Dickinson, Mackaman, Tyler & Hagen, P.C.

The new Business Property Tax Credit

The new Business Property Tax Credit

Posted on 12/16/2013 at 08:03 AM by Benjamin Bruner

The 2013 legislative session produced landmark property tax reform, and the key highlight of the overall reform was the Business Property Tax Credit. The credit was signed into law by the Governor, and Iowa property owners should take note of its coverage and implications in order to timely and properly take advantage of the credit and its corresponding tax savings. The Business Property Tax Credit is available for certain commercial, industrial and railroad properties. The credit applies to both individual parcels and “property units”. The “property unit” is a new concept that is specific only to the credit, and encompasses certain contiguous parcels of the same classification, which are commonly owned with a common use or purpose. Not all commercial property qualifies for the credit however as certain property, including but not limited to low income housing, mobile home parks, nursing homes and apartment complexes, are not eligible (but still receive a tax break under a different part of the overall reform). The credit can take effect with regards to 2013 property assessments and may be applied towards the tax installments related thereto, which are due and payable in the fall of 2014 and spring of 2015. In order to obtain the credit for qualifying property for the 2013 assessment, the property owner must apply for the same with the county or city assessor no later than January 15, 2014. Any and all applications received after that date will be applied to the 2014 property tax assessment. Thus, the deadline is quickly approaching and you should take action now to ensure you are able to take advantage of the credit. The Legislative Services Agency has estimated that the first year credit amount will be approximately $523. The actual credit amount for each property unit is dependent, in part, upon the total value of all statewide units and the average consolidated tax rates for each individual property unit. Thus, the actual credit amount will depend upon how many applications are received and approved statewide as compared to the amount that is appropriated for the fiscal year. The calculation of the credit is designed to spend 98% of the amount appropriated by the Iowa legislature. If you have general or specific questions related to the Business Property Tax Credit, and whether or not your property qualifies for the same (and the process in which to obtain the credit) please contact Ben Bruner.  

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