A bill that would overhaul Iowa’s economic development tax incentives is on its way to the governor’s desk.
It would limit state money spent on research and development tax credits to $40 million per year. It would also cut some funding for the Endow Iowa tax credit, which encourages donations to community foundations. The bill would also create tax credits to encourage the production of movies and sustainable aviation fuel in Iowa.
Rep. Bobby Kaufmann, R-Wilton, says Iowa’s income tax rate is now much lower than it used to be.
“The need for as many incentives on economic development as we used to have is no longer. So, the reflection of this bill is both a restructure and, I would argue, a very large reduction in our tax credit system.”
The bill also allows the Iowa Economic Development Authority to reduce or eliminate tax incentives for businesses that close or have mass layoffs. It passed the House with a bipartisan vote of 84-3.