IA
Iowa Senate Bill SF2400

Iowa 2023-2024 Regular Session

Iowa Senate Bill SF2400

Introduced
2/27/24  
Introduced
2/27/24  

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.

Impact

The enactment of SF2400 will have a significant impact on Iowa's agricultural sector by potentially enhancing the financial viability of livestock farmers and ranchers. It encourages long-term investment in livestock production, which may, in turn, stabilize local agricultural economies. Furthermore, by making these exclusions retroactive to January 1, 2024, it acknowledges the farming industry's reliance on historical investment strategies and offers relief effective from the start of the tax year. This provision could lead to increased economic activity and investment in agriculture before it takes full effect.

Summary

Senate File 2400 proposes an amendment to the individual income tax regulations by excluding net capital gains generated from the sale of specific livestock from a taxpayer's net income computation. This bill aims to alleviate the tax burden on farmers and ranchers who rely heavily on livestock as part of their revenue. The proposal introduces eligibility criteria, stipulating that livestock must be held for a minimum period—24 months for cattle and horses, and 12 months for other breeding livestock—to qualify for the exclusion. Additionally, the bill requires that the taxpayer derive more than 50% of their gross income from farming or ranching operations to benefit from this tax relief.

Contention

While the bill has support from agricultural stakeholders who argue it will ease the tax burden on livestock sellers and stimulate farming revenues, there is concern regarding the eligibility restrictions imposed on retired farmers. Individuals who fall into this category and are utilizing parallel tax exclusions may be adversely affected, leading to discussions about equity among different categories of farmers. Opponents of the bill may argue that exclusions should be broader to include all farmers, irrespective of their operational status, citing that the current language may create unnecessary barriers for certain individuals within the agricultural community.

Companion Bills

IA HSB680

Related 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.)

IA HF2649

Similar To 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. (Formerly HSB 680.) Effective date: 07/01/2024. Applicability date: 01/01/2023.

Previously Filed As

IA HSB680

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.)

IA HF2649

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. (Formerly HSB 680.) Effective date: 07/01/2024. Applicability date: 01/01/2023.

IA HF567

A bill for an act excluding the net capital gain from the sale of gold or silver from the calculations of Iowa net income for purposes of the individual income tax, and including effective date and retroactive applicability provisions.

IA HF2638

A bill for an act excluding nonqualified deferred compensation income from the individual income tax, and including retroactive applicability provisions.(Formerly HF 2105.)

IA HF2105

A bill for an act excluding nonqualified deferred compensation income from the individual income tax, and including retroactive applicability provisions.(See HF 2638.)

IA HF2626

A bill for an act modifying the computation of net income for the individual income tax related to the capital gain or loss from the sale of bullion, coins, and currency, and including applicability provisions.(Formerly HF 659, HF 208.)

IA HF659

A bill for an act modifying the computation of net income for the individual income tax related to the capital gain or loss from the sale of bullion, coins, and currency, and including applicability provisions.(Formerly HF 208; See HF 2626.)

IA HF568

A bill for an act excluding interest income earned from banks and credit unions from the calculations of Iowa net income for purposes of the individual income tax, and including effective date and retroactive applicability provisions.

IA HF624

A bill for an act relating to the farm tenancy net income exclusion available against the individual income tax, and including effective date and retroactive applicability provisions.(Formerly HF 56.)

IA SF552

A bill for an act relating to individual and corporate income taxes, the insurance premium tax, and including the contingent repeal of the individual income tax, and including retroactive applicability and effective date provisions.(Formerly SSB 1126.)

Similar Bills

No similar bills found.