[Author: Will Rogers, 03.2016 | Keywords: Section 179, Sales Tax, Rental Fleet, All-Terrain Vehicles]
Since the start of the legislative session, the Iowa-Nebraska Equipment Dealers Association (I-NEDA) has been hard at work attending subcommittee meetings and pushing to move legislation forward that is in the best interests of Iowa dealers. Bills are carefully reviewed by Association staff and we continue to receive valuable input from dealers across the state.
Section 179 Coupling for Tax Year 2015
As a result of the federal government passing legislation late last year dealing with the Section 179 expensing provision, the state of Iowa is taking the steps necessary to ensure that taxpayers can take full advantage of the deduction by “coupling” state tax provisions with federal tax laws for the 2015 tax year. House File 2092 would align Iowa tax laws to allow the full utilization of the Section 179 expensing provision and is necessary since Iowa currently allows federal deductibility of federal taxes on an Iowa tax return.
House File 2092 successfully passed in less than a week of action in the Iowa House, but has yet to be seen on the Senate debate calendar. One of the main concerns with the Section 179 expensing provision is that it will have a fiscal impact of $62 million on the state budget and Senate Democrats would rather use the resources for education. In addition, Governor Branstad did not include the provision in his budget submitted to the legislature at the end of 2015 and he has not indicated that he will support the coupling legislation.
Lawmakers are being asked to make a decision soon, since state tax filings are due at the end of April and tax preparers need clarification as to what levels of expensing can be utilized for tax year 2015.
Exempting Dealers from Sales Tax on Purchases of Equipment for Rental Fleets
I-NEDA and our members are seeking a legislative correction to the Iowa Code regarding the collection of excise tax on the purchase, sale and rental cost of self-propelled construction equipment. It is our position that no tax liability should be incurred when a construction equipment dealer purchases a qualified piece of equipment that is held in inventory for retail sale or rental.
Proposed bill language was submitted by I-NEDA in the fall of 2015 to the House and Senate. We are currently expecting a Study Bill to be introduced sometime after the first legislative funnel, since the legislation is funnel proof and would be eligible for debate until the legislature has adjourned for the year.
Our main objective of this proposed legislation is to reduce any sales tax liabilities that equipment dealers incur when they place construction equipment into a rental fleet. We will provide updates when the bills are assigned to subcommittee.
Speed Limit Increase – House File 2125 & House File 2126
Legislation is being considered to increase the speed limit for certain non-federal, hard surfaced roads not located in business, residential, school or suburban districts. Currently set at 55 mph, House File 2125 would increase the maximum speed limit to 60 mph, while House File 2126 would increase the limit to 65 mph. The Association has not taken a formal position regarding either bill, but is currently monitoring the legislation.
All-Terrain Vehicle Registration Clarification
House File 2098 provides that registration with the department of natural resources is not required for all-terrain and off-road utility vehicles used primarily as farm implements. Current Iowa law states that ATVs are not required to be registered when used by farmers “exclusively” as farm implements. House File 2098 would clarify the law to include off-road utility vehicles and only require they be “primarily” used as farm implements. The Association will continue to monitor this legislation, which is not expected to pass this session.
Iowa Legislative Reception – The 2016 Iowa Legislative Reception was held on February 3rd at Principal’s River Edge Restaurant at the Iowa Events Center, in conjunction with the Iowa Power Farming Show. We were honored to host several members of the Iowa Legislature and approximately 20 dealers.
About the Author
For more than nine years, Will has advocated for our members on both the state and national legislative fronts and has led I-NEDA’s educational efforts. In his free time, Will enjoys “dabbling” in politics, gardening, spending time with his wife and daughter, and managing his ever-growing collections (U.S. postage stamps, beer cans, comic books…).