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The House also
rejected repealing the 10 percent across the board income tax cut
(1997), the subchapter “S” tax cut (2002), the hospital sales
tax exemption, the insurance premium tax cut (2002), and the Tax
Incentive Credit and Refund (SF 2290, see Economic Growth section).
Reinstated the
Phase-out on Residential Utility Bills – During the
Extraordinary Session of 2003, the House and Senate approved HF 692
and HF 683 that contained a delay in the tax cut, to offset the
income tax cut (see above). When the Governor item-vetoed the
income tax reduction, he also item-vetoed the sales tax delay.
The Governor’s action resulted in increasing the sales tax on
utility bills to 5%, beginning in July of this year.
The House
voted to correct the Governor’s mistake by setting the sales tax
rate on utility bills at 2% for July-December 2004, 1% for 2005 and
permanently removes the sales tax beginning
January 1, 2006
. This schedule reinstates the phase-out of the sales tax that
was approved by the Legislature and signed by the Governor during
the 2001 Legislative Session.
Non-Public
School
Tuition Organization Tax Credit – Provided for a
non-refundable personal income tax credit of 75% of up to $700 in
contributions by a single taxpayer and of 75% of up to $800 in
contributions by a married couple to a non-public school tuition
organization. At least 90% of annual revenue of the private
school tuition organization must be allocated for educational
scholarships or tuition grants to children enrolled in a qualifying
school each year.
TAX
FREEDOM DAY ARRIVED on APRIL 3RD in
IOWA
, AMONG the EARLIEST DATES
Tax Freedom Day is the day when Americans finally have earned
enough money to pay off their total tax bill for the year. In 2004,
Iowa
taxpayers had to work until April 3rd (ranked 41st nationally) to
pay their total tax bill, more than a week earlier than National Tax
Freedom Day (April 11th).
Iowa
taxpayers must work 35 days into the year just to pay their state
and local tax bill which, at $3,211 per-capita, is 27th highest
nationally. The Tax Freedom Days of neighboring states were:
Minnesota
, April 12th (12th);
Wisconsin
, April 13th (11th);
Illinois
, April 11th (13th);
Missouri
, April 4th (40th);
Nebraska
, April 5th (34th); and
South Dakota
, April 2nd (43rd). (c) Tax
Foundation 2004
.
Ways
& Means Update
Bills
introduced introduced in
committee
this week:
HSB
726- An Act relating to the excise tax imposed upon gasoline.
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Week
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