SF 449 – Small Business Health Care Tax Credit
SSB 1252 – Replacement tax for private water utilities
HF 631 – Propane Education & Research Council
HF 634 – Department of Revenue policy bill
FLOOR ACTION:
SF 449 creates a small business tax credit to help offset the cost of health insurance premiums made by small employers on behalf of employees. Currently, the federal Patient Protection and Affordable Care Act provides for a health insurance income tax credit for small employers. This Iowa credit is equal to 25 percent of the federal credit. The credit is refundable. The credit is available for employers with fewer than 25 employees. An amendment was adopted in committee to allow the credit to be used against the franchise tax, the premium tax and the moneys and credit tax. The fiscal impact in FY14 is estimated at $5.5 million. [4/22: 50-0]
COMMITTEE ACTION:
HF 631 allows the professional fire fighters association to appoint a member to the Propane Education and Research Council. A council member’s service is for three years, and the number of terms is no longer limited. The future repeal (Dec. 31, 2014) of the council is struck. [4/24: short form]
HF 634 is the Department of Revenue’s proposed policy bill. The bill makes various changes to tax policy, including:
•Repeals two tax credits, the Disaster Recover Housing Project and the Assistive Device tax credits, which were not being used.
•Extends the S corporation apportionment credit to trusts whose situs is in Iowa Legislature.
•Adds silvicultural activities to the existing sales tax exemption for agricultural production. Silviculture consists of forestry management techniques, and does not include tree trimming or pruning services.
•Provides that peace officers who furnish private security services with the knowledge and consent of their employer are not included in the definition of taxable service for detective and security services. Currently, the private security services a peace officer provides are tax exempt if the services are done on a contract basis with the city, but are not tax exempt if the officer does them outside of a contract with the agency. This language eliminates this distinction.
•Adds consumable goods to the existing sales tax exemption for manufacturing equipment replacement parts.
•Amends the definition of a manufacturer to conform with a Supreme Court decision that nullified existing language to restrict who qualified as a manufacturer to only those who were primarily engaged in traditional manufacturing. The court decision and the bill language eliminate the “primarily engaged in traditional manufacturing” requirement.
•Codifies an agreement between the Department of Revenue, the Attorney General’s office and the groups involved with the “Fund of Funds” to wind down and sunset the program.
•Extends the Replacement Tax Task Force for an additional three years. The task force was scheduled to sunset on January 1, 2013.
•Provides for a study report on the administrative appeals process for tax matters and asks for recommended changes to the process.
•Streamlines the process for the distribution of the Secure and Advanced Vision for Education (SAVE) and Property Tax Equity Relief (PTER). The system had functioned as if the existing local option sales tax for schools was still in effect, complicating reporting for retailers and utilities and the distribution of money by the Department of Revenue. The new process makes it simpler to distribute the money to districts and into the PTER fund. The committee adopted an amended to strike provisions of the bill that added consumable goods to the existing replacement part sales tax exemption for manufacturers and removed a findings provision relating to the Fund of Funds wind down process. [4/24: short form]
SSB 1252 changes the taxation of rate regulated private water utilities to match the existing taxation method for rate regulated electric and natural gas utilities. Iowa American is only one private water utility in the state. The electric and gas utilities transitioned to a replacement tax in 1999, but the private water utility did not have its taxation method changed. The bill simply aligns the private water utility with the other rate-regulated utilities. [4/24: short form]