Today House Republican Leader Kraig Paulsen (R-Hiawatha) called the governor’s failure to couple Iowa tax laws with federal tax law changes and allow disaster victims, students, and teachers to keep their full tax return a calculated decision, not an accident.
In February, the governor’s office received a memo from the Department of Revenue outlining federal tax changes and how they would affect Iowans’ tax bills. The governor and legislative Democrats knew in February that a failure to couple with the changes meant Iowans could not deduct disaster losses, college tuition and fees, or educator expenses from their Iowa returns.
In March, Republicans on the House Ways and Means Committee tried to force the committee to bring up the legislation dealing with the tax changes. Unfortunately for Iowans, all the House Democrats on the committee voted against the bill to allow disaster victims to fully deduct net disaster losses.
Additionally, House Republicans repeatedly requested debate on the House floor on this important issue.
“The governor is acting like this was an accident or an oversight. That is not what happened,” said House Republican Leader Kraig Paulsen. “The governor and Legislative Democrats made a calculated decision to not couple with federal law and force Iowans to payback tax returns because they needed the money for their spending plans. House Republicans stand ready to correct this error.”
It has been at least 20 years since the Legislature failed to pass a bill that couples with the federal tax changes. Even in 2000 and 2001, when the state was facing similar economic hardships, the Legislature still coupled with the federal changes.
You can view a memo dated February 9, 2009, from the Iowa Department of Revenue to the Legislative Services Agency and Charles Krogmeier in the governor’s office by clicking here.
Also, below is the vote taken in the House Ways and Means committee on March 26, 2009, outlining the entire Democrat committee caucus who voted against the measure, some of which represent disaster-affected communities.
House Study Bill 105—Internal Revenue Code Update Bill
Vote and Details: 3/26/2009, Committee Minutes for Ways and Means
Reps voting against: Shomshor, Olson T., Bell, Bukta, Frevert, Isenhart, Kelley, Olson D., Petersen, Reasoner, Steckman, Thomas, Wendt, Willems.