IA
Iowa House Bill HSB543

Iowa 2023-2024 Regular Session

Iowa House Bill HSB543

Introduced
1/10/24  
Introduced
1/10/24  

Caption

A bill for an act relating to state taxation and appropriations by combining special purpose funds, modifying individual income tax rates, placing assessment limitations for property tax purposes on commercial child care facilities, and modifying unemployment benefits, and including effective date and retroactive applicability provisions.

Impact

In addition to modifying income tax rates, the bill merges the Iowa Economic Emergency Fund (EEF) and the Cash Reserve Fund (CRF), which changes how state financial safety nets are managed. With the maximum balance of the CRF being increased to 12.5%, the bill allows more flexibility for the state to address financial emergencies while delivering surplus funds into taxpayer relief efforts. This merger signals a shift in how Iowa plans to manage its fiscal reserves amidst fluctuating economic climates.

Summary

House Study Bill 543 (HSB543) addresses significant changes to Iowa's taxation and appropriations framework. The bill effectively collapses the graduated individual income tax system into a flat rate structure, starting at 3.65% for tax years beginning January 1, 2024, and dropping to 3.50% beginning January 1, 2025. This change aims to simplify tax calculations and potentially provide relief to taxpayers by reducing overall tax rates, a move that has garnered support from proponents of tax reform. However, by eliminating tax brackets, critics express concerns about fairness and the long-term impacts on state revenue generation.

Contention

Notably contentious is the provision concerning unemployment benefits, where the bill alters the taxation and contribution rate calculations significantly. It introduces changes to the calculation of maximum weekly unemployment benefits and amendments to base the contributions on a reduced percentage of the average statewide weekly wage. This adjustment could lower the financial burden on employers but raises concerns about the adequacy of benefits for unemployed individuals. Furthermore, the child care facility property tax assessment limitations could lead to tensions between local governments and the state government as property values are assessed differently, potentially affecting funding for local services.

Latest HSB543 Activity

Companion Bills

IA SSB3038

Related A bill for an act relating to state taxation and appropriations by combining special purpose funds, modifying individual income tax rates, placing assessment limitations for property tax purposes on commercial child care facilities, and modifying unemployment benefits, and including effective date and retroactive applicability provisions.(See SF 2398.)

IA SF2398

Replaced by A bill for an act relating to state taxation by modifying alternate and individual income tax rates, and including effective date and retroactive applicability provisions.(Formerly SSB 3038.)

Similar Bills

IA SSB3038

A bill for an act relating to state taxation and appropriations by combining special purpose funds, modifying individual income tax rates, placing assessment limitations for property tax purposes on commercial child care facilities, and modifying unemployment benefits, and including effective date and retroactive applicability provisions.(See SF 2398.)

IA HSB752

A bill for an act relating to state and local finances by modifying individual and alternate income tax rates, withholding credits, franchise tax deductions, methodologies for determining property taxes, and property tax assessment limitations, changing methods of determining compensation of county officials, making contingent transfers from the taxpayer relief fund, and making corrections, and including effective date and applicability provisions.(See HF 2705.)

IA HF2705

A bill for an act relating to state and local finances by modifying individual and alternate income tax rates, withholding credits, franchise tax deductions, methodologies for determining property taxes, and property tax assessment limitations, changing methods of determining compensation of county officials, making contingent transfers from the taxpayer relief fund, and making corrections, and including effective date and applicability provisions.(Formerly HSB 752.)

IA SSB3207

A bill for an act relating to state and local finances by modifying individual and alternate income tax rates, withholding credits, franchise tax deductions, methodologies for determining property taxes, and property tax assessment limitations, changing methods of determining compensation of county officials, making contingent transfers from the taxpayer relief fund, and making corrections, and including effective date and applicability provisions.(See SF 2442.)

IA SF2442

A bill for an act relating to state and local finances by modifying individual and alternate income tax rates, withholding credits, franchise tax deductions, methodologies for determining property taxes, and property tax assessment limitations, changing methods of determining compensation of county officials, making contingent transfers from the taxpayer relief fund, and making corrections, and including effective date and applicability provisions. (Formerly SSB 3207.) Effective date: Enactment, 05/01/2024, 07/01/2024, 01/01/2025. Applicability date: 01/01/2024, 01/01/2025, 07/01/2025.

IA SF565

A bill for an act relating to state and local finance and the administration of the tax and related laws by the department of revenue, and including effective date, applicability, and retroactive applicability provisions. (Formerly SSB 1148.) Effective date: 06/01/2023, 07/01/2023, 01/01/2024, 01/01/2026. Applicability date: 01/01/2023, 07/01/2024.

IA HF715

A bill for an act relating to state and local finance and the administration of the tax and related laws by the department of revenue, and including effective date, applicability, and retroactive applicability provisions.(Formerly HSB 187.)

OK SB304

Income tax; limiting certain personal exemption to certain tax years; modifying amount of standard deduction for certain tax years. Effective date.