2010 Iowa Tax Expenditure Study Iowa Code Expenditure Type Citation Iowa Administrative Code Citation Assessment

Tax Expenditure Change Value ($) Value ($) Estimate Year

Title

Tax Type

Expenditure Category

Description Iowa law provides for statewide limitations on annual growth in assessed property valuations. Growth limits are set at 4% a year (8% for utilities) with a base of the 1978 assessment year for residential and agricultural property and 1979 for other classes of property. Assessed valuations are rolled back to accommodate these limits and the rollback percentage is multiplied by the assessed value to obtain the taxable value of the property. Increases in the assessment of residential and agricultural property is limited to the smaller increase in either of these two classes of property. There is a lag between assessments and property tax liability, therefore this estimate is based on 2008 assessments and reflects a 45.5893% rollback for that assessment year.

Final Result

Residential Land Valuation Rollback

Property

Consumer Benefit

Iowa Code 2009 Partial exemption 441.21(4) & 441.21(5)

IAC (2010) 70171.11

Estimated

$70,175,600,000

2010

Religious, Literary, and Charitable Societies' Property

Property

Charitable Organization Support

Exemption

Iowa Code 2009 427.1(8)

None

Urban Revitalization

Property

Community Development Support

Partial exemption

Iowa Code 2009 404

IAC (2010) 70180.8

Property used for non-profit religious, education, or charitable purposes is Estimated exempt from property tax. Cities or counties may establish urban revitalization areas in order to encourage development. The city or county may thereby exempt from property tax portions of new taxable value added to qualified property located in the urban revitalization area if the new value is the result of Estimated improvements made to the property as part of a revitalization project. The percent and the length of time over which the exemption applies may vary. Generally, the exemptions are for no more than ten years and may be for shorter periods at higher levels. Iowa law provides for statewide limitations on annual growth in assessed property valuations. Growth limits are set at 4% a year (8% for utilities) with a base of the 1978 assessment year for residential and agricultural property and 1979 for other classes of property. Assessed valuations are rolled back to accommodate these limits and the rollback percentage is multiplied by the assessed value to obtain the taxable value of the property. Increases in the assessment of residential and agricultural property is limited to the smaller increase in either of these two classes of property. There is a lag between assessments and property tax liability, therefore this estimate is based on 2008 assessments and reflects a 93.8568% rollback for that assessment year. Certain pollution control and recycling property are exempt from property tax, limited to the market value of such property. Claimants must be certified as eligible by the Iowa Department of Natural Resources.

$8,066,500,000

$1,834,400,000

2010

Agricultural Land Valuation Rollback

Property

Agriculture Support

Iowa Code 2009 Partial exemption 441.21(4) & 441.21(5)

IAC (2010) 70171.11

Estimated

$1,575,800,000

Pollution Control and Recycling Property Property

Business Incentive

Partial exemption

Iowa Code 2009 427.1(19)

IAC (2010) 70180.3

Estimated

$354,400,000

Low-Rent Housing for the Elderly and Persons with Disabilities

Property

Charitable Organization Support

Partial exemption

Iowa Code 2009 427.1(21)

IAC (2010) 70180.4

Property owned and operated by a nonprofit organization providing lowrent housing for persons who are elderly or with physical or mental disabilities is exempt from property tax. The exemption extends only until the original low-rent housing development mortgage on the property has Estimated been paid in full or expires. Elderly means individuals at least 62 years of age, and persons with physical or mental disabilities means those who are unable to engage in substantial, gainful employment. Property established as a forest or fruit tree reservation is exempt from property tax. Forest reserves must be at least two acres and have at least 200 trees per acre. Fruit tree reserves must be between one and ten Estimated acres and have at least 40 apple trees or 70 other fruit trees per acre. The reserve must also meet the criteria established by the Iowa Department of Natural Resources. A city council or county board of supervisors may enact an ordinance granting partial exemption from property tax of the value added to industrial real estate as a result of new construction of industrial real estate, research service facilities, warehouses, and distribution centers. The exemption lasts for five years declining in percentage from seventyfive to fifteen over the period. A partial exemption may also be approved.

$307,700,000

Forest and Fruit-Tree Reservations

Property

Natural Resources Support

Partial exemption

Iowa Code 2009 427C

IAC (2010) 70180.9

$280,700,000

2010

Industrial Property, Research-Service Facilities, Warehouses, Distribution Centers

Property

Business Incentive

Iowa Code 2009 Partial exemption 427B.1

IAC (2010) 70180.6

Estimated

$171,600,000

New Jobs and Income Program (NJIP) Local Property Tax Exemption

Property

Business Incentive

Iowa Code 2009 Partial exemption 15.332

IAC (2010) 26158.4(2)

Enterprise Zone Program and High Quality Jobs Local Property Tax Exemption

Property

Business Incentive

Iowa Code 2009 Partial exemption 15E.191 through 15E.197

IAC (2010) 26159

A city, county, or partnership of government entities may exempt the value added by property improvements related to new jobs created by the location or expansion of an eligible business from property tax. The Estimated exemption may be for up to twenty years beginning the year the improvements are first assessed for taxation and the exemption applies to all taxing districts in which the real property is located. Cities and counties may exempt from property tax, for up to ten years, all or a part of the value-added by improvements to property of eligible businesses located in designated economic development enterprise Estimated zones. The Economic Department Authority must approve establishment of the zones and eligibility of businesses within the zones to receive tax benefits.

$168,400,000

$149,300,000

2010 Iowa Tax Expenditure Study Iowa Code Expenditure Type Citation Exemption Iowa Code 2009 427.1(7) Iowa Code 2009 427.1(5) Iowa Code 2009 427.1(10) Iowa Administrative Code Citation IAC (2010) 70180.27 None Assessment Tax Expenditure Change Value ($) Value ($) $45,100,000 Estimate Year

Title Libraries and Art Galleries

Tax Type Property

Expenditure Category Charitable Organization Support

War Veterans' Associations

Property

Military/Veterans' Support

Exemption

Description Final Result The grounds and buildings of public libraries, public art galleries, and private libraries and art galleries for public use and not for private profit are Estimated exempt from property tax. Property of any organization composed only of military veterans of any war is exempt from property tax when the property is only used by the Estimated organization and is not used for profit. The buildings and grounds of homes owned and operated by organizations of United States soldiers, sailors, or marines when used as non-profit homes for disabled veterans are exempt from property tax. Wildlife areas and natural conservation areas are exempt from property tax. Such areas include recreational lakes, forest covers, rivers, streams, and open prairies as designated by the county board of supervisors. To be eligible for the exemption, the property cannot be used for economic gain and must comprise at least two acres and provide erosion control or wildlife habitat. Real property used in the operation of a racetrack or racetrack enclosure that is owned by a city, county, state, or charitable or nonprofit entity is exempt from property tax. Estimated

$28,200,000

Homes for Soldiers

Property

Military/Veterans' Support

Exemption

None

$27,700,000

Wildlife Areas or Natural Conservation

Property

Natural Resources Support

Iowa Code 2009 Partial exemption 427.1(22)

None

Estimated

$23,500,000

Racetracks

Property

Business Incentive

Exemption

Iowa Code 2009 99D.14

None

Estimated

$21,200,000

Dwelling Unit Property Owned by Community Housing Development Organization

Property

Charitable Organization Support

Exemption

Iowa Code 2009 427.1(21a)

IAC (2010) 70180.19

Dwelling unit properties owned by non-profit community housing development organizations are exempt from property tax. The dwelling units must be located in a city with a population of more than 110,000 which has a public housing authority that does not own or manage its own Estimated low-rent housing. The non-profit community housing development organization must own and manage more than 150 units in the city. The exemption does not extend to dwelling units located outside the city. Native prairie and wetland property is exempt from property tax. To be exempt, such property cannot be used for economic gain and must be certified by the Iowa Department of Natural Resources. Land used to provide wildlife habitat is exempt from property tax. To be exempt, such property must be classified as agricultural real estate and be certified by the Iowa Department of Natural Resources. A city council or county board of supervisors may enact an ordinance granting property tax exemptions for value added as a result of new construction, reconstruction, or renovation of speculative shell buildings owned by community development organizations, for-profit entities, or notfor-profit organizations. Impoundment structures and underlying land located outside any incorporated city are exempt from property tax. To be exempt, such structures must be approved by Soil and Water Conservation District commissioners and the Iowa Department of Natural Resources. Property used to collect methane gas or other gases produced as a byproduct of waste decomposition and to convert the gas to energy is exempt from property tax. Methane gas conversion property includes personal property, real property, improvements to real property, and machinery, equipment, and computers assessed as real property. Estimated

$9,100,000

2010

Native Prairie and Wetlands

Property

Natural Resources Support

Partial exemption

Iowa Code 2009 427.1(23) Iowa Code 2009 427.1(24)

None

$3,500,000

2010

Wildlife Habitat

Property

Natural Resources Support

Partial exemption

None

Estimated

$2,500,000

2010

Speculative Shell Buildings

Property

Business Incentive

Partial exemption

Iowa Code 2009 427.1(27)

IAC (2010) 70180.5

Estimated

$2,200,000

2010

Impoundment Structures

Property

Business Incentive

Exemption

Iowa Code 2009 427.1(20)

None

Estimated

$1,900,000

2010

Methane Gas Conversion Property

Property

Business Incentive

Partial exemption

Iowa Code 2009 427.1(29)

IAC (2010) 70180.12

Estimated

$1,800,000

2010

Historic Property Rehabilitation

Property

Business Incentive

Partial exemption

Iowa Code 2009 427.16

IAC (2010) 22347

Property that has been designated by a county board of supervisors as historic property may receive a property tax exemption for substantial rehabilitation for seven years. Qualified expenditures are costs incurred to preserve or to maintain a building as a historic property according to established standards. The valuation is reduced by one hundred percent Estimated for the first four years of the exemption. The valuation of qualified property for the fifth year is the base valuation plus twenty-five percent of the adjustment in value. The percentage increases to fifty percent in the sixth year and seventy-five percent in the seventh year. In the following years, the valuation is based upon the current fair cash value. Storm shelters for manufactured home communities or mobile home parks are exempt from property tax. If such a structure is used exclusively as a storm shelter structure, all of the structure's assessed value is Estimated exempt from tax, otherwise it is assessed at 50 percent of its value as commercial property. The increase in assessed value from improvements made to barns constructed prior to 1937 is exempt from property tax. The exemption for a barn continues as long as the structure is used for the storage of farm products or feed or for the housing of farm animals or farm equipment.

$1,600,000

2010

Mobile Home Park Storm Shelter

Property

Consumer Benefit

Partial exemption

Iowa Code 2009 427.1(30)

IAC (2010) 70180.14

$1,100,000

2010

Barn Preservation

Property

Agriculture Support

Partial exemption

Iowa Code 2009 427.1(31)

IAC (2010) 70180.15

Estimated

$100,000

2010

Agricultural Produce

Property

Agriculture Support

Exemption

Iowa Code 2009 427.1(11)

None

Land used to grow agricultural produce and horticultural crops with the exception of commercial orchards and vineyards are exempt from Not Estimated property tax. Eligible agricultural and horticultural crops include Christmas trees, bedding plants, berries and other nursery crops.

2010

2010 Iowa Tax Expenditure Study Iowa Code Expenditure Type Citation Iowa Administrative Code Citation Assessment Tax Expenditure Change Value ($) Value ($) Estimate Year

Title

Tax Type

Expenditure Category

Description

Final Result

Annexation of Property by a City

Property

Business Incentive

Iowa Code 2009 Partial exemption 368.11(3)"m"

IAC (2010) 70180.21

City councils may provide exemption from city property taxes in annexation areas and phase in the imposition of city taxes over up to ten years. Iowa Code provides a schedule whereby city councils may exempt annexation areas from 75 percent of property taxes in the first and second years after Not Estimated annexation. The amount of exemption falls to 15 percent of property taxes in the ninth and tenth years after annexation and to zero percent thereafter. A city council may adopt an alternative schedule. All personal and real property held and used for armory or military purposes is exempt from property tax. Car wash equipment is exempt from property tax. Such equipment includes that used in washing, waxing, drying, and vacuuming motor vehicles and point-of-sale equipment used in purchasing car wash services. A city council or county board of supervisors may enact an ordinance granting partial exemption from property tax of the value added to owneroperated cattle facilities, including small or medium sized feedlots but not including slaughter facilities, either by new construction or by the retrofitting for existing facilities. The exemption lasts for five years declining in percentage from seventy-five to fifteen over the period. A partial exemption may also be approved. Burial grounds, mausoleums, buildings, and equipment owned and operated by cemetery associations and used exclusively for the interment of human remains are exempt from property tax. All computers, machinery and equipment classified as industrial real estate acquired after December 31, 1993 are exempt from property tax. Not Estimated

2010

Armory or Military Property

Property

Military/Veterans' Support

Exemption

Iowa Code 2009 29A.60 Iowa Code 2009 427A.1(6)

None IAC (2010) 70180.25

2010

Car Wash Equipment

Property

Business Incentive

Exemption

Not Estimated

Cattle Facilities

Property

Agriculture Support

Partial exemption

Iowa Code 2009 427B.7

IAC (2010) 70180.6

Not Estimated

2010

Cemetery Associations

Property

Charitable Organization Support

Exemption

Iowa Code 2009 427.1(6) Iowa Code 2009 427B.17 Iowa Code 2009 427A.1(c) Iowa Code 2009 425.15

None IAC (2010) 70180.7 IAC (2010) 70180.23 IAC (2010) 70180.1(3)

Not Estimated

Computers and Industrial Machinery and Property Equipment Special Valuation Concrete Batch Plants and Hot Mix Asphalt Facilities Disabled Veterans Homestead Tax Credit Property

Business Incentive Business Incentive

Exemption Exemption

Not Estimated

2010 2010

Property

Military/Veterans' Support

Credit

Machinery, equipment, and fixtures used in processing concrete or asphalt Not Estimated at a mixing facility are exempt from property tax. Any disabled veteran eligible for a Homestead credit who acquired the homestead property under Title 38 of the United States Code (which provides support for housing for disabled veterans) and whose household Not Estimated income does not exceed $35,000 may claim a credit equal to the entire amount of property tax payable on the homestead. Cities or counties may designate disaster revitalization areas in counties which the Iowa governor or the United States president has proclaimed a disaster area. Any increase in the assessed value of property in disaster revitalization areas is exempt from property taxation for up to five years. The tax exemption percentage may be less than 100 percent but not greater than 100 percent. The owners of the real property eligible for the exemption can take the disaster revitalization exemption or they may take another exemption for which they are eligible, but not both. Property of the State of Iowa and the United States, with the exception of federal property subject to taxation under federal statute, is exempt from property tax. Publicly-owned fire company property is exempt from property tax. Such property includes buildings and grounds used exclusively for keeping fire engines and firefighting equipment. Trees planted for forest, fruit, shade, windbreak, or ornamental purposes are exempt from property tax in that they do not increase the valuation of the land. Government property that is entered and located or purchased from the State of Iowa is exempt from property tax. Property owned and operated by Indian housing authorities is exempt from property tax. An exemption agreement must be signed by the board of supervisors or the city council. Property that is otherwise taxable as real property but that is held solely as inventory for sale, lease, or rent is exempt from property tax. The inventory exemption does not apply to land or buildings.

2010

Disaster Revitalization Area

Property

Business Incentive

Partial exemption

Iowa Code 2009 404B

IAC (2010) 70180.28

Not Estimated

2010

Federal and State Property

Property

State and Local Government

Exemption

Iowa Code 2009 427.1(1) Iowa Code 2009 427.1(4)

None

Not Estimated

2010

Fire Company Property

Property

State and Local Government

Exemption

None IAC (2010) 57173.1 None IAC (2010) 70180.17 None

Not Estimated

2010

Forest and Fruit-Tree Reservation Government Lands Indian Housing Authority Property

Property Property Property

Natural Resources Support State and Local Government Charitable Organization Support

Iowa Code 2009 Partial exemption 427C.1 and 441.22 Iowa Code 2009 Exemption 427.1(12) Exemption Iowa Code 2009 427.1(33) Iowa Code 2009 427A.1(5)

Not Estimated Not Estimated Not Estimated 2010 2010

Inventories

Property

Administrative

Exemption

Not Estimated

2010

Municipal and Military Property

Property

State and Local Government

Exemption

Iowa Code 2009 427.1(2)

None

Government municipal and military property is exempt from property tax. Such property includes property of counties, townships, cities, school corporations, levee districts, and the Iowa National Guard. The exemption Not Estimated also applies to property operated by municipalities, such as libraries, museums, sports stadiums, convention centers, and airports. The property of nursing facilities which are exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code are are exempt Not Estimated from property tax. The increase in assessed value from improvements made to one-room school houses is exempt from property tax. The exemption for the school Estimated house continues as long as the structure is not used for dwelling purposes Minimal and is preserved as a one-room school house.

2010

Nursing Facilities

Property

Charitable Organization Support

Exemption

Iowa Code 2009 427.1(14a) Iowa Code 2009 427.1(32)

IAC (2010) 70180.20 IAC (2010) 70180.15

2010

One-Room Schoolhouse Preservation

Property

Charitable Organization Support

Partial exemption

2010

2010 Iowa Tax Expenditure Study Iowa Code Expenditure Type Citation Iowa Code 2009 Exemption 427A.2 Exemption Iowa Code 2009 427.1(34) Iowa Code 2009 427.1(13) Iowa Code 2009 427.1(3) Iowa Code 2009 427.1(26) Iowa Code 2009 427.1(17) Iowa Code 2009 441.21(8)(b) Iowa Code 2009 427B.20 through 427B.22 Iowa Code 2009 427.1(35) and 427.1(36) Iowa Administrative Code Citation None IAC (2010) 70180.22 IAC (2010) 70180.24 None None None Assessment Tax Expenditure Change Value ($) Value ($) Estimate Year

Title Personal Property

Tax Type Property

Expenditure Category Consumer Benefit

Description Personal property is not subject to property tax. Iowa Code provides for the creation of port authorities to provide and foster transportation, economic development, recreation, and other purposes. The property of port authorities, when devoted to public use and not held for profit, is exempt from property tax. Public airports are exempt from property tax. Public grounds including cemeteries and adjacent crematoriums are exempt from property tax. The exemption only applies if no profits are derived from the property. All public television station grounds and buildings not leased or otherwise used for profit are exempt from property tax.

Final Result Not Estimated

Port Authority

Property

Community Development Support

Not Estimated

2010

Public Airport Property Public Grounds and Cemeteries Public Television Station Rural Water Distribution

Property Property Property Property

Business Incentive State and Local Government State and Local Government Charitable Organization Support

Exemption Exemption Exemption Exemption

Not Estimated Not Estimated Not Estimated 2010

Real property of nonprofit corporations devoted to the sale and distribution Not Estimated of water to rural areas for public use is exempt from property tax. Construction or installation of a solar energy system on agricultural, residential, commercial, or industrial property, shall not increase the Not Estimated taxable value of the property for five full assessment years. A city council or county board of supervisors may by ordinance grant property tax credits to small business owners for payment of underground Not Estimated storage cleanup costs. The credit may be for part or all of the property taxes otherwise owed. Property that is used by a web search portal business is exempt from property tax. Such property may include cooling systems, power Not Estimated infrastructure, and cabling which are necessary for the maintenance and operation of the Web search portal. A city council or county board of supervisors may provide for special valuation of wind energy conversion property. The special valuation applies to the net acquisition cost of the wind energy conversion property. The special valuation schedule is 0% for the first assessment year; 5% to 25, for the second through the sixth year; and 30% for each subsequent year. Public utility property may also qualify for the special valuation. This exemption is in lieu of the five year full exemption for solar energy systems defined to include wind energy.

Solar Energy Systems

Property

Consumer Benefit

Partial exemption

None

2010

Underground Storage Tanks

Property

Natural Resources Support

Credit

IAC (2010) 70180.10

2010

Web Search Portal and Business Property

Property

Business Incentive

Exemption

IAC (2010) 70180.26

Wind Energy Conversion Property

Property

Business Incentive

Partial exemption

Iowa Code 2009 427B.26

IAC (2010) 70180.13

Not Estimated

Homestead Tax Credit

Property

Consumer Benefit

Credit

Iowa Code 2009 425

IAC (2010) 70180.1

Provides property tax relief to individuals that own and occupy a property as a homestead on July 1 of each year, declare residency in Iowa for income tax purposes, and occupy the property for at least six months each Estimated year are eligible to claim a credit against property tax. The credit is equal to the actual tax levy on the first $4,850 of actual value. Persons in the military or nursing homes who would otherwise qualify are also eligible. The Agricultural Land Tax credit was established to partially offset the school tax burden borne by agricultural real estate. Current law allows a credit for any general school fund tax in excess of $5.40 per $1,000 of assessed value. Land used for agricultural or horticultural purposes in tracts of 10 acres or more is eligible. This credit, which is incorporated in the Homestead Tax Credit, provides property tax relief to low-income elderly or disabled homeowners or renters. The amount of credit is based in part upon property taxes paid or rent constituting taxes paid. The Family Farm Tax Credit partially offsets the school tax burden borne by agricultural real estate. Current law allows a credit for any general school fund tax in excess of $5.40 per $1,000 of assessed value. The owner or other specified persons (e.g., the owners relatives) must be actively engaged in farming the land and the land must be used for agricultural or horticultural purposes. For World War I veterans, $2,778 of taxable value and $1,852 for other veterans is exempt from property tax. Eligible property must be owned by the veteran, spouse, or certain other relatives or a family farm corporation of which the person is a shareholder. The claimant must be a resident of Iowa. The exemption applies to real property and mobile homes assessed as real estate. Enacted as a supplement to the Property Tax Credit & Rent Reimbursement for Elderly and Disabled, this credit provides owners of mobile, manufactured, and modular homes owners with commensurate aid. To be eligible, a homeowner must be an Iowa resident, 23 or older, and meet annual household low-income requirements.

$94,200,000

2010

Agricultural Land Tax Credit

Property

Agriculture Support

Credit

Iowa Code 2009 426

IAC (2010) 70180.16

Estimated

$24,600,000

2010

Property Tax Credit & Rent Property Reimbursement for Elderly and Disabled

Consumer Benefit

Credit

Iowa Code 2009 425.16 through 425.40

IAC (2010) 70173

Estimated

$22,100,000

Family Farm Tax Credit

Property

Agriculture Support

Credit

Iowa Code 2009 425A

IAC (2010) 70180.11

Estimated

$7,800,000

2010

Military Service

Property

Military/Veterans' Support

Partial exemption

Iowa Code 2009 426A

IAC (2010) 70180.2

Estimated

$2,400,000

Mobile Home Low-Income Credit

Property

Consumer Benefit

Credit

Iowa Code 2009 435.22(1)

IAC (2010) 70174.4

Estimated

$100,000

2010

2010 Iowa Tax Expenditure Study Iowa Code Expenditure Type Citation Iowa Administrative Code Citation Assessment Tax Expenditure Change Value ($) Value ($) Estimate Year

Title

Tax Type

Expenditure Category

Agricultural Land Valuation

Property

Agriculture Support

Partial exemption

Iowa Code 2009 441.21(1)(e)

IAC (2010) 70171.3

Description Rather than market value, assessment of agricultural real estate is based exclusively on consideration of productivity and net earning capacity. The methods for determining productivity and earning capacity are applied uniformly among counties and classes of property. Such methods make use of data from Iowa State University, the Iowa Crop and Livestock Reporting Service, the Iowa Department of Revenue, and any other reliable sources.

Final Result

Not Estimated