Des Moines, Iowa — A new report shows the State of Iowa issued nearly 44 million dollars worth of tax REFUNDS last year to corporations claiming a tax credit for research activities.
Senate Majority Leader Jack Whitver says that’s part of the discussion as Senate Republicans press to cut the corporate income tax RATE, while at the same time reducing tax CREDITS commonly used by businesses.
Corporations claim the research activities credit to reduce what they owe in state taxes and the credit is so lucrative, many corporations erase all of what they owe and then some — so they get a refund check from the State. Whitver says the credit has supported companies with high-paying jobs in research.
House Republicans approved their tax plan this week and it does not include a corporate tax reduction. House Speaker Pat Grassley isn’t closing the door on a corporate tax cut, however.
Senator Whitver says there’s already agreement on about 75 percent of what should be in the final tax plan, with the exception of the taxes corporations pay.
Governor Reynolds has proposed lowering the corporate income tax rate to five-and-a-half percent. The Senate GOP plan doesn’t go as far, but would cut that rate to just under eight percent AND get rid of about 140 million dollars worth of business tax breaks — including a tax credit for the purchase of computers.
