Close
Close

Iowa Supreme Court rejects inclusion of parent company in consolidated report

On March 24, 2017, the Iowa Supreme Court affirmed a District Court decision that a group’s parent company could not be included with its subsidiaries in an Iowa consolidated income tax return because the parent did not receive taxable Iowa income. Rather, the parent’s activities in Iowa consisted of owning and controlling the subsidiaries, and this activity does not establish a taxable nexus with Iowa. While Iowa law allows corporate groups to file a nexus consolidated income tax return, a corporation is allowed to join in the filing of the consolidated return only if it has taxable Iowa source income.