View the Department’s Executive Order 10 - Rulemaking Information.
IDR Administrative Rules: Reorganization Update
The Iowa Department of Revenue previously submitted the following proposed rules to the Iowa Legislature. The following rules have recently been adopted and filed. Visit the Iowa Legislature Administrative Rules page to review a complete listing of department rules.
This rulemaking implements the excise tax on electric fuel, enacted by the Iowa Legislature in 2019 Iowa Acts, House File 767, that will become effective July 1, 2023. These rules provide guidance as to what entities need to obtain a license to sell or dispense electric fuel either as a user, dealer, or both. Several changes were made to the Notice of Intended Action for these rules, ARC 6921C. Read more about those changes in the rule filing.
Pursuant to Part IV of Executive Order 10, the Department proposed this Notice of Intended Action in light of the concerns received after the official public comment period for ARC 6577C and the effective date of the new rule implementing the taxable service of commercial recreation. The Department is rescinding rule 701—216.3(423) and replacing it with the text previously found in rule 701—26.24(422), with minor updates for consistency with other administrative rules. No changes were made from the Notice of Intended Action for this rulemaking.
The amendment adds a new method for the Department to provide relief from the requirement that certain taxpayers file Iowa income tax returns electronically. The original subrule offered relief only when a taxpayer requested it for good cause, and the subrule specified that inadequate return preparation software would never be considered good cause. The Department encountered a scenario in which a legal requirement changed and required an update to forms after the electronic tax forms had been developed for the year.
Paragraph 8.5(2)“b” currently lists a requirement for electronic return originators to use a process for electronic signatures that is much more stringent than the current practice of the Department. The amendment changes the language of the rule to align with current practice.
This rulemaking is intended to provide updates and clarifications for the Department’s automatic extension of time for filing fiduciary income tax returns. The current rule includes detailed, outdated information relevant to tax years 1986 through 1991. The automatic filing extension applicable to current tax years is incorporated by reference to the automatic extension for individual income tax. This rulemaking removes the outdated information and provides the relevant extension language that was previously incorporated by reference.
The Iowa Legislature enacted a sales tax exemption for diapers in 2022 Iowa Acts, Senate File 2367, division II, which took effect January 1, 2023. New Iowa Code section 423.3(109) specifically exempts from sales tax “[t]he sales price from the sale of a child or adult diaper, whether cloth or disposable.” This adopted rule defines “diaper” in accordance with the definition adopted by the Streamlined Sales Tax Governing Board, of which Iowa is a member state. No changes were made to ARC 6920C.
The Department previously adopted rule 701—215.2(423) to implement an exemption found in Iowa Code section 423.3(49) for manufacturers of “marketable food products for human consumption.” Senate File 2367, division VIII, amended that exemption, such that it now applies to manufacturers of “food or food ingredients.” The Department has amended the rule implementing that exemption so that it conforms to the statutory change. The Department made changes from ARC 6924C to clarify that a business that cannot claim this exemption may still be able to claim other exemptions in the law.
The amendments accomplish a variety of objectives. The rule regarding applicability and scope was amended in Item 1. Definitions are amended in Item 2 to eliminate unnecessary duplication of statute. The list of tax types now available on GovConnectIowa is updated in Item 3. Changes to the Department’s rules on taxpayer representation more clearly describe the Department’s signature requirements, to modify the Department’s procedures related to tax returns of minors, and to add clarity to the rules.
This rulemaking removes references to the “property tax division” and replaces them with “local government services division” to reflect the current name of the internal division.
This rulemaking implements statutory changes to the penalty imposed on payers of withholding who fail to file income statements with the Department. Payers of withholding will now be penalized $500 for each instance of willful failure to file an income statement with the Department. This rulemaking implements a statutory change that eliminates the requirement that payers of withholding submit an annual summary of withholding payments.