DES MOINES, IOWA (June 16, 2021) — Governor Kim Reynolds signed SF 619 into law, legislation that cuts taxes and invests significantly in mental health as well as foundational priorities like child care and housing. This legislation was a compromise brokered by Gov Reynolds with the Iowa House and Senate to wrap up the 2021 Legislative Session.
“In Iowa, we are cutting taxes and helping Iowans keep more of their hard-earned money. Not only does this legislation reduce income and property taxes, it completely phases out the state’s inheritance tax,” said Gov Reynolds. “With this legislation, we also provide steady and reliable funding for our state’s mental health system while making significant investments in housing, workforce, and child care.”
SF 619 provides significant tax relief to hardworking Iowans:
- SF 619 drops tax rate from 8.53% to 6.5%;
- Reduces the number of tax brackets from 9 to 4;
- Eliminates Federal Deductibility;
- Phases out the mental-health levy over 2 years, saving property tax-payers over $100 million;
- Phases out state inheritance-tax over 4 years, saving tax-payers nearly $100 million;
- Expands eligibility for the Beginning Farmers Tax Credit; and
- Food Bank sales tax exemption.
SF 619 invests in mental health and foundational priorities like child care and housing:
- Dedicated, sustainable mental-health funding from Iowa’s General Fund;
- Includes a growth factor that allocates new money as revenue increases;
- Increases eligibility for the Child Care Tax Credits from families making $45k-$90k;
- Increases workforce housing-tax credits to $40 million for FY22 ($35 million for years following);
- Extends Brownfield/Grayfield and increases funding from $10 million to $15 million; and
- Develops a Manufacturing 4.0 strategic roadmap for the future of manufacturing in the state of Iowa.
“Today’s legislation ushers in a new era of growth and opportunity in Iowa,” said Gov Reynolds. “But we are not done yet. Next year, I’ll be proposing additional income tax cuts as we continue to make Iowa the most attractive place in America to open a business, raise a family, and start a career.”
Gov Reynolds was joined by Majority Leader Whitver, Senator Dawson, Senator Costello, Senator Edler, Rep Hite, Rep. Fry, Rep. Lundgren, Rep Meyer. They were also joined by the Iowa Association of Business and Industry, Iowa Business Council, Iowa Housing Partnership, NFIB, Iowa Farm Bureau, Iowa Hospital Assoc., Iowa Bankers Assoc., Iowa Chamber Alliance, Iowans for Tax Relief, Iowa Taxpayers Association, Iowa Food Bank Asc, and Americans for Prosperity.
