For the first time in more than three decades, Iowa business property owners are getting a tax break. Businesses recently received $127.3 million in tax relief thanks to landmark legislation approved last year.
Senate File 295 phased in a tax credit for business property. Qualifying businesses that applied with their counties for the tax credit last January divided $49 million. Over a ten-year period, the law is projected to provide $4.4 billion in property tax relief.
The law also rolled back the taxable value for commercial and industrial property to 90% of assessed value for 2014 and beyond. Previously, those properties were taxed at 100% of valuation. Since property taxes are a product of both the assessed value and the tax rate that local governments determine, higher rates could possibly negate tax savings in the future.
Beginning in January 2015, a new multi-residential property tax classification will also go into effect under SF 295. It will reduce taxes for apartments, assisted living centers, mobile home parks, and other properties primarily intended for human habitation, which had been taxed at the commercial rate.