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Text: HSB00740                          Text: HSB00742
Text: HSB00700 - HSB00799               Text: HSB Index
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House Study Bill 741

Conference Committee Text

  1  1    Section 1.  Section 422.47, Code Supplement 1995, is
  1  2 amended by adding the following new subsection:
  1  3    NEW SUBSECTION.  5.  a.  The department shall issue or the
  1  4 seller may separately provide exemption certificates in the
  1  5 form prescribed by the director to assist retailers in
  1  6 properly accounting for nontaxable sales of tangible personal
  1  7 property or services to state and county fairs for their own
  1  8 use.
  1  9    b.  The sales tax liability for all sales of tangible
  1 10 personal property and all sales of services is upon the seller
  1 11 and the purchaser unless the seller takes in good faith from
  1 12 the purchaser a valid exemption certificate stating under
  1 13 penalties for perjury that the purchase is for the use of a
  1 14 state or county fair and is not a purchase for resale or for
  1 15 processing or unless the seller takes a fuel exemption
  1 16 certificate pursuant to subsection 4.  If the tangible
  1 17 personal property or services are purchased tax free pursuant
  1 18 to a valid exemption certificate which is taken in good faith
  1 19 by the seller, and the tangible personal property or services
  1 20 are used or disposed of by the purchaser in a nonexempt
  1 21 manner, the purchaser is solely liable for the taxes and shall
  1 22 remit the taxes directly to the department and sections
  1 23 422.50, 422.51, 422.52, 422.54, 422.55, 422.56, 422.57,
  1 24 422.58, and 422.59 shall apply to the purchaser.
  1 25    c.  A valid exemption certificate is an exemption
  1 26 certificate which is complete and correct according to the
  1 27 requirements of the director.
  1 28    d.  A valid exemption certificate is taken in good faith by
  1 29 the seller when the seller has exercised that caution and
  1 30 diligence which honest persons of ordinary prudence would
  1 31 exercise in handling their own business affairs, and includes
  1 32 an honesty of intention and freedom from knowledge of
  1 33 circumstances which ought to put one upon inquiry as to the
  1 34 facts.  In order for a seller to take a valid exemption
  1 35 certificate in good faith, the seller must exercise reasonable
  2  1 prudence to determine the facts supporting the valid exemption
  2  2 certificate, and if any facts upon such certificate would lead
  2  3 a reasonable person to further inquiry, then such inquiry must
  2  4 be made with an honest intent to discover the facts.
  2  5    e.  If the circumstances change and the tangible personal
  2  6 property or services are used or disposed of by the purchaser
  2  7 in a nonexempt manner, the purchaser is liable solely for the
  2  8 taxes and shall remit the taxes directly to the department in
  2  9 accordance with this subsection.  
  2 10                           EXPLANATION
  2 11    The bill provides that the department of revenue and
  2 12 finance shall issue or the seller may provide separately
  2 13 exemption certificates for nontaxable sales made to state and
  2 14 county fairs for purposes of the state sales and use taxes.
  2 15 The exemption certificate would allow state and county fairs
  2 16 to purchase property or services for its own use without
  2 17 having to first pay the sales tax since these fairs are exempt
  2 18 from the tax.  
  2 19 LSB 4326HC 76
  2 20 mg/jj/8

Text: HSB00740                          Text: HSB00742
Text: HSB00700 - HSB00799               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

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