Businesses see effect of 2013 tax relief bill

By Marcie Klomp
Iowa is finally making strides to persuade new businesses to locate in the state through the historic tax relief bill of 2013. Businesses are seeing some reduction of property taxes.

Howard County Treasurer Warren Steffen explained, “Businesses are taxed at 100 percent of their assessed value. We are trying to knock that down to attract new business to Iowa.”

County Assessor Tom Mullen clarified by saying residential properties only pay taxes on 48 percent of the assessed value of their property. The 2013 tax relief bill will allow businesses to also receive a reduction in taxes over the next 10 years until it is the same rollback as residential.

The first year (fall 2014 and spring 2015) decrease is at 95 percent. The next round of taxes is at 90 percent then 86.25 percent and 82 percent. It continues to the year 2022.

Mullen said about 300 businesses signed up in Howard County. That relates to about 70 percent of the parcels. A business can still sign up. They just won’t see any reduction in taxes until the next go-around, fall 2015.

The tax bill was geared toward smaller businesses. Mullen stated each application was only allowed a maximum of around $60,000 assessed value to claim. That means a Main Street business could have the same reduction in taxes as a multi-million dollar company.

Totally in Iowa, businesses saw $127 million in state funding for tax relief. In Howard County, that number was $202,813.07 for backfill (or rollback) and $200,634.18 for state tax credit to taxpayers. Howard County received half ($101,406.54) just last week, Sept. 23, according to Steffen. The other half will come in March. Businesses will see their portion coming to them in November and May.

Mitchell County had $257,949.24 for the county and $182,766.16 for taxpayers.

The historic tax reform passage of 2013 received strong bipartisan support. It passed the Iowa Senate 43-6 on May 22, 2013, and the Iowa House 84-13 on May 23, 2013.

For more information, call Mullen at 563-547-9201.

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