Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.25 - Exclusion of Income From Sale, Rental or Furnishing of Tangible Personal Property or Services Directly Related to Production of Film, Television, or Video Projects

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Projects registered on or after January 1, 2007, but before July 1,
				2009.
For tax years beginning on or after January 1, 2007, a taxpayer
				that is an Iowa-based business may exclude, to the extent included in federal
				taxable income, income received from the sale, rental or furnishing of tangible
				personal property or services directly related to the production of film,
				television, or video projects that are registered with the film office of the
				Iowa department of economic development.
income which can be excluded on the Iowa return must meet the
				  criteria of a qualified expenditure for purposes of the film qualified
				  expenditure tax credit as set forth in rule
				  701-5234.
				  (15,422). An Iowa-based business is a business whose commercial domicile as
				  defined in Iowa Code section
				  42232(3).
				  is in Iowa.
However, if a taxpayer claims this income tax exclusion, the
				  same taxpayer cannot also claim the film qualified expenditure tax credit as
				  described in rule
				  701-5234.
				  (15,422). In addition, any taxpayer who claims this income tax exclusion cannot
				  have an equity interest in a business which received a film qualified
				  expenditure tax credit. Finally, any taxpayer who claims this income tax
				  exclusion cannot participate in the management of the business which received
				  the film qualified expenditure tax credit.
EXAMPLE: A production company which registers with the film
				  office for a project is a corporation which is domiciled in Iowa. If this same
				  corporation receives income that is a qualified expenditure for purposes of the
				  film qualified expenditure tax credit, the corporation cannot exclude this
				  income on the Iowa corporation income tax return because the corporation has
				  claimed the film qualified expenditure tax credit.
(2)
Projects registered on or after
				July 1, 2009.
For tax years beginning on or after July 1, 2009, a
				taxpayer that is an Iowa-based business may exclude no more than 25 percent of
				the income received from the sale, rental or furnishing of tangible personal
				property or services directly related to the production of film, television, or
				video projects that are registered with the film office of the Iowa department
				of economic development in the year in which the qualified expenditure
				occurred. A reduction of 25 percent of the income is allowed to be excluded for
				the three subsequent tax years.
EXAMPLE: An Iowa taxpayer received $10,000 in income in the
				  2010 tax year related to qualified film expenditures for a project registered
				  on February 1, 2010. The $10,000 was reported as income on taxpayer's 2010
				  federal tax return. Taxpayer may exclude $2,500 of income on the Iowa
				  corporation income tax return for each of the tax years 2010-2013.
This rule is intended to implement Iowa Code section 15.393
				  as amended by 2009 Iowa Acts, Senate File 480, section 5, and section
				  422.35.