Income/Franchise:
Iowa: Proposed Rule Implements New Law that Contingently Reduces Corporate Income Tax Rates

Proposed New Rule section 701—51.10(422), Iowa Dept. of Rev. (8/10/22). The Iowa Department of Revenue (Department) proposed a new rule “intended to implement the statutory changes to the corporate income tax rates” under legislation enacted earlier this year [see H.F. 2317 (2022), and State Tax Matters, Issue 2022-9, for more details on this new law] that adjusts Iowa’s corporate income tax rate for a given year so long as net corporate income tax proceeds collected by Iowa exceed $700 million in the immediately prior fiscal year. Specifically, if Iowa net corporate income tax receipts for the preceding fiscal year exceed $700 million, Iowa law requires the Department to calculate the applicable corporate tax rates that would have generated $700 million in net corporate income tax receipts in the preceding fiscal year, subject to some limitations; this proposed new rule describes the method the Department will use to determine the applicable Iowa corporate income tax rates. Written comments on the proposed new rule are due by August 30, 2022, and a related virtual public hearing is scheduled for August 31, 2022. Please contact us with any questions.