SF 2325 (LSB 6034SV (3) 86)

SENATE FILE 2325

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO SSB 3168)

(As Amended and Passed by the Senate 2016-04-28)

A BILL FOR

An Act providing a sales tax refund for the sale of goods and services furnished in fulfillment of a written construction contract with a qualifying nonprofit hospital, and providing penalties.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 423.4, Code 2016, is amended by adding the following new subsection:
   NEW SUBSECTION.  12.  a.  For purposes of this subsection, “designated nonprofit hospital” means a nonprofit hospital licensed pursuant to chapter 135B that satisfies all of the following requirements:
   (1)  The hospital entered into a written construction contract on or after January 1, 2014, but prior to December 31, 2016, or the hospital issued bonds to fund construction on or after July 1, 2014, but prior to December 31, 2016.
   (2)  The hospital is located in a county that borders Illinois and has a population of at least one hundred fifty thousand according to the 2010 certified federal census. 
   (3)  Between July 1, 2014, and December 31, 2018, the hospital, including any affiliated system hospital located in the same county, expends more than two million dollars on capital expenditures for facilities to provide inpatient or outpatient behavioral health services, as determined by the department from the Medicare cost reports prepared by the hospital.
   b.  Beginning July 1, 2017, a designated nonprofit hospital in this state may make application to the department for the refund of the sales or use tax upon the sales price of all sales of goods, wares, or merchandise, or from services furnished to a contractor, used in the fulfillment of a written construction contract with the designated nonprofit hospital entered into on or after January 1, 2014, but prior to December 31, 2016. In order to qualify for the refund, the sale and delivery of the goods, wares, or merchandise, or the services furnished, must have occurred between January 1, 2014, and December 31, 2017, and must have been purchased directly by a contractor, or by a contractor as the agent for the designated nonprofit hospital, or directly by the designated nonprofit hospital.
   c.  Such contractor shall state under oath, on forms provided by the department, the amount of such sales of goods, wares, or merchandise, or services furnished and used in the performance of such contract, and upon which sales or use tax has been paid, and shall file such forms with the designated nonprofit hospital which has made any written contract for performance by the contractor.
   d.  On or after July 1, 2017, but not more than three years after final settlement has been made, the designated nonprofit hospital shall make application to the department for any refund of the amount of the sales or use tax which shall have been paid upon any goods, wares, or merchandise, or services furnished. The application shall be made in the manner prescribed by the department and upon forms provided by the department. The department shall audit the claim and, if approved, issue a warrant to the designated nonprofit hospital in the amount of the sales or use tax which has been paid to the state of Iowa under the contract. However, for sales and use tax paid between January 1, 2014, and July 1, 2017, the total eligible refund shall be amortized equally over two calendar years, and the department shall issue one warrant each calendar quarter for forty-eight calendar quarters until the total applicable refund amount has been issued. 
   e.  The total amount of refunds provided pursuant to this subsection shall not exceed two million dollars. 
   f.  Any contractor who willfully makes a false report of tax paid under the provisions of this subsection is guilty of a simple misdemeanor and in addition shall be liable for the payment of the tax and any applicable penalty and interest.
   g.  This subsection is repealed July 1, 2022, or thirty days following the date on which two million dollars in total refunds have been provided.