Reynolds signs tax omnibus, childcare bill into law

Iowa Gov. Kim Reynolds recently signed two new pieces of legislation: SF 619, the sweeping tax omnibus, and HF 302, legislation supported by the Quad Cities Chamber addressing the childcare cliff-effect for working families. 

SF 619 -- Here are some of the provisions in the tax omnibus law:

• Removes the 2018 tax cut triggers.
• Eliminates the inheritance tax over 4 years.
• Workforce housing tax credit: $40 million for the upcoming fiscal year.
• Decreases the High Quality Jobs (HQJ) tax credit to $70 million. The HQJ program provides businesses assistance to companies to create or retain high-quality jobs in the State of Iowa. 
• Onsite childcare now qualifies for the High Quality Jobs Program.
• Moves mental health funding to a state appropriation than from local property taxes over 2 years eliminating $116.8 million in property taxes.
• Property Tax backfill – will phase out the backfill promised in the 2013 tax cuts.
• Nonprofit food banks will not need to pay sales tax on purchases for charitable use.
• Creates the Downtown Loan Guarantee Program to encourage investment in main streets and downtowns. Will receive funding through IEDA but no new funds have been appropriated.
• Manufacturing 4.0 - IEDA can issue grants up to $75,000 for manufactures using smart technology.
• Raises the childcare tax credit income limitation from $45,000 to $90,000. 
• Insurance companies must reimburse mental health providers for virtual and in-person appointments at the same rate. 
• COVID-19 grants are exempted from state income taxes.
• Housing Trust Fund cap raised from $3 million to $7 million - grants for low-income housing developments.
• Redevelopment tax credit: the program to redevelop abandoned buildings is increased to $15 million.
• Loans from the Paycheck Protection Program are tax-exempt. 

HF 302 – Establishes an eligibility phase-out program for state childcare assistance allowing working families an “exit ramp” from the government assistance program. A person can accept raises and move up the career ladder without sacrificing childcare.  
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