Plan to Revitalize Rural Business

Almost 90% of Iowa’s sales tax revenues come from Iowa’s largest cities. Most rural downtown areas have boarded up buildings that were once thriving businesses. Iowa’s largest retailers are rarely owned by Iowans. Small businesses, that would normally locate in these areas, are unable to compete with the large national corporations. We don't put large retailers at a disadvantage, we encourage small businesses to locate in Main Street, Iowa by removing some red-tape and bureaucracy.

Exempt small businesses in small towns from collecting state sales tax. The state doesn't lose revenue, because most sales taxes are collected in cities – and much of that wealth is lost to other states. The increased income tax the state would collect from the owners of these exempted businesses would far outweigh the losses in sales tax revenue. Small businesses would locate in small towns in hopes of drawing local customers which would increase property tax collection as well.

Businesses should qualify for the exemption. They would have to be located in towns under 10,000, and they could only qualify for the sales tax exemption if they were sole proprietorships. The proposal does not extend to the sales of alcohol or tobacco. Also Local Option Sales Taxes, having been enacted by popular vote for local projects, would continue to be collected. Iowa's Governors declare a sales tax holiday during a weekend in August – this would be a permanent sales tax holiday for small businesses in rural towns.

Not only would this remove bureaucratic regulation from small businesses, it eliminates a tax. Replacing empty boarded-up buildings with thriving businesses would speak well of Iowa. We ask businesses and people to relocate to Iowa, and many visit our small towns to take advantage of the lower property taxes, and an intelligent and trained workforce. But they are not seeing thriving small town economies. The exemption from state sales taxes would help put a spit-shine back on rural Iowa.

The plan is 'environmentally friendly' because people who live in small towns would shop locally rather than driving long distances just to pick up a few items – saving gasoline and reducing our dependency on foreign oil.