701—40.3 (422) Interest and dividends from foreign securities, and securities of state and their political subdivisions. Interest and dividends from foreign securities and from securities of state and their 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 467A.22 (transferred to Iowa Code section 161A.22 in 1993 Iowa Code).
	  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. 	 Iowa Alcoholic Beverage Control Act - Warehouse project: Bonds issued under Iowa Code section 123.159.
	  8. 	 County Health Center: Bonds issued under Iowa Code section 331.441(2)“c”(7).
	  9. 	 Iowa Finance Authority, Sewage treatment and drinking water facilities financing: Bonds issued under Iowa Code section 220.131(6) (transferred to Iowa Code section 16.131(6) in 1993 Iowa Code).
	  10. 	 Agricultural Development Authority, Beginning farmer loan program: Bonds issued under Iowa Code section 175.17.
	  11. 	 Iowa Finance Authority, Iowa comprehensive petroleum underground storage tank fund: Bonds issued under Iowa Code section 455G.6(14).
	  12. 	 Iowa Finance Authority, E911 Program notes and bonds: Bonds issued under Iowa Code section 477B.20(6). (Transferred to Iowa Code section 34A.20(6) in 1993 Iowa Code.)
	  13. 	 Quad Cities Interstate Metropolitan Authority Bonds: Bonds issued under Iowa Code section 330B.24. (Transferred to Iowa Code section 28A.24 in 1993 Iowa Code.)
	  14. 	 Iowa Finance Authority, Municipal Investment Recovery Program: Bonds issued under Iowa Code section 220.173(4). (Transferred to Iowa Code section 16.173(4) in 1993 Iowa Code.)
	  15. 	 Prison Infrastructure Revenue Bonds: Bonds issued under Iowa Code section 16.177(8).
	  16. 	 Government Flood Damage Program Bonds: Bonds issued under Iowa Code section 16.183(4).
	  17. 	 Iowa sewage treatment bonds: Bonds issued under Iowa Code section 16.131(6).
	  18. 	 Community college residence halls and dormitories bonds: Bonds issued under Iowa Code section 260C.61.
	  19. 	 Community college bond program bonds: Bonds issued under Iowa Code section 260C.71(6).
	  20. 	 Regents institutions medical and hospital buildings at University of Iowa bonds: Bonds issued under Iowa Code section 263A.6.
	  21. 	 Interstate bridges bonds: Bonds issued under Iowa Code section 313A.36.
	  22. 	 Iowa higher education loan authority: Obligations issued by the authority on or after July 1, 2000, pursuant to either division of Iowa Code chapter 261A as authorized in Iowa Code section 261A.27.
	  23. 	 Vision Iowa program: Bonds issued on or after July 1, 2000, upon request of the vision Iowa board pursuant to subsection 8 of Iowa Code section 12.71.
	  24. 	 Honey Creek premier destination park bonds: Bonds issued under Iowa Code Supplement section 463C.12(8).
	  25. 	 Iowa utilities board and Iowa consumer advocate building project bonds: Bonds issued under 2006 Iowa Acts, chapter 1179, section 70.
	  26. 	 Iowa jobs program bonds: Bonds issued under 2009 Iowa Acts, Senate File 376, section 1.
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, 514 US —, 130 L.Ed.	2d 470, 115 S.Ct.	— (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 sections 12.71, 261A.27, 357A.15, 422.7, 463C.12 and Iowa Code Supplement section 12.87.
[ARC 8605B, IAB 3/10/10, effective 4/14/10]