Winter storms and the Iowa Caucuses cut last week short at the capitol. The legislature did not meet Monday so members could participate in their local caucuses, a record-breaking event as it took place. Tuesday covered much of the state in snow, so many committee and subcommittee meetings were rescheduled for a later date.
Hot Topic
Fireworks have once again become a hot topic in the Iowa Legislature. SF 508 was in committee this week and passed out of subcommittee last week. The issue is not a new discussion, but interest fizzled out before adjournment last year. The bill this year would legalize the sale, use and regulation of consumer fireworks designated to meet standards of the American Pyrotechnics Association, following the lead of approximately 40 other states allow for the use of some or all consumer fireworks. The proposed legislation would place the regulation duties within the office of the state fire marshal to enforce all laws dealing with the use and sale of fireworks and would provide guidelines and protections to only allow for the sale of consumer fireworks. Under provisions in the bill, individuals would get licenses to sell, with revocation of licensure for violations of the law. Additionally, the bill restricts the use of consumer fireworks to those 18 years or older and provides designated use times.
Iowa Cattlemen Share Their Industry
When we returned Wednesday morning to the capitol, my colleague Sen. Tom Shipley from Nodaway rose to speak in support of Iowa’s beef industry and its significance in our state. It is definitely significant as the cattle industry contributes more than $6 billion in business activity in Iowa according to the Iowa Beef Industry Council.
Iowa Cattlemen Association members served brisket sandwiches for lunch on Wednesday. It was rewarding to learn more about the industry. Did you know Iowa ranks seventh nationally in total number of cattle and calves, which was nearly 3.9 million? Cattle are raised in all 99 counties and more than 21,000 cattle operations in the state, according to the Iowa Beef Industry Council. In many cases, the cattle business is a family operation. Statistics indicate 80 percent of cattle operations across the U..S. have been run by the same family for 25 years or more. Ten percent of American cattle businesses have been operated by the same families for 100 plus years.
Still No Senate Action on Coupling
There has still been no senate action on coupling Iowa’s income tax with federal regulation. Following are some concerns brought to me by local CPA Kurt Konek:
1. The purpose of Section 179 is economic stimulation which Congress has long recognized. Encouraging taxpayers to purchase equipment creates jobs and improves the economy. Many large manufacturers have been struggling since 2010, in part, because the federal government has been extending the “extenders bill” in one or two year increments. When federal tax bills are passed in the final weeks of December, or the first weeks of January, taxpayers don’t have time to adequately do year-end tax planning. One of the largest manufacturers in the area feeling the impact is John Deere. The state should be sending the message they do support their manufacturers and economic stimulation.
2. The delay in passing any bill prevents almost all Iowa taxpayers, who utilize tax software, from filing their federal and Iowa income tax returns. Many software providers require the federal and Iowa returns be transmitted at the same time. Others will allow filers to transmit the federal and Iowa returns separately, but this requires additional work for taxpayers. After passage of any bill software companies may require one to two weeks to update the tax software before tax returns may be filed.
3. Farmer tax returns are due March 1. The delay noted above, in 2, may make it difficult to timely file farm tax returns by March 1. It may be necessary to extend the farm due date to April 30 to accommodate the farm clients who cannot timely file tax returns as a result of the delayed passage.
4. If the Section 179 deduction is not included in the bill farmers may be forced to sell grain to pay additional Iowa tax when grain prices are low.
5. Tax preparers cannot file many Iowa returns at this time. This is creating a growing problem; the backlog of tax returns will increase the workload of tax professionals who only have roughly 10 weeks to file timely tax returns for their clients.