The Legislature’s first funnel was this week, which means our focus has been narrowed to bills that have a better chance of being debated on the floor and signed into law.
What is the funnel? It’s a deadline when House bills are required to pass at least one House committee to remain eligible for discussion and vice versa for the Senate. If a bill fails to advance through a committee, it is considered “dead” for the session and is tabled. Oftentimes, a bill is not moved forward because it lacks support or needs improvement over the interim. The funnel does not apply to Appropriations or Ways & Means bills.
Also, this week the House passed Senate File 364 that provides three very important pandemic related tax exemptions.
First, Senate File 364 fully conforms with federal law for those fiscal-year filers who previously were excluded from such conformity and allows such filers to take business expense deductions using federal paycheck protection program loan proceeds that were forgiven. With this provision, all businesses who received PPP loans that were forgiven will be able to take expense deductions without regard to whether they are a calendar or fiscal filer.
Second, the bill exempts any qualifying COVID-19 grant issued to an individual by the economic development authority, the Iowa finance authority, or the department of agriculture and land stewardship from income tax. A “qualifying COVID-19 grant” includes any grant identified by the department of revenue by rule that was issued under a grant program administered by the economic development authority, Iowa finance authority, or the department of agriculture and land stewardship to provide financial assistance to individuals or businesses economically impacted by the COVID-19 pandemic.
Finally, the bill excludes the additional pandemic-related federal unemployment benefits from Iowa taxable income. This is only applicable to the additional $600 in federal unemployment that Americans received. The changes are retroactive to January 1, 2020, and apply to tax year (TY) 2020Al.
The funds to pay for the bill with amendment come from the Taxpayer Relief Fund, which has $90.2 million currently in its account in FY 2021. The additional funds will come from the ending balance. After the December 2020 Revenue Estimating Conference, the FY 21 ending balance was projected to be $443.4 million.
Since it was government that forced shutdowns which led to job and income loss, the I firmly believe that taxing pandemic relief money is not the right thing for Iowa. As your representative I will consistently support measures to help schools, families, and businesses return to normal.
If you have interest in any particular bill or would like to know where it is in the process please contact me and I will do my best to try and keep you up to date. You can also follow bills on the legislative website once you know the bill number http://www.legis.iowa.gov.
Lee Hein 