A Look at How Iowa Gov. Tax Plan Could Affect Farmers
Iowa Governor Kim Reynolds wants to lower the state income to a single flat rate of 4 percent which would save the average farmer around $1,300 a year.
So how will this affect Iowa farmers?
During her annual Condition of the State address, Governor Reynolds proposed that retired farmers who have farmed for at least ten years would no longer be taxed on cash rent for their farmland.
Reynolds tax plan does include farmers when it comes to tax breaks. The Governor says that they are written in a way that would not allow out-of-state- investors to claim them.
We didn’t want somebody coming in, buying a bunch of lands and then claiming an exemption.
Taxes are usually a hot topic when a session or election is taking place. It is one of the priorities that Iowa Corn Growers Association wants to address.
Farmers are always concerned about taxes. Our financial world is completely different than most. And it's very vulnerable. We can easily lose everything that has just been a year and therefore we're paying huge amounts of taxes.
American Families Plan
When the Biden Administration proposed the American Families Plan in April, Iowa State University looked into the tax implications that would come from it.
Kristine Tidgren, director of Iowa State’s Center for Agricultural Law and Taxation authored the study.
Because of the proposed increase in rates, we estimate that, on average, a full-time farmer owning 358 acres of farmland would see tax liability from a lifetime sale increase from $475,248 to $860,572, an 81% increase, or from 14.5% to 26% of fair market value,
The impact of this tax is dependent on the farm size and appreciation.