SF 315 (LSB 2482XS (2) 86)

SENATE FILE 315

BY  SMITH

A BILL FOR

An Act relating to the fee for new registration for a vehicle purchased within sixty days of the sale of another vehicle by the same owner.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 321.105A, subsection 2, paragraph a, subparagraph (2), subparagraph division (a), unnumbered paragraph 1, Code 2015, is amended to read as follows:

   In transactions, except those subject to subparagraph division (b) or (0c), in which a vehicle subject to registration is traded toward the purchase price of another vehicle subject to registration, the purchase price is only that portion of the purchase price which is valued in money, whether received in money or not, if the following conditions are met:
    Sec. 2.  Section 321.105A, subsection 2, paragraph a, subparagraph (2), Code 2015, is amended by adding the following new subparagraph division:
   NEW SUBPARAGRAPH DIVISION.  (0c)  In cases involving two separate transactions in which an owner who is not a dealer sells a vehicle subject to registration to a purchaser, whether in this state or out-of-state, and, within sixty days before or after the date of the sale, purchases another vehicle subject to registration, the amount of the sales price of the vehicle sold by the owner shall be considered trade-in value and exempted from the purchase price of the vehicle purchased by the owner. To qualify for the exemption, the owner shall do one of the following, as applicable:
   (i)  If the qualifying sale of a vehicle occurs prior to the owner making application for new registration and certificate of title for the newly purchased vehicle, the exemption shall be included in the calculation of the fee for new registration on the newly purchased vehicle. At the time the owner applies for new registration and certificate of title, the owner shall provide to the county treasurer payment of the fee for new registration and proof of the transaction involving the qualifying sale of a vehicle and the sales price of the vehicle sold.
   (ii)  If the qualifying sale of a vehicle occurs after the owner applies for new registration and certificate of title and pays the fee for new registration for the newly purchased vehicle, the owner may apply to the department for a refund of the amount of the fee for new registration already paid which is in excess of the amount owed after the exemption provided for in this subparagraph division (0c) is applied.
    Sec. 3.  Section 321.105A, subsection 6, paragraph a, Code 2015, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (4)  If the amount of the fee for new registration paid by the owner of a vehicle subject to registration was computed upon the full purchase price and the owner subsequently qualifies for an exemption pursuant to subsection 2, paragraph “a”, subparagraph (2), subparagraph division (0c), the owner is entitled to a refund of the amount paid in excess of the amount owed after the exemption is applied. Notwithstanding subsection 5 or any other provision of law to the contrary, to obtain a refund, the owner shall apply to the county treasurer on a form provided by the department and provide proof that the fee for new registration for the newly purchased vehicle was paid and proof of the qualifying sale of another vehicle and the sales price of the vehicle sold. No later than sixty days after the date the owner applies to the county treasurer, the department shall issue a refund to the owner or notify the owner that the application for a refund is denied and the reason for the denial.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   Under current law, when the new owner of a vehicle subject to registration applies for registration and certificate of title, a fee for new registration is due in the amount of 5 percent of the purchase price of the vehicle. In transactions in which a vehicle is traded toward the purchase price of another vehicle, the value of the trade-in is excluded from the purchase price of the vehicle when calculating the fee for new registration.
   This bill provides for a similar calculation of the purchase price in cases where a person sells one vehicle and purchases another vehicle in separate transactions. Under the bill, if a person sells a vehicle subject to registration to an in-state or out-of-state purchaser and purchases another vehicle within 60 days before or after the sale, the amount of the sales price of the vehicle sold is treated as trade-in value and is exempt from the purchase price used to calculate the fee for new registration for the vehicle purchased. If the qualifying sale of a vehicle occurs before the fee for new registration is paid for the newly purchased vehicle, the exemption shall be included in the calculation of the fee for new registration which is remitted to the county treasurer by the owner, or, if the vehicle is purchased from a dealer, by the dealer on the owner’s behalf, along with the application for registration and certificate of title. The owner must provide proof of the qualifying vehicle sale and the sales price of the vehicle sold. If the qualifying sale occurs after the fee for new registration is paid for the newly purchased vehicle, the owner may apply to the county treasurer for a refund of the amount of the fee paid in excess of the amount owed. The application for a refund must be accompanied by proof that the fee for new registration for the newly purchased vehicle has been paid and proof of the qualifying sale of another vehicle and the sales price of that vehicle. The department of revenue has 60 days in which to issue a refund of the excess payment or notify the owner that the application for a refund is denied and the reason for the denial.
   In accordance with current law relating to the calculation of the purchase price in transactions involving traded vehicles, the name or names on the title and registration of the vehicle purchased must be the same as the name or names on the title and registration of the vehicle sold, with certain exceptions for transactions involving spousal ownership and transactions involving family members, business ownership, or loan cosigning requirements.