Iowa 2023-2024 Regular Session

Iowa Senate Bill SSB3207

Introduced
4/17/24  
Introduced
4/17/24  

Caption

A bill for an act relating to state and local finances by modifying individual and alternate income tax rates, withholding credits, franchise tax deductions, methodologies for determining property taxes, and property tax assessment limitations, changing methods of determining compensation of county officials, making contingent transfers from the taxpayer relief fund, and making corrections, and including effective date and applicability provisions.(See SF 2442.)

Impact

In addition to the tax rate modifications, SSB3207 introduces adjustments to the methodologies for determining property taxes and property tax assessment limitations. For instance, the bill proposes to gradually reduce the percentage of actual value at which certain properties assessed by the Iowa Department of Revenue are taxed, aiming for a 90% assessment rate by January 2029. The legislation will also revise the processes surrounding the setting of county and city tax levy rates, aligning them with growth thresholds and previous fiscal years' rates to provide more predictable financial management for local governments.

Summary

Senate Study Bill 3207 proposes a comprehensive set of modifications regarding state and local finances in Iowa. The bill emphasizes adjustments to the individual and alternate income tax rates, notably moving up the effective date for a tax rate reduction from January 1, 2026, to January 1, 2025. It decreases the primary tax rate from 3.90% to 3.80%, and the corresponding alternate income tax rate from 4.40% to 4.30%. The bill also makes critical corrections to how withholding rates and income tax brackets are calculated, paving the way for a streamlined tax structure. These changes are set to take effect on January 1, 2025, and apply to tax years beginning after this date.

Contention

Notably, SSB3207 contains provisions that may trigger contention among various stakeholders. While supporters argue that the bill will drive economic development by reducing tax burdens and streamlining tax processes, opponents may raise concerns about potential impacts on local governance, particularly regarding property tax assessments and county compensation protocols. The bill also reflects a shift in authority, as it allows counties to consolidate designated county seats, potentially challenging longstanding local governance structures. Overall, SSB3207 is positioned as a significant legislative effort aimed at reshaping Iowa's financial landscape.

Companion Bills

IA SF2442

Replaced by A bill for an act relating to state and local finances by modifying individual and alternate income tax rates, withholding credits, franchise tax deductions, methodologies for determining property taxes, and property tax assessment limitations, changing methods of determining compensation of county officials, making contingent transfers from the taxpayer relief fund, and making corrections, and including effective date and applicability provisions. (Formerly SSB 3207.) Effective date: Enactment, 05/01/2024, 07/01/2024, 01/01/2025. Applicability date: 01/01/2024, 01/01/2025, 07/01/2025.

Previously Filed As

IA HF418

A bill for an act relating to property taxes by modifying the methodology for determining actual value of residential property, certain levy rates, and assessment limitations of certain classes of property, and including retroactive applicability provisions.

IA HF2577

A bill for an act relating to property taxes and local government funding by modifying the methodology for determining actual value of property, certain levy rates, bonding procedures, assessment protests, and assessment limitations of certain classes of property, and including retroactive applicability provisions.

IA SSB3182

A bill for an act relating to state finances by modifying the taxes imposed on health maintenance organizations, making transfers from the taxpayer relief fund, making and supplementing appropriations to the department of health and human services, and including effective date, contingent effective date, and retroactive applicability provisions.(See SF 2464.)

IA HF496

A bill for an act modifying the individual and alternate income tax rates, and including applicability provisions.

IA SF2464

A bill for an act relating to state finances by modifying the taxes imposed on health maintenance organizations, making transfers from the taxpayer relief fund, making and supplementing appropriations to the department of health and human services, and including effective date, contingent effective date, and retroactive applicability provisions.(Formerly SSB 3182.)

IA HSB762

A bill for an act relating to state finances by modifying the taxes imposed on health maintenance organizations, making transfers from the taxpayer relief fund, making and supplementing appropriations to the department of health and human services, and including effective date, contingent effective date, applicability, and retroactive applicability provisions.(See HF 2739.)

IA SSB1239

A bill for an act relating to the elimination of the individual income tax and alternate income tax by creating the taxpayer relief trust fund and income tax elimination board and fund, and making appropriations.

IA SSB1156

A bill for an act relating to the administration of the tax by the department of revenue by modifying provisions related to personal income, property, sales and use, motor fuel, and inheritance taxes, changing tax expenditure reviews, and including effective date and retroactive applicability provisions.(See SF 614.)

IA HSB596

A bill for an act relating to local government taxes, budgets, and authority, by establishing property tax limitations and modifying provisions relating to the assessment and taxation of property, certain taxpayer notices, bond issuances, and councils of governments, and including applicability and retroactive applicability provisions.(See HF 2745.)

IA HF2739

A bill for an act relating to state finances by modifying the taxes imposed on health maintenance organizations, making transfers from the taxpayer relief fund, making and supplementing appropriations to the department of health and human services, and including effective date, contingent effective date, and retroactive applicability provisions. (Formerly HSB 762.) Contingent effective date, effective 03/25/2026, 07/01/2026. Applicability date: 01/01/2026.

Similar Bills

No similar bills found.