Tax reform bill signed by Gov. Kim Reynolds


AMES, Iowa – Gov. Kim Reynolds signed a sweeping tax bill into law Wednesday morning while promising there will be more tax cuts in the future.

The law gets rid of the state inheritance tax and provides that state income tax cuts to go into effect by 2023.

She signed the new law at the YSS Youth Recovery House in Ames, largely because the legislation will also realign the state’s system for funding mental health services. Mental health is currently funded by property taxes, so this will phase out that tax levy and create a state fund for Iowa’s 14 regions.

Republicans say this will not only relieve taxpayers but provide a sustainable framework funding for mental health.

“Our reforms have provided a full array of mental health services to Iowans when and where they need it most. Health care professionals and patients who rely on Iowa’s mental health system deserve the sustainability and predictability this funding source will provide,” Reynolds said.

The governor told the group at the bill-signing that “we are not done yet” and that she plans to propose even further personal income tax cuts in 2022.

“If we’re overcollecting we should make sure that we get that money back to them,” she said. “…We’ll make sure that we do it in a responsible manner and that we can maintain prioirties that are important to Iowans.”

WHO 13’s Monica Madden asked the governor if Republicans would consider eventually eliminating the state income tax altogether and Reynolds said it is not off the table.

“That’s where they’re going and if you listen to governors that’s kind of their goal in several states and I mean multiple states…taxpayers win when you’ve got governors that are competing to create an environment that not only helps Iowans and Iowa families keep more of their money,” she said.

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