Text: SSB00000 - SSB00099 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 423.4, subsection 16, Code 1997, is 1 2 amended by adding the following new unnumbered paragraph: 1 3 NEW UNNUMBERED PARAGRAPH. A lessor may maintain the 1 4 exemption from use tax under this subsection for a qualifying 1 5 lease that terminates at the conclusion or prior to the 1 6 contracted expiration date, if the lessor does not use the 1 7 vehicle for any purpose other than for lease. Once the 1 8 vehicle is used by the lessor for a purpose other than for 1 9 lease, the exemption from use tax under this subsection no 1 10 longer applies and, unless there is an exemption from the use 1 11 tax, use tax is due on the fair market value of the vehicle 1 12 determined at the time the lessor uses the vehicle for a 1 13 purpose other than for lease, payable to the department. If 1 14 the lessor holds the vehicle exclusively for sale, use tax is 1 15 due and payable on the purchase price of the vehicle at the 1 16 time of purchase pursuant to this chapter. 1 17 Sec. 2. Section 423.7A, subsections 1, 2, and 4, Code 1 18 1997, are amended to read as follows: 1 19 1. The tax imposed upon the use of leased vehicles subject 1 20 to registration under chapter 321, with gross vehicle weight 1 21 ratings of less than sixteen thousand pounds, excluding 1 22 motorcycles and motorized bicycles, which are leased by a 1 23 lessor licensed pursuant to chapter 321F for a period of 1 24 twelve months or more shall be paid by the owner of the 1 25 vehicle to the county treasurer or state department of 1 26 transportation from whom the registration receipt or 1 27 certificate of title is obtained. A registration receipt for 1 28 a vehicle subject to registration or issuance of a certificate 1 29 of title shall not be issued until the tax is paid in the 1 30 initial instance. Tax on the lease transaction that does not 1 31 require titling or registration of the vehicle shall be 1 32 remitted to the department. Tax and the reporting of tax due 1 33 to the department shall be remitted on or before fifteen days 1 34 from the last day of the month that the vehicle lease tax 1 35 becomes due. Failure to timely report or remit any of the tax 2 1 when due shall result in a penalty and interest being imposed 2 2 on the tax due pursuant to sections 423.18 and 423.23. 2 3 2. The amount subject to tax shall be computed on each 2 4 separate lease transaction bymultiplying the number of months2 5of the lease by the monthlytaking the total of the lease 2 6 payments, plus the down payment,less any manufacturer's2 7rebateand excluding all of the following: 2 8 a. Title fee. 2 9 b. Registration fees. 2 10 c. Vehicle lease tax pursuant to this section. 2 11 d. Federal excise taxes attributable to the sale of the 2 12 vehicle to the owner or to the lease of the vehicle by the 2 13 owner. 2 14 e. Optional service or warranty contracts subject to tax 2 15 pursuant to section 422.43, subsection 6. 2 16 f. Insurance. 2 17 g. Manufacturer's rebate. 2 18 h. Refundable deposit. 2 19 i. Finance charges, if any, on items listed in paragraphs 2 20 "a" through "h". 2 21 If any or all of the items in paragraphs "a" through "i" are 2 22 excluded from the taxable lease price, the owner shall 2 23 maintain adequate records of the amounts of those items. If 2 24 the parties to a lease enter into an agreement providing that 2 25 the tax imposed under this statute is to be paid by the lessee 2 26 or included in the monthly lease payments to be paid by the 2 27 lessee, the total cost of the tax shall not be included in the 2 28 computation of lease price for the purpose of taxation under 2 29 this section. The county treasureror, the state department 2 30 of transportation, or the department of revenue and finance 2 31 shall require every applicant for a registration receipt for a 2 32 vehicle subject to tax under this section to supply 2 33 information as the county treasurer or director deems 2 34 necessary as to the date of the lease transaction, the lease 2 35 price, and other information relative to the lease of the 3 1 vehicle. 3 2 4. If the lease is terminated prior to the termination 3 3 date contained in the lease agreement, no refund shall be 3 4 allowed for tax previously paidon the monthly rental payments3 5 under this section, except as provided in section 322G.4. 3 6 EXPLANATION 3 7 Section 423.4, subsection 16, was enacted in 1996 to 3 8 provide an exemption from use tax for vehicles purchased for 3 9 lease qualifying under section 423.7A. The current language 3 10 of that exemption indicates that once a lessor has met the 3 11 qualifications for exemption under the statute, the exemption 3 12 is maintained regardless of how the vehicle is subsequently 3 13 used by the lessor. In addition, the statute also provides 3 14 that if a vehicle subject to lease does not meet the 3 15 qualifications under the statute, then use tax is due on the 3 16 vehicle. The statute does not provide a period of time to 3 17 allow the vehicle to be released. Accordingly, section 423.4, 3 18 subsection 16, is amended to assist in the administration of 3 19 the tax by providing that the use tax exemption may be 3 20 retained as long as the lessor does not use the vehicle for 3 21 any purpose other than for lease. 3 22 Section 423.7A is amended to allow for the department of 3 23 revenue and finance to receive tax under section 423.7A in 3 24 instances where tax is due on the lease, but the transaction 3 25 creating the tax does not require registration or titling of 3 26 the vehicle subject to the lease. 3 27 Section 423.7A is also amended to provide that certain 3 28 items shall not be included in the computation of the lease 3 29 price. These items include title and registration fees, 3 30 federal excise taxes, insurance, manufacturer's rebates, and 3 31 refundable deposits. The amendment of this section also sets 3 32 forth that when the parties to a lease agree to include the 3 33 tax in the lease payments to be paid by the lessee, the total 3 34 of the use tax shall not be included in the computation of 3 35 total lease price. Instead, the cost of the tax shall only be 4 1 reflected as part of the monthly lease payments. Providing an 4 2 exclusion of the tax in the computation of total lease price 4 3 in this situation will assist in the computation of the tax 4 4 and auditing of lessor records. 4 5 The bill also provides that if a lease is terminated prior 4 6 to the termination date, no use tax paid is refundable except 4 7 in the case the lease is terminated under the defective motor 4 8 vehicle (lemon law) statute. 4 9 LSB 2411SS 77 4 10 mg/jw/5
Text: SSB00000 - SSB00099 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
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