Des Moines, IA- Iowa state tax collections are continuing to increase, but that trend will likely be altered by upcoming tax cuts.
Radio Iowa reports that net state tax revenue is up 6.7% over the past five months. Legislative Services Agency fiscal analyst Jeff Robinson says that the top state income tax rates for individuals and corporations will be reduced on January 1st.
“Retirement income will become exempt from income tax,” Robinson says. “In addition, the state’s inheritance tax will be further reduced.”
In October, a panel of experts had predicted those cuts would lead to a 2.7% reduction in total state tax collection.
The Revenue Estimating Conference meets Wednesday to review data and determine a new prediction. The total tax estimate will be used as a starting point for decisions regarding the state budget.
