1 School district surtax. Iowa law provides for the implementation of an income

surtax for increasing local school district budgets. The surtax must be approved by the voters of a school district in a special election or by a resolution of the board of directors of a school district. The surtax rate is determined by the department of management on the basis of the revenue to be raised by the surtax for the particular school district with the surtax. The school district surtax is imposed on the income tax liabilities of all taxpayers residing in the school district on the last day of the taxpayers’ tax years. For purposes of the school district surtax, income tax liability is the tax computed under Iowa Code section 422.5, less the nonrefundable credits against computed tax which are authorized in Iowa Code chapter 422, division II. In a situation where an individual is residing in a school district with a surtax and the individual dies during the tax year, the individual will be considered to be subject to the surtax, since the individual was residing in the school district on the last day of the individual’s tax year. An individual serving in the Armed Forces of the United States who maintains permanent residence in an Iowa school district with a surtax is subject to the surtax regardless of whether the individual is physically residing in the school district on the last day of the tax year. A person who is present in the school district on the last day of the tax year on a temporary basis due to annual leave or in transit between duty stations is not subject to the surtax. This rule is intended to implement Iowa Code sections 257.21, 257.29, and 422.15. [ARC 8702B, IAB 4/21/10, effective 5/26/10; Editorial change: IAC Supplement 11/2/22]