Administrative Orders

Petitioner, a nonresident entity, entered into an agreement with an Iowa excursion gambling boat to run their online sportsbook, including serving as its withholding agent. Petitioner asked if it is required to withhold Iowa income tax on payments of sports wagering winnings. The Director found that Petitioner is required to withhold Iowa income tax on sports wagering winnings received by nonresidents, but not on sports wagering winnings received by Iowa resident pursuant to Iowa Code section 422.16.

The taxpayer filed a motion to delete certain identifying details. The Director found that the taxpayer had not met the requirements for this motion as identified in Iowa Administrative Code rule 701-7.9(2), including the lack of an affidavit, evidence or other argument that the information requested to be deleted constituted an unwarranted invasion of personal privacy. Therefore, the motion was denied without prejudice.

The taxpayer was assessed individual income tax and interest for underpayment of 2021 income tax. The Administrative Law Judge (ALJ) affirmed the Department’s assessment of additional, unpaid tax and interest. The ALJ agreed with the Department that the taxpayer was not exempt from Iowa individual income tax. The ALJ determined that taxes withheld by an employer are approximations of what is owed, but that taxpayers may ultimately owe more than the amount withheld and the Department may assess taxpayers when such an amount remains unpaid. Iowa Code § 422.16(1)(a). The ALJ held, further, that taxes are not consumer credit transactions, and the Department is not a “debt collector” within the meaning the applicable state and federal consumer protection statutes and that the Department's efforts to collect unpaid tax owed were proper. Iowa Code § 537.7102(3) & (5); 15 U.S.C. § 1692a(5). Finally, the ALJ noted that, while taxpayers may wish to direct how the specific dollars they pay in income tax are used by the state, the budgeting process is a function of the legislature and budgets, once adopted, are publicly available. Neither party appealed the proposed decision, and it became the Department's final order pursuant to Iowa Administrative Code rule 701-7.17(8)(d).

The Administrative Law Judge held that the Department did not err in including social security payments in calculating Taxpayer’s income for purposes of determining rent- reimbursement eligibility. Therefore, the ALJ affirmed the Department’s denial of Taxpayer’s claim for rent reimbursement. Neither party appeal the proposed decision of the ALJ; therefore, it became the Department’s final order under Iowa Administrative Code rule 701-7.19(8)(d).

Taxpayers appealed the Administrative Law Judge's (ALJ) denial of their application for reinstatement after the Department denied their appeal as untimely. The ALJ upheld the Department's denial, applying the new rule that became effective after Taxpayers received their Notice of Assessment, but prior to submitting the appeal the Department dismissed as untimely. The Director overturned the ALJ's ruling, finding that the ALJ applied the wrong rule and should have analyzed Taxpayer's appeal under the good cause standard in the previous rule.

Taxpayer disputed the Department’s calculation of the assessed amount for the retail sax tax owed by Taxpayer. The Administrative Law Judge upheld the Department’s assessment, stating that because Taxpayer did not provide sufficient records to determine the amount of sales tax due during the audit period, Taxpayer did not meet the burden of proving the assessment was erroneous. Neither party appealed the proposed decision; therefore it became the Department’s final order under Iowa Administrative Code rule 701-7.19.

Petitioner, a healthcare information and record management company, sought a determination on the taxability of the records requests it fulfills for healthcare providers made by patients, their attorneys, or representatives pursuant to Iowa Code section 622.10. The Director determined and held that those record requests made pursuant to Iowa Code section 622.10 are exempt from sales tax under Iowa Code section 423.3(96) and 622.10(6). The taxability of other types of record requests or services the petitioner provides are not the subject of this declaratory order, nor was any determination about the applicability of other agency’s Administrative Code rules made. Further, any part of the determinations made in the 2003 Smart Document Solutions declaratory order that conflict with this order or the provisions in sections 423.3(96) and 622.10(6) are not controlling as the 2003 order was decided before those Iowa Code sections were enacted.

An Administrative Law Judge affirmed the Department’s rejection of the Taxpayer’s contention that he was exempt from inheritance tax under Iowa Code section 450.9. Taxpayer claimed that the executor had told him he was exempt from inheritance tax as a direct descendant of the deceased; Taxpayer was, in fact, the brother of the deceased, and not a direct descendant. Siblings are not among the relations listed in Iowa Code section 450.9 as exempt from inheritance tax. The Administrative Law Judge also rejected the Taxpayer’s contentions that he was entitled to a reduction in the inheritance tax assessed due to charitable contributions allegedly made from the inherited funds. The Taxpayer did not appeal the decision, which became a final order pursuant to Iowa Administrative Code rule 701-7.19(8)(d).