Iowa Senate Bill SF44

Iowa 2025-2026 Regular Session

• Introduced: 1/15/25
• Refer: 1/15/25

Caption

A bill for an act relating to the historic preservation tax credit available against the individual and corporate income taxes, the franchise tax, and the insurance premiums tax.

Impact

With the proposed amendment, SF44 expands the preservation of existing rights to tax credits issued prior to July 1, 2023, offering reassurance to those who may have already planned their financial affairs based on the former terms of the historic preservation tax credit. This provision is crucial to ensuring that taxpayers do not face retroactive penalties or limitations on credit claims, thereby maintaining some stability in fiscal planning for those engaged in historical property preservation.

Summary

Senate File 44 proposes changes to the historic preservation tax credit applicable against individual and corporate income taxes, franchise taxes, and insurance premiums taxes. The bill seeks to amend existing legislation enacted during the 2022 session, which gradually reduced the refundability of the historic preservation tax credit starting from tax year 2023. Previously, taxpayers could claim a full refund on credits that exceeded their tax liability, but this will begin to decrease to a 75% refund by 2027.

Contention

The main point of contention surrounding SF44 relates to balancing the need for fiscal responsibility with encouraging the preservation of historic properties. Supporters believe that maintaining a more favorable tax credit structure could promote revitalization efforts and encourage development in historical districts, bolstering local economies. Critics, however, may argue about the long-term sustainability of such tax incentives and their potential impact on state revenue as refundable credits reduce the tax base.

Notable_points

Moreover, the bill's expansion of preservation rights may yield significant implications for future projects and investments in heritage sites across Iowa. The alteration of refundability terms could establish a precedent for how historic preservation tax credits are administered in the state, influencing both property owners and policymakers in their future interactions with such financial instruments.