(Radio Iowa) – Governor Kim Reynolds has signed a wide-ranging bill into law that cuts personal income taxes, gradually gets rid of the state inheritance tax and erases a property tax levy used to finance mental health services. State money is to be used to finance the mental health system. “Health care professionals and patients who rely on Iowa’s mental health system deserve this sustainability and predictability this funding source will provide,” the governor says.

Reynolds says she’ll recommend MORE personal income tax cuts in 2022. The legislation was a compromise brokered by Governor Reynolds with the Iowa House and Senate to wrap up the 2021 Legislative Session.

SF 619 provides significant tax relief to hardworking Iowans:   

• SF 619 drops tax rate from 8.53% to 6.5%  
  • Reduces the number of tax brackets from 9 to 4  
  • Eliminates Federal Deductibility  
• Phases out the mental health levy over 2 years, saving property taxpayers over $100 million
• Phases out state inheritance tax over 4 years, saving taxpayers nearly $100 million
• Expands eligibility for the Beginning Farmers Tax Credit
• Food Bank sales tax exemption

SF 619 invests in mental health and foundational priorities like child care and housing:  

• Dedicated, sustainable mental health funding from Iowa’s General Fund
  • Includes a growth factor that allocates new money as revenue increases

• Increases eligibility for the Child Care Tax Credits from families making $45k – $90k
• Increases workforce housing tax credits to $40 million for FY22 ($35 million for years following)
• Extends Brownfield/Grayfield and increases funding from $10 million to $15 million
• Develops a Manufacturing 4.0 strategic roadmap for the future of manufacturing in the state of Iowa