Republicans on an Iowa House subcommittee have approved a bill requiring Deere & Co. to return half of its 2024 state research tax credit due to large-scale layoffs.
HSB 306 targets companies that laid off over 1,500 workers in 2024, mandating repayment of up to 50 percent of funds received through Iowa’s Research Activities Tax Credit. Deere laid off approximately 1,700 workers at its Iowa plants, prompting lawmakers to push for financial accountability.
Radio Iowa reported that Republican Representative Derek Wulf of Hudson linked the measure to President Donald Trump’s economic policies, stating, “In my opinion, this bill is the definition of ‘America First’ and more importantly ‘Iowa First.’ ” Trump has previously warned of tariffs on John Deere products if the company shifts more production to Mexico.
During a subcommittee hearing, Deere & Co. lobbyist Stacey Pellet defended the company’s research investments, emphasizing that the tax credit is earned after spending on R&D.
“Deere invests roughly $2.5 million a day in research and development, and half of that is done in Iowa,” Pellet said. She argued that penalizing businesses during economic downturns could deter future investment in the state.
The bill’s provisions extend beyond Deere, requiring any company that received the tax credit and conducted layoffs in 2024 to repay at least 6.25 percent, with a maximum of 50 percent for those cutting 1,500 or more jobs. The requirement would also apply in future years.
According to WQAD News 8, opposition to the bill comes from the Iowa Taxpayers Association and the Iowa Association of Business and Industry, with critics arguing that revoking earned tax credits during what they categorize as “economic hardships” sends the wrong message to businesses and investors.
The proposed legislation would apply retroactively, taking effect on Jan. 1, 2024.
In 2024, Deere laid off approximately 1,600 workers, including hundreds from its Waterloo and Davenport plants.
More recently, the company cut 75 jobs at its Ottumwa Works and plans to lay off 119 employees at its Ankeny plant between March and April.
Deere has attributed the layoffs to declining customer orders, reduced revenue, and uncertain market conditions.
Although Deere claims that 75 percent of all U.S. sales are from U.S.-based facilities, former President Donald Trump warned Deere of a 200 percent tariff if the company shifted production to Mexico during his campaign.
