Administrative Rules

2019 Iowa Acts, Senate File 282, repealed the Honey Creek Premier Destination Park Bond Program and related Iowa Code provisions.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.

This rule making implements new income tax exemptions for certain broadband grants provided to qualified service providers by providing definitions necessary to implement those exemptions.

This rule making adopts new Chapter 216 on bundled transactions to implement the adoption of language by the General Assembly in 2018 Iowa Acts, Senate File 2417, as well as the addition of “specified digital products” into the bundled transaction provision in the Iowa Code in 2020 Iowa Acts, House File 2641. No changes were made from the Notice of Intended Action on this rule filing.

This rule making makes a number of changes to the Department's rules on the solar energy system tax credit in Iowa Code 422.11L. The rule making includes updates that reflect current law, improve clarity and readability, and provide additional guidance on the administration of certain tax credit issues, including but not limited to Iowa tax credit calculations in the case of solar installations that are subject to a federal tax credit recomputation or that are used for both residential and business purposes.

This rule making implements the Iowa geothermal heat pump income tax credit enacted in 2019 Iowa Acts, House File 779, for geothermal& heat pumps installed on residential property in Iowa on or after January 1, 2019. This new income tax credit replaces previous geothermal-related income tax credits that were repealed by the Iowa legislature effective in 2019.

In 2020, the Legislature enacted a change to the definition of “barbershop” to allow for barber shops to be “readily movable” and lists “barber and beauty” among the services subject to sales tax in Iowa. This rule making amends an existing rule by removing explanation of activities included in the phrase “barber and beauty,” and instead refer to the definitions of “barbering,” “cosmetology,” and “esthetics” from the Iowa Code chapters that govern the practices of those professions.

This rule making amends existing rules to reflect new laws, clarify areas of confusion, and modify current procedures to improve administration. Rule 701—7.6 defines the powers that a representative under a power of attorney may utilize, the method a taxpayer may use to file a power of attorney, who may authorize a power of attorney on behalf of a taxpayer, and the process by which a power of attorney may be revoked.

Through 2020 Iowa Acts, House File 2641, the Legislature added language to Iowa Code section 423.3(31), an exemption from sales tax for purchases by certain government entities and instrumentalities of the government, to clarify that purchases by tribal governments are exempt. This rule making amends an existing rule to implement that change and make other minor updates. No changes from the Notice of Intended Action on this rule making were made.

In 2019, the Department proposed and adopted an amendment to Iowa Administrative Code Chapter 46 (see ARC 4678C). One change in that rule making inadvertently attempted to move the annual deadline for filing Verified Summary of Payments Reports, W-2 forms, and 1099 forms with the Department from January 31 to February 15. That change was unintentional.

This rule making implements statutory changes from the 2019 legislation to the adoption tax credit set forth in Iowa Code section 422.12A and provides further explanation and examples to implement such changes relating to how taxpayers are to claim the credit in tax years beginning on or after January 1, 2019.