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422.32 Definitions.

For the purpose of this division and unless otherwise required by the context:

1. The term "affiliated group" means a group of corporations as defined in section 1504(a) of the Internal Revenue Code.

2. "Business income" means income arising from transactions and activity in the regular course of the taxpayer's trade or business; or income from tangible and intangible property if the acquisition, management, and disposition of the property constitute integral parts of the taxpayer's regular trade or business operations; or gain or loss resulting from the sale, exchange, or other disposition of real property or of tangible or intangible personal property, if the property while owned by the taxpayer was operationally related to the taxpayer's trade or business carried on in Iowa; or gain or loss resulting from the sale, exchange, or other disposition of stock in another corporation if the activities of the other corporation were operationally related to the taxpayer's trade or business carried on in Iowa while the stock was owned by the taxpayer. A taxpayer may have more than one regular trade or business in determining whether income is business income.

It is the intent of the general assembly to treat as apportionable business income all income that may be treated as apportionable business income under the Constitution of the United States.

The filing of an Iowa income tax return on a combined report basis is neither allowed nor required by this subsection.

3. "Commercial domicile" means the principal place from which the trade of business of the taxpayer is directed or managed.

4. "Corporation" includes joint stock companies, and associations organized for pecuniary profit, and publicly traded partnerships and limited liability companies taxed as corporations under the Internal Revenue Code.

5. The words "domestic corporation" mean any corporation organized under the laws of this state.

6. The words "foreign corporation" mean any corporation other than a domestic corporation.

7. "Nonbusiness income" means all income other than business income.

8. "State" means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, and any foreign country or political subdivision thereof.

9. "Taxable in another state". For purposes of allocation and apportionment of income under this division, a taxpayer is taxable in another state if:

a. In that state the taxpayer is subject to a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of doing business, or a corporate stock tax; or

b. That state has jurisdiction to subject the taxpayer to a net income tax regardless of whether, in fact, the state does or does not.

10. The term "unitary business" means a business carried on partly within and partly without a state where the portion of the business carried on within the state depends on or contributes to the business outside the state.

The words, terms, and phrases defined in division II, section 422.4, subsections 4 to 6, 8, 9, 13, and 15 to 17, when used in this division, shall have the meanings ascribed to them in said section except where the context clearly indicates a different meaning.

Section History: Early form

[C35, § 6943-f28; C39, § 6943.064; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, § 422.32; 81 Acts, ch 132, § 7, 9; 82 Acts, ch 1023, § 11, 30, ch 1103, § 1111, ch 1203, § 1]

Section History: Recent form

83 Acts, ch 179, § 12, 13, 21, 23; 84 Acts, ch 1305, § 33, 34; 87 Acts, 1st Ex, ch 1, § 5; 88 Acts, ch 1028, § 30--;32, 55; 92 Acts, ch 1151, § 7; 94 Acts, ch 1165, §18; 95 Acts, ch 141, §1


1995 amendment to subsection 2 applies retroactively to January 1, 1995, for tax years beginning on or after that date; effect on filed tax returns; 95 Acts, ch 141, §2, 3

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