DES MOINES, Iowa–Iowa Governor Terry Branstad signed a compromised $98 million tax cut plan, known as coupling, which means breaks for thousands of Iowans.
“Yes, I intend to sign that piece of legislation,” Branstad told reporters at his weekly news conference.
Hours later, his staff send out a news release confirming the governor has given his official signature to the plan.
The tax breaks–limited to the 2015 state tax returns–conform to the federal tax system and provide up to $500,000 in breaks. The reductions will offset some of the costs farmers and small business owners had with equipment purchases. Much smaller breaks would go to teachers for classroom supplies.
The coupling bill passed overwhelmingly in the house and senate after lawmakers agreed to make this just a one-year deal. Some legislators wanted to make the provision permanently attached to federal tax guidelines. But critics worried the state may not be able to afford that in the future.
Anyone affected who already filed their 2015 taxes would have to file an amended tax return to reflect the changes.
Here’s the news release:
House File 2433: an Act relating to state taxation by temporarily updating the Code references to the Internal Revenue Code, decoupling from certain federal bonus depreciation provisions, rescinding certain administrative rules and rule amendments and modifying the sales tax exemptions related to the purchase of items used in manufacturing and other activities, and including effective date and retroactive applicability provisions.“I’m pleased that the Legislature was able to come together and reach a consensus on this bill. I support coupling for one year and placing into Iowa Code an exemption for supplies consumed in manufacturing from the sales tax that will help Iowa taxpayers and businesses,” said Branstad. “Although I am disappointed that the exemption does not go as far as the administrative rules that were passed through the Administrative Rules Review Committee earlier this year that dealt with advanced manufacturing, I’m proud to sign the bill that moves Iowa forward on both of these key issues.”Lt. Gov. Kim Reynolds added, “The Iowa Legislature did a great service by passing this bill in a bi-partisan fashion that will provide tax certainty and relief to Iowa families and businesses. I’m pleased to see them reach an agreement that will help grow jobs in the Iowa economy.”The bill passed the Iowa House 79-18 on March 15, 2016 and the Iowa Senate on March 15, 2016, 50-0.