Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.3 - Interest and Dividends From Foreign Securities and Securities of State and Other Political Subdivisions

Current through Register Vol. 47, No. 3, July 24, 2024
Interest and dividends from foreign securities and from
				  securities of state and other political subdivisions are to be included in Iowa
				  net income. Certain types of interest and dividends, because of specific
				  exemption, are not includable in income for federal tax purposes. To the extent
				  such income has been excluded for federal income tax purposes, unless the item
				  of income is specifically exempted from state taxation by the laws or
				  constitution of Iowa or of the United States, it must be added to Iowa taxable
				  income.
The following is a noninclusive listing of bonds issued by
				  the state of Iowa and its political subdivisions, interest on which is exempt
				  from both federal and state income taxes.
1. Board of regents: Bonds issued under Iowa
				Code sections 262.41,
				262.51,
				262.60,
				262A.8, and
				263A.6.
2. Urban renewal: Bonds issued under Iowa
				Code section 403.9(2).
3. Municipal housing law - low-income
				housing: Bonds issued under Iowa Code section 403A.12.
4. Subdistricts of soil conservation
				districts, revenue bonds: Bonds issued under Iowa Code section
				161A.22.
5. Aviation authorities,
				revenue bonds: Bonds issued under Iowa Code section
				330A.16.
6. Rural water districts: Bonds and notes
				issued under Iowa Code section
				357A.15.
7. County health center: Bonds issued under
				Iowa Code section 331.441(2)
"c"
(7).
8. Iowa
				finance authority, water pollution control works and drinking water facilities
				financing: Bonds issued under Iowa Code section
				16.131(5).
9. Iowa finance authority, beginning farmer
				loan program: Bonds issued under Iowa Code section
				16.64.
10. Iowa finance authority, Iowa
				comprehensive petroleum underground storage tank fund: Bonds issued under Iowa
				Code section 455G.6(14).
11. Iowa finance authority, 911 program notes
				and bonds: Bonds issued under Iowa Code section
				34A.20(6).
12. Quad Cities interstate metropolitan
				authority bonds: Bonds issued under Iowa Code section
				28A.24.
13. Prison infrastructure revenue bonds:
				Bonds issued under Iowa Code sections
				12.80(3)  and
				16.177(8).
14. Community college residence halls and
				dormitories bonds: Bonds issued under Iowa Code section
				260C.61.
15. Community college bond program bonds:
				Bonds issued under Iowa Code section
				260C.71(6).
16. Interstate bridges bonds: Bonds issued
				under Iowa Code section
				313A.36.
17. Iowa higher education loan authority:
				Obligations issued by the authority pursuant to Iowa Code section
				261A.27.
18. Vision Iowa program:
				Bonds issued pursuant to Iowa Code section
				12.71(8).
19. School infrastructure program bonds:
				Bonds issued under Iowa Code section
				12.81(8).
20. Iowa utilities board and Iowa consumer
				advocate building project bonds: Bonds issued under Iowa Code section
				12.91(9).
21. Iowa jobs program
				revenue bonds: Bonds issued under Iowa Code section
				12.87(8).
Interest from repurchase agreements involving obligations of
				  the type discussed in this rule is subject to Iowa income tax.
Nebraska
				  Department of Revenue v. John Loewenstein,
513 US
				  123 (1994).
Everett v. State Dept. of
				  Revenue and Finance,
470 N.W.2d 13 (Iowa 1991).
For the treatment of interest or dividends from regulated
				  investment companies (mutual funds) that invest in obligations of the type
				  discussed in this rule, see rule
				  701-40.52 (422).
Gains and losses from the sale or other disposition of bonds
				  issued by the state of Iowa or its political subdivisions, as distinguished
				  from interest income, shall be taxable for state income tax purposes.
This rule is intended to implement Iowa Code section
				  422.7.