Iowa Administrative Code › Agency 701 - Revenue Department › Title II - Property Tax › Chapter 110 - Property Tax Credits and Exemptions › Rule 701-110.7 - Assessment of Computers and Industrial Machinery and Equipment

Current through Register Vol. 47, No. 3, July 24, 2024
(1) Computers and
				industrial machinery and equipment are to be assessed at 30 percent of the
				property's net acquisition cost through the 1998 assessment year, 22 percent of
				the net acquisition cost in the 1999 assessment year, 14 percent of the net
				acquisition cost in the 2000 assessment year, and 6 percent of the net
				acquisition cost in the 2001 assessment year. The property will be exempt from
				tax beginning with the 2002 assessment year.
Computers and industrial machinery and equipment acquired
				  after December 31, 1993, and not previously assessed in Iowa, are exempt from
				  tax.
Computers and industrial machinery and equipment assessed
				  pursuant to Iowa Code section
				  427B.17 are not eligible to
				  receive the partial property tax exemption under Iowa Code sections
				  427B.1 to
				  427B.7.
(2) Computers assessed under Iowa Code
				section 427A.1(1)
"j"
are limited to the percent of the computer's net
				acquisition cost as provided in Iowa Code section
				427B.17 regardless of the
				classification of the real estate in which the computer is located.
(3) For computers and industrial machinery
				and equipment, the net acquisition cost shall be the acquired cost of the
				property.
(4) Computation of
				taxpayer's value. Assume a machine is acquired at a net acquisition cost of
				$10,000. Assume also that the actual depreciated value of the machine is
				$9,000. The value on which taxes would be levied would be limited to $3,000
				($10,000 Ã— .30). This percent will change over the course of the phaseout
				of the tax.
(5) If all or a portion
				of the value of property assessed pursuant to Iowa Code section
				427B.17 is eligible to receive
				an exemption from taxation, the amount of value to be exempt shall be
				subtracted from the net acquisition cost of the property before the taxpayer's
				value prescribed in Iowa Code section
				427B.17 is determined. For
				example, if property has a net acquisition cost of $30,000 and is eligible to
				receive a pollution exemption for $15,000 of value, the taxable net acquisition
				cost would be $15,000 and the taxpayer's value would be $4,500 ($15,000 Ã—
				30). This percent will change over the course of the phaseout of the
				tax.
(6) In the event the actual
				depreciated fair market value of property assessed pursuant to Iowa Code
				section 427B.17 is less than the
				valuation determined as a percent of the net acquisition cost of the property
				as provided in Iowa Code section
				427B.17, the taxpayer's assessed
				value would be equal to the actual depreciated fair market value of the
				property.
(7) Property ineligible
				for phaseout and exemption. Computers and industrial machinery and equipment,
				the taxes on which are used to fund a new jobs training project approved on or
				before June 30, 1995, do not qualify for the exemption provided in Iowa Code
				section 427B.17(2)  nor
				the phaseout contained in Iowa Code section
				427B.17(3) 
				until the assessment year following the calendar year in which the funding
				obligations have been retired, refinanced, or refunded. At that time, the
				property will be subject to phaseout if acquired prior to January 1, 1994, or
				exempt from tax if acquired after December 31, 1993, and not previously
				assessed in Iowa. See subrule 80.7(1). The community college must notify the
				assessor by February 15 of each assessment year if the community college will
				be using a taxpayer's machinery and equipment taxes to finance a project that
				year. In any year in which the community college does rely on a taxpayer's
				machinery and equipment taxes for funding, the phaseout and exemption will not
				apply to that taxpayer that year.
(8) County replacement.
a. For fiscal years beginning July 1, 1996,
				and ending June 30, 2001, the county replacement amount shall be equal to the
				difference between the assessed value of computers and industrial machinery and
				equipment as of January 1 of the previous calendar year and the assessed value
				of such property as of January 1, 1994, multiplied by the tax levy rate for
				that fiscal year. If there is an increase in valuation (the January 1, 1994,
				value is less), there will be no replacement for that fiscal year.
b. For fiscal years beginning July 1, 2001,
				and ending June 30, 2004, the county replacement amount shall be equal to the
				difference between the assessed value of computers and industrial machinery and
				equipment as of January 1 of the previous calendar year and the assessed value
				of such property as of January 1, 1994, less, if any, the increase in the
				assessed value of commercial and industrial property as of January 1 of the
				previous calendar year and the assessed value of such property as of January 1,
				1994, multiplied by the tax levy rate for that fiscal year. If the calculation
				results in a negative amount, there will be no replacement for that fiscal
				year.
c. The replacement amounts
				shall be determined for each taxing district and a replacement claim
				summarizing the total amounts for the county prepared and submitted by the
				county auditor to the department of revenue by September 1 of each year. The
				department shall pay the replacement amount to the county treasurer in
				September and March of each year.
d. No replacement is allowable if a community
				college elects not to fund a new jobs training project with a tax on computers
				and industrial machinery and equipment.
This rule is intended to implement Iowa Code chapter 427B as
				  amended by 2003 Iowa Acts, Senate File 453.