federal tax definitions.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 · Senate Apr 15, 2026

SF 2292: A bill for an act creating a state corporate income tax deduction for net controlled foreign corporation tested income, and including retroactive applicability provisions.

SF 2292 updates Iowa's corporate tax code to maintain a deduction for net controlled foreign corporation tested income (NCTI), aligning with recent federal tax law changes. It replaces the outdated reference to "global intangible low-taxed income" (GILTI) with NCTI under federal Section 951A, ensuring Iowa businesses can still claim this deduction. The bill directly affects Iowa corporations with foreign operations that previously relied on this deduction under state law. It applies retroactively to tax years beginning January 1, 2026, to correct a technical gap caused by federal legislation.

Topics ✗ Budget & TaxesOpposes Budget & TaxesCreates corporate tax deduction for foreign operations, reducing state revenue; aligns with tax breaks for businesses per indicators.85% confidence

Sub-Topics Business Taxes Income Tax

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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 26, 2026

HF 2152: A bill for an act repealing the school tuition organization tax credit available against the individual and corporate income taxes and including effective date provisions.

HF 2152 repeals Iowa's school tuition organization (STO) tax credit program, which allowed taxpayers to reduce their individual or corporate income tax by 75% of donations to private schools. Starting July 1, 2026, new contributions to STOs will no longer qualify for this credit, and the annual credit limit for 2026 is reduced to $10 million (down from $20 million). The program is fully repealed effective July 1, 2032, ending all future use of the credit. This directly affects Iowa taxpayers and businesses that previously claimed this credit against their state income tax bills.

Topics ✗ Budget & TaxesOpposes Budget & TaxesRepeals tax credit diverting state revenue to private schools, closing a tax loophole that reduced public tax revenue by $10M+ annually.95% confidence ✗ EducationOpposes EducationBill repeals tax credit funding for private school donations, directly reducing financial support for private education options and limiting educational access via tax incentives.95% confidence

Sub-Topics Business Taxes Income Tax Tax Credits Higher Education School Choice

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in committee · Iowa · Senate Feb 25, 2026

SSB 3034: A bill for an act relating to state and local government taxes, budgets, and authority, by modifying provisions relating to the assessment and taxation of property, funding from the secure an advanced vision for education fund, the election of certain county officers, urban renewal areas and urban revitalization areas, establishing a rent reimbursement program, establishing a program for certain first-time homebuyers, establishing a local government shared-services grant fund, making appropriations, and including effective date, applicability, and retroactive applicability provisions.

SSB 3034 establishes new limits on local government property tax levies and reserve funds for budgets certified after July 1, 2027. It caps the maximum property tax levy at 102% of the prior year's total plus new valuation growth (from construction, boundary changes, etc.), and restricts unassigned general fund reserves to no more than 10% of budgeted expenditures. These rules apply to cities, counties, and other local governments (excluding school districts), with the Department of Management overseeing compliance. The bill also modifies audit requirements to verify adherence to these financial limits.

Topics ✗ Budget & TaxesOpposes Budget & TaxesCaps local property tax levies at 102% of prior year + new growth and restricts unassigned reserves to ≤10% of budgeted expenditures, limiting fiscal flexibility.90% confidence ✓ HousingSupports HousingBill establishes rent reimbursement program and first-time homebuyer program, directly funding housing assistance and affordability initiatives per bill's summary.95% confidence

Sub-Topics Business Taxes Property Tax State Budget Property Taxes Renters

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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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introduced · Iowa · Legislature

5374XD: Governmental Subdivision Audits, Income Tax Exemption (5374XD) - Auditor of State

This bill (5374XD) exempts certified public accountants (CPAs) from Iowa state income tax on fees earned from auditing or examining local governments (like cities, counties, or school districts). It amends Iowa tax codes 422.7 (individual tax) and 422.35 (corporate tax) to exclude such income from taxable earnings. The exemption applies retroactively to tax years beginning on or after January 1, 2026. The bill directly affects CPAs who perform these government audits, removing a tax liability on their fees for this specific service.

Topics ✗ Budget & TaxesOpposes Budget & TaxesExempts CPAs from income tax on government audit fees, reducing state revenue and creating a targeted tax break for professionals, aligning with 'creates tax breaks primarily for wealthy' indicator.90% confidence

Sub-Topics Audits & Accountability Business Taxes Income Tax

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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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