Iowa House Bill HSB680

Iowa 2023-2024 Regular Session

• Introduced: 2/8/24
• Refer: 2/8/24

Caption

A bill for an act excluding the net capital gain from the sale of certain livestock from the computation of net income for purposes of the individual income tax, and including retroactive applicability provisions.(See HF 2649.)

Impact

The implications of HSB680 are significant for the agricultural community in Iowa. By enabling a tax exclusion for capital gains on livestock sales, the bill is designed to provide financial relief to farmers and ranchers who are engaged primarily in these operations. This could lead to increased investments in livestock production and potentially stimulate growth within the agriculture sector. Additionally, it may encourage more sustainable practices among livestock holders who are incentivized to retain animals longer, positively influencing breeding and raising practices in the state.

Summary

House Study Bill 680 introduces an amendment to the Iowa Code that seeks to exclude net capital gains from the sale of certain livestock from a taxpayer's net income calculation for individual income tax purposes. This bill specifically targets livestock such as cattle and horses, allowing their sellers to be exempt from capital gains taxation if these animals have been held for at least 24 months and the seller has derived more than half of their gross income from farming or ranching activities during the tax year. Similarly, the bill applies to other breeding livestock, provided they have been held for at least 12 months under the same income conditions.

Contention

Despite its potential benefits, HSB680 may also face scrutiny and opposition from various stakeholders. Critics could argue that the bill disproportionately favors larger agricultural operations that can afford to hold livestock for extended periods. There may be concerns regarding how this tax exclusion could be perceived, with worries about its fairness in relation to smaller farmers who might not have the same capacity or financial backing. Furthermore, the retroactive applicability to January 1, 2024, could raise questions about the bill's implementation and its effects on tax planning for the current tax year.