Business Property Tax Credit Implementation

October 24, 2013

Business Property Tax Credit Implementation

The Iowa Department of Revenue announces implementation of the new Business Property Tax Credit. The Business Property Tax Credit is one of the components of the largest tax cut in Iowa history signed into law by Governor Branstad on June 12, 2013.  

2013 Iowa Acts Senate File 295 provides a Business Property Tax Credit for certain commercial, industrial, and railroad properties.  The credit does not apply to residential or agriculturally classified property. One credit is available for each qualified property unit.  A property unit consists of contiguous parcels of the same classification that are owned by the same person and operated by that person for a common use and purpose.  Applications for credit against 2013 property tax assessments must be received by the county or city assessor by January 15, 2014.  The actual amount of credit each property unit will receive depends in part upon the total value of all property units and the average consolidated rates in each unit.  The credit calculation is designed to spend ninety-eight percent of the amount appropriated by the Legislature to the Business Property Tax Credit Fund.  For the first year of the credit $50 million was appropriated to the Fund.  The Legislative Services Agency has estimated that the maximum first year credit amount will be approximately $523.

Since Senate File 295 was signed into law, the Department has been working closely with local government officials to develop the tax credit process, starting with the taxpayer’s application all the way through the actual adjustments to taxpayers’ property tax statements.  The Department has created a page on its website devoted exclusively to 2013 commercial property tax reform.  On this web page taxpayers can access and print a copy of the Business Property Tax Credit Application Form and view answers to questions that have been asked (Q and As). 

The Department is in the final stages of rule development, but cautions that rules cannot possibly address every scenario that might be encountered in administering the credit.  “We encourage people to visit our website and view the Q and As,” said Julie Roisen, the Department’s Property Tax Division Administrator. “If their questions aren’t already answered there, they can submit them to us online.  We will add the new Q and As to the body of information we are accumulating.” The Department updates the Q and As weekly.

For more information on the Business Property Tax Credit, including the application form, visit the Department’s website at http://www.iowa.gov/tax/locgov/13PTReform.html

Additionally, you can sign up for the Department’s Property Tax Reform eList at http://elists.idrf.state.ia.us/scripts/wa.exe?SUBED1=PROPERTYTAX&A=1.

The mission of the Iowa Department of Revenue is to serve Iowans and support state government by collecting all taxes required by law, but no more.

Contact: Victoria L. Daniels, Iowa Department of Revenue, 515.281.8450