Iowa bill eliminates tampon tax, makes COVID bonuses, diapers tax-free

Iowans will not need to pay state taxes on the bonuses that Iowa Gov. Kim Reynolds awarded to academics, correctional officers, law enforcement officials and youngster care staff underneath a invoice headed to her desk.  

The identical invoice additionally eliminates gross sales tax on female hygiene merchandise and the tax on youngster and grownup diapers. The wide-ranging tax laws received unanimous assist in each the Home and Senate on Monday. 

Iowa academics who labored by the pandemic and continued this 12 months have acquired a $1,000 retention bonus by federal funding, which Reynolds introduced in her Situation of the State handle. Peace officers and correctional staff are additionally receiving a $1,000 bonus. 

Reynolds additionally in January introduced she would dedicate $30 million to recruitment and retention bonuses out there to youngster growth house operators, licensed youngster care heart employees and newly employed workers.  

The invoice, Senate File 2367, would eradicate state revenue tax on every of these bonuses. Nonetheless, it wouldn’t have an effect on further bonuses that some Iowa faculty districts have determined to make use of federal funds to lengthen to counselors, nurses, librarians and different employees members, nevertheless.

Throughout Monday’s Senate debate, Sen. Nate Boulton, D-Des Moines, stated Monday he helps the tax exemption for the bonuses however believes it ought to lengthen to these further bonuses faculty districts have supplied to assist employees.

“Increasing retention bonuses was the appropriate resolution for varsity districts throughout our state,” he stated. “They stored necessary faculty workers in locations the place they had been wanted. Now it’s time for us to do the appropriate factor on this chamber.”

However Sen. Dan Dawson, R-Council Bluffs, pushed again on the characterization that the state is selecting favorites, saying the laws relieves taxes on the academics who acquired bonuses from the state, which the state is ready to monitor. 

“There’s actually no good, clear line on some of these items right here. However the perfect line that we had been in a position to attract was at these monies issued by the chief department,” he stated. “As a result of we even have visibility on these, whereas with the faculties we do not have visibility.”

The invoice would eradicate gross sales tax on female hygiene merchandise, generally known as a tampon tax by advocates for ending the levy on such merchandise. The invoice additionally prohibits gross sales taxes on youngster or grownup diapers beginning in 2023. 

If Reynolds indicators the invoice, Iowa would be part of a rising variety of states eliminating the tax on female merchandise. At the moment, about half of states have such a tax, in line with the group Interval Fairness. 

“There are such a lot of issues on this specific modification that we, the Democratic Social gathering, have initiated as amendments on different payments, so I’m joyful to see that a few of our concepts are reaching fruition,” stated Rep. Cindy Winckler, D-Davenport.

The tax exemptions had been amongst a handful of additives that Republicans made to a bigger tax invoice proposed by the Iowa Division of Income.

Ian Richardson covers the Iowa Statehouse for the Des Moines Register. Attain him at irichardson@registermedia.com, at 515-284-8254, or on Twitter at @DMRIanR.