SF2442: Tax Bill

Division I – Income Tax Cut – Current law ratchets the income tax down to 3.9% by 2026.  This bill would instead lower that rate to 3.8% and have it take effect in 2025.  Also lowers the alternative minimum tax from 4.4 to 4.3%, also in 2025. 

Division II – Targeted Jobs Withholding Credit – Makes changes to the pilot program (in use in Sioux City and some other border communities), including raising an employer’s qualifying investment from $500K to $1M and changing the program’s sunset date from June 30, 2024 to June 30, 2027.

Division III – Franchise Tax changes dealing with financial institutions’ investments.

Division IV – Makes a number of property tax corrective changes, including changing dates by which local governments need to file reports with the Department of Management, the dates statements to taxpayers needs to be sent out, the information included in those statements, the examples provided to the taxpayers, etc.  This division allows Lee County to decide their courthouse/county seat situation. The division takes steps to protect the confidentiality of homestead credit applicants over the age of 65.  This division also extends by 3 years certain housing TIF projects that faced challenges due to COVID supply chain shortages.  

Division V – Compensation Elected County Officials – The bill makes a number of changes, including allowing county supervisors to establish or eliminate county compensation boards.  

Division VI – City & County Levy Growth Limitations – The bill adds a bracket into the calculations on how much cities and counties are allowed to raise their levies.  Under last year’s bill, there were three: 0% to 3% increase in growth is allowed to maintain their levy, 3%-6% growth is allowed to increase their levy by 2%, and growth exceeding 6% is allowed to increase their levy by 3%.  Under the bill, the new brackets would be: 0% to 2.75% allowed to maintain same levy, 2.75% to 4% allowed a 1% increase, 4% to 6% allowed a 2% increase, over 6% allowed a 3% increase. 

Division VII – Public Utility/Pipeline property tax assessment limitations – Under current law, property owned by such entities are assessed by the Department of Revenue and distributed to the local entities.  The bill removes the state part of this returning it to the local governments, and institutes a 2% per year rollback until those properties are assessed at 90% in 2029 (same as commercial). 

Division VIII – Taxpayer Relief Fund – The bill makes changes to the thresholds used when State revenues come in at certain levels, and how those funds are transferred.  

Division IX – Makes a corrective change to the MEGA sites bill, SF 574.

Signed by Governor May 1, 2024. Takes effect July 1, 2024.