Iowa
Gov. Kim Reynolds signs a new Iowa income tax cut into law. What that means for you:
Iowans will pay a 3.8% flat income tax rate starting next year after Gov. Kim Reynolds signed a law Wednesday lowering the state’s rate and speeding up a series of cuts.
The law builds on a 2022 tax cut that was already set to take Iowa to a 3.9% flat income tax rate in 2026.
Iowa’s top income tax rate this year is 5.7%. Under the new law, all Iowans will pay a 3.8% income tax rate next year.
Reynolds, a Republican, signed Senate File 2442 Wednesday afternoon in the governor’s formal office in the Iowa State Capitol.
It’s the latest in a series of tax cuts Reynolds and Republican majorities in the Iowa Legislature have passed since 2018. Those cuts have brought Iowa from a top individual income tax rate of 8.98% to next year’s 3.8% flat rate, which will apply to Iowans across the board.
“Simply put, we’ve comprehensively transformed our tax code and dramatically increased our competitiveness within a few short years,” Reynolds said. “At the same time, conservative budgeting practices have kept us living within our means and allowed us to continue making historic investments in key priorities of Iowans.”
The latest changes to Iowa’s tax code are expected to reduce state revenues by more than $1 billion over the first three years, and more than $1.3 billion through fiscal year 2030.
Reynolds said when added together all the tax cuts she has signed into law as governor will save Iowa taxpayers $24 billion over a decade.
More: Iowa’s income tax rate is dropping to 3.8%. See how that stacks up against other states
Individual income taxes made up 46.8% of Iowa’s revenues in fiscal year 2023, the most recent year for which complete data is available.
The new law will give Iowa the sixth-lowest income tax rate in the country among states that impose an income tax. Nine states have no income tax for individuals.
Democrats have criticized the flat tax, saying most of the benefits go to the wealthiest Iowans.
There are also around half a million Iowans who do not receive any benefit because their income is low enough that they do not pay income taxes.
Instead, House Democrats this year proposed cutting the state’s sales tax by 1 cent, which they say would disproportionately benefit lower-income Iowans.
“As opposed to the legislation we’re considering, which will be a tax cut for about two-thirds of Iowans, this will be a tax cut for 100% of Iowans,” Rep. Sami Scheetz, D-Cedar Rapids, said April 19 during debate in the Iowa House. “And as so many people in this state know, the sales tax is the most regressive form of taxation. It hits the people in the state who need help the most, the hardest.”
More: What’s in Iowa’s $8.9 billion state budget for the coming year? We break it down:
Law taps Taxpayer Relief Fund to make up shortfall if state revenues fall below spending
If state revenues drop below state spending during a fiscal year, the law says 50% of the costs will be covered using the Taxpayer Relief Fund. The other half would come from the state’s ending balance.
That part of the law will be repealed on July 1, 2029.
The LSA analysis of the legislation says state revenues are not estimated to fall below the state’s spending levels through fiscal year 2029, meaning the relief fund would not need to be tapped.
The state ended the previous fiscal year with $2.74 billion in the Taxpayer Relief Fund. The amount is expected to rise to about $3.6 billion in July, when the fiscal year ends.
More: All-night marathon caps Iowa Legislature’s 2024 session. What’s changing: AEAs, your taxes
What else does the tax law do?
The law also allows county boards of supervisors to eliminate their county compensation boards, which review salaries for elected officials and recommend increases.
And it makes changes to a property tax law last year that limits how much city and property tax revenue can grow. The new law tweaks how much a community’s assessed property value can grow before the government must use a portion of its excess revenue to lower property taxes.
The legislation also repeals an 1848 law requiring Lee County, the only county in Iowa with two courthouses, to maintain courthouses in both Fort Madison and Keokuk.
Reynolds signs law authorizing tax credits for large projects
Reynolds on Wednesday also signed Senate File 574, which creates a new tax credit program for large manufacturing and research projects that cost at least $1 billion.
The new program, called the Major Economic Growth Attraction Program, applies to businesses “primarily engaged in advanced manufacturing, biosciences or research and development.” Data centers and retail businesses are not eligible for the tax credit.
Companies seeking the tax credit must demonstrate that their project will create jobs that pay benefits and meet a certain wage threshold.
The program allows the Iowa Economic Development Authority to authorize a tax credit for up to 5% of the cost of the businesses’ investment in the project. Companies cannot claim the credit until the project is in service and at least half of the jobs specified in the company’s contract have been created.
The tax credit can offset taxes paid by the company, and will be spread out over five years.
More: Kim Reynolds signs Iowa farmland law regulating foreign ownership. Here’s what it does:
The law also authorizes businesses to claim a withholding tax credit of up to 3% of gross wages paid to employees on the qualifying project.
And businesses can qualify for a sales tax refund on taxes paid on electricity, water, gas and sewer utilities, property or services performed by subcontractors. The Department of Revenue will pay the refund to the business over five years.
Reynolds signed a law in April strengthening disclosure requirements for foreign ownerships of Iowa farmland and stepping up penalties for owners that fail to comply.
Senate File 574 allows the tax credits to go to a foreign business as long as the business qualifies for the program and can establish that it is not associated with a foreign adversary and is not actively engaged in farming.
Stephen Gruber-Miller covers the Iowa Statehouse and politics for the Register. He can be reached by email at sgrubermil@registermedia.com or by phone at 515-284-8169. Follow him on Twitter at @sgrubermiller.
LAURENS, Iowa (IOWA CAPITAL DISPATCH) – An Iowa man is taking Nintendo and Pokémon Company International to federal court for allegedly refusing to grant him “Pokémon Professor” status.
Kyle Owens, 34, of Laurens is suing Nintendo of America and its affiliate, Pokémon Company International, in U.S. District Court for the Southern District of Iowa, alleging federal anti-trust actions that violate the Sherman Act.
The lawsuit seeks a court order and injunction that would grant Owens $341,000 in damages and award him Pokémon Professor certification, restore his access to “official Pokémon Professor tools” and enable him to host Pokémon events.
Pokémon is a Japanese franchise, aimed primarily at children, that includes trading cards, video games and movies involving a fictional universe populated by species that possess special powers. The franchise gained worldwide popularity in the late 1990s, but continues to be embraced today by children as well as adult collectors and gamers.
“The Pokémon Professor program is not merely recreational,” the lawsuit alleges. “It functions as a structured certification and authorization system, granting official status, access to official event tools, the ability to host sanctioned card and video-game matches, listing in an event locator, and opportunities that generate business traffic, customer attendance, product sales, good will and commercial advantage.”
Owens’ lawsuit alleges that on March 12, 2024, Pokémon Company International informed him he had passed the basic exam for the rank of Professor of Pokémon with a score of 100%.
Court exhibits indicate the notice informing Owens he had passed the exam also stated that before he could be welcomed into the program and take his “first steps as a Pokémon Professor,” he would need to submit to a background check.
The exhibits, made public in Owens’ court filings, indicate the background check conducted on behalf of the defendants determined there was a pending arrest warrant, issued by another state in 2022, for failing to appear in court on misdemeanor charges of disorderly conduct by engaging in fighting; possessing, repairing or selling an offensive weapon; and criminal mischief through damage to property.
On May 6, 2024, Pokémon Company International wrote to Owens, informing him that his “application to the professor program has been denied after reviewing the results of your background check.” The letter indicated that once the background check was completed, it was determined he had scored 80% on the exam and failed the test for professor status.
In his lawsuit, Owens claims he was initially denied certification due to an “old, low-level felony that was more than 10 years old,” and that the stated rationale for his denial was later changed to the three misdemeanor charges that do “not show guilty findings.”
The lawsuit claims the defendants’ denial of his certification as a Professor of Pokémon does not merely harm Owens personally but also reduces competition and consumer access by eliminating a qualified, Iowa-based event host from the official, organized-play system associated with Pokémon.
The defendants have yet to file a response to the lawsuit.
Copyright 2026 IOWA CAPITAL DISPATCH. All rights reserved.
KINGSLEY, Iowa (KTIV) – Plymouth County Emergency Management says the city of Kingsley, Iowa, has sustained significant damage after the severe weather on Sunday, May 17.
In a press release, officials say all people are being turned away from entering Kingsley, and numerous power lines have fallen. Management says Kingsley residents are strongly encouraged to stay indoors until routes are cleared and power lines are restored.
If you are a Kingsley resident or in the immediate area, call the Plymouth County Communications Center’s non-emergency line at (712)-546-8191.
Emergency Management says updates will be posted to the Plymouth County Emergency Management Facebook page.
Want to get the latest news and weather from Siouxland’s News Source? Follow these links to download our KTIV News app and our First Alert Weather app.
Copyright 2026 KTIV. All rights reserved.
The Iowa State Cyclones have had quite the offseason. They lost Matt Campbell, Rocco Becht, and the majority of the roster, with many heading to Happy Valley to join the Penn State Nittany Lions. After years of consistency and greatness amongst the Big 12 conference, they now look in a completely different situation. Now, they have to save the program.
Over the last few seasons, Iowa State’s face of the program has been their quarterbacks. Outside of one solid Hunter Dekkers year, the last couple of years have been dominated by the likes of Becht and Brock Purdy. But with Becht now out the door, they have to look to the next best option.
The general consensus around the Cyclones is that their offseason was terrible. Partially that was true. But the players that Iowa State brought in aren’t as bad as people may think, and one name especially, takes the crown as the best offseason addition.
Jaylen Raynor is Key
The Cyclones brought in Jaylen Raynor, a three-year starter from the Arkansas State Red Wolves. He looks like he may be the savior of the program.
Raynor was a solid player as a freshman, having 2,550 yards, 17 touchdowns, and seven interceptions throughout the year. The potential was limitless right off the bat. He stayed for a second year, improving his numbers to 2,783 yards, 16 touchdowns, and 10 interceptions. Then finally in his junior year, he once again bumped them up, this time to 3,361 yards, 19 touchdowns, and 11 interceptions.
Raynor has been consistent throughout his collegiate career, and needs to continue that at Iowa State.
To be completely honest, the Cyclones are in a rough situation. Their roster is pretty sub-par, and a lot of their pieces aren’t near the expectations that Iowa State have. One of the only players that can really put everything together is Raynor, one of the most proven veterans of them all.
Raynor has to be the leader of the Cyclones. Everyone is coming in from different programs from different areas at different levels. When that happens, a quarterback needs to come in and lead his team by bringing the locker room together.
Iowa State’s season doesn’t just change depending on Raynor, it’s defined by him. A veteran leader that has consistently proven to shine now gets one last chance with a new program, where he has the opportunity to save the history, the success, and the pride of the Cyclones.
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