| Hypothetical Iowa Unitary Business Taxable Income Computation | |||||
| This is an example of how Iowa taxation might look if Iowa adopts a "combined reporting" system for C corporations. This example is based on California's rules. | |||||
| Iowa Sales | Total Sales | Taxable Income | Iowa Factor | Unitary % | |
| Desmoinesco | $ 10,000 | $ 1,000,000 | $ 100,000 | 1.00% | 20.00% |
| Siouxfalls | 1,000,000 | 4,000,000 | 400,000 | 25.00% | 80.00% |
| Combined | $ 1,010,000 | $ 5,000,000 | $ 500,000 | 20.20% | |
| Iowa Taxable Income, Current Rules | |||||
| Desmoinesco Income | $ 100,000 | ||||
| Desmoinesco Iowa factor | 1.00% | ||||
| Income allocable to Iowa | $ 1,000 | ||||
| Iowa Taxable Income on Combined Basis | |||||
| Combined income | $ 500,000 | ||||
| Desmoinesco Iowa factor (1) | 1.00% | ||||
| Income allocable to Iowa | $ 5,000 | ||||
| (1) Because Siouxfalls is not taxable in Iowa, its factor is ignored in this computation. | |||||
| Desmoinesco and Siouxfalls are corporations under common ownership operating as a unitary business. Desmoinesco has Iowa nexus and is taxable in Iowa. Siouxfalls has no Iowa nexus or oprerations; it only sells into Iowa from out of state. It is not taxable in Iowa | |||||