Iowa Administrative Code › Agency 223 - Historical Division › Chapter 48 - Historic Preservation and Cultural and Entertainment District Tax Credits › Rule 223-48.35 - Compliance

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Annual
			 reports.
The eligible taxpayer shall, for the length of the agreement,
			 annually certify to the department compliance with the requirements of the
			 agreement. The certification shall be due each year on the anniversary of the
			 date upon which the agreement was entered into. Instructions and forms shall be
			 made available on the department's Web site.
(2)
Burden of proof.
The
			 eligible taxpayer shall have the burden of proof to demonstrate to the
			 department that all requirements of the agreement, Iowa Code chapter 404A, and
			 the applicable rules are satisfied. The taxpayer shall notify the department in
			 a timely manner of any changes in the qualification of the rehabilitation
			 project or in the eligibility of the taxpayer to claim the tax credit provided
			 under this chapter, or of any other change that may have a negative impact on
			 the eligible taxpayer's ability to successfully complete any requirement under
			 the agreement.
(3)
Events
			 of default, revocation, recapture.
If, after entering into the
			 agreement but before a tax credit certificate is issued, the eligible taxpayer
			 or the qualified rehabilitation project no longer meets the requirements of the
			 agreement, Iowa Code chapter 404A, and the applicable rules, the department may
			 find the taxpayer in default and may revoke the tax credit award.
a.
Voluntary abandonment.
An
			 applicant may choose to irrevocably decline the tax credit that is the subject
			 of the agreement at any time after the agreement is entered into. To
			 irrevocably decline the tax credit, the applicant shall send a letter to the
			 department stating the applicant's decision to irrevocably decline the tax
			 credit. The department shall notify the applicant by certified U.S. mail or
			 courier that the tax credit has been irrevocably declined. The tax credit shall
			 be reallocated to the extent permitted by Iowa Code section
			 404A.4.
			 If the applicant wishes to apply for a tax credit on the same qualified
			 rehabilitation project at a later date, the applicant must complete the
			 application process as though the project is a new project.
b.
Revocation and recapture for
			 prohibited activity; liability of certain transferees.
If an eligible
			 taxpayer obtains a tax credit certificate from the department by way of a
			 prohibited activity, the eligible taxpayer and any transferee shall be jointly
			 and severally liable to the state for the amount of the tax credits so issued,
			 interest and penalties allowed under Iowa Code chapter 422, and reasonable
			 attorney fees and litigation costs, except that the liability of the transferee
			 shall not exceed an amount equal to the amount of the tax credits acquired by
			 the transferee. The department of revenue, upon notification or discovery that
			 a tax credit certificate was issued to an eligible taxpayer by way of a
			 prohibited activity, shall revoke any outstanding tax credit and seek repayment
			 of the value of any tax credit already claimed, and the failure to make such a
			 repayment may be treated by the department of revenue in the same manner as a
			 failure to pay the tax shown due or required to be shown due with the filing of
			 a return or deposit form. A qualifying transferee is not subject to the
			 liability, revocation, and repayment imposed under this paragraph. For purposes
			 of this paragraph:
(1) "Prohibited activity"
			 means a breach or default under the agreement with the department, the
			 violation of any warranty provided by the eligible taxpayer to the department
			 or the department of revenue, the claiming of a tax credit issued under this
			 chapter for expenditures that are not qualified rehabilitation expenditures,
			 the violation of any requirements of Iowa Code chapter 404A or rules adopted
			 pursuant to Iowa Code chapter 404A, misrepresentation, fraud, or any other
			 unlawful act or omission.
(2)
			 "Qualifying transferee" means a transferee who acquires a tax credit
			 certificate issued under this chapter for value, in good faith, without actual
			 or constructive notice of a prohibited activity of the eligible taxpayer who
			 was originally issued the tax credit, and without actual or constructive notice
			 of any other claim to or defense against the tax credit, and which transferee
			 is not associated with the eligible taxpayer by being one or more of the
			 following:
1. An owner, member, shareholder,
			 or partner of the eligible taxpayer who directly or indirectly owns or
			 controls, in whole or in part, the eligible taxpayer.
2. A director, officer, or employee of the
			 eligible taxpayer.
3. A relative of
			 the eligible taxpayer or a person listed in paragraph "1" or "2" of this
			 subparagraph or, if the eligible taxpayer or an owner, member, shareholder, or
			 partner of the eligible taxpayer is a legal entity, the natural persons who
			 ultimately own such legal entity.
4. A person who is owned or controlled, in
			 whole or in part, by a person listed in paragraph "1" or "2" of this
			 subparagraph.
(3)
			 "Relative" means an individual related by consanguinity within the second
			 degree as determined by common law, a spouse, or an individual related to a
			 spouse within the second degree as so determined, and includes an individual in
			 an adoptive relationship within the second degree.
This rule is intended to implement Iowa Code section
				404A.3
				as amended by 2014 Iowa Acts, House File 2453.