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HF 1027 – Radon Mitigation System, Tax Credit (LSB2320HV)
Staff Contact: Eric Richardson (515.281.6767) eric.richardson@legis.iowa.gov
Fiscal Note Version – New
Description
House File 1027 creates a nonrefundable individual income and corporate income tax credit not
to exceed $1,000 for the purchase of a “radon mitigation system,” defined as a system installed
and designed to reduce radon concentrations in the indoor air of a building. The tax credit may
be carried forward to the following tax year.
The Bill is retroactively effective to January 1, 2025, for tax years beginning on or after that date.
Background
Radon is a naturally occurring radioactive gas that is colorless, odorless, and tasteless and
comes from the natural decay of uranium found in soil and rock.
Iowa Code chapter 103A defines “building” as “a combination of any materials, whether portable
or fixed, to form a structure affording facilities or shelter for persons, animals or property” and
“includes any part of a building unless the context clearly requires a different meaning.”
Assumptions
• The former Iowa Department of Public Health (DPH) reported that there are approximately
3,000 qualifying radon mitigation system installations annually. The number of annual
installations is expected to be stable in future years.
• Each qualified taxpayer will be able to claim the entire $1,000 tax credit for the eligible tax
year due to purchase and installation costs of a qualifying radon mitigation system
exceeding the tax credit limit.
• The initial fiscal impact for claims under the Bill will occur in FY 2026 for TY 2025.
• The income surtax for schools is a local option tax that is based on a taxpayer’s Iowa
income tax liability. Law changes that lower Iowa income tax liability also lower the amount
of income surtax owed by any taxpayer subject to the surtax. For this projection, the surtax
is assumed to equal 2.5% of State individual income tax liability.
Fiscal Impact
The proposed individual income tax credit in HF 1027 is projected to decrease net individual
income tax liability and State General Fund revenue by $3.0 million annually beginning in
FY 2026. The decrease in tax liability is also projected to decrease the statewide local option
income surtax for schools by $75,000 annually beginning in FY 2026.
Fiscal Note
Fiscal Services Division 2
Sources
Iowa Department of Public Health
Iowa Department of Revenue
Legislative Services Agency analysis
/s/ Jennifer Acton
April 22, 2025
Doc ID 1526245
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in developing this
fiscal note is available from the Fiscal Services Division of the Legislative Services Agency upon request.
www.legis.iowa.gov