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On January 19, 2021, the Iowa Department of Revenue issued guidance on the Iowa Small Business Relief Grant program. This guidance clarifies that House File 2641, in part, exempts from the Iowa income and franchise tax only grants under the Iowa Small Business Relief Grant Program.
Update: On the evening of December 27, 2020, President Trump signed the Consolidated Appropriations Act into law.
On November 4, 2020, the Iowa Court of Appeals issued an opinion determining whether an assessor properly appraised a feed manufacturing facility’s machinery for property tax purposes. The court analyzed whether a feed mill and steel grain storage bins met the definition of machinery under Iowa Code chapters 427A and 427B. Machinery must be used directly in manufacturing and a necessary part of the manufacturing process, used solely for effectuating that purpose, to qualify as tax exempt machinery.
On November 4, 2020, the Iowa Court of Appeals affirmed a district court order granting a permanent injunction preventing the defendant from interfering with the plaintiffs' use of an easement and private roadway. The court found that the defendant had improperly obstructed the easement with gates, fencing, and speed bumps, and that Iowa's partition fence law was inapplicable to the case.
On November 4, 2020, the Iowa Court of Appeals determined that beneficiaries of a trust had not shown that a trust advisor should be removed from her role. The court found that any potential conflict of interest was waived when the settlor created the trust and that the advisor had not committed fraud, dishonesty, or abuse of discretion so as to require removal.
On November 4, 2020, the Iowa Court of Appeals affirmed a district court’s judgment in a property dispute between a dairy farmer and his new neighbors. The court ruled that the dairy farmer failed to show that both landowners accepted a fence as the boundary line. The court also affirmed that a 1955 easement did not grant the neighbors the right to cross the dairy farmer’s land.
It has certainly been a year of challenges. COVID-19 triggered widespread economic harm, a once-in-a-lifetime derecho flattened fields and pummeled grain bins, and drought compounded the damage. Because of these disasters, most farmers received some unexpected payments in 2020.
On October 7, 2020, the Iowa Court of Appeals issued an opinion on whether a document signed by the trust grantor the day before he passed away was an amendment to his estate plan or merely instructions to his attorneys to redraft the plan. Because the document was “vague, obscure, and ambiguous,” the court affirmed that it was not an amendment to the trust.
On October 27, 2020, the EPA announced that it had approved the applications of Bayer and BASF for new registrations of dicamba-based XtendiMax and Engenia for over-the-top use on dicamba-tolerant cotton and soybeans. It also approved Syngenta’s application for a label amendment to extend the December 20, 2020, expiration date for dicamba-based Tavium.
On October 7, 2020, the Iowa Court of Appeals reversed a district court order which had denied a farming cooperative summary judgment on a claim of negligent hiring. The claim arose in a wrongful death lawsuit brought by the estate and family members of a farmer killed when an employee of a trucking company drove into the back of the farmer’s tractor with a grain truck The court ruled that the cooperative could not be liable for the negligent hiring of its independent contractor’s employee.
With the election just around the corner, American tax policy faces uncertainty. The Tax Cuts and Jobs Act of 2017 ushered in the most significant changes to the tax code in 30 years. Depending upon the outcome, the 2020 election could significantly alter the landscape again.
On October 7, 2020, the Iowa Court of Appeals issued an opinion concerning a city’s intent to develop land for a park and new high school. A landowner claimed the city committed an unconstitutional taking when it “earmarked” approximately nine acres of land for a potential right-of-way. Because the plans to acquire the land were theoretical, the court affirmed that the city did not create a servitude or uneconomical remnant.
Update: On October 6, Clinton County was added to the list.
On September 1, individual assistance was extended to:
The founders of our country believed that debtors should have an opportunity for a fresh start. The Constitution authorizes Congress to create bankruptcy laws. U.S. Const. Art. I, Sect. 8. The U.S. Supreme Court has stated, “Bankruptcy gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.” Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934). This fresh start occurs through a “bankruptcy discharge,” which generally releases debtors from personal liability for certain debts, preventing creditors from collecting those debts in the future.
On September 23, 2020, the Iowa Court of Appeals issued an opinion considering whether a release of liability waiver was a binding and enforceable contract. After a passenger of a semi-tractor was injured in an accident, she sought damages against the owner of the vehicle for the injuries sustained. The court affirmed that the waiver signed by the passenger was a valid release of her claims.
On September 2, 2020, the Iowa Court of Appeals issued an opinion regarding a claim for a breach of contract of a farm lease and for replevin. Without a written lease, the trial court analyzed the conduct and credibility of both parties in order to determine whether the farm lease was modified. The court affirmed the district court’s award of damages for the landlord, but reversed the ruling denying replevin of farm equipment.
Many are reeling from the damage caused by the derecho which tore through the Midwest on August 10, 2020. Farmers lost grain bins, outbuildings, crops, and much more. Clean up is ongoing with hundreds of trees uprooted and strewn across lawns. This post provides an overview of some of the tax issues associated with the destruction, clean-up, and rebuilding.
On September 2, 2020, the Iowa Court of Appeals affirmed the award of damages to a landlord for the breach of a pasture lease. The court declined to address the merits of the case because the tenant failed to preserve error.
Iowa land is is some of the most productive in the world. As settlers began arriving to the area, they encountered many swamps and sloughs making agriculture production difficult. To address the excess water, individual property owners drained their land using underground pipes, pumps, and open ditches to move excess surface water away from cropland.
The period for making Paycheck Protection Program loans through the CARES Act ended August 8. The program enabled 5.2 million loans, with $525 billion in proceeds disbursed to U.S. small businesses. When all was said and done, nearly $137 billion was left on the table.
On August 28, 2020, IRS issued Notice 2020-65, 2.5 pages of guidance related to the President’s August 8 payroll tax deferral Memorandum (Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster).
On August 25, 2020, Governor Reynolds announced that she was allocating $100 million of Iowa CARES Act relief funds to new agricultural programs created to offset the impact of COVID-19 on farmers and renewable fuel businesses.
A recent case from the Iowa Court of Appeals illustrates how redemption works after a farm foreclosure and warns debtors that they must strictly follow the letter of the law to redeem their land.
As of September 2, no progress has been made on a stimulus package. Congress returns from the Labor Day Recess on September 8.
Despite the recess for COVID-19, the Iowa Legislature passed many laws this term, many of them effective July 1, 2020. Below is summary of the new Iowa laws impacting agricultural producers and rural landowners.
On July 22, 2020, the Iowa Court of Appeals issued an opinion in a case seeking to set aside fraudulent transfers of a farm and three parcels of real estate. The court affirmed the district court’s order setting aside the transfer of the three parcels of land, but reversed the decision to set aside the transfer of the farm. The court ruled that the statute of limitations prevented the court from setting aside the otherwise fraudulent transfer of the farm.
On July 22, 2020, the Iowa Court of Appeals issued an opinion regarding a petition to foreclose a mechanic’s lien and claim for breach of contract. After a working relationship soured, a contractor attempted to foreclose a mechanic’s lien and claimed he was still owed compensation for services performed. Because there was no written contract or accounting of payments, the court relied on the district court’s findings and affirmed the ruling dismissing the mechanic’s lien and finding that the homeowners reasonably compensated the contractor for his services.
On July 22, 2020, the Iowa Court of Appeals issued an opinion affirming a Board of Adjustment’s grant of an area variance. The Board properly considered all evidence and accurately applied Iowa law when granting a variance to prevent unnecessary hardship.
On July 22, 2020, the Iowa Court of Appeals issued an opinion regarding a trustee’s request for fees and expenses incurred in administering a trust. The court affirmed the lower court’s ruling finding that the trustee was only entitled to a small portion of the claimed fees and expenses because she had not fulfilled her obligations to the trust or the beneficiary—likely in order to preserve trust assets for herself.
Called the 2020 Omnibus Bill, HF 2641 makes a number of changes to Iowa tax law. Signed into law by the Governor on June 29, 2020, the primary intent of the bill was to streamline the administration of Iowa’s tax laws and coordinate their interaction with federal law.
On July 22, 2020, the Iowa Court of Appeals issued an opinion reversing a district court decision interpreting a family trust. The district court had ruled that the income beneficiary was entitled to a distribution of the gross income of the trust, but her children argued that she was only entitled to the net income. The court agreed, ruling that a settlement agreement and the Iowa Uniform Principal and Income Act required a net income distribution.
On June 23, 2020, IRS issued Notice 2020-51, providing guidance for the waiver of 2020 required minimum distributions (RMD) made possible by the CARES Act. The guidance also provides sample plan amendments.
Update: On July 4, 2020, President Trump signed S.4116 into law. This new law allows new PPP loans to be made through August 8, 2020. The law does not allow businesses that have already obtained a loan to receive a second one.
A person commits food operation trespass by entering or remaining on the property of a food operation without the consent of a person who has real or apparent authority to allow the person to enter or remain on the property.
On June 19, 2020, the Iowa Supreme Court ruled that the Iowa Department of Revenue rationally interpreted Iowa Code § 422.7(21)(a) to prevent a typical cash rental landlord from taking the Iowa capital gain deduction. Christensen v. Iowa Department of Revenue, No. 19-0261 (Iowa Sup. Ct.
On Friday, June 19, IRS issued Notice 2020-50, expanding the definition of “qualified individuals” eligible for coronavirus-related distributions from eligible retirement accounts. The Notice also provides detailed guidance for coronavirus-related distributions and expanded plan loans made available by the CARES Act.
On June 12, 2020, the Iowa Supreme Court issued an opinion concerning the right of first refusal to purchase farmland. The plaintiffs did not seek specific performance, but instead sought monetary damages for an alleged breach of contract. The Court found that the statute of limitations for real estate transactions did not apply and no other grounds warranted granting summary judgment on the issue.
On June 16, 2020, the Center for Agricultural Law & Taxation hosted a crop marketing seminar presented by Dr. Steve Johnson, Extension Farm Management Specialist. In this webinar, Steve reviewed both old & new crop supply/demand & cash price projections, highlighted crop marketing strategies & tools and featured written crop marketing plans for a 1,000 acre row-crop example farm. The webinar also included an extensive Q & A period.
In this one-hour event, farm management specialist Steve Johnson and the Center's Kristine Tidgren provided an update to farmland owners on key farm program and legal developments. Kristine discussed the status of dicamba-based herbicides and reviewed the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDLs). Steve discussed Coronavirus Food Assistance Program (CFAP) payments, 2020 crop budgets and Iowa State University's 2020 Farmland Cash Rental Rate Survey.
On June 8, 2020, IRS and Treasury issued proposed regulations (REG-109755-19) that will (once they become final) open the door for those involved with health care sharing ministries and direct primary care arrangements to realize tax savings for the cost of these programs.
Update: On June 19, the Ninth Circuit denied the plaintiff's emergency motion to enforce the vacature and hold EPA in contempt.
The Center for Agricultural Law and Taxation does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. The Center's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.