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Senate bill seeks to cut corporate income taxes

Tax CutsBy Bob Eschliman
Editor

 

A bill offered this week by state Sen. Brad Zaun (R-Urbandale) would reduce the tax rates applied to corporations under the state corporate income tax.

Tax Foundation RankingsAccording to the Tax Foundation, Iowa ranks 40th overall in taxes, but ranks 49th in terms of corporate income tax (see chart at right, click to see full size). Iowa’s corporate income tax is imposed in a “progressive” manner with four income brackets with increasing rates:

  • the first $25,000 of taxable income, 6 percent;
  • taxable income between $25,001 and $100,000, 8 percent;
  • taxable income between $100,001 and $250,000, 10 percent; and
  • taxable income above $250,000, 12 percent.

Senate File 359 would eliminate the tiered brackets and rate structure and impose a 6 percent rate on the corporation’s taxable income. The bill would apply retroactively to tax years beginning on or after Jan. 1 of this year.

The bill is supported by the Iowa Association of Business and Industry. The following lobbyist groups have declared they are “undecided” on the proposed legislation: Hy-Vee Inc., Meredith Corporation, the Iowa Communications Alliance, Isle of Capri Casinos Inc., the Greater Des Moines Partnership, the Iowa Automobile Dealers Association, the Iowa Chamber Alliance, the Iowa Grocery Industry Association, the Iowa Newspaper Association, the Iowa Propane Gas Association, the Iowa Society of Certified Public Accountants, the Monsanto Company, and the University of Phoenix.