The Iowa Economic Development Authority’s proposed overhaul of state tax credits advanced through subcommittees in the House and Senate Thursday.
The proposed changes include limiting the money spent on research and development tax credits to $40 million per year, and allocating $5 million for a new credit to encourage sustainable aviation fuel production.
Iowa Economic Development Authority Director Debi Durham says changes are needed because some incentives were designed to compensate for Iowa not having competitive tax policies.
“But, you all have made us more competitive every session that you have — led by Gov. Reynolds — when you get to the point where we are with our corporate taxes … our personal income taxes, regulatory reform and all that. It’s a totally different landscape.”
Nonprofit leaders from rural parts of the state expressed concerns about repealing the Endow Iowa tax credit. They say it would hurt their ability to support and grow their communities, and some businesses are concerned about capping the research tax credit and potentially missing out on incentives.