Iowa House Republicans look to lower household costs

DES MOINES — As inflation continues to rise and on-again, off-again tariffs are creating uncertainty for consumers, Iowa House lawmakers are proposing a slate of bills they say will lower everyday costs for Iowans.

Earlier this legislative session, Iowa House Speaker Pat Grassley noted that alleviating the cost-of-living burdens Iowans are facing is one of the goals this year. He told reporters in March that Republicans planned to start introducing bills to do that.

Now, with the Iowa Legislature is in its last full month of the session unless it goes into overtime, these bills are being unrolled — including measures that exempt household products like toilet paper and laundry detergent from the state’s sales tax, which is 6 percent without the addition of voter-approved local option taxes in some communities.

Both exemptions advanced Wednesday out of House subcommittees with bipartisan support.

“I was actually frankly a little surprised that these items hadn’t been previously exempted,” Republican Rep. Christian Hermanson, of Mason City, who sat on the subcommittee, told reporters. “I think every little bit where the state can lean in and loosen the burden of sales tax on a family, on daily necessities like toilet paper … or just detergent in general, is probably a good thing.”

Hermanson said he believes “good tax policy is always a priority,” but isn’t sure where the legislation stands in the Iowa Senate.

“This is a bill that will put more money into the pockets of working families,” said Democratic Rep. Aime Wichtendahl, of Hiawatha, who was also on the subcommittee.

Another sales tax exemption, House File 966, also advanced out of subcommittee Wednesday. It would lift the sales tax on dietary supplements such as vitamins, minerals and amino acids.

In 2022, Iowa sales taxes were lifted from menstrual products and diapers. Most non-prepared food items also are exempt.

Expanding income tax credits

Along with lifting sales taxes, House Republicans also introduced bills to expand tax credits for child care and adoption.

House File 962 would remove the income threshold for the Iowa Child and Dependent Care Tax Credit, a refundable credit calculated as a percentage of the federal Child and Dependent Care Credit, currently capped at household incomes of $90,000.

The legislation also would allow Iowans with net incomes equal to or exceeding $25,000 to use 50 percent of their federal child and dependent care tax credits as a refundable credit against state individual income tax.

Another piece of tax credit-related legislation advanced unanimously out of subcommittee Wednesday — House File 965 — would increase Iowa’s Adoption Tax Credit for qualified adoption expenses from $5,000 to $20,000

Qualified adoption expenses are unreimbursed adoption-related expenses, including medical and hospital expenses from the biological mother giving birth to an adopted child, welfare agency fees, legal fees and other costs.

Rep. Brooke Boden, R-Indianola, who chaired the subcommittee on the bill, said she and her husband considered adoption after they had a difficult time getting pregnant, but weren’t able to afford it.

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“There was no way that we could, at the time, afford adoption,” Boden said during the subcommittee meeting. “It was a heavy burden to have to turn that away. I think we should do whatever we can to help both parents and children.”

While the bills have bipartisan support, House Democrats — who are in the minority — say they have been introducing legislation aimed at lowering costs for Iowans since the beginning of the session, and are calling for more relief beyond what the current legislation provides.

During the last few months, House Democrats have introduced legislation that would increase Iowa’s minimum wage from $7.25 to $15 an hour, create a small business child care tax credit and expand unemployment insurance coverage from 16 weeks to 26 weeks.

“For the last three months, House Democrats have put forward over a dozen bills to put more money in the pockets of Iowans,” House Minority Leader Rep. Jennifer Konfrst, of Windsor Heights, said in a statement. “As Republicans raise taxes on Iowans and more economic uncertainty is ahead, we need bold action to lower costs for families. The package of bills offered today by GOP lawmakers just isn’t enough. For most Iowa families, these proposals won't make up for rising costs in healthcare, childcare, and housing.”