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Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.1 - Computation of Net Income for Corporations

Current through Register Vol. 47, No. 3, July 24, 2024
Net income for state purposes shall mean federal taxable
				  income, before deduction for net operating losses, as properly computed under
				  the Internal Revenue Code, and shall include the adjustments in
				  701-532.
				  (422) to
				  701-5313.
				  (422) and
				  701-5317.
				  (422) to
				  701-5326.
				  (422). The remaining provisions of this rule and
				  701-5314.
				  (422) to
				  701-5316.
				  (422) shall also be applicable in determining net income.
In the case of a corporation which is a member of an
				  affiliated group of corporations filing a consolidated income tax return for
				  the taxable year for federal income tax purposes, but files a separate return
				  for state purposes, taxable income as properly computed for federal purposes is
				  determined as if the corporation had filed a separate return for federal income
				  tax purposes for the taxable year and each preceding taxable year for which it
				  was a member of an affiliated group. For purposes of this paragraph, the
				  taxpayer's separate taxable income shall be determined as if the election
				  provided by Section 243(b)(2) of the Internal Revenue Code had been in effect
				  for all those years.
When a federal short period return is filed and the federal
				  taxable income is required to be adjusted to an annual basis, the Iowa taxable
				  income shall also be adjusted to an annual basis. The tax liability for a short
				  period is computed by multiplying the taxable income for the short period by 12
				  and dividing the result by the number of months in the short period. The tax is
				  determined on the resulting total as if it were the taxable income, and the tax
				  computed is divided by 12 and multiplied by the number of months in the short
				  period. This adjustment shall apply only to income attributable to business
				  carried on within the state of Iowa.
This rule is intended to implement Iowa Code section
				  42235..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.2 - Net Operating Loss Carrybacks and Carryovers

Current through Register Vol. 47, No. 3, July 24, 2024
In years beginning after December 31,1954, net operating
				  losses shall be allowed or allowable for Iowa corporation income tax purposes
				  to the same extent they are allowed or allowable for federal corporation income
				  tax purposes for the same period, provided the following adjustments are
				  made:
(1)
Additions to
				income.
a. Refunds of federal income
				taxes due to net operating loss and credit carrybacks shall be reflected in the
				following manner:
(1)Accrual basis taxpayers
				shall accrue refunds of federal income taxes to the year in which the net
				operating loss or excess credit occurs. The federal refund shall still accrue
				for tax periods beginning on or after January 1, 2009, even though the Iowa net
				operating loss carryback is not allowed.
(2)Cash basis taxpayers shall reflect refunds
				of federal income taxes in the return for the year in which the refunds are
				received. The federal refund due to any net operating loss carryback for
				federal income tax purposes for tax years beginning on or after January 1,
				2009, must still be reflected even though the Iowa net operating loss carryback
				is not allowed.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.3 - Capital Loss Carryback

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
				Capital losses shall be allowed or allowable for Iowa corporation income tax
				purposes to the same extent they are allowed or allowable for federal
				corporation income tax purposes. Capital loss carrybacks shall be treated as an
				adjustment to federal taxable income to arrive at net allocable and
				apportionable income.
a. For accrual-basis
				taxpayers the federal income tax refund shall not be accrued to the loss year
				but rather treated as a reduction in federal income tax paid in the carryback
				year.
b. Cash-basis taxpayers shall
				include the federal income tax refund in Iowa taxable income in the year
				received.
c. Where the taxpayer
				files a separate Iowa corporation income tax return but files as part of a
				federal consolidated income tax return, the portion of the federal refund due
				to a capital loss carryback attributable to the taxpayer shall be calculated by
				computing the federal tax deduction in the carryback year as follows:
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Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.4 - Net Operating and Capital Loss Carrybacks and Carryovers

Current through Register Vol. 47, No. 3, July 24, 2024
If the taxpayer, for tax periods beginning prior to January
				  1, 2009, has both a net operating loss and a capital loss carryback to a prior
				  tax year, the capital loss shall be carried back first and then the new
				  operating loss offset against any remaining income.
This rule is intended to implement Iowa Code section
				  42235.
				  as amended by 2009 Iowa Acts, Senate File 483.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.5 - Interest and Dividends From Federal Securities

Current through Register Vol. 47, No. 3, July 24, 2024
See rule
				  701-402.
				  (422) for a discussion of the exempt status of interest and dividends from
				  federal securities. This rule is intended to implement Iowa Code section
				  42235..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.6 - Interest and Dividends From Foreign Securities, and Securities of State and Their Political Subdivisions

Current through Register Vol. 47, No. 3, July 24, 2024
Interest and dividends from foreign securities and from
				  securities of state and their political subdivisions are to be included in Iowa
				  taxable 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. See rule
				  701-403.
				  (422) for a listing of obligations of the state of Iowa and its political
				  subdivisions, the interest from which is exempt from Iowa corporation income
				  tax. For the tax treatment of interest or dividends from regulated investment
				  companies (mutual funds) that invest in obligations of the type discussed in
				  rule
				  701-403.
				  (422), see rule
				  701-4052.
				  (422).
For tax years beginning on or after January 1, 1987, add
				  dividends received from regulated investment companies exempt from federal tax
				  under Section 852(b)(5) of the Internal Revenue Code and subtract the loss on
				  the sale or exchange of a share of a regulated investment company held for six
				  months or less to the extent the loss was disallowed under Section 852(b)(4)(B)
				  of the Internal Revenue Code.
For tax years beginning on or after January 1, 2001, add, to
				  the extent not already included, income from the sale of obligations of the
				  state of Iowa and its political subdivisions. Gains or losses from the sale or
				  other disposition of bonds issued by the state of Iowa or its political
				  subdivisions shall be included in Iowa taxable income unless the law
				  authorizing these obligations specifically exempts the income from the sale or
				  other disposition from Iowa corporation income tax.
This rule is intended to implement Iowa Code section
				  42235.
				  as amended by 2001 Iowa Acts, House File 715.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.7 - Safe Harbor Leases

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years ending after January 1, 1981, deductions in
				  determining federal taxable income for sale-leaseback agreements taken as a
				  result of the application of Section 168(f)(8) of the Internal Revenue Code
				  shall be added in determining Iowa taxable income to the extent such deductions
				  cannot be taken under provisions of Sections 162, 163 and 167 of the Internal
				  Revenue Code. The lessor shall add depreciation and interest expense, and the
				  lessee shall add rental expense. When the deduction for depreciation is not
				  allowed under a previous provision of this rule, the lessee shall be allowed a
				  deduction for depreciation on any property involved in a sale-leaseback
				  agreement. This depreciation shall be computed in accordance with Section
				  168(a) of the Internal Revenue Code. income received as a result of a
				  sale-leaseback agreement shall be deducted in determining Iowa taxable income.
				  The lessee shall deduct interest income and the lessor shall deduct rent
				  income. Each lessor and lessee corporation shall include a copy of federal Form
				  6793 in its Iowa corporation income tax return for the year in which a safe
				  harbor lease is entered into.
This rule is intended to implement Iowa Code section
				  42235..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.8 - Additions to Federal Taxable Income

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Disallowance of private club
				expenses.
Rescinded IAB 11/24/04, effective 12/29/04.
(2)
Percentage depletion.
For tax years beginning on or after January 1, 1986, add the amount that
				percentage depletion of an oil, gas, or geothermal well computed under Section
				613 of the Internal Revenue Code is in excess of cost depletion computed under
				Section 611 of the Internal Revenue Code.
(3)
Charitable contributions relating
				to the charitable conservation contribution tax credit.
For tax years
				beginning on or after January 1, 2008, a taxpayer who claims a charitable
				conservation contribution tax credit in accordance with rule
				701-5237.
				(422) cannot claim a deduction for charitable contributions under Section 170
				of the Internal Revenue Code for the amount of the contribution for which the
				tax credit is claimed for Iowa tax purposes.
(4)
Charitable contributions relating
				to school tuition organizations.
For tax years beginning on or after
				July 1, 2009, a taxpayer who claims a school tuition organization tax credit in
				accordance with rule
				701-5238.
				(422) cannot claim a deduction for charitable contributions under Section 170
				of the Internal Revenue Code for the amount of the contribution to the school
				tuition organization for which the tax credit is claimed for Iowa tax
				purposes.
(5)
Charitable
				contributions relating to the endow Iowa tax credit.
For tax years
				beginning on or after January 1, 2010, a taxpayer who claims an endow Iowa tax
				credit in accordance with rule
				701-5223.
				(15E,422) cannot claim a deduction for charitable contributions under Section
				170 of the Internal Revenue Code for the amount of the contribution for which
				the tax credit is claimed for Iowa tax purposes.
(6)
Charitable contributions related
				to the from farm to food donation tax credit.
For tax years beginning
				on or after January 1, 2014, a taxpayer who claims a from farm to food donation
				tax credit in accordance with rule
				701-5245.
				(422,85GA,SF452) cannot claim a deduction for charitable contributions under
				Section 170 of the Internal Revenue Code for the amount of the contribution for
				which the tax credit is claimed for Iowa tax purposes.
This rule is intended to implement Iowa Code section 422.35
				  and 2013 Iowa Acts, Senate File 452.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.9 - Gains and Losses on Property Acquired Before January 1, 1934

Current through Register Vol. 47, No. 3, July 24, 2024
Where property was acquired prior to January 1, 1934, the
				  basis as of January 1, 1934, for determining capital or other gains or losses
				  is the higher of cost, adjusted for depreciation allowed or allowable to
				  January 1, 1934, or fair market value as of that date.
City National
				  Bank of Clinton v. Iowa State Tax commission,
251 Iowa 603,
				  102N.W.2d381 (1960).
If as a result of this provision a basis is to be used for
				  purposes of Iowa corporation income tax which is different from the basis used
				  for purposes of federal income tax, appropriate adjustment must be made and
				  detailed schedules supplied in the computation of Iowa taxable income.
This rule is intended to implement Iowa Code section
				  42235..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.10 - Work Opportunity Tax and Alcohol Fuel Credit

Current through Register Vol. 47, No. 3, July 24, 2024
Where provided for in the Internal Revenue Code, as detailed
				  below, a deduction shall be allowed for the amount of credit to the extent that
				  the credit increased federal taxable income.
(1) For tax years beginning on or after
				January 1, 1977, the amount of credit allowable for federal work opportunity
				tax credit as provided for in Section 51 of the Internal Revenue Code shall be
				a deduction from Iowa taxable income to the extent the credit increased
				income.
(2) For tax periods
				beginning on or after January 1,1980, the amount of credit allowable for the
				federal alcohol and cellulosic biofuel fuels credit as provided for in Section
				40 of the Internal Revenue Code shall be a deduction from Iowa taxable income
				to the extent the credit increased income.
This rule is intended to implement 2011 Iowa Code Supplement
				  section
				  42235.
				  as amended by 2012 Iowa Acts, Senate File 2328.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.13 - Iowa Income Taxes and Iowa Tax Refund

Current through Register Vol. 47, No. 3, July 24, 2024
Iowa corporation income taxes paid or accrued during the tax
				  year as may be applicable under the method of filing are permissible deductions
				  for federal corporation income tax purposes, but are not permissible deductions
				  for purposes of determining Iowa net taxable income. To the extent taxes were
				  deducted in the determination of federal taxable income, they shall be added to
				  federal taxable income for Iowa corporation income tax purposes. Refunds of
				  Iowa income tax to the extent that the refunds were included in the
				  determination of federal taxable income shall be subtracted from federal
				  taxable income, only to the extent that a deduction for Iowa income taxes was
				  disallowed on a prior Iowa return. Iowa income tax refunds resulting from Iowa
				  refundable tax credits are not allowed as a deduction for Iowa corporation
				  income tax purposes.
Example: Corporation A reports income on a cash basis and
				  made Iowa estimated payments of $2,000 during the 2003 tax year. The $2,000 of
				  estimated payments was claimed as a deduction for federal income tax purposes,
				  but was not allowed as a deduction for Iowa tax purposes. The 2003 Iowa return
				  reported a tax liability of $1,600. Corporation A had $2,000 of Iowa estimated
				  payments and a $500 ethanol blended gasoline tax credit, and received a $900
				  Iowa tax refund in 2004. Of the $900 refund reported as income on the federal
				  return, Corporation A will be allowed a $400 ($2,000 - $1,600) reduction on the
				  Iowa return for 2004.
This rule is intended to implement Iowa Code section
				  42235..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.14 - Method of Accounting, Accounting Period

Current through Register Vol. 47, No. 3, July 24, 2024
The return shall be computed on the same basis and for the
				  same accounting period as the taxpayer's return for federal corporation income
				  tax purposes. Permission to change accounting methods or accounting periods for
				  corporation tax purposes is not required provided the taxpayer furnishes the
				  department with a copy of the federal consent.
This rule is intended to implement Iowa Code section
				  42235..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.16 - Federal Rulings and Regulations

Current through Register Vol. 47, No. 3, July 24, 2024
In determining whether "taxable income," "net operating loss
				  deduction" or any other deductions are computed for federal tax purposes under,
				  or have the same meaning as provided by, the Internal Revenue Code, the
				  department will use applicable rulings and regulations that have been duly
				  promulgated by the commissioner of Internal Revenue, unless the director has
				  created rules and regulations or has exercised discretionary powers as
				  prescribed by statute which call for an alternative method for determining
				  "taxable income," "net operating loss deduction," or any other deductions, or
				  unless the department finds that an applicable Internal Revenue ruling or
				  regulation is unauthorized according to the Iowa Code.
This rule is intended to implement Iowa Code section
				  42235..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.17 - Depreciation of Speculative Shell Buildings

Current through Register Vol. 47, No. 3, July 24, 2024
(1) For tax years beginning on or after July
				1, 1992, speculative shell buildings constructed or reconstructed after that
				date may be depreciated as 15-year property under the accelerated cost recovery
				system of the Internal Revenue Code. If the taxpayer has deducted depreciation
				on the speculative shell building on the taxpayer's federal income tax return,
				that amount of depreciation must be added to the federal taxable income in
				order to deduct depreciation under this rule.
(2) On sale or other disposition of the
				speculative shell building, the taxpayer must report on the taxpayer's Iowa
				corporation income tax return the same gain or loss reported on the taxpayer's
				federal corporation income tax return. If, while owned by the taxpayer, the
				building is converted from a speculative shell building to another use, the
				taxpayer must deduct the same amount of depreciation on the taxpayer's Iowa tax
				return as is deducted on the taxpayer's federal tax return.
(3) For the purposes of this rule, the term
				"speculative shell building" means a building as defined in Iowa Code section
				4271.,
				subsection (27)
"c. "
This rule is intended to implement Iowa Code section
				  422.35.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.18 - Deduction of Multipurpose Vehicle Registration Fee

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1992, and
				  before January 1, 2005, corporations may claim a deduction for 60 percent of
				  the amount of the registration fee paid for a multipurpose vehicle under Iowa
				  Code section
				  321124.,
				  subsection 3, paragraph
"h. "
In order to qualify for this
				  deduction, no part of the multipurpose vehicle registration fee may have been
				  deducted as an ordinary and necessary business expense.
For tax years beginning on or after January 1, 2005, the
				  deduction for Iowa corporation income tax for multipurpose vehicle registration
				  fees is the same as allowed under Section 164 of the Internal Revenue Code for
				  federal tax purposes.
This rule is intended to implement Iowa Code section
				  42235..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.19 - Deduction of Foreign Dividends

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1992,
				  corporations may claim a deduction based on percentage of ownership as set
				  forth in Section 243 of the Internal Revenue Code for foreign dividends
				  including Subpart F income as defined in Section 952 of the Internal Revenue
				  Code. See
Kraft General Foods, Inc. v. Iowa Department of Revenue and
				  Finance,
505 U.S. 71, 120 L.Ed 59, 112 S.Ct. 2365 (1992).
This rule is intended to implement Iowa Code section
				  42235..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.20 - Employer Social Security Credit for Tips

Current through Register Vol. 47, No. 3, July 24, 2024
Employers in the food and beverage industry are allowed a
				  credit under Section 45B of the Internal Revenue Code for a portion of the
				  social security taxes paid or incurred after 1993 on employee tips. The credit
				  is equal to the employer's FICA obligation attributable to tips received which
				  exceed tips treated as wages for purposes of satisfying minimum wage standards
				  of the Fair Labor Standards Act. The credit is allowed only for tips received
				  by an employee in the course of employment from customers on the premises of a
				  business for which the tipping of employees serving food or beverages is
				  customary. To the extent that an employer takes the credit for a portion of the
				  social security taxes paid or incurred, the employer's deduction for the social
				  security tax is reduced accordingly. For Iowa income tax purposes, the full
				  deduction for the social security tax paid or incurred is allowed for tax years
				  beginning on or after January 1, 1994. No social security tax credit is allowed
				  on the Iowa corporation income tax return.
This rule is intended to implement Iowa Code section
				  42235.
				  as amended by 1995 Iowa Acts, chapter 152.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.21 - Deductions Related to the Iowa Educational Savings Plan Trust

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 2016, certain
				  qualifying organizations may establish Iowa education savings plan trust
				  accounts as participants, as described in Iowa Code chapter 12D. Taxpayers may
				  make contributions to such qualifying organizations so that the organization
				  can deposit the contribution into the organization's Iowa education savings
				  plan trust account. However, for Iowa income tax purposes, a taxpayer must add
				  back any portion of the federal charitable contribution deduction allowed for a
				  contribution to a qualifying organization, to the extent that the taxpayer
				  designated that any part of such contribution be used for the direct benefit of
				  a dependent of a shareholder or for the benefit of any other specific person
				  chosen by the taxpayer.
This rule is intended to implement Iowa Code section
				  42235.
				  as amended by 2016 Iowa Acts, chapter 1107.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.26 - Exclusion of Biodiesel Production Refund

Current through Register Vol. 47, No. 3, July 24, 2024
A taxpayer may exclude, to the extent included in federal
				  taxable income, the amount of the biodiesel production refund described in rule
				  701-250.1 (423).
This rule is intended to implement Iowa Code section
				  422.35.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 53 - Determination of Net Income › Rule 701-53.28 - Broadband Infrastructure Grant Exemption

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Broadband infrastructure grant
				exemption, generally.
For tax years beginning on or after January 1,
				2019, certain qualifying communications service providers may subtract, to the
				extent included in income, the amount of qualifying government grants used to
				install broadband infrastructure that facilitates broadband service in targeted
				service areas at or above download and upload speeds identified by the Federal
				Communications Commission pursuant to Section 706 of the federal
				Telecommunications Act of 1996, as amended. This rule explains terms not
				defined in Iowa Code section
				422.35.
(2)
Definitions.
"Facilitate"
shall have the same meaning as
				  defined in Iowa Code section
				  8B.1.
"Grant"
means a transfer for a governmental
				  purpose of money or property to a transferee that is not a related party to or
				  an agent of the transferor. The transfer must not impose any obligation or
				  condition to directly or indirectly repay any amount to the transferor or a
				  related party. Obligations or conditions intended solely to assure expenditure
				  of the transferred moneys in accordance with the governmental purpose of the
				  transfer do not prevent a transfer from being a grant.
1. "Federal grant" means any grant issued by
				the United States government, including any agency or instrumentality
				thereof.
2. "State grant" means any
				grant issued by any state of the United States, the District of Columbia, or a
				territory or possession of the United States, including any agency or
				instrumentality thereof.
3. "Local
				grant" means any grant issued by any city, county, township, school district,
				or any other unit of local government, including any agency or instrumentality
				thereof.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 54 - Allocation and Apportionment › Rule 701-54.4 - Net Gains and Losses From the Sale of Assets

Current through Register Vol. 47, No. 3, July 24, 2024
For purposes of administration of this rule, a capital gain
				  or loss shall mean the sale price or value at the time of disposal of an asset
				  less the adjusted basis, whether reportable as short-term or long-term capital
				  gain or ordinary income for federal income tax purposes.
Nonbusiness gain or loss from the sale, exchange or other
				  disposition of property if the property while owned by the taxpayer was not
				  operationally related to the taxpayer's trade or business carried on in Iowa
				  shall be allocated as follows:
(1)
				Gains or losses from the sale, exchange or other disposition of real property
				located in this state are allocable to this state.
(2) Gains and losses from the sale, exchange
				or other disposition of tangible personal property are allocable to this state
				if:
a. The property had a situs in this state
				at the time of sale; or
b. The
				taxpayer's commercial domicile is in this state and the taxpayer is not taxable
				in the state in which the property had a situs.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 54 - Allocation and Apportionment › Rule 701-54.7 - Apportionment of Income of Transportation, Communications, and Certain Public Utilities Corporations

Current through Register Vol. 47, No. 3, July 24, 2024
Net income of these corporations, other than interest,
				  dividends, rents and royahies, which is not specifically allocated by 54.2(422)
				  and 54.6(422) shall be apportioned as follows:
(1) Railroads shall determine their Iowa
				proportion of gross receipts or gross revenue from railroad operations by the
				following methodology:
a. Freight revenue.
				Freight revenue within and without Iowa shall be determined for each individual
				freight movement by taking the proportion of car and locornotive miles traveled
				in Iowa to total car and locornotive miles traveled within and without Iowa for
				the individual freight movement and applying such individual percentage to the
				gross receipts derived from the individual freight movement. Empty mileage that
				does not produce gross receipts shall not be used.
b. Passenger revenue. Passenger revenue
				within and without Iowa shall be determined by use of the same principles
				applicable to freight revenue.
c.
				Switching revenue. Unless the switching revenue is accounted for in the freight
				revenue or passenger revenue categories, it shall be determined in accordance
				with subrule 54.6(1).
d.
				Miscellaneous revenue. Nonexclusive examples of miscellaneous revenues include
				demurrage revenue, station services revenue, storage revenue, railway property
				rental, joint facility revenue, and amounts received from government
				authorities. These revenues shall be attributed to the state in which they were
				earned.
e. All of the above classes
				of revenues shall be aggregated and combined with other gross receipts or gross
				revenues from sources within Iowa to cornpose the numerator The denominator
				shall be computed in accordance with 701-subrule 54.2(2).
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 54 - Allocation and Apportionment › Rule 701-54.8 - Apportionment of Income Derived From More Than One Business Activity Carried on Within a Single Corporate Structure

Current through Register Vol. 47, No. 3, July 24, 2024
Net income from corporations where more than one business
				  activity is conducted within a single unitary corporate structure shall be
				  apportioned by combining gross receipts or gross revenues of each business
				  activity in the business activity ratio. Where necessary, formulas authorized
				  by the department's rules or statute shall be used to ascertain the gross
				  receipts from such business activities.
Example: The taxpayer is engaged in the business of both
				  manufacture of tangible personal property and trucking. During the tax year,
				  the taxpayer received $1,000,000 in gross receipts, $400,000 of which was from
				  its manufacturing operations and $600,000 of which was from its trucking
				  operations. In its trucking operations, the taxpayer traveled 100,000 miles in
				  Iowa and 400,000 everywhere, and in its manufacturing operations, $300,000 of
				  sales were attributable to this state. The numerator of the business activity
				  ratio would be $450,000, which includes $300,000 from manufacturing operations
				  and $150,000 (100,000/400,000 x 600,000 = 150,000) from trucking operations.
				  See subrule 54.7(2). The denominator of the business activity ratio would be
				  $1,000,000.
This rule is intended to implement Iowa Code section
				  42233..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 55 - Assessments, Refunds, Appeals › Rule 701-55.1 - Notice of Discrepancies

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Notice of adjustment.
An employee of the department,
				designated by the director to examine returns and make audits, who discovers
				discrepancies in returns or learns that the income of the taxpayer may not have
				been listed, in whole or in part, or that no return was filed when one was due,
				is authorized to notify the taxpayer of the discovery by ordinary mail. The
				notice shall not be termed an assessment, and it may inform the taxpayer of the
				amount due if the information discovered is correct.
(2)
Right of taxpayer upon receipt of
				notice of adjustment.
A taxpayer who has received notice of an
				adjustment in connection with a return may pay the additional amount stated to
				be due. If payment is made, and the taxpayer wishes to contest the matter, the
				taxpayer should then file claim for refund. However, payment will not be
				required until assessment has been made (although interest will continue to
				accrue if payment is not made). If no payment is made, the taxpayer may discuss
				with the employee who notified the taxpayer of the discrepancy, either in
				person or through correspondence, all matters of fact and law which the
				taxpayer considers relevant to the situation. Documents and records supporting
				the taxpayer's position may be required.
This rule is intended to implement Iowa Code section
				  422.25.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 55 - Assessments, Refunds, Appeals › Rule 701-55.2 - Notice of Assessment

Current through Register Vol. 47, No. 3, July 24, 2024
If after following the procedure outlined in 5 5.1 (2) no
				  agreement is reached, and the taxpayer does not pay the amount determined to be
				  correct, a notice of assessment shall be sent to the taxpayer by mail. If the
				  period in which the correct amount of tax can be determined is nearly at an
				  end, either a notice of assessment, without compliance with 55.1(1) and
				  55.1(2), or a jeopardy assessment may be issued. All notices of assessment
				  shall contain the signature of the director This rule is intended to implement
				  Iowa Code sections
				  42225.
				  and
				  42228..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 55 - Assessments, Refunds, Appeals › Rule 701-55.3 - Refund of Overpaid Tax

Current through Register Vol. 47, No. 3, July 24, 2024
The following are provisions for refunding or crediting to
				  the taxpayer deposits or payments for tax in excess of amounts legally
				  due.
(1) A claim for refund of
				corporation income tax may be made on a form obtainable from the department.
				Claims for refund should not be mailed in the same envelope or attached to the
				return. In the case of a claim filed by an agent of the taxpayer, a power of
				attorney must accompany the claim.
(2) A corporate taxpayer shall not offset a
				refund or overpayment of tax for one year as a prior payment of tax of a
				subsequent year on the return of a subsequent year without authorization in
				writing by the department. The department may, however, apply an overpayment,
				or a refund otherwise due the taxpayer, to any tax due or to become due from
				the taxpayer
(3) When an
				overpayment of estimated tax is indicated on the face of the return, the
				overpayment will ordinarily be refunded to the taxpayer by the department
				without the filing of a formal claim for refund. If a refund of the indicated
				overpayment is not received within a reasonable period of time, a claim for
				refund may be filed by the taxpayer on an official form obtainable from the
				Taxpayer Services Section, Iowa Department of Revenue, P.O. Box 10457, Des
				Moines, Iowa 50306.
If an overpayment of income tax is claimed as a credit
				  against estimated tax for the succeeding taxable year, such amount shall be
				  considered as a payment of the income tax for the succeeding taxable year and
				  no claim for credit or refund shall be allowed.
When a taxpayer elects to have an overpayment credited to
				  estimated tax for the succeeding year, interest may be properly assessed on a
				  deficiency of income tax for the year in which the overpayment arose. If a
				  taxpayer elects to have all or part of an overpayment shown on the return
				  applied to the estimated income tax for the succeeding taxable year or
				  refunded, the election is binding to the taxpayer
An overpayment of tax may be used to offset any outstanding
				  tax liability owed by the taxpayer, but once an elected amount is credited as a
				  payment of estimated tax for the succeeding year, it loses its character as an
				  overpayment for the year in which it arose and thereafter cannot offset any
				  subsequently determined tax liability.
(4) Rescinded lAB 11/24/04, effective
				12/29/04.
(5) Refunds-statute of
				limitations for tax years ending after January 1, 1979. The statute of
				limitations with respect to which refunds or credits may be claimed are:
a. The later of
(1) Three years after the due date of payment
				upon which refund or credit is claimed; or
(2) One year after which such payment was
				actually made.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 55 - Assessments, Refunds, Appeals › Rule 701-55.4 - Abatement of Tax

Current through Register Vol. 47, No. 3, July 24, 2024
For notices of assessment issued on or after January 1,
				  1995, if the statutory period for appeal has expired, the director may abate
				  any portion of unpaid tax, penalties or interest which the director determines
				  to be erroneous, illegal, or excessive. See rule
				  701-731.
				  (421) for procedures on requesting abatement of tax.
This rule is intended to implement Iowa Code section
				  42160..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 55 - Assessments, Refunds, Appeals › Rule 701-55.5 - Protests

Current through Register Vol. 47, No. 3, July 24, 2024
A taxpayer may appeal to the director at any time within 60
				  days from the date of the notice of the assessment of tax, additional tax,
				  interest or penalties. For assessments issued on or after January 1, 1995, if a
				  taxpayer failed to timely appeal a notice of assessment, the taxpayer may pay
				  the entire assessment and file a refund claim within the period provided by law
				  for filing such claims. In addition, a taxpayer may appeal to the director at
				  any time within 60 days from the date of notice from the department denying
				  changes in filing methods, denying refund claims, or denying portions of refund
				  claims.
This rule is intended to implement Iowa Code sections
				  42110.,
				  42160.
				  and
				  42228..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 56 - Estimated Tax for Corporations › Rule 701-56.1 - Who Must Pay Estimated Tax

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
General rule.
Every corporate taxpayer, including both
				domiciliary and nondomiciliary corporations, shall pay estimated tax if the
				amount of tax payable, less credits, can reasonably be expected to be more than
				$1,000 for the calendar or fiscal year. The amount of estimated tax paid shall
				be used as a credit on the Iowa corporate income tax return.
(2)
Definition.
For purposes
				of this division, "estimated tax" means the amount which the taxpayer estimates
				to be the tax due and payable under division III of Iowa Code chapter 422.
This rule is intended to implement Iowa Code section
				  422.85.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 56 - Estimated Tax for Corporations › Rule 701-56.2 - Time for Filing and Payment of Tax

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Time for filing.
a.
General rule.
The date for filing the first estimated tax payment is
				on or before the last day of the fourth month of the tax year. The estimated
				tax form is to be filed with Corporate Estimate Processing, P.O. Box 10466, Des
				Moines, Iowa 50306.
b.
Amended estimates.
Generally, whenever a taxpayer who is required to
				make estimated tax payments has reason to believe that the taxpayer's Iowa
				income tax may increase or decrease, an amended estimate shall be filed at such
				time to reflect the increase or decrease in estimated Iowa income tax. The
				amended estimate shall be made on or before the next installment date. The
				unpaid balance after amending the estimate should be paid in equal installments
				on the remaining payment dates.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 56 - Estimated Tax for Corporations › Rule 701-56.4 - Reporting Forms

Current through Register Vol. 47, No. 3, July 24, 2024
Corporations which have paid estimated tax in the prior year
				  will receive by mail a preaddressed reporting form unless requirements for
				  electronic transmission of installments are met. Blank reporting forms are
				  available from the department for those making an estimate for the first time,
				  or when the preaddressed form is misplaced or lost.
This rule is intended to implement Iowa Code section
				  42221..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 56 - Estimated Tax for Corporations › Rule 701-56.5 - Penalties

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Underpayment penalty.
a. A
				penalty is imposed for underpayment of the estimated tax by the taxpayer. This
				underpayment penalty is imposed whether or not there was reasonable cause for
				the underpayment. The Iowa penalty for underpayment of estimated tax is
				computed on Form IA 2220.
b. The
				amount of the underpayment penalty is determined at the statutory rate upon the
				amount of underpayment of the estimated tax for the period from the date the
				amount is required to be paid until the last day of the fourth month following
				the close of the income year, or the date the underpayment is paid, whichever
				is earlier.
Example. A calendar year corporation is required to make four
				  equal estimated payments of $2,500 in the current year to meet the exception to
				  the underpayment of estimated tax penalty. The corporation does not make a
				  first quarter estimated payment which was due on April 30, but makes an
				  estimated payment of $5,000 for the second quarter on June 30. The corporation
				  is subject to the underpayment of estimated tax penalty for the period from
				  April 30 to June 30, when the underpayment was paid.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 57 - Administration › Rule 701-57.1 - Definitions

Current through Register Vol. 47, No. 3, July 24, 2024
(1) When the
				word
"department"
appears herein, it refers to and is
				synonymous with the "Iowa Department of Revenue"; the
				word
"director"
is the "Director of Revenue" or the director's
				authorized assistants and employees; the word
"tax"
is the
				"franchise tax on financial institutions"; and the word
"return
				"
is the "franchise tax return."
The administration of the franchise tax is a responsibility
				  of the department. The department is charged with the administration of the
				  franchise tax, subject always to the rules, regulations and direction of the
				  director.
(2) Effective
				June 1, 1989, the term "financial institution" as used in division V of Iowa
				Code chapter 422 and in 701-Chapters 57 to 61 includes an Iowa chartered bank,
				a state bank chartered under the laws of any other state, a nationally
				chartered bank, a trust company, a federally chartered savings and loan
				association, a non-Iowa chartered savings bank, a financial institution
				chartered by the Federal Home Loan Bank Board, a non-Iowa chartered savings and
				loan association, an association incorporated or authorized to do business
				under Iowa Code chapter 534 or a production credit association.
Effective July 1,2012, the term "financial institution" as
				  used in division V of Iowa Code chapter 422 and in 701-Chapters 57 to 61
				  includes an Iowa chartered bank, a state bank chartered under the laws of any
				  other state, a nationally chartered bank, a trust company, a federally
				  chartered savings and loan association, a non-Iowa chartered savings bank, a
				  financial institution chartered by the Federal Home Loan Bank Board, a non-Iowa
				  chartered savings and loan association or a production credit
				  association.
Unincorporated privately held financial institutions are
				  exempt from the franchise tax filing requirements.
(3) The term
"Internal Revenue Code
				"
means the Internal Revenue Code of 1954 prior to the date of its
				redesignation as the Internal Revenue Code of 1986 or the Internal Revenue Code
				of 1986, whichever is applicable.
This rule is intended to implement Iowa Code section 422.61
				  as amended by 2012 Iowa Acts, Senate File 2202.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 57 - Administration › Rule 701-57.3 - Retention of Records

Current through Register Vol. 47, No. 3, July 24, 2024
(1) Every
				financial institutionsubject to the tax imposed by Iowa Code section
				42260.
				(whether or not the financial institution incurs liability for the tax) shall
				retain its books and records as required by Section 6001 of the Internal
				Revenue Code and federal income tax regulation 1.6001-1(e) including the
				federal schedules required by 701-subrule 58.3(2). For taxpayers using an
				electronic data interchange process or technology also see 701-subrule
				11.4(4).
(2) In addition, records
				relating to computation of the Iowa apportionment factor, allocable income,
				other deductions or additions to federal taxable income, and Iowa tax credits
				shall be retained so long as the contents may be material in the administration
				of the Iowa Code under the statutes of Limitation for audit specified in Iowa
				Code section
				42225..
This rule is intended to implement Iowa Code sections 422.25
				  and 422.70.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 57 - Administration › Rule 701-57.4 - Authority for Deductions

Current through Register Vol. 47, No. 3, July 24, 2024
Whether and to what extent deductions shall be allowed
				  depends upon specific legislative Acts, and only where there is a clear
				  provision can any particular deduction be allowed. Therefore, a deduction will
				  be allowed only if the taxpayer can establish the validity and correctness of
				  such a deduction. 77
Am. Jur. 2d State and Local Taxation, subsection
				  518 (1973).
This rule is intended to implement Iowa Code sections
				  42235.
				  and
				  42261..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 57 - Administration › Rule 701-57.5 - Jeopardy Assessments

Current through Register Vol. 47, No. 3, July 24, 2024
(1) A
				jeopardy assessment may be made where a return has been filed and the director
				believes for any reason that collection of the tax will be jeopardized by
				delay, or where a taxpayer fails to file a return, whether or not formally
				called upon to file a return. The department is authorized to estimate the
				income of the taxpayer upon the basis of available information, add penalty and
				interest, and demand immediate payment.
(2) A jeopardy assessment is due and payable
				when the notice of the assessment is served upon the taxpayer. Proceedings to
				enforce the payment of the assessment by seizure or sale of any property of the
				taxpayer may be instituted immediately.
This rule is intended to implement Iowa Code sections 422.30
				  and 422.66.