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Iowa Business Property Tax Credit

By Andrea Hughes on November 25, 2013 in Articles, State & Local Tax
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Andrea HughesDuring the 2013 Legislative Session, the State of Iowa passed the Iowa Business Property Tax Credit. This legislation includes a Property Tax Credit for commercial, industrial, and railway property under new Iowa Code chapter 426C for property taxes due and payable in fiscal years beginning on or after July 1, 2014. The legislature has appropriated from the General Fund of the State $50 million for the fiscal year beginning July 1, 2014, $100 million for the fiscal year beginning July 1, 2015, and $125 million for each fiscal year beginning on or after July 1, 2016.

How to Qualify

This new credit is based on 2013 property tax valuations and effective for Iowa counties in fiscal years beginning July 1, 2014.   A credit is available to each eligible parcel classified and taxed as commercial property, industrial property, or railway property.  A parcel that is part of a property unit that is claiming the credit is not eligible for a separate credit. To qualify as a property unit, the parcels that make up the property unit must:

  1. be contiguous, or touching;
  2. be located within the same county;
  3. have the same property classification;
  4. be owned by the same person; and
  5. be operated by that person for a common use and purpose

What is the Credit Worth
The credit will treat up to $145,000 of valuation of each parcel or property unit as if it were residential property for taxing purposes.  The total accepted applicants will  share in a pool of 50 million appropriated by the legislature for the fiscal year beginning July 1, 2014, to provide commercial property tax relief. The Legislative Services Agency estimates the maximum credit, per property unit or parcel, for the fiscal year to begin July 1, 2014, at approximately $523.

Properties that are not Eligible for the Credit

Farmland and residential properties are not eligible.  Single family and duplex residential rental units are currently classified as residential real estate and receive the full residential property tax rollback. Residential rental units containing three or more dwelling units are currently taxed as commercial property, but beginning in 2015, will receive a new classification as Multi-Residential and receive a larger property tax rollback than commercial property as an increased rollback is phased in through 2022.

The application Deadline is January 15th 2014.  For more information contact Andrea Hughes at ahughes@marksnelsoncpa.com.

 

 

 

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Andrea HughesView all posts by Andrea Hughes