I joined the Senate in working on a $200 million commercial property tax break that will help grow Iowa’s small businesses and create new economic opportunities. |I joined the Senate in working on a $200 million commercial property tax break that will help grow Iowa’s small businesses and create new economic opportunities.
Senate File 522, approved overwhelmingly on a bipartisan vote, provides permanent property tax relief with no financial impact on local governments, schools, community colleges and other institutions which rely on property taxes.
Commercial property owners are currently taxed on 100 percent of the value of their properties. That means they’re paying more than any other class of property owner. This can hurt community efforts to expand and bring new businesses to Iowa.
During the first year of our new tax break, the commercial property tax credit would be worth approximately $600 for property valued at $30,000 or more. For example, the owners of a Main Street building valued at $105,000 and a building owned by a nation-wide chain store valued at $1.5 million would both receive a $600 credit. As the size of the fund grows, the value of the credit will increase. When fully implemented, it’s estimated that the property tax credit would be worth approximately $4,029 for a property valued at $200,000.
To pay for this permanent tax break, we’ll create a Business Property Tax Relief Fund with an annual appropriation of $50 million beginning July 1, 2012. The appropriation will increase by an additional $50 million each year that the state revenues grow by at least 4 percent to reach the permanent level of $200 million in tax credits each year.
Other proposals intended to solve Iowa’s commercial property tax problem have failed because they shift costs onto homeowners, increase residential property taxes, or cut funding local schools and local services. Our new Senate proposal will not affect any of these areas.|