From the Desk of Representative Chuck Soderberg
As week two of the 2008 Iowa General Assembly concludes, the activity level has increased and the political process is fully engaged. In this process, before a bill becomes law, it is assigned to a committee for review, research and approval before it goes to the full House and Senate for debate and a vote. If passed by both Chambers, it must then be signed into law by the Governor.
Information on all the bills, amendments, and floor action can be found on the Iowa General Assembly web at: www.legis.state.ia.us. This can be an invaluable resource if you are interested in tracking legislation. You can also create your own bill-tracking list and check it whenever you want for real-time information on bills you are interested in.
Will There be a Vote to Define Traditional Marriage?
After Judge Hanson’s ruling late last summer, many Iowans have been concerned about the potential collapse of Iowa’s marriage laws. The definition of marriage remains unresolved and undefined. It is up to the Majority Party leadership whether or not this issue will be considered in the Legislature. Governor Culver and the Democrat leaders have said they will wait to hear the Supreme Court’s ruling, thereby delaying any discussion on this important issue.
HJR 8 was introduced in the House last year but unfortunately it did not move out of committee. As a cosponsor of this legislation, I was very disappointed that no action was taken. The bill would allow Iowans to vote on this issue. If approved, Article I of the Iowa Constitution would be amended by adding a new section defining that only a marriage between a man and a woman shall be valid or recognized in the State of Iowa.
HJR 8 has bipartisan support as 48 legislators have signed on as supporters of the bill. As House Minority Leader Christopher Rants pointed out in his opening address to the members of the House, “If this chamber can spend an hour debating the merits of registering propane tanks, then surely there is 1 hour out of 100 days that we can debate the merits of marriage.” Hundreds of Iowans have gathered together at the Capitol to ask this same question.
Governor Recommends Drastic Changes to Iowa’s Corporate Tax Structure
Governor Culver proposed several significant tax increases in his proposed FY 2009 budget. The largest of proposed tax increases is combined corporate reporting. This tax increase is being marketed as “closing a tax loophole”, and is estimated to bring in $75 million in FY 2009.
What is combined reporting? Combined corporate income tax reporting requires a corporation with any reporting requirement in Iowa to combine all its subsidiaries that are deemed unitary and file an Iowa return based upon an apportioned allocation of tax liability to Iowa.
Iowa’s current law allows Iowa corporations use separate entity reporting. This allows the Iowa income tax to apply to each separate corporation doing business in the state. These separate entities must file separate tax returns reporting net income.
Combined tax reporting requires that two or more related entities engaged in businesses big and small, and/or, inside and outside of Iowa calculate their tax burden as a single unit. Combined reporting is a radical change in the way corporate income taxes are calculated. Why is this bad for Iowa?
· Multi-jurisdictional corporate tax managers generally consider combined reporting a negative factor when evaluating states for new or expanded industrial plants.
· Combined reporting runs counter to the principle of simplicity and many state legislatures have removed combined reporting from their statutes.
· As stated in a 1999 report “When a fundamental change in the tax law comes about, businesses and individuals change their behavior. When the other factors remain unchanged, taxpayers will move homes and jobs, offices and plants, to find the lower tax liabilities to which they are accustomed. Taxpayers disadvantaged by a move to combined reporting are likely to move physical, financial, and human capital out of the state, in managing their tax costs.” The report continues “Combined reporting translates into a tax increase for companies. They will mitigate these circumstances by moving or passing on the costs to consumers.” Several businesses announced publically this week that this income tax change would significantly impact their decision to expand in Iowa.
Beware of Income Tax Phishing Scams
The Internal Revenue Service has issued several recent consumer warnings on the fraudulent use of the IRS name or logo by scamsters trying to gain access to consumers’ financial information in order to steal their identity and assets. The latest phishing scam involves an email that asks recipients to click on a link to access a form for a tax refund. In reality, taxpayers claim their tax refunds through the filing of an annual tax return, not a separate application form.
If you or someone else you know has received an email such as those listed above, you can relay that email to a new IRS mailbox, phishing@irs.gov. The IRS can use the information, URLs and links in the suspicious emails you send to trace the hosting Web site and alert authorities to help shut down the fraudulent sites. The IRS does not send out unsolicited e-mails or ask for detailed personal information. Additionally, the IRS never asks people for the PIN numbers, passwords or similar secret access information for their credit card, bank or other financial accounts.
On January 26th, I will be participating in a forum in Sioux City at the Siouxland Senior Center beginning at 10:00am. On February 2nd, Senator Mulder and I are holding joint Legislative Forums at the Le Mars Public Library beginning at 9:15am and the Akron Public Library beginning at 11:00am. I hope to see you all there to discuss these and other issues. If you know someone who would like to receive my electronic newsletter via email, just email, call or drop me a note.
If you have any questions or comments, please feel free to reach me during the week at (515)-281-3221, on weekends at (712)-546-6136 or email me at Chuck.Soderberg@legis.state.ia.us.