How Iowa's 'Coupling' Bills Could Help Your Small Business

Date: March 14, 2016 Last Edit: March 16, 2016

Bill aims to match federal expensing limit for equipment purchases.

How the 'Coupling' Bills Could Help Your Small Business

Two Iowa bills addressing federal coupling have passed the Ways and Means committees in both chambers. Both bills, SF 2303, couple the state tax code with federal tax changes and codify the definition of replacement parts and consumables supplies for Iowa manufacturers. 

The bill is headed to Gov. Terry Branstad, who has expressed support for the proposal.

Here are some more details:

  • These bills couple with the federal tax code for 2015. Small business owners and farmers will be able to expense up to $500,000 (Sec 179) worth of qualified purchases. They do not couple with bonus depreciation.
  • Also included are deductions for out-of-pocket expenses of classroom material for teachers, IRA contributions for charity, homeowner mortgage insurance, qualified higher education tuition and basis adjustment for S corporation charitable contributions.
  • The bills rescind the administrative rule that was passed by the Legislative Rules Review Committee prior to session. This rule amended administrative code dealing with exemption from sales tax on replacement parts and supplies used in manufacturing.
  • The bills insert the language from the “Consumables Bill” that was passed by the House two years prior. They further clarify the definitions for replacement parts and supplies in manufacturing and exempts them from sales tax.
Leaders from both parties issued statements Thursday expressing optimism.

Related Content: Small Business News | Iowa | Regulations | Taxes

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