- The Iowa House passed bills to exempt "everyday items" like toilet paper, vitamins and laundry detergent from sales tax.
- An expanded child care tax credit passed with broad support, eliminating the income threshold and increasing refundability.
- A new radon mitigation tax credit aims to address high radon levels in Iowa homes, a known cause of lung cancer.
- These measures are projected to reduce revenue to the state general fund by over $200 million through the coming fiscal years.
- The bills' fate is uncertain as the Senate has yet to consider them.
Sales tax exemptions on "everyday items," an expanded child care tax credit and a new tax credit for radon mitigation have passed the Iowa House as lawmakers look to cut Iowans' living expenses, but the proposals would mean millions of dollars in diminished sales tax revenue to the state.
The slate of bills is intended to ease costs for essential items as voters leading up to the November election were persuaded by GOP lawmakers' messages on addressing high prices.
Across the next several years, Iowa's nonpartisan Legislative Services Agency projects several of the measures that the House handily passed April 23 and 24 would result in a drop of more than $200 million in revenue coming into the state's general fund.
The fate of the measures is uncertain as the Senate has yet to take up any of the bills with the annual legislative session slated to end in the coming weeks.
Which new items would be exempt from the sales tax?
Toilet paper, vitamins and laundry detergent wouldn't be subject to the sales tax underHouse File 1019, House File 1021 and House File 1022, respectively.
The Legislative Services Agency estimates all three proposals would reduce revenues to the state general fund, the Secure an Advanced Vision for Education fund used for school infrastructure and Local Option Sales Tax pool.
The measures would reduce revenues by the following amounts through fiscal year 2030, the budget year that ends June 30, 2030:
- House File 1019: $31.4 million from the general fund, $6.3 million from SAVE, $6.1 million from LOST.
- House File 1021: $34.8 million from the general fund, $6.9 million from SAVE, $6.8 million from LOST.
- House File 1022: $50.2 million from the general fund, $10 million from SAVE, $9.7 million from LOST.
House Speaker Pat Grassley, R-New Hartford, and 22 other House Republicans sponsored the bills.
Grassley had pitched eliminating the sales tax on certain "everyday items" at the start of the 2025 legislative session in January.
"I think we want to continue to try to relieve pressure that way," Grassley told reporters April 17.
In 2022, a new law exempted feminine hygiene products and diapers from the state sales tax.
Several grocery itemsalready are exemptfrom the state sales tax, including bread and flour products, eggs, fish, fruits and vegetables and other products.
House Minority Leader Jennifer Konfrst, D-Windsor Heights, told reporters April 10 the measures were "small potatoes compared to what Iowans need."
"Certainly any lowering costs can help, but this isn't going to really make up for the rising costs in healthcare, childcare and housing, and we've been proposing legislation to lower those costs for a long time," Konfrst said.
The toilet paper measure passed in an 82-11 vote.
On the House floor, Rep. Christian Hermanson, R-Mason City, said every little bit helps for Iowans managing tight budgets.
"Toilet paper is not a luxury," Hermanson said. "It's not a choice. It's a necessity."
Rep. Aime Wichtendahl, D-Hiawatha, supported the effort to put more money in Iowans' pockets.
"I think it's time that we flush away this sales tax," Wichtendahl said.
As the vitamins sales tax exemption passed the House in an 81-12 vote, Wichtendahl said it was healthy to cut sales taxes for Iowans "trying to live a healthier life."
The laundry soap and detergent sales tax exemption passed the House in an 84-5 vote April 24.
"This bill's about doing the right thing — cutting taxes on everyday essentials and helping Iowans keep more of their hard-earned money," Hermanson said.
Child care tax credit increase earns broad support
Under House File 1020, which passed unanimously with 93 votes, Iowa parents who make more than $90,000 a year could qualify for child tax credits.
It would remove the maximum income threshold and adjusts theIowa Child and Dependent Care Tax Creditto make it 50% refundable for Iowa taxpayers with a net income of $25,000 or above.
The proposal is projected to reduce revenues to the state general fund by $88.5 million through fiscal year 2030, a Legislative Services Agency analysis shows.
Rep. Lindsay James, D-Dubuque, said the bill was an important step forward and would help moms who want to work but face barriers because of Iowa's child care desert.
"Young families continue to struggle under the weight of child care costs," James said. "They're having to make impossible decisions with their finances because of this."
House File 1026, which the full House has not yet taken up, would raise the adoption tax credit from $5,000 of expenses to $20,000, which lawmakers say could encourage more adoption in the state. It advanced April 16 out of the House Ways and Means Committee.
The Legislative Services Agency estimates that will reduce revenues to the general fund by $19.3 million through fiscal year 2032.
Grassley and more than 20 other House Republicans sponsored both measures.
Radon mitigation tax credit looks to address a cause of cancer
House File 1027 would create a nonrefundable individual income and corporate income tax credit capped at $1,000 for the purchase of a radon mitigation system designed to reduce radon concentrations inside buildings.
It passed 92-1, with Rep. Mark Cisneros, R-Muscatine, casting the sole vote against the bill.
Radon is a naturally occurring radioactive gas produced by the decay of uranium found in many rocks, soil and water. It seeps into homes through cracks in foundations, floor drains and other openings.
It is a known cause of lung cancer. Breathing it in can damage the lining of the lungs, increasing the risk of developing cancer.
Iowa has the highest radon levels in the U.S., with more than 70% of Iowa homes testing above the Environmental Protection Agency's action level calling for remedial measures.
The Legislative Services Agency projects the proposal would reduce net individual income tax liability and state general fund revenue by $3 million annually beginning in fiscal year 2026. It also is projected to decrease the statewide local option income surtax for schools by $75,000 a year.
But every $1 the state invests in radon mitigation would help Iowans savings even more in avoided health care costs, said Rep. Hans Wilz, R-Ottumwa.
"This is a commonsense policy that drives right into the solution of addressing cancer rates here in the state of Iowa," Wilz said.
Marissa Payne covers the Iowa Statehouse and politics for the Register. Reach her by email atmjpayne@registermedia.com. Follow her on X, formerly known as Twitter, at @marissajpayne.
(This story has been updated to add new information.)
