Legislation providing thousands of dollars in tax relief for Iowans could be debated on the floor of the legislature as early as today. Last week, the Ways and Means Committees in the House and Senate approved separate bills involving tax coupling. This would be for a one year measure to Section 179, allowing farmers and small businesses to expense and depreciate capital expenses on their tax returns.

This legislation reflects the federal tax relief measure passed both the U.S. House and Senate in conjunction with the Protecting Americans from Tax Hikes (PATH) Act passed last year. The steps taken would allow coupling of Iowa’s tax code with this recent change to the federal code, including Section 179, a key tool for farmers and small businesses alike. The change allows the businesses to deduct the full purchase price of qualifying equipment and software purchased or financed during the tax year from gross income.

Jarad Klein of House Representative 78 added the committee also drew up an agreement on consumables, avoiding the double taxation of goods used during the manufacturing process. Klein adds the new legislation will help shape the overall state budget, and avoids a $95 million tax increase to the state’s farmers, small business owners, and teachers.