A legislative committee passed a bill late Thursday that would replace local-option sales taxes for improving school buildings and property with a permanent, statewide penny sales tax.
Lawmakers made some changes to the original proposal to ensure that taxpayers would not see their vehicle sales or use taxes rise. They also approved an automatic date for repealing the statewide tax.
House File 2066 would set the state's sales tax at 6 percent and dedicate 1 percent, now raised in local-option taxes, to schools on a per-pupil basis statewide.
Local-option sales taxes already are in effect in each of Iowa's counties. The measure would require the money to be redistributed evenly, instead of based on sales in the county where the tax is collected, as current law requires.
The bill is aimed at eliminating disparities between school districts. It would also eliminate the regularly scheduled public referendums to reauthorize the taxes and thereby not interrupt the revenue, supporters say.
Opponents object to what they say is a measure that makes it more difficult for the public to discontinue the tax. Some have said the bill amounts to a large tax increase.
But the bill had bipartisan support, and lawmakers approved it 18-6 Thursday evening in the House Ways and Means Committee.
Provisions to the bill aimed at winning Republican support included a section that will provide property tax relief.
Other changes included exempting vehicle and equipment sales from the higher tax. Local-option taxes are not currently applied to vehicle and equipment sales. Without the amendment added Thursday, sales tax on such items would have increased from 5 percent to 6 percent.
The Legislature passed legislation in 1998 giving voters the right to adopt 1-cent local-option sales taxes in their counties to pay for school infrastructure. Since then, all 99 counties have enacted them.