# Iowa SF 657: A bill for an act related to state taxation and finance and other related matters, by creating, modifying, and eliminating tax credits and tax incentive programs, providing for penalties, and including effective date and retroactive applicability provisions. (Formerly SSB 1205.) Effective date: 06/06/2025, 07/01/2025, 12/31/2025, 01/01/2026. Applicability date: 01/01/2017, 01/01/2025, 01/01/2026. Iowa SF 657, A bill for an act related to state taxation and finance and other related matters, by creating, modifying, and eliminating tax credits and tax incentive programs, providing for penalties, and including effective date and retroactive applicability provisions. (Formerly SSB 1205.) Effective date: 06/06/2025, 07/01/2025, 12/31/2025, 01/01/2026. Applicability date: 01/01/2017, 01/01/2025, 01/01/2026., is a 91st General Assembly (2025–2026) Senate bill sponsored by COMMITTEE ON WAYS AND MEANS; status signed, last action 2025-06-27 (Explanations of votes.); PRIA reads it as touching household money (as of 2026-10-18). - Canonical: https://policyrisk.com/state-bill/IA-SF657-2025-2026 - As of: 2026-10-18 - Plain-text twin of the page above; the HTML and this file carry the same facts. ## Facts - Bill: Iowa SF 657 - State: Iowa - Session: 91st General Assembly (2025–2026) - Title: A bill for an act related to state taxation and finance and other related matters, by creating, modifying, and eliminating tax credits and tax incentive programs, providing for penalties, and including effective date and retroactive applicability provisions. (Formerly SSB 1205.) Effective date: 06/06/2025, 07/01/2025, 12/31/2025, 01/01/2026. Applicability date: 01/01/2017, 01/01/2025, 01/01/2026. - Status: signed - Chamber: Senate - Introduced: 2025-05-12 - Last action: 2025-06-27, Explanations of votes. - Sponsor: COMMITTEE ON WAYS AND MEANS - Cosponsors: 0 - Touches household money: yes - Roll calls: 3 (157 yes, 62 no in all) - Economic provisions PRIA read: 35 ## Summary No summary available. ## Bill overview: provisions PRIA read - Youth grants prioritize struggling Iowa counties: benefit, low. Beginning December 31, 2025, summer youth corps grants use a county-based definition of economic distress. Counties must meet at least three of six measures covering unemployment, wages, family poverty, population loss, or residents age 65 or older. The commission designates a share of grants for d… - Funding options for startup business accelerators: benefit, low. Beginning December 31, 2025, the authority may fund the creation or operation of business accelerators and their satellite locations. Eligible accelerators serve technology, value-added agriculture, information solutions, alternative and renewable energy, or advanced manufacturing startups. Assista… - Production companies get temporary filming rebates: benefit, low. Qualifying production facilities can receive rebates up to 30% of documented eligible costs, excluding sales, use, and hotel and motel taxes. Eligible costs must follow application approval and occur from July 1, 2025, through June 30, 2027. Productions need a fully funded budget of at least $1 mil… - State funds support business disaster recovery: benefit, low. The law creates state funds for development programs, designated fund deposits, disaster recovery businesses, and Business Incentives for Growth. Disaster aid requires physical damage, closure from a natural disaster, and a location in a federally declared disaster area. A reopening plan must inclu… - Fuel dealers keep gasoline promotion credits: benefit, low. The law extends specified fuel-credit repeal dates from January 1, 2026, to January 1, 2028. Eligible E-15-plus gasoline dealers whose tax years end before December 31, 2027, get a transition claim. They can claim the remaining eligible period through December 31, 2027, in the following tax year. - Local property tax relief for businesses: benefit, low. Effective June 6, 2025, communities can exempt part of the value added by approved business project improvements from property taxes. Eligible improvements include new construction, rehabilitation and additions. Relief can last up to 10 years, starting when the improvements are first assessed. Comm… - Lower Endow Iowa credits for donors: cost, high. The yearly pool of Endow Iowa tax credits falls from $6 million to $3.5 million. The maximum credit for one taxpayer falls from $100,000 to $50,000. These lower limits reduce available tax help for donors contributing to qualifying funds. - Small business disability credit limited: cost, high. This small business assistive-device credit is limited to tax years beginning in 2024. It covers qualifying device purchases, rentals, modifications, or workplace changes for a current or future employee with a disability. Credits depend on availability, and 90% of any credit above the business's t… - Tighter rules for charitable giving credits: cost, medium. Endow Iowa credits require foundations and permanent endowment funds without a corporation's or other business's name. Foundations must report the previous year's grants to the legislature by January 31. They must also provide requested information to verify eligible gifts. Beginning January 1, 202… - New fees for business incentive recipients: cost, medium. Beginning December 31, 2025, participating businesses and housing businesses pay a one-time $500 fee before receiving a tax incentive certificate. Agreements worth at least $100,000 also carry a 0.5% fee. For business agreements, that fee applies to incentives actually claimed and is collected afte… - Contractors face penalties for false reports: cost, medium. Beginning June 6, 2025, contractors and subcontractors commit an aggravated misdemeanor by willfully filing false tax-paid reports under the refund program. They also owe the tax, any applicable penalty, and interest. - Rising penalties for fuel reporting violations: cost, medium. People required to file motor fuel reports or keep records face civil penalties for late reports or missing records. The director may charge $100 for the first violation. The penalty rises by $100 for each additional violation in the calendar year of the first violation. - Lower yearly cap on business credits: cost, medium. Iowa cuts the yearly tax-credit limit for covered business programs from $170 million to $110 million. The Iowa Economic Development Authority can exceed that limit by up to 20%, charged against the next fiscal year. Credits irrevocably declined or revoked by June 30 of the following fiscal year ca… - Business applicants pay fees and plan: cost, low. Effective June 6, 2025, businesses seeking program incentives must pay an application fee set by agency rule. They must use the authority's required application form and process. Projects with high water use must include a water conservation and waste reduction plan. - Less required help for business applications: cost, low. Beginning December 31, 2025, the state office providing technical support no longer has to help complete certain business-assistance applications. This removes required help with technical information for the referenced economic development assistance. The change does not itself change who qualifie… - Tighter business aid rules after cuts: cost, low. The authority may cut or end assistance after a business closure or mass layoff that requires state notice. Beginning December 31, 2025, projects without new jobs or substantial new investment are presumed to simply move operations within Iowa. Local operating cuts within 12 months before or after… - Business growth incentives face award caps: cost, low. Business Incentives for Growth awards cannot begin before January 1, 2026. Each business's total award is capped at 5% of qualifying investment, or 7.5% in a rural county. Rural counties have 20,000 or fewer residents under the latest decennial census. During transition, growth incentives share $50… - Businesses face incentive repayment enforcement: cost, low. Participating businesses must certify compliance annually, meet project terms and maintain base employment through their agreement's end. Assigning an agreement requires advance written approval; good-cause amendments cannot raise the approved incentive maximum. Violations, layoffs, permanent closu… - Businesses face tighter incentive eligibility rules: cost, low. Effective June 6, 2025, these incentives target advanced manufacturing, bioscience, insurance and finance, and technology and innovation. Data centers, retail businesses, and businesses limiting entry through membership or cover charges are excluded. Projects need community approval, comprehensive… - Employer child care credit narrows: cost, low. This employer child care credit applies only to tax years beginning January 1 through December 31, 2025. The state credit equals the share of the federal employer-provided child care credit tied to Iowa spending. The related state-code provisions are repealed January 1, 2031. - Veterinary research gets retroactive tax rules: cost, low. For individual and corporate research credits, qualifying cattle and hog veterinary research is not treated as agricultural production. This rule applies when the credit is based on qualifying agriscience research. That research must meet oversight, Iowa research, evaluation and public-results requ… - New tax refunds for startup investors: mixed, high. For tax years starting January 1, 2025, onward, cash equity investments earn refundable credits: 20% for urban businesses or 35% for rural businesses. The minimum investment is $10,000; principals and affiliates are excluded. Annual credit limits are $100,000 per person, spouse and dependents combi… - Housing refunds protected, repayments treated as taxes: mixed, low. Beginning December 31, 2025, housing businesses can seek refunds for project-related sales and use taxes paid before completion. The taxes must be listed in the agreement. Claims filed within one year after the agreement completion date cannot be denied under the specified filing-time limit. If a b… - Lower investment requirements for Iowa fund: mixed, low. The Iowa fund's required proposed binding investment commitments drop from at least $15 million to at least $3 million. Its minimum investment in companies based in Iowa also drops from $15 million to $3 million. The fund faces lower investment requirements, but less investment in Iowa companies is… - Disaster housing credits get separate funding: mixed, low. Disaster recovery housing credits are administered separately from workforce housing's annual limits and small-city reservation. Beginning December 31, 2025, projects need a presidential major disaster declaration dated March 12, 2019, or later. The county must qualify for federal individual assist… - Housing developers face caps and preferences: mixed, low. Workforce housing credit caps are $39.5 million in 2025–2026, $36.5 million in 2026–2027, and $35 million annually thereafter. Half is reserved for qualified small-city projects; unused reservations can fund other projects that year. Each project faces a $1 million combined incentive cap, with redu… - Business project aid with funding limits: mixed, low. Beginning June 6, 2025, eligible businesses can receive grants, loans, forgivable loans, royalty payments, or other help. The authority and board set the amount and type, using only legally available funds and assets. They must find the help supports project completion, extensive economic impact, o… - Aviation fuel producers gain capped credits: mixed, low. Qualifying Iowa sustainable aviation fuel earns a refundable credit of $0.25 per gallon for production during 2026–2035. Fuel must use feedstock processed or refined in Iowa, meet specified quality standards, and cut life-cycle emissions at least 50%. Producers need a state agreement and must apply… - Blended fuel tax calculations face corrections: mixed, low. Before June 1, Iowa's tax department can correct distribution percentages used to set blended-fuel excise tax rates. Corrections address mistakes or late retail-dealer reports. They can raise or lower rates for gasoline containing at least 15% ethanol and biodiesel containing at least 20% biodiesel. - Business incentive transition protects existing awards: mixed, low. The law repeals listed High Quality Jobs statutes effective December 31, 2025. Agreements entered into or amended by that date remain valid, and earlier incentives and carryforward rights stay protected. Beginning that date, eligible businesses can combine program incentives with other federal, sta… - Business investment credits carry repayment risks: mixed, low. Effective June 6, 2025, approved businesses can receive investment credits spread equally over five tax years. Certificates require the project, or part of it, to be in service; pass-through owners claim their earnings share. Annual allocations limit awards, and credits cannot be carried back befor… - Business project refunds arrive faster: mixed, low. Certified businesses can receive negotiated sales and use tax refunds for project construction and equipment under written contracts. Eligible costs include specified utilities, tangible property and services, but exclude intangible property, furniture and furnishings. Contractors must provide swor… - Businesses get a replacement research credit: mixed, low. The former research activities credit is limited to tax years starting in 2025; its code section is repealed January 1, 2027. For tax years starting in 2026 onward, approved businesses get a refundable replacement credit of up to 3.5% of eligible research costs. Businesses claim it the year after s… - Investor credit funding and transition limits: mixed, low. The law allocates $10 million annually between innovation fund and seed investor credits, with the board deciding the split. For the fiscal year starting July 1, 2025, qualifying-business credits authorized before July 1, 2026, reduce that allocation. The law repeals five legacy investment-credit p… - Redevelopment credits gain reuse and limits: mixed, low. Brownfield and grayfield redevelopment tax credit awards face a $15 million annual limit. Revoked, previously unawarded and qualifying declined credits can be awarded later without counting against that limit. Declined awards must be irrevocably returned by June 30 of the immediately following fisc… ## Sponsors and cosponsors - Sponsor: COMMITTEE ON WAYS AND MEANS ## Roll call votes | Date | Chamber | Motion | Result | Yes | No | Other | | --- | --- | --- | --- | --- | --- | --- | | 2025-05-14 | legislature | Amendment H-1351 | fail | 29 | 58 | | | 2025-05-14 | House | Passed House | pass | 84 | 3 | | | 2025-05-13 | Senate | Passed Senate | pass | 44 | 1 | | ## Actions (20) - 2025-06-27: Explanations of votes. (House) - 2025-06-27: Explanation of vote. (House) - 2025-06-06: Signed by Governor. (Senate) - 2025-06-06: Fiscal note. (legislature) - 2025-05-23: Reported correctly enrolled, signed by President and Speaker, and sent to Governor. (Senate) - 2025-05-20: Explanation of vote. (House) - 2025-05-14: Message from House. (Senate) - 2025-05-14: Immediate message. (House) - 2025-05-14: Passed House, yeas 84, nays 3. (House) - 2025-05-14: Amendment H-1351, yeas 29, nays 58, filed, lost. (House) - 2025-05-14: Substituted for HF 1054. (House) - 2025-05-14: Read first time, passed on file. (House) - 2025-05-14: Fiscal note. (legislature) - 2025-05-14: Message from Senate. (House) - 2025-05-13: Immediate message. (Senate) - 2025-05-13: Passed Senate, yeas 44, nays 1. (Senate) - 2025-05-13: Amendment S-3175 filed, adopted. (Senate) - 2025-05-13: Fiscal note. (legislature) - 2025-05-12: Committee report, approving bill. (Senate) - 2025-05-12: Introduced, placed on Ways and Means calendar. (Senate) ## Bill text - As Introduced: [PDF](https://www.legis.iowa.gov/docs/publications/LGI/91/SF657.pdf) - Enrolled: [PDF](https://www.legis.iowa.gov/docs/publications/LGE/91/SF657.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/SF657.pdf) - [Enrolled (PDF)](https://www.legis.iowa.gov/docs/publications/LGE/91/SF657.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-SF657-2025-2026 (as of 2026-10-18).