The Quad-City Times analyzed Scott County property data for taxes paid in 2016/2017, measuring how much the taxes are for parcels under the new system of determining commercial and industrial property taxes and compared those figures to what would have been paid under the old system, before Iowa passed a property tax cut in 2013.
The analysis found that the highest valued properties in Scott County are garnering the bulk of the savings from Iowa’s 2013 change. However, it’s the smaller parcels that are seeing the largest drop in the share of taxes they would have paid under the former system.
For the top 20 parcels, in terms of assessed value, the savings amounted to $1.5 million, or nearly 10 percent of the nearly $15.7 million in reductions to commercial and industrial properties in the county.
County-wide, there are roughly 5,600 parcels, according to the assessor offices for Scott County and the City of Davenport.
(Not all property owners may have seen tax savings from 2013/2014, the last tax year for the former system. That’s because local governments could have changed assessments and rates since then, which would affect how much actual taxes were paid. In 2016, for example, the City of Davenport re-evaluated commercial and industrial properties, which will be reflected on taxes paid this fall and next spring. That will show up on 2017/18 tax bills.)
The larger dollar savings for higher valued properties are mostly driven by the fact that part of the law sought to help commercial and industrial properties by only taxing 90 percent of their overall value.
In pure dollar terms, the average savings for those top 20 properties was $74,675.
For years, business owners have said that they were picking up a disproportionate share of the property tax load, because a state “rollback” lowered the proportion of values for agriculture and residential properties subject to taxation. Only about half a single family home's actual value is subject to property taxes in Iowa.
The largest property in Scott County, at $52.2 million assessed value, is NorthPark Mall, which is owned by California-based Macerich. Taxing only 90 percent of its value would mean a nearly $210,000 savings for 2016/17 compared with what it would have paid under the old system, according to the Times analysis.
The mall's ownership did not respond to a request for comment.
Isle of Capri Casino, at $50 million, is 2nd largest in the county.
The casino estimates the company has had its taxes reduced about $200,000 per year as a result of the change in the law. However, property taxes are only a part of what the company pays, said Jill Alexander, a spokesperson. She noted the casino also pays 22 percent of its gross gaming revenues to state, city and county governments.
"As a result, the overall taxes paid by Isle to the city, county and state exceed those paid by other businesses," Alexander said in an email.
John Riches, an Arconic spokesman, another of the largest property owners in the county, said a number of factors affect decision making at the company, and that taxes are but one of the factors.
Arconic expanded its Riverdale operation with a $300 million investment, completed in 2014. But that was announced in 2011, before the Legislature changed the commercial and industrial property taxes. This week it completed a $150 million investment in a plate stretcher. Iowa does not levy property taxes on investments in machinery and equipment.
"Anything that makes Iowa more attractive for businesses to locate is a good thing and helps increase the number of jobs in the community," Riches said.
As for smaller commercial and industrial properties, the savings are smaller.
For the 20 commercial and industrial properties whose assessed values were closest to the county median -- roughly $146,000 -- their savings resulting from the new system averaged $1,467 for the 2016/17 tax year.
That number is smaller than for larger properties. But the percentage reduction in their taxes amounted to about 26 percent over what they would have paid under the old system, more than twice the average 10.5 percent reduction for the top 20 properties.
This difference results in part from the reduction in the amount of value subject to taxes, but mostly it's driven by creation of the Business Property Tax Credit, which was another important part of the 2013 law.
The business credit is available to commercial and industrial parcels. And for those mid-sized properties, it can amount to a sizeable chunk of the overall tax load. For the 20 medium-sized properties, the credit made up roughly two-thirds of their savings.
Senate Democrats pushed the tax credit as a way to help Main Street businesses.
However, the size of the reduction, at less than $1,500, is relatively small and some analysts are skeptical that it's enough to lead a business to expand its operations.
"The combined benefits affect small operations in a way that most likely boosts their bottom lines and enhances their abilities to remain going concerns. The values are not enough to induce significant levels of new investment, but they are nonetheless meaningful," said Dave Swenson, an economist at Iowa State University.