Policy letter; September 13, 1988
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Policy letter; September 13, 1988
This letter is in response to your telephone call of September 9, 1988. The Following is my understanding of the factual situation you set forth. You are considering forming a limited partnership which would have manufacturing facility in Iowa. The majority if not all of the sales of the limited partnership would be in states other than Iowa. Theses sales would be solicited at the customer's place of business by employees or partners of the limited partnership. You would be the general partner and the local managers would be the limited partners. You have no intent of becoming an Iowa resident. Based upon the above facts, the following would be the Iowa income tax impact upon you. The partnership would be required to file form IA 1065, Iowa Partnership Return which is an informational return similar to the federal form 1065. As a nonresident taxpayer with income from sources within Iowa, you would be required to file an Iowa form 1040 Individual income tax return reporting your apportioned distributive share of the partnership income or loss. Iowa Code sections 422.5(1) and 422.8(2) set forth the imposition of tax on nonresidents. Department rules 40.16(3), 40.16(4), 40.16(5) and Chapter 45 set forth the method of apportionment to be used to the determine the income attributable to Iowa for nonresidents and filing requirements for partnerships. Copies of the above are enclosed. Based upon the foregoing, the partnership would determine the portion of its net income attributable to Iowa based upon its ratio of sales made within the state to the total gross sales everywhere and your distributive share of that apportioned income would be subject to Iowa tax. The advice given in this letter is not a declaratory ruling issued pursuant to Iowa Code section 17A.9 (1987) and is not binding upon the Department. If you have any further questions, please contact me. Yours Truly, John Christensen Policy Section Technical Services Division