The chairman of the committee in the Iowa state senate that drafts tax state policy says Governor Terry Branstad is trying to push through a 37-million dollar tax break for businesses that senators reviewed but did NOT approve two years ago.
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That’s Senator Joe Bolkcom (BOWL-kum), a Democrat from Iowa City who is chairman of the Senate Ways and Means Committee. Bolkcom says the governor is abusing executive power by having the proposal drafted as an administrative rule and implemented by his state agency.
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The proposal deals with “consumable supplies” that are used in the manufacturing process, like hydraulic fluids and drill bits. Branstad’s Department of Revenue is proposing an administrative rule that would exclude “consumable supplies” from the state sales tax. It’s an estimated savings of 37 million dollars for Iowa businesses. Branstad describes it as a way to “modernize” the tax code. A bill that would have achieved the same goal passed the Republican-led Iowa House in 2013, but stalled in the Iowa Senate, where Democrats control the debate agenda. A legislative committee reviews all administrative rules and could block the proposal.