The past week was the fifth of this year’s legislative session and this week is the first funnel week. Funnel weeks are designed to eliminate policy bills that are not viable and to focus our work on those that are. By the end of the week, all policy bills must have passed at least one committee in either the Senate or the House. Tax and appropriation bills are exempt.

Below are a couple of timely tax issues.

Tax Fraud

The Iowa Department of Revenue estimates they had more than 10,000 fraudulent tax returns last year. Of those, more than 2,000 were for refund claims using identities stolen from Iowans. To combat that, this tax season the department will up their technology game to track fraud, validate bank accounts and share information with the IRS and other states.

Iowa was not alone last year in reporting a slew of fake state returns filed through TurboTax software preparation. Many states reported that thieves had stolen 2013 tax returns to help them file a fraudulent return in 2014.

Many of the new anti-fraud procedures came out of a security summit the IRS hosted where government officials, tax software companies and state departments decided to really work together. Iowa and other states are strengthening measures to keep taxpayer information secure. Iowa is also restricting refunds to prepaid cards because of their known preference by fraudsters due to the difficulty in tracking them.

The Iowa Revenue Department has added six temporary employees to assist with phone calls during tax season, which is well underway.

Business Property Tax Credit Applications Due

The Business Property Tax Credit was enacted as part of the larger property tax reform bill in 2013. The credit is available for certain commercial, industrial and railroad properties. A credit is available to individual parcels as well as property units. One credit can be obtained for each parcel or unit. Property that is not eligible includes agricultural property, residential property, mobile home parks, nursing homes and apartment buildings.

The Business Property Tax Credit application for assessment year 2015 is due March 1 of this year. After this round, applications will be due on July 1 for the current assessment year. (Applications for the 2016 assessment year are due July 1, 2016). The application is to be submitted to the city or county where the property is located. The amount of the credit depends on how many applications are received for the credit statewide. The legislature appropriates $125 million annually to the credit. The application can be found here: https://tax.iowa.gov/sites/files/idr/forms1/54024_2.pdf.

If you have any questions or concerns, please contact me.

Home phone: 515-382-2352

E-mail: Dave.Deyoe@legis.iowa.gov