Iowa Admin. Code r. 701-40.3
Current through Register Vol. 47, No. 6, September 18, 2024
Rule 701-40.3 - Interest and dividends from foreign securities and securities of state and other political subdivisionsInterest and dividends from foreign securities and from securities of state and other political subdivisions are to be included in Iowa net income. Certain types of interest and dividends, because of specific exemption, are not includable in income for federal tax purposes. To the extent such income has been excluded for federal income tax purposes, unless the item of income is specifically exempted from state taxation by the laws or constitution of Iowa or of the United States, it must be added to Iowa taxable income.
The following is a noninclusive listing of bonds issued by the state of Iowa and its political subdivisions, interest on which is exempt from both federal and state income taxes.
1. Board of regents: Bonds issued under Iowa Code sections 262.41, 262.51, 262.60, 262A.8, and 263A.6.2. Urban renewal: Bonds issued under Iowa Code section 403.9(2).3. Municipal housing law - low-income housing: Bonds issued under Iowa Code section 403A.12.4. Subdistricts of soil conservation districts, revenue bonds: Bonds issued under Iowa Code section 161A.22.5. Aviation authorities, revenue bonds: Bonds issued under Iowa Code section 330A.16.6. Rural water districts: Bonds and notes issued under Iowa Code section 357A.15.7. County health center: Bonds issued under Iowa Code section 331.441(2)"c" (7).8. Iowa finance authority, water pollution control works and drinking water facilities financing: Bonds issued under Iowa Code section 16.131(5).9. Iowa finance authority, beginning farmer loan program: Bonds issued under Iowa Code section 16.64.10. Iowa finance authority, Iowa comprehensive petroleum underground storage tank fund: Bonds issued under Iowa Code section 455G.6(14).11. Iowa finance authority, 911 program notes and bonds: Bonds issued under Iowa Code section 34A.20(6).12. Quad Cities interstate metropolitan authority bonds: Bonds issued under Iowa Code section 28A.24.13. Prison infrastructure revenue bonds: Bonds issued under Iowa Code sections 12.80(3) and 16.177(8).14. Community college residence halls and dormitories bonds: Bonds issued under Iowa Code section 260C.61.15. Community college bond program bonds: Bonds issued under Iowa Code section 260C.71(6).16. Interstate bridges bonds: Bonds issued under Iowa Code section 313A.36.17. Iowa higher education loan authority: Obligations issued by the authority pursuant to Iowa Code section 261A.27.18. Vision Iowa program: Bonds issued pursuant to Iowa Code section 12.71(8).19. School infrastructure program bonds: Bonds issued under Iowa Code section 12.81(8).20. Iowa utilities board and Iowa consumer advocate building project bonds: Bonds issued under Iowa Code section 12.91(9).21. Iowa jobs program revenue bonds: Bonds issued under Iowa Code section 12.87(8). Interest from repurchase agreements involving obligations of the type discussed in this rule is subject to Iowa income tax. Nebraska Department of Revenue v. John Loewenstein,513 US 123 (1994).Everett v. State Dept. of Revenue and Finance, 470 N.W.2d 13 (Iowa 1991).
For the treatment of interest or dividends from regulated investment companies (mutual funds) that invest in obligations of the type discussed in this rule, see rule 701-40.52 (422).
Gains and losses from the sale or other disposition of bonds issued by the state of Iowa or its political subdivisions, as distinguished from interest income, shall be taxable for state income tax purposes.
This rule is intended to implement Iowa Code section 422.7.
Iowa Admin. Code r. 701-40.3
ARC 8605B, lAB 3/10/10, effective 4/14/10Amended by IAB October 15, 2014/Volume XXXVII, Number 8, effective 11/19/2014Amended by IAB February 13, 2019/Volume XLI, Number 17, effective 3/20/2019Amended by IAB June 2, 2021/Volume XLIII, Number 25, effective 7/7/2021