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The Iowa Department of Revenue has updated the Iowa Tax Research Library. A brief document summary of the addition follows. Visit the What's New section to access the full documents.
Date Updated: 08-15-2024
Tax Type: Individual Income Tax
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MICROSOFT CORPORATION (DO) (2024)
Petitioner, a technology company, requested a determination on its eligibility for the data center business exemption found in Iowa Code section 423.3(95). It specifically inquired on whether a lease agreement and its value could satisfy the required elements to claim the exemption as it is considering building or leasing data centers as options for expanding its data center operations. The Director determined that unlike the refund provisions available for data center businesses in Iowa Code section 423.4(7) and (8), the minimum investment clause found in Iowa Code section 423.3(95)(b)(3) does not include the terms lease or lease agreement. Therefore the required minimum investment does not include the value of a lease agreement and the initial lease term does not constitute the %22date of the initial investment%22 under the exemption. Additionally the Director was unable to determine if the beginning of an initial lease term would constitute %22site preparation activities%22 under the statute because of insufficient information in the Petition. Finally, the Director determined that provided the Petitioner can meet the required minimum investment without including the value of lease agreements along with each of the other required elements, it could still qualify for the exemption under Iowa Code section 423.3(95).
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T5 DATA CENTERS LLC (DO) (2024)
Petitioner, a data center business, inquired as to its ability to qualify for the sales tax exemption for data center businesses under Iowa Code section 423.3(95) as it is considering building a data center in Iowa to lease to data center tenants. The Director found that a data center property owner and a data center tenant based at the same physical location cannot aggregate their investments to meet the requirements of the sales tax exemption, but they can both qualify for the exemption as long as they each independently meet the minimum requirements.
The mission of the Iowa Department of Revenue is to serve Iowans through the
responsible collection and generation of revenue to support the public good.
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