We are two weeks into the new session and one important issue that needs addressed at the beginning of every Legislative Session is that of coupling with the federal tax code. This issue is certainly not lost on accountants as they have to “hurry up and wait” to see what action the state legislature will take before finalizing their clients’ tax returns.
It is an annual occurrence for numerous federal tax incentives to expire at the end of the year, only to be retroactively resurrected by Congress at the last minute. It is something that tax preparers have been forced to patiently endure.
This could finally be the year that things change. The bill that was recently signed by the president made the research and development credits and the enhanced Section 179 deductions permanent for businesses. Additionally, the enhanced Child Tax Credit, American Opportunity Tax Credit, Teacher Supply Deduction and some charitable giving incentives were also made permanent for individuals.
Since congress finally passed their tax bill, each state legislature is now able to decide which provisions of the federal bill to couple with and which ones to disallow.
During the first week of session, the governor gave his State of the State Address and we received his Fiscal Year 2017 budget. I was disappointed to learn that his plan does not couple at all for tax year 2015. This means that taxpayers would not be able to take advantage of Section 179 business expensing on items purchased in 2015, in addition to the rest of the federal tax extenders that have an Iowa component when they file their taxes this April.
The governor does recommend permanently coupling with the Internal Revenue Code in tax year 2016, with the exception of Section 179 expensing or bonus depreciation. The governor’s plan would permanently not couple these.
I have heard from several business owners and tax accountants, expressing their angst over the lack of coupling for the previous year’s business purchases. As a small business owner that relies on Section 179, I understand the frustration of having a method of expensing disappear unexpectedly after a year of purchases have been made. I am not in favor of this and will be advocating to couple with Section 179 for 2015.
As in previous years, I am holding town hall meetings in each of the three counties in House District 28 to hear constituents’ concerns. Be sure to check my schedule for one that is closest to you. This Friday,I will be at the Last Chance Market in Russell at 8 a.m., Mosaic’s in Chariton at 10 a.m. and Coffee Cup Cafe in Sully at 2 p.m.
If you are unable to attend one of my scheduled forums, please contact me at 641-218-0185 or greg.heartsill@legis.iowa.gov with your issues or concerns. I appreciate and welcome your comments and feedback. Also, to keep up-to-date on issues at the Statehouse, consider subscribing to my weekly e-newsletter.
I am honored to be your representative in the Iowa Legislature. Until next time, God bless!