HF 255 (LSB 1618HH (3) 88)

HOUSE FILE 255

BY  SHIPLEY

A BILL FOR

An Act relating to the taxation of virtual currencies, and including retroactive applicability provisions. 
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 422.3, Code 2019, is amended by adding the following new subsection:
   NEW SUBSECTION.  7.  “Virtual currency” means a type of unregulated, digital money, which is issued and usually controlled by the developers of the currency, and used and accepted as a medium of exchange, but does not have legal tender status as recognized by the United States.
    Sec. 2.  Section 422.7, Code 2019, is amended by adding the following new subsection:
   NEW SUBSECTION.  60.  Subtract, to the extent included, a gain from the sale of a virtual currency. Add, to the extent taken, a loss from such a sale.
    Sec. 3.  Section 422.35, Code 2019, is amended by adding the following new subsection:
   NEW SUBSECTION.  26.  Subtract, to the extent included, a gain from the sale of a virtual currency. Add, to the extent taken, a loss from such a sale.
    Sec. 4.  Section 423.3, Code 2019, is amended by adding the following new subsection:
   NEW SUBSECTION.  107.  The sales price from sales of tangible personal property, services, and specified digital products to the extent the sales price was paid in a virtual currency as defined in section 422.3.
    Sec. 5.  Section 423.14A, subsection 1, paragraph b, subparagraph (1), subparagraph division (b), subparagraph subdivision (v), Code 2019, is amended by striking the subparagraph subdivision.
    Sec. 6.  Section 450.4, Code 2019, is amended by adding the following new subsection:
   NEW SUBSECTION.  10.  On the value of virtual currency as defined in section 422.3.
    Sec. 7.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to January 1, 2019, for tax years beginning on or after that date.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to the taxation of virtual currencies. The bill defines “virtual currency” to mean a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted as a medium of exchange, but does not have legal tender status as recognized by the United States.
   The bill exempts virtual currencies from individual, corporate, franchise, sales and use, and inheritance taxes. 
   The bill strikes a reference to “virtual currency” in Code section 423.14A(1)(b)(1)(b)(v) relating to the responsibility of a “marketplace facilitator” to collect sales tax when purchasers of tangible personal property, services, or digital products use virtual currency.
   The bill applies retroactively to January 1, 2019, for tax years beginning on or after that date.