# Iowa HF 976: A bill for an act relating to the administration of the tax by the department of revenue by modifying provisions related to personal income, property, sales and use, motor fuel, and inheritance taxes, changing tax expenditure reviews, and including effective date and retroactive applicability provisions. (Formerly HSB 89.) Effective date: 06/06/2025, 07/01/2025, 01/01/2026. Applicability date: 01/01/2024, 01/01/2025, 01/01/2026. Iowa HF 976, A bill for an act relating to the administration of the tax by the department of revenue by modifying provisions related to personal income, property, sales and use, motor fuel, and inheritance taxes, changing tax expenditure reviews, and including effective date and retroactive applicability provisions. (Formerly HSB 89.) Effective date: 06/06/2025, 07/01/2025, 01/01/2026. Applicability date: 01/01/2024, 01/01/2025, 01/01/2026., is a 91st General Assembly (2025–2026) House bill sponsored by COMMITTEE ON WAYS AND MEANS; status signed, last action 2025-06-06 (Signed by Governor.); PRIA reads it as touching household money (as of 2026-10-18). - Canonical: https://policyrisk.com/state-bill/IA-HF976-2025-2026 - As of: 2026-10-18 - Plain-text twin of the page above; the HTML and this file carry the same facts. ## Facts - Bill: Iowa HF 976 - State: Iowa - Session: 91st General Assembly (2025–2026) - Title: A bill for an act relating to the administration of the tax by the department of revenue by modifying provisions related to personal income, property, sales and use, motor fuel, and inheritance taxes, changing tax expenditure reviews, and including effective date and retroactive applicability provisions. (Formerly HSB 89.) Effective date: 06/06/2025, 07/01/2025, 01/01/2026. Applicability date: 01/01/2024, 01/01/2025, 01/01/2026. - Status: signed - Chamber: House - Introduced: 2025-03-24 - Last action: 2025-06-06, Signed by Governor. - Sponsor: COMMITTEE ON WAYS AND MEANS - Cosponsors: 0 - Touches household money: yes - Roll calls: 2 (129 yes, 0 no in all) - Economic provisions PRIA read: 19 ## Summary No summary available. ## Bill overview: provisions PRIA read - Retirees avoid extra lump-sum distribution tax: benefit, high. Iowa exempts qualifying lump-sum retirement payments from its extra tax, otherwise equal to 25% of the separate federal tax. Recipients qualify through disability, age 55 or older, or qualifying survivor status. Covered sources include government and other retirement plans, annuities, individual re… - Tax break for longtime farm owners: benefit, high. Eligible individuals can subtract qualifying net income received under a farm tenancy agreement from Iowa taxable income. They must have held the real property for at least 10 years. They must also have materially participated in a farming business for at least 10 years total. Federal holding-perio… - Tax breaks for qualifying Iowa bondholders: benefit, medium. Bonds issued under Iowa Code section 16.177, and their interest, are exempt from Iowa inheritance tax. Interest on these bonds is also exempt from Iowa income tax. These exemptions have no stated dollar cap. - Property taxpayers get clearer refund rights: benefit, low. County boards must refund property taxes paid in error or illegally, including interest, fees, and costs actually paid. Claims must be presented within two years of the tax due date. After an appeal, the two years run from the final decision, including decisions by Iowa's Department of Revenue. The… - Fewer taxpayers need estimated tax payments: benefit, low. For tax years beginning on or after January 1, 2026, Iowa raises its estimated-payment threshold from $200 to $1,000. Filers must make estimated payments when their expected yearly Iowa income tax liability is at least $1,000. Taxpayers below that threshold avoid this estimated-payment requirement,… - Newer estates face fewer tax filings: benefit, low. The specified inheritance tax probate, reporting, and administration rules apply only to deaths before January 1, 2025. Estates involving deaths on or after that date are not subject to those requirements. The change took effect June 6, 2025, and applies retroactively to those newer estates. - Tax agency can share suspected crimes: benefit, low. Beginning June 6, 2025, Iowa's Department of Revenue can refer suspected tax crimes to federal, state, or local law enforcement. It can share state returns, return information, investigative records, and audit information. This authority applies when information indicates intentional tax fraud, int… - Expired business exemptions fund energy loans: benefit, low. Iowa directs tax revenue tied to specified expired data center and web search portal exemptions to its Energy Infrastructure Revolving Loan Fund. The use-tax transfer covers all related use-tax revenue and took effect June 6, 2025, outside the general-fund deposit rule. Transfers of the specified s… - Leased data centers gain tax access: benefit, low. Businesses leasing space to operate data centers can qualify for Iowa's data center sales and use tax exemption. For facilities using the specified materials, equipment, and systems, property tax relief starts in the year investment or construction is first assessed. For leased facilities, it can s… - Data businesses face energy tax limits: cost, low. Qualifying new data center and web search portal construction or additions face time limits on backup-fuel and electricity tax exemptions. The limit is 10 years if any property lies in a city over 30,000 people; otherwise, it is 15 years. Population is based on the latest decennial federal census;… - Fuel reporting violations bring rising fines: cost, low. Iowa's revenue director can fine people who file required motor fuel reports late or fail to keep required records. The first violation carries a $100 civil penalty. Each additional violation in the same calendar year raises that violation's penalty by $100. The second violation is $200, and the th… - Property tax claim extension options change: mixed, low. Iowa's health and human services director can extend property tax reimbursement claim deadlines for sickness, absence, disability, or good cause. An extension cannot go beyond December 31 of the year after the claim was due. The revenue director no longer has authority under this provision to exten… - Estate rules clarify savings plan taxes: mixed, low. The law limits the specified inheritance tax treatment for education and disability savings plans to deaths before January 1, 2025. Covered plans include Iowa educational savings plans, Iowa ABLE plans, and the contracted qualified ABLE program. This provision does not establish a general rule for… - Contractors get clearer materials tax rules: mixed, low. Contractors' building-material purchases for new construction, reconstruction, alterations, expansions, and remodeling are taxable retail sales. Materials bought for repairs or installation in existing buildings count as purchases for resale. Building equipment remains taxable, and carpeting is tax… - Partnership audits bring appeals and penalties: mixed, low. Partnership and pass-through audit adjustment notices count as tax assessments that entities can appeal through Iowa's tax appeal process. State partnership audits cannot use the penalty exceptions in Iowa Code section 421.27(2)(b) and (c). These changes took effect June 6, 2025; the partnership au… - Blended fuel tax calculations allow corrections: mixed, low. Before June 1, Iowa's Department of Revenue can correct distribution percentages used to set certain blended-fuel excise tax rates. Covered fuels are gasoline with at least 15% ethanol and biodiesel blends with at least 20% biodiesel. Corrections can address late retailer reports, mistakes, or inac… - Business direct-pay tax permit threshold changes: mixed, low. Purchasers can qualify for a direct-pay permit after accruing more than $8,000 in covered sales and use taxes in one month. This replaces the threshold of more than $4,000 in a half-month. Applicants must apply to the revenue director and receive a permit. Permit holders file returns and pay covere… - Data center investment clocks include leases: mixed, low. Data center investment deadlines can run from the initial lease start, when applicable, instead of site preparation. One program requires a $200 million Iowa investment within six years; its exemption period also uses the applicable lease start. Missing its 80% investment test within six years mean… - Electric fuel sellers face filing changes: mixed, low. Electric fuel tax dealers and users file twice yearly, with returns due July 31 and January 31. The January return covers July through December and lists delivery locations; returns are certified under penalties for false certification. Beginning January 1, 2026, the Department of Revenue can requi… ## Sponsors and cosponsors - Sponsor: COMMITTEE ON WAYS AND MEANS ## Roll call votes | Date | Chamber | Motion | Result | Yes | No | Other | | --- | --- | --- | --- | --- | --- | --- | | 2025-05-13 | Senate | Passed Senate | pass | 45 | 0 | | | 2025-05-08 | House | Passed House | pass | 84 | 0 | | ## Actions (14) - 2025-06-06: Signed by Governor. (House) - 2025-06-06: Fiscal note. (legislature) - 2025-05-27: Reported correctly enrolled, signed by Speaker and President, and sent to Governor. (House) - 2025-05-13: Message from Senate. (House) - 2025-05-13: Immediate message. (Senate) - 2025-05-13: Passed Senate, yeas 45, nays 0. (Senate) - 2025-05-13: Substituted for SF 614. (Senate) - 2025-05-13: Explanation of vote. (House) - 2025-05-09: Read first time, attached to SF 614. (Senate) - 2025-05-09: Message from House. (Senate) - 2025-05-08: Immediate message. (House) - 2025-05-08: Passed House, yeas 84, nays 0. (House) - 2025-03-27: Fiscal note. (legislature) - 2025-03-24: Introduced, placed on Ways and Means calendar. (House) ## Bill text - As Introduced: [PDF](https://www.legis.iowa.gov/docs/publications/LGI/91/HF976.pdf) - Enrolled: [PDF](https://www.legis.iowa.gov/docs/publications/LGE/91/HF976.pdf) ## Related bills - HF 2801: A bill for an act modifying the major economic growth attraction program, and including effective date provisions. (Formerly HSB 785.) Effective date: 10/02/20… (signed) - SF 2472: A bill for an act relating to state and local government taxes, fees, financial authority, and budgets, by modifying property assessment provisions, divisions… (signed) - HF 2601: A bill for an act relating to campaign finance, including participation in ballot issue campaigns by foreign nationals and investigations of election misconduc… (signed) - SF 2399: A bill for an act relating to bail and bond amounts and conditions. (Formerly SSB 3162.) Effective date: 07/01/2026. (signed) - SF 2471: A bill for an act relating to fees for lifetime fur harvester licenses. (Formerly SF 2317, SSB 3121.) Effective date: 07/01/2026. (signed) - SF 2299: A bill for an act relating to the district-to-community college sharing or concurrent enrollment program. (Formerly SF 2176.) Vetoed 6-2-26. (vetoed) ## Sources - [As Introduced (PDF)](https://www.legis.iowa.gov/docs/publications/LGI/91/HF976.pdf) - [Enrolled (PDF)](https://www.legis.iowa.gov/docs/publications/LGE/91/HF976.pdf) ## Related - [HF 2801: A bill for an act modifying the major economic growth attraction program, and i…](https://policyrisk.com/state-bill/IA-HF2801-2025-2026) - [SF 2472: A bill for an act relating to state and local government taxes, fees, financial…](https://policyrisk.com/state-bill/IA-SF2472-2025-2026) - [HF 2601: A bill for an act relating to campaign finance, including participation in ball…](https://policyrisk.com/state-bill/IA-HF2601-2025-2026) - [SF 2399: A bill for an act relating to bail and bond amounts and conditions. (Formerly S…](https://policyrisk.com/state-bill/IA-SF2399-2025-2026) - [SF 2471: A bill for an act relating to fees for lifetime fur harvester licenses. (Former…](https://policyrisk.com/state-bill/IA-SF2471-2025-2026) - [SF 2299: A bill for an act relating to the district-to-community college sharing or conc…](https://policyrisk.com/state-bill/IA-SF2299-2025-2026) - [Iowa bills](https://policyrisk.com/states/iowa/bills) - [Iowa state hub](https://policyrisk.com/states/iowa) - [All state legislation](https://policyrisk.com/state-bills) Source: PRIA, https://policyrisk.com/state-bill/IA-HF976-2025-2026 (as of 2026-10-18).