HF 2746 (LSB 5222HV (1) 91)

HOUSE FILE 2746

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO HF 2028)

A BILL FOR

An Act relating to establishing a reciprocal tax agreement study by the department of revenue, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  RECIPROCAL TAX AGREEMENT WITH THE STATE OF WISCONSIN —— STUDY.
   1.  Due to numerous residents of this state employed in the state of Wisconsin and conversely numerous residents of the state of Wisconsin employed in this state, and for the mutual benefit of this state and the state of Wisconsin, the department of revenue is directed to study the feasibility of entering into a reciprocal tax agreement with the tax administration agencies of the state of Wisconsin that adheres to the conditions established in section 422.8, subsection 4.
   2.  By December 1, 2026, the department of revenue shall report to the general assembly the findings of the study, including the reasons the reciprocal tax agreement is feasible or not feasible. If a reciprocal tax agreement is determined to be feasible and mutually beneficial by this state and the state of Wisconsin, the department of revenue shall submit the proposed reciprocal tax agreement in bill form to the legislative services agency prior to the 2027 regular session of the Ninety-second General Assembly for authorization and approval as required by section 422.8, subsection 4.
    Sec. 2.  EFFECTIVE DATE.  This Act, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to establishing a reciprocal tax agreement study by the department of revenue.
   For the mutual benefit of both this state and the state of Wisconsin, the bill directs the department of revenue (DOR) to study the feasibility of entering into a reciprocal tax agreement with the tax administration agencies of the state of Wisconsin that adheres to the conditions established in Code section 422.8(4). Generally, under such an agreement any wages or salary made by an Iowa resident working in Wisconsin is taxable only to Iowa and not to Wisconsin, and any wages or salary made by a Wisconsin resident working in Iowa is taxable only to Wisconsin and not to Iowa.
   By December 1, 2026, DOR shall report to the general assembly the findings of the study, including the reasons the reciprocal tax agreement is feasible or not feasible. If a reciprocal tax agreement is determined to be feasible and mutually beneficial by this state and the state of Wisconsin, DOR shall submit the proposed reciprocal tax agreement in bill form to the legislative services agency prior to the 2027 regular session of the 92nd General Assembly for authorization and approval as required by Code section 422.8(4).
   Currently, the state of Iowa has one existing reciprocal tax agreement with the state of Illinois.
   The bill takes effect upon enactment.