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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 twelve- 1 5 month qualifying lease that terminates at the conclusion or 1 6 prior to the contracted expiration date, if the lessor does 1 7 not use the vehicle for any purpose other than for lease. 1 8 Once the vehicle is used by the lessor for a purpose other 1 9 than for lease, the exemption from use tax under this 1 10 subsection no longer applies and use tax is due on the fair 1 11 market value of the vehicle determined at the time the lessor 1 12 uses the vehicle for a purpose other than for lease, payable 1 13 to the department. If the lessor holds the vehicle 1 14 exclusively for sale, use tax is due and payable on the 1 15 purchase price of the vehicle at the time of purchase pursuant 1 16 to this chapter. 1 17 Sec. 2. Section 423.7A, subsections 1 and 2, Code 1997, 1 18 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 total lease price of a 1 31 transaction that does not require titling or registration of 1 32 the vehicle shall be remitted to the department. Tax and the 1 33 reporting of tax due to the department shall be remitted on or 1 34 before fifteen days from the last day of the month that the 1 35 vehicle lease tax becomes due. Failure to timely report or 2 1 remit any of the tax when due shall result in a penalty and 2 2 interest being imposed on the tax due pursuant to sections 2 3 423.18 and 423.23. 2 4 2. The amount subject to tax shall be computed on each 2 5 separate lease transaction by multiplying the number of months 2 6 of the lease by the monthly lease payments, plus the 2 7 downpayment, less any manufacturer's rebate and refundable 2 8 deposit. If the parties to a lease enter into an agreement 2 9 providing that the tax imposed under this statute is to be 2 10 included in the monthly lease payments to be paid by the 2 11 lessee, the total cost of the tax shall not be included in the 2 12 computation of lease price for the purpose of taxation under 2 13 this section. The county treasureror, the state department 2 14 of transportation, or the department of revenue and finance 2 15 shall require every applicant for a registration receipt for a 2 16 vehicle subject to tax under this section to supply 2 17 information as the county treasurer or director deems 2 18 necessary as to the date of the lease transaction, the lease 2 19 price, and other information relative to the lease of the 2 20 vehicle. 2 21 Sec. 3. This Act, being deemed of immediate importance, 2 22 takes effect upon enactment and applies retroactively to 2 23 January 1, 1997, for leases entered into on or after that 2 24 date. 2 25 EXPLANATION 2 26 Section 423.4, subsection 16, was enacted in 1996 to 2 27 provide an exemption from use tax for vehicles purchased for 2 28 lease qualifying under section 423.7A. The current language 2 29 of that exemption indicates that once a lessor has met the 2 30 qualifications for exemption under the statute, the exemption 2 31 is maintained regardless of how the vehicle is subsequently 2 32 used by the lessor. In addition, the statute also provides 2 33 that if a vehicle subject to lease does not meet the 2 34 qualifications under the statute, then use tax is due on the 2 35 vehicle. The statute does not provide a period of time to 3 1 allow the vehicle to be released. Accordingly, section 423.4, 3 2 subsection 16, is amended to assist in the administration of 3 3 the tax by providing that the use tax exemption may be 3 4 retained as long as the lessor does not use the vehicle for 3 5 any purpose other than for lease. 3 6 Section 423.7A is amended to allow for the department of 3 7 revenue and finance to receive tax under section 423.7A in 3 8 instances where tax is due on the lease, but the transaction 3 9 creating the tax does not require registration or titling of 3 10 the vehicle subject to the lease. 3 11 Section 423.7A is also amended to provide that a deposit 3 12 given by the lessee to the lessor shall not be included in the 3 13 computation of the lease price to the extent the deposit is 3 14 refunded to the lessee at the termination of the lease. The 3 15 amendment of this section also sets forth that when the 3 16 parties to a lease agree to include the tax in the lease 3 17 payments to be paid by the lessee, the total of the use tax 3 18 shall not be included in the computation of total lease price. 3 19 Instead, the cost of the tax shall only be reflected as part 3 20 of the monthly lease payments. Providing an exclusion of the 3 21 tax in the computation of total lease price in this situation 3 22 will assist in the computation of the tax and auditing of 3 23 lessor records. 3 24 The bill provides a retroactive effective date for these 3 25 amendments of January 1, 1997, for leases entered into on or 3 26 after that date. 3 27 LSB 1112DP 77 3 28 mg/jw/5
Text: SSB00063 Text: SSB00065 Text: SSB00000 - SSB00099 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
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