701—59.28(422) Apportionment factor. In determining the total net taxable income, the apportionable income attributable to this state, as determined by use of the apportionment fraction, shall be added to the nonapportionable income allocable to this state.
	59.28(1) Receipts derived from transactions and activities in the regular course of trade or business which produce business income are included in the denominator of the apportionment factor. Income which is not subject to the Iowa franchise tax shall not be included in the computation of the apportionment factor.
	59.28(2) The numerator of the apportionment factor is that portion of the total receipts included in the denominator of the taxpayer attributable to this state during the income year determined as follows:
	a. 	Receipts from the lease, rental, or other use of real property shall be included in the numerator if the real property is located in Iowa.
	b. 	Receipts from the sale of tangible personal property shall be included in the numerator if the property is delivered or shipped to a purchaser in this state regardless of the f.o.b.	point or other conditions of the sales.
	c. 	Receipts from the use of tangible personal property shall be included in the numerator of the business activity formula to the extent that property is utilized in Iowa. The extent of utilization of tangible personal property in a state is determined by multiplying the rent by a fraction, the numerator of which is the number of days of physical location of the property in the state during the rental period in the taxable year and the denominator of which is the number of days of physical location of the property everywhere during all rental periods in the taxable year. If the physical location of the property during the rental period is unknown or not ascertainable by the taxpayer, tangible personal property is utilized in the state in which the property was located at the time the rental payer obtained possession.
	d. 	All royalty income from intangible personal property determined to be business income shall be included in the numerator of the business activity formula if the taxpayer’s commercial domicile is in Iowa. All royalty income from tangible personal property or real property determined to be business income shall be included in the numerator of the business activity formula if the situs of the tangible personal property or real property is within Iowa.
	e. 	Interest and other receipts from assets in the nature of loans (including federal funds sold and banker’s acceptances) and installment obligations shall be attributed to the state where the borrower is located.
	f. 	Interest income from a participating bank’s portion of participation loan shall be attributed to the state where the borrower is located.
	g. 	Interest income from loans solicited by traveling loan officers shall be attributed to the state where the borrower is located.
	h. 	Interest or service charges from bank, travel, and entertainment credit card receivables and credit card holders’ fees shall be attributed to the state in which the credit card holder resides in the case of an individual or, if a corporation, to the state of the corporation’s commercial domicile.
	i. 	Merchant discount income derived from bank and financial corporation credit card holder transactions with a merchant shall be attributed to the state in which the merchant is located. It shall be presumed that the location of the merchant is the address on the invoice submitted by the merchant to the taxpayer.
	j. 	Receipts for the performance of fiduciary services are attributable to the state where the services are principally performed.
	k. 	Receipts from investments of a bank in securities, the income from which constitutes business income, shall be attributed to its commercial domicile except that:
	(1)	Receipts from securities used to maintain reserves against deposits to meet federal and state reserve deposit requirements shall be attributed to each state based upon the ratio that total deposits in the state bear to total deposits everywhere.
	(2)	Receipts from securities owned by a bank but held by a state treasurer or other public official or pledged to secure public or trust funds deposited in the bank shall be attributed to the banking office at which the secured deposit is maintained.
	l. 	Receipts (fees or charges) from the issuance of traveler’s checks and money orders shall be attributed to the state where the taxpayer’s office is located that issued the traveler’s checks. If the traveler’s checks are issued by an independent representative or agent of the taxpayer, the fees or charges shall be attributed to the state where the independent representative or agent issued the traveler’s checks.
	m. 	Fees, commissions, or other compensation for financial services rendered for a customer located in this state or an account maintained within this state.
	n. 	Any other gross receipts resulting from the operation as a financial organization within the state to the extent the items do not represent a recapture of an expense.
	o. 	Receipts from management services if the recipient of the management services is located in this state.
	p. 	The net amount of global intangible low tax income (net GILTI) shall be included in the numerator of the business activity formula to the extent that the income arises from the taxpayer’s ownership of controlled foreign corporation(s) (CFCs) that are an integral part of some business activity occurring regularly in Iowa.
	(1)	If no portion of the net GILTI is part of some business activity occurring regularly in or outside of Iowa but the income is determined to be business income, the net GILTI shall be included in the numerator if the taxpayer’s commercial domicile is in this state.
	(2)	Where net GILTI is included in the Iowa apportionment factor, the amount included in the denominator shall be the taxpayer’s entire net GILTI.
	(3)	“Net GILTI” means the amount of global intangible low tax income as defined in Internal Revenue Code (IRC) Section 951A, less the deduction allowed under IRC Section 250(a)(1)(B) (if any).
This rule is intended to implement Iowa Code section 422.63.
[ARC 4955C, IAB 2/26/20, effective 4/1/20]