The Department of Revenue previously submitted the following proposed rules to the Iowa Legislature. The following rules have been adopted and filed.
Adopted and Filed Rules
Adopted and Filed Rules
This rule making is primarily intended to implement statutory changes to the tax credit rate and the total school tuition organization tax credits that may be authorized each calendar year. 2021 Iowa Acts, House File 847, increases the tax credit rate to 75 percent from 65 percent for tax years beginning on or after January 1, 2021, and increases the amount of the credit available to taxpayers in 2022 and subsequent years.
Iowa Code section 423.3(49) provides a limited exemption for manufacturers producing “marketable food products for human consumption.” The phrase “marketable food products for human consumption” had never been defined in the Iowa Code or the Department’s administrative rules. The Department’s long-standing interpretation of the term has been that only final food products, not food ingredients, are “marketable food products for human consumption.” The Department has adopted this definition. No changes to the NOIA for this rule making were made.
In the design of its new tax administration system, the Department is incorporating its voluntary disclosure agreement (VDA) process into the filing system. In reviewing relevant rules for the VDA program, the Department noticed the list of permitted tax types does not include all excise taxes and fees. This rule making adds excise taxes and fees that were not part of the Iowa Code the last time subrule 3.1(3) was updated: the water service excise tax, equipment excise tax, state and local hotel and motel taxes, automobile rental excise tax, and prepaid wireless 911 surcharge.
The Department is incorporating the sales and use tax refund request process for data center businesses into its new tax administration system. The existing rule implementing the refund for data center businesses requires that an affidavit be filed by the business before the business can file a refund claim. This rule making allows businesses to submit the refund claim form and the affidavit simultaneously, after which the Department will review the affidavit prior to reviewing the refund claim form.
Item 1 of this rule making amends Chapter 68 primarily to reflect the enactment of 2020 Iowa Acts, Senate File 2403. Notably, Senate File 2403 changed tax rates for gasoline and biodiesel-blended fuel rated B11 or higher and created new classifications of ethanol blended gasolines. Senate File 2403 also modified the report the Department uses to calculate motor fuel distribution percentages used to determine these rates, switching from fuel tax monthly reports to an annual retailers’ report. Items 2 through 13 reflect cleanup of outdated citations or terms throughout the chapter.
Through 2020 Iowa Acts, House File 2641, the General Assembly added the term “computer peripheral” to an existing sales tax exemption in Iowa Code section 423.3(47) and defined that term in Iowa Code section 423.1. This rule making adds that term to the Department’s rule implementing that exemption as applicable. The Department is also taking this opportunity to clean up a few other items in and related to those rules.
This rule making updates rule 701—38.15(422) to reflect certain changes to Iowa Code section 422.21(7) and to provide taxpayers with additional clarity when seeking relief from joint and several liability for tax, penalty, and interest owed to the Department.
This rule implements the adjustments to income for Iowa individual and corporate income and franchise taxes for interest expense deductions, which are limited for federal income tax purposes but permitted in full for Iowa purposes for tax years beginning on or after January 1, 2020. The rule also covers adjustments that may be needed due to Iowa’s changing conformity with these federal limitations for tax years 2018 and 2019. View the Department's Business Interest Expense Conformity page for additional clarification.
This rule making is intended to implement statutory changes to how fees, taxes, interest, and penalties are paid and deposited with the Department. In particular, this rule making addresses a change to Iowa Code section 422.69. That section formerly required payment of fees, taxes, interest, and penalties to the Department to be paid in the form of remittances payable to the Treasurer of State. The statute now requires that remittances be made payable to the Department. The Department is still required to transmit payments to the Treasurer of State.
2019 Iowa Acts, Senate File 282, repealed the Honey Creek Premier Destination Park Bond Program and related Iowa Code provisions. This includes an exemption from federal and state income taxes for bonds issued under that program. The Department adopted this rule making to strike a reference to Honey Creek Premier Destination Park bonds from a non-exhaustive list of exempt bonds. No changes were made to the Notice of Intended Action on this rule making.