SF 278 – Local property tax abatement for rehabilitation of nuisance buildings
SF 409 – SILO/SAVE extension
SSB 1219 – Determination of Iowa corporate income tax for broadcasters
COMMITTEE ACTION:
SF 278 authorizes a local government to provide by ordinance 10-year exemptions from property tax of the actual value added to residential property by improvements to the property if it is declared a public nuisance prior to the improvements. As amended in committee, the city or county may establish an alternate schedule and/or an alternate rate for the exemption for the project. The applicant must also disclose other sources of public funding that they will use to finance the rehabilitation of the property. [3/18: short form]
SF 409 extends the 6 percent sales tax rate, the allocation to the SAVE fund and the statutory repeal of Code chapter 423F until January 1, 2050.
Code section 423.2 imposes a state tax of 6 percent on the sale price of all tangible personal property, consisting of goods, wares, merchandise and other items designated by statute, sold at retail in the state to consumers, except as otherwise provided by Code chapter 423. Generally, by operation of law, a sale subject to the sales tax is also subject to the use tax. Following the transfer of amounts required for the Natural Resources and Outdoor Recreation Trust Fund, one-sixth of the remaining state sales tax revenue from the 6 percent tax is transferred to the Secure an Advanced Vision for Education (SAVE) fund created in Code section 423F.2. Money in the SAVE fund is allocated to school districts on a per-pupil basis to be used for infrastructure and property tax reduction purposes specified in Code chapter 423F.
Under current law, the sales tax rate is reduced from 6 to 5 percent on January 1, 2030, and Code chapter 423F, along with other corresponding provisions, is repealed December 31, 2029. [3/18: short form (Behn and Schultz “no”)]
SSB 1219 provides for a new method of apportioning the income received by a commercial broadcaster for Iowa corporate income tax. Currently, the Department of Revenue uses an audience method for determining which portion of a broadcaster’s income from advertising and licensing agreements with local television service providers should be subject to taxes in Iowa. The national broadcasters who are paying the tax on the income they receive from licensing and advertising sold to local service providers often do not have access to audience information for determining what their tax obligation is. Additionally, border markets would have to determine how much of their audience was located in Iowa for determining which revenues are owed to Iowa versus the border state. This new method simply says that if the national broadcaster receives income from a television service provider located in Iowa, that income is used to determine their Iowa corporate income tax obligation. The new method is simpler and offers consistency for determining a broadcaster’s tax obligation. [3/18: short form]