Tax Credit Reform Boosts Support for Small Businesses & Improves Accountability
Tuesday, March 02, 2010 - Des Moines, Iowa – State Representative Todd Taylor of Cedar Rapids today outlined the details of tax credit reform legislation that will boost support for Iowa small businesses while bringing accountability and common sense to Iowa’s tax credit spending.
“In today’s tough economic times, my top priority is to help create good-paying jobs for small businesses. The tax credit reform plan will shift dollars away from Wall Street companies and move some of those dollars to support small, Main Street businesses whose success will benefit more Iowans,” said Taylor.
“As spending on tax credits has grown significantly over the last few years at a rate far exceeding budget increases for priorities like education, we are listening to our constituents and responding with reforms that will reduce our tax credit liability more than $115 million,” added Taylor.
The reforms will end some tax credits, cut many remaining credits, and dramatically increase accountability for all tax credit spending. Some of the specific reforms include: suspension of the film tax credit program for two years; lowering the cap from $185 million to $120 million on business tax credits; cutting the Iowa Fund of Funds contingent tax credits from $100 million to $60 million. In addition, the Supplemental Research Activities Tax Credit will be cut in half for large corporations and increased to help small businesses.
“Iowans deserve to know if the money they have spent on tax credits is producing the jobs and economic growth promised to their community. Our plan will give the same careful, open examination of tax credits that rest of the budget already receives each year,” added Taylor.
The tax credit accountability measures include an on-going oversight process which will regularly evaluate all tax credits for results. The new review process will identify which tax credits are not producing results so they can be fixed or eliminated.
The bill will be considered by the House Ways & Means Committee next week.