IA
Iowa Senate Bill SSB3038

Iowa 2023-2024 Regular Session

Iowa Senate Bill SSB3038

Introduced
1/11/24  
Introduced
1/11/24  

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.(See SF 2398.)

Impact

In addition to tax adjustments, SSB3038 proposes the merger of the Iowa economic emergency fund with the cash reserve fund and increases the maximum balance for the cash reserve fund. This change is intended to enhance state financial management by consolidating resources and providing more flexibility in times of need. The bill also includes provisions for overwithholding penalties and modifies property tax assessments specifically for commercial child care facilities, allowing exemptions and limitations that could reduce operational costs for these businesses.

Summary

Senate Study Bill 3038 (SSB3038) is a comprehensive bill focusing on state taxation and appropriations changes. The bill introduces a flat individual income tax rate, which is set at 3.65 percent for the tax year beginning January 1, 2024, and further reduces it to 3.50 percent starting in 2025. This marks a significant shift from the current graduated tax structure, which had a scheduled rate of 3.90 percent starting in 2026. This transition aims to simplify the tax landscape for individuals and potentially stimulate economic growth by making the tax system more predictable and easier to navigate for taxpayers.

Contention

Notably, the bill has sparked discussions over its implications for revenue generation and public services. Critics argue that abolishing the graduated tax rates may disproportionately benefit higher-income individuals while straining state resources for public services. The changes to property tax assessments for child care facilities have also led to contention, with supporters advocating for improved access to affordable child care, and opponents expressing concerns over the potential reduction in local government revenues, which could affect public service funding. Overall, SSB3038 reflects a broader push towards tax reform in Iowa, emphasizing a simplified tax structure while navigating the complexities of fiscal responsibility.

Latest SSB3038 Activity

Companion Bills

IA HSB543

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.

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.)

Previously Filed As

IA HSB543

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.

Similar Bills

IA HSB543

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.

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.