Our Dash of SALT Blog provides the most recent developments and changes in state and local tax regulations. Here are the latest updates for Iowa.
December 11, 2024
Iowa’s Sales Tax Exemption Requirements for Data Center Facility
Authored by: Bonnie Susmano, JD, MBA and Brandon Spinella
A declaratory order was issued by the Iowa Department of Revenue (“DOR”) in response to Microsoft Corporation’s petition for a sales and use tax exemption under Iowa Code Section 423.3(95) for leasing a data center facility. Since tax exemption statutes are construed narrowly and the terms lease or lease agreements are not listed under Iowa Code Section 423.3(95), it was determined that the value of the lease agreement could not be included in the required $200 million minimum investment amount. However, Microsoft may qualify for a partial refund of 50% under Iowa Code Sections 423.4(7) and (8), implemented by Iowa Administrative Code rule 701-215.13, for the sales tax paid on the sales price from the purchase or rental of computers and equipment necessary for the operation of a data center business and property either directly or indirectly connected to the computers. In addition, the data center business must meet certain criteria.
If you have questions about sales tax exemptions, please reach out to a member of the Withum SALT Team.
November 25, 2024
Iowa’s Corporate Income Tax Rate Remains Unchanged
Authored by: Bonnie Susmano, JD, MBA and Kiana McGowan, CPA, MBA
In Order 2024-01, signed on October 15, 2024, Iowa Department of Revenue Director Mary Mosiman affirmed that the corporate income tax rate will remain at 7.1%. This decision follows a notable decrease from 8.4% to 7.1% between the 2023 and 2024 tax years. The order was based on the fiscal year’s corporate receipts, which fell just below the $700 million threshold required to trigger a further reduction in the tax rate.
The Iowa legislature has established a mechanism to gradually reduce the corporate income tax rate to a flat 5.5% if net corporate receipts exceed $700 million in a fiscal year. However, since the 2024 receipts did not meet this threshold, the rate will remain at 7.1% for the upcoming 2025 tax year.
If you have questions about state corporate income taxes, please reach out to a member of the Withum SALT Team.
PTET elections for tax year 2022 are made by filing the 2022 PTET form on GovConnectIowa. If you have questions about state PTET elections, please reach out to a member of the Withum SALT Team.
Disclaimer: Please note this is the information that is readily available at this time, it is subject to change so please consult your Withum tax advisor.
Have Questions or Need Guidance?
For more information on this topic, please contact a member of our team.