(Radio Iowa) – Republicans on an Iowa House Subcommittee have voted to require that Deere and Company return half of the lucrative state tax credit it received for research activities in 2024 — due to what the bill describes as “mass layoffs.” President Trump threatened to slap tariffs on John Deere products if the company move more production to Mexico and Republican Representative Derek Wulf of Hudson suggests the bill fits with Trump’s agenda. “In my opinion, this bill is the definition of ‘America First’ and more importantly ‘Iowa First,'” Wulf said. About 17-hundred workers at Deere plants in Iowa were laid off in 2024. Stacey Pellet, a lobbyist for Deere and Company, says layoffs are a last resort and not uncommon during market downturns.

“The message that this bill sends to the industries, to companies and also to people looking to invest in Iowa is very concerning,” Pellet said. She told lawmakers Deere doesn’t earn the credit until the company has spent the money on research and development in Iowa. “Deere invests roughly $2.5 million a day in research and development and half of that is done in Iowa,” Pellet said. “…We invest more in R&D here than in anywhere else in the world and we’re pretty proud of that.” The bill wouldn’t just penalize Deere. The bill says ANY company that received the state Research Activities tax credit and laid off workers in 2024 would have to repay at least six percent of the credit. The repayment requirement, with escalates based on the number of layoffs, also would be imposed in future years on companies that cut payrolls.

The Iowa Capitol in Des Moines

Iowa Taxpayers Association Nate Ristow says coming after businesses facing economic headwinds is the wrong approach. “If they’re doing the research here in Iowa and they earned the credit, we think that should be honored and not reduced,” Ristow said.

The Iowa Association of Business and Industry also opposes the bill.