Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.70 - 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
				who is a resident of Iowa may exclude, to the extent included in federal
				adjusted gross 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
				  701-4237.
				  (15,422). See rule 701-38.17(422) for the determination of Iowa
				  residency.
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
				  701-4237.
				  (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 limited liability company with three members, all of
				  whom are Iowa residents. If any of the three members receives income that is a
				  qualified expenditure for purposes of the film qualified expenditure tax
				  credit, such member(s) cannot exclude this income on the Iowa income tax return
				  because the member(s) has an equity interest in the business which received the
				  credit.
(2)
Projects registered on or after July 1, 2009.
For tax years
				beginning on or after July 1, 2009, a taxpayer who is a resident of Iowa 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 I, 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
				  individual 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 Iowa Code section
				  422.7.