A Message From the President
By Chapter President Jeremy Feldmann, J&K Contracting
We are well into 2016 and it appears the dreadful winter has moved out of Iowa early this year. As a result, work has picked up for most of us sooner than anticipated. The rumor is there is more work than there is contractors and man power… definitely a good problem to have in our business.
As I reflect on this past year, I am reminded how proud I am to be part of the NUCA organization. The organization put on a very successful Annual Banquet at the Isle Casino in Waterloo where, for the first time, we offered safety certification programs and educational breakout sessions a day and a half leading up to the banquet.
Thank you to Andy Stoulil and Jamie Crubaugh for all your hard work in coordinating the safety program. Callie did an excellent job yet again in organizing the event without any hiccups. We raised $865 from our 50/50 raffle, an all-time record, and over $2,500 from the silent auction. Thank you to all of the member companies who sponsored and attended the event, making it one of the most successful events to date. We plan to continue the safety program in conjunction with the Annual Banquet next year at Prairie Meadows Casino & Hotel in Altoona on February 16-17, 2017.
I believe it’s important to take some time to recognize the dangers we face in our industry. Safety should be our #1 priority.Sadly, we lost two men in Iowa to collapsed ditches. We need to take time out of each day to recognize the risks we face and do everything we can to prevent injuries and casualties. There are several training & educational resources available on the nuca.com website. I encourage everyone to visit the website and do your part to ensure all of our hard working men and women make it home to their families every night. Finally, I want to thank Callie for all her hard work and dedication to NUCA of Iowa over the last four years. Callie has decided to pursue a new career opportunity with Diamond Oil Co. Callie will be greatly missed but we wish her the best of luck.
Section 179 Coupling In Jeopardy
Written by Matthew Patane, The Des Moines Register
With just about two months remaining until Iowans need to file their state taxes, an ongoing debate among lawmakers about fixing discrepancies between the state and federal tax code has left some of the state’s business owners, accountants and others scrambling. “Like every business, we’re all waiting for the state to actually make a decision. We can’t even do our taxes,” said Dustin Lee whose Cedar Rapids company, Midwest Curb Grinding, does road construction.
At issue is whether the state will conform its tax code with changes at the federal level.
The changes include extending a provision — Section 179 of the Internal Revenue Code — that would allow farmers and business owners to expense up to $500,000 of purchased assets, such as equipment, all at once, instead of over several years.
The last few years, Iowa has matched, or “coupled,” its tax code with much of federal tax law. The state has coupled with Section 179’s $500,000 limit every year since 2010, according to the Iowa Department of Revenue.
But so far this year, Iowa hasn’t signed off on tax coupling, which would cost the state about $97.6 million in the current fiscal year, according to the nonpartisan Legislative Services Agency.
The coupling debate has caught Lee, other business owners and accountants off guard. “This year, they really threw us for a loop,” Peg Trevino, a certified public accountant in Fort Dodge, said.
The Department of Revenue has already pushed back the tax filing deadline for farmers to April 30 from the original March 1 deadline.
Iowa’s House has passed a bill that would couple state rules with federal ones, but it is hung up in the Senate, where Democrats worry about eroding revenue they say is desperately needed to fund education and other programs. The House legislation would conform Iowa’s tax laws with most of what U.S. legislators approved in December. Even so, the House bill only deals with 2015 and wouldn’t set in stone any rules for 2016 or beyond.
The debate pits two conflicting priorities against each other. On one hand is the legislature’s desire to support small business owners and farmers who could use any extra money from the tax break to buy more equipment, make renovations or hire more employees. On the other hand is the concern that Iowa needs to tighten its belt financially and focus on bolstering other priorities such as school funding, rather than giving away tax revenue.
“Until the students of Iowa are provided a high quality of education, we don’t think the state should be enacting tax cuts mainly for businesses,” said Brad Hudson, a lobbyist for the Iowa State Education Association that is registered as opposing the House legislation.
While legislators are debating the merits of how coupling would affect the state’s budget, Trevino and others see the issue as causing another problem: confusion. “When taxes are a major expense of most businesses, how are they even supposed to know how to price their products or anything like that, when they don’t even know what their tax burden is going to be?” Trevino said. Not coupling, Trevino said, would mean she’d have to keep two sets of books for her clients: one for federal tax liability and another for state liability. That could increase the time it takes her to work with clients, increasing costs.
Trevino and others also said the delay affects tax-preparation software-makers who may have to reprogram their software once Iowa reaches a decision.
How coupling works
The federal government approved extending some of the tax code changes in December. Since Iowa had followed suit before by coupling its tax code to match, Trevino and others said they expected Iowa would do the same this time.
The changes include a number of extensions or alterations for federal tax code. For example, the government made permanent a $250 deduction that teachers could take for buying supplies for their classrooms. Among all of those provisions, though, tax professionals pointed to the Section 179 extension as the most significant. The measure had allowed business owners to deduct up to $25,000 for qualifying expenses, but after the economic downturn that amount was raised to as much as $500,000. There is an upper limit of $2 million, meaning if a business owner spends above that threshold, the amount he or she may deduct tapers off.
“It’s huge for farmers who have to buy this very expensive equipment. If they had income, they were really banking on cancelling out that income with this expense,” said Kristine Tidgren, staff attorney with Iowa State University’s Center for Agricultural Law and Taxation. Still, the effect of coupling with the federal Section 179 levels is limited to a few.
Only about 25,000 Iowa taxpayers in 2014 made a Section 179 claim of more than $25,000, according to numbers from the Iowa Department of Revenue. About 12,000 were farmers.
By comparison, the state Department of Revenue processed 1.58 million individual income tax returns for 2014.Without coupling, Iowa farmers and business owners could deduct up to $500,000 on their federal tax returns, but only up to $25,000 on their state returns.
Left on the hook
Lee and other business owners said they used the measure last year to buy vehicles, upgrade equipment or remodel stores. They spent the money to do so, they said, in part because they figured they were in line to deduct much of the cost of any of those purchases. Joe Gibbons, who owns three Culver’s restaurants in the Des Moines area, said he renovated one of the stores at the end of last year, expecting he’d be able to write off some of the cost.”We’d been planning on it, but what really pushed us over the hump to do it that quick at the end of the season was we thought we’d have this deduction coming,” Gibbons said. Dennis Pyle, an accountant in Ames, said he’d at least like to see Iowa lawmakers come halfway. If they don’t want to approve up to the $500,000 mark, they could approve something that is more than the $25,000 limit currently in Iowa code. “Because for $25,000 you can’t buy a decent vehicle to drive for a business. … That’s like me going to a store to buy a half-gallon of milk with 50 cents in my pocket. It just doesn’t make any sense,” Pyle said.
Lee said his company bought upgraded equipment about halfway through last year. Once the federal government approved the 179 extension, though, they bought more, expecting they’d be able to expense the cost on their tax returns.”It’s a budgeting issue. We’re complying with the politician’s tax laws. We comply and then they throw stuff in like this mid-stream, it throws people into a tail spin,” Lee said.
NUCA of Iowa is now accepting applications for the Steve Corell Education Scholarship
The Steve Corell Education Scholarship was established in 2013 to recognize an outstanding member or relative of a member who has achieved positive academic records and plans to further his/her education with a four year college degree. The scholarship is named after the late Steve Corell…an outstanding, long-time NUCA member.
Applicants are selected by a panel of judges who make up the Scholarship Committee. The committee considers standardized test scores (SAT, ACT, etc.), community service, and extra-curricular activities, career goals, work experience, essay, and other information required in the application.
Applicants must be a son, daughter, grandson, or granddaughter of a full-time employee of a NUCA of Iowa member or of a NUCA of Iowa staff member, or be a part time employee of a NUCA of Iowa member with a minimum of 300 hours worked in the last year; must be a high school graduate or will graduate the year applying, or a college student; must have a GPA greater than or equal to a 2.5 on a 4.0 scale; and must be pursuing undergraduate work only towards a four-year degree. Applications must be post marked no later than April 26, 2016. For a complete list of requirements and to download the application, visit nucaiowa.com.
NUCA National is also accepting applications for the National Education Scholarship
Any high school senior whose parent or guardian is employed by a NUCA member company may apply. NUCA members must be in good standing. Part time student employees may also apply. Scholarship flyers for printing, posting, and distributing to your employees are available at nuca.com/scholarships. To begin the online application, visit nuca.com. Application deadline is May 27, 2016.
Annual Banquet Revamped
This year’s annual banquet offered members the opportunity to complete their required safety training courses, network with industry professionals, compete for the corntoss championship title, and try their luck on the slot machines, all in two days at the Isle Casino in Waterloo.
A big ‘thanks’ goes out to United Rentals Trench Safety and Greg Strudwick & Associates for partnering with us to offer the Confined Space, Competent Person, and OSHA 10 Hour courses… we couldn’t have done it without you!
We will be offering safety training in conjunction with next year’s annual banquet again so be sure to mark your calendar and plan to join us at Prairie Meadows & Casino in Altoona February 16 & 17. Details to follow.