Text: HF00735 Text: HF00737 Text: HF00700 - HF00799 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 HOUSE FILE 736 1 2 1 3 AN ACT 1 4 RELATING TO THE ADMINISTRATION OF THE TAX AND RELATED LAWS 1 5 BY THE DEPARTMENT OF REVENUE AND FINANCE, INCLUDING 1 6 ADMINISTRATION OF STATE SALES AND USE, REAL ESTATE TRANSFER, 1 7 ENVIRONMENTAL PROTECTION CHARGE ON PETROLEUM DIMINUTION, 1 8 PROPERTY, MOTOR FUEL, SPECIAL FUEL, AND INHERITANCE TAXES, 1 9 AND INCLUDING EFFECTIVE AND APPLICABILITY DATE PROVISIONS. 1 10 1 11 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 1 12 1 13 Section 1. Section 422.43, Code 2001, is amended by adding 1 14 the following new subsections: 1 15 NEW SUBSECTION. 16. a. A tax of five percent is imposed 1 16 upon the gross receipts from sales of bundled services 1 17 contracts. For purposes of this subsection, a "bundled 1 18 services contract" means an agreement providing for a 1 19 retailer's performance of services, one or more of which is a 1 20 taxable service enumerated in this section and one or more of 1 21 which is not, in return for a consumer's or user's single 1 22 payment for the performance of the services, with no separate 1 23 statement to the consumer or user of what portion of that 1 24 payment is attributable to any one service which is a part of 1 25 the contract. 1 26 b. For purposes of the administration of the tax on 1 27 bundled services contracts, the director may enter into 1 28 agreements of limited duration with individual retailers, 1 29 groups of retailers, or organizations representing retailers 1 30 of bundled services contracts. Such an agreement shall impose 1 31 the tax rate only upon that portion of the gross receipts from 1 32 a bundled services contract which is attributable to taxable 1 33 services provided under the contract. 1 34 NEW SUBSECTION. 17. A tax of five percent is imposed upon 1 35 the gross receipts from any mobile telecommunication service 2 1 which this state is allowed to tax by the provisions of the 2 2 federal Mobile Telecommunications Sourcing Act, Pub. L. No. 2 3 106-252, 4 U.S.C. } 116 et seq. For purposes of this 2 4 subsection, taxes on mobile telecommunications service, as 2 5 defined under the federal Mobile Telecommunications Sourcing 2 6 Act that are deemed to be provided by the customer's home 2 7 service provider shall be paid to the taxing jurisdiction 2 8 whose territorial limits encompass the customer's place of 2 9 primary use, regardless of where the mobile telecommunication 2 10 service originates, terminates, or passes through and shall in 2 11 all other respects be taxed in conformity with the federal 2 12 Mobile Telecommunications Sourcing Act. All other provisions 2 13 of the federal Mobile Telecommunications Sourcing Act are 2 14 adopted by the state of Iowa and incorporated into this 2 15 subsection by reference. With respect to mobile 2 16 telecommunications service under the federal Mobile 2 17 Telecommunications Sourcing Act the director shall, if 2 18 requested, enter into agreements consistent with the 2 19 provisions of the federal Act. 2 20 Sec. 2. Section 422.45, subsection 3, Code 2001, is 2 21 amended by striking the subsection and inserting in lieu 2 22 thereof the following: 2 23 3. The gross receipts from sales or rental of tangible 2 24 personal property, or services rendered by any entity where 2 25 the profits from the sales or rental of the tangible personal 2 26 property, or services rendered are used by or donated to a 2 27 nonprofit entity which is exempt from federal income taxation 2 28 pursuant to section 501(c)(3) of the Internal Revenue Code, a 2 29 government entity, or a private educational institution, and 2 30 where the entire proceeds from the sales, rental, or services 2 31 are expended for any of the following purposes: 2 32 a. Educational. 2 33 b. Religious. 2 34 c. Charitable. A charitable act is an act done out of 2 35 goodwill, benevolence, and a desire to add or improve the good 3 1 of humankind in general or any class or portion of humankind, 3 2 with no pecuniary profit inuring to the person performing the 3 3 service or giving the gift. 3 4 This exemption does not apply to the gross receipts from 3 5 games of skill, games of chance, raffles, and bingo games as 3 6 defined in chapter 99B. This exemption is disallowed on the 3 7 amount of the gross receipts only to the extent the profits 3 8 from the sales, rental, or services are not used by or donated 3 9 to the appropriate entity and expended for educational, 3 10 religious, or charitable purposes. 3 11 Sec. 3. Section 422.45, subsection 8, Code 2001, is 3 12 amended to read as follows: 3 13 8. The gross receipts of all sales of goods, wares,or3 14 merchandise, or services, used for educational purposes to any 3 15 private nonprofit educational institution in this state.The3 16exemption provided by this subsection shall also apply to all3 17such sales of goods, wares or merchandise, or services,3 18subject to use tax under the provisions of chapter 423.For 3 19 the purpose of this subsection, "educational institution" 3 20 means an institution which primarily functions as a school, 3 21 college, or university with students, faculty, and an 3 22 established curriculum. The faculty of an educational 3 23 institution must be associated with the institution and the 3 24 curriculum must include basic courses which are offered every 3 25 year. "Educational institution" includes an institution 3 26 primarily functioning as a library. 3 27 Sec. 4. Section 422.45, Code 2001, is amended by adding 3 28 the following new subsection: 3 29 NEW SUBSECTION. 60. The gross receipts from sales of 3 30 goods, wares, or merchandise, or from services performed, 3 31 rendered, or furnished to a nonprofit private art center to be 3 32 used in the operation of the art center. 3 33 Sec. 5. Section 423.1, subsection 10, Code 2001, is 3 34 amended to read as follows: 3 35 10. "Retailer maintaining a place of business in this 4 1 state" or any like term includes any retailer having or 4 2 maintaining within this state, directly or by a subsidiary, 4 3 tangible personal property leased to a lessee of the retailer, 4 4 an office, distribution house, sales house, warehouse, or 4 5 other place of business, or any representative operating 4 6 within this state under the authority of the retailer or its 4 7 subsidiary, irrespective of whether that place of business or 4 8 representative is located here permanently or temporarily, or 4 9 whether the retailer or subsidiary is admitted to do business 4 10 within this state pursuant to chapter 490. 4 11 Sec. 6. Section 423.1, subsection 12, Code 2001, is 4 12 amended to read as follows: 4 13 12. "Tangible personal property" means tangible goods, 4 14 wares, merchandise, optional service or warranty contracts, 4 15 except residential service contracts regulated under chapter 4 16 523C, vulcanizing, recapping, or retreading services, 4 17 engraving, photography, retouching, printing, or binding 4 18 services, and gas, electricity,andwater, and communication 4 19 service when furnished or delivered to consumers or users 4 20 within this state. 4 21 Sec. 7. Section 423.4, subsection 9, Code 2001, is amended 4 22 to read as follows: 4 23 9. Vehicles subject to registration which are transferred 4 24 from a business or individual conducting a business within 4 25 this state as a sole proprietorship,orpartnership, or 4 26 limited liability company to a corporation formed by the sole 4 27 proprietorship,orpartnership, or limited liability company 4 28 for the purpose of continuing the business when all of the 4 29 stock of the corporation so formed is owned by the sole 4 30 proprietor and the sole proprietor's spouse,orby all the 4 31 partners in the case of a partnership, or by all of the 4 32 members in the case of a limited liability company. This 4 33 exemption is equally available where the vehicles subject to 4 34 registration are transferred from a corporation to a sole 4 35 proprietorship,orpartnership, or limited liability company 5 1 formed by that corporation for the purpose of continuing the 5 2 business when all of the incidents of ownership are owned by 5 3 the same person or persons who were stockholders of the 5 4 corporation. 5 5 This exemption also applies where the vehicles subject to 5 6 registration are transferred from a corporation as part of the 5 7 liquidation of the corporation to its stockholders if within 5 8 three months of such transfer the stockholders retransfer 5 9 those vehicles subject to registration to a sole 5 10 proprietorship, partnership, or limited liability company for 5 11 the purpose of continuing the business of the corporation when 5 12 all of the incidents of ownership are owned by the same person 5 13 or persons who were stockholders of the corporation. 5 14 Sec. 8. Section 424.10, subsections 1 and 3, Code 2001, 5 15 are amended to read as follows: 5 16 1. As soon as practicable after a return is filed and in 5 17 any event withinfivethree years after the return is filed 5 18 the department shall examine it, assess and determine the 5 19 charge due if the return is found to be incorrect, and give 5 20 notice to the depositor ofsuchthe assessment and 5 21 determination as provided in subsection 2. The period for the 5 22 examination and determination of the correct amount of the 5 23 charge is unlimited in the case of a false or fraudulent 5 24 return made with the intent to evade the charge or in the case 5 25 of a failure to file a return. If the determination that a 5 26 return is incorrect is the result of an audit of the books and 5 27 records of the depositor, the charge, or additional charge, if 5 28 any is found due, shall be assessed and determined and the 5 29 notice to the depositor shall be given by the department 5 30 within one year after the completion of the examination of the 5 31 books and records. 5 32 3. If the amount paid is greater than the correct charge, 5 33 penalty, and interest due, the department shall refund the 5 34 excess, with interest after sixty days from the date of 5 35 payment at the rate in effect under section 421.7, pursuant to 6 1 rules prescribed by the director. However, the director shall 6 2 not allow a claim for refund that has not been filed with the 6 3 department withinfivethree years after the charge payment 6 4 upon which a refund is claimed became due, or one year after 6 5 the charge payment was made, whichever time is later. A 6 6 determination by the department of the amount of charge, 6 7 penalty, and interest due, or the amount of refund for any 6 8 excess amount paid, is final unless the person aggrieved by 6 9 the determination appeals to the director for a revision of 6 10 the determination within sixty days from the date of the 6 11 notice of determination of charge, penalty, and interest due 6 12 or refund owing. The director shall grant a hearing, and upon 6 13 hearing the director shall determine the correct charge, 6 14 penalty, and interest due or refund owing, and notify the 6 15 appellant of the decision by mail. The decision of the 6 16 director is final unless the appellant seeks judicial review 6 17 of the director's decision under section 424.13. 6 18 Sec. 9. Section 424.12, Code 2001, is amended to read as 6 19 follows: 6 20 424.12 RECORDS REQUIRED. 6 21 Itshall beis the duty of every depositor required to make 6 22 a report and pay any charge under this chapter, to preserve 6 23 such records as the director may require, and itshall beis 6 24 the duty of every depositor to preserve for a period offive6 25 three years all invoices and other records; and all such 6 26 books, invoices, and other records shall be open to 6 27 examination at any time by the department, and shall be made 6 28 available within this state forsuchexamination upon 6 29 reasonable notice when the director shall so order. When 6 30 requested to do so by any person from whom a charge payer is 6 31 seeking credit, or with whom the charge payer is negotiating 6 32 the sale of any personal property, or by any other person 6 33 having a legitimate interest in such information, the 6 34 director, upon being satisfied that such a situation exists, 6 35 shall informsuchthat person as to the amount of unpaid 7 1 charges due by the charge payer underthe provisions ofthis 7 2 chapter. The giving ofsuchinformation under such 7 3 circumstances shall not be deemed a violation of section 7 4 422.72 as applied to this chapter. 7 5 Section 422.72 applies to this chapter as if the 7 6 environmental protection charge were a tax. 7 7 Sec. 10. Section 424.15, unnumbered paragraph 1, Code 7 8 2001, is amended to read as follows: 7 9 If it appears that, as a result of mistake, an amount of a 7 10 charge, penalty, or interest has been paid which was not due 7 11 underthe provisions ofthis chapter, thensuchthat amount 7 12 shall be refunded tosuch personthe charge payer by the 7 13 department. A claim for refund that has not been filed with 7 14 the department withinfivethree years after the charge 7 15 payment upon which a refund is claimed became due, or one year 7 16 aftersuchthat charge payment was made, whichever time is the 7 17 later, shall not be allowed by the director. 7 18 Sec. 11. Section 427.1, subsection 14, unnumbered 7 19 paragraph 1, Code 2001, is amended to read as follows: 7 20 A society or organization claiming an exemption under 7 21 subsection 5 or subsection 8 shall file with the assessor not 7 22 later thanApril 15February 1 a statement upon forms to be 7 23 prescribed by the director of revenue and finance, describing 7 24 the nature of the property upon which the exemption is claimed 7 25 and setting out in detail any uses and income from the 7 26 property derived from the rentals, leases, or other uses of 7 27 the property not solely for the appropriate objects of the 7 28 society or organization. Upon the filing and allowance of the 7 29 claim, the claim shall be allowed on the property for 7 30 successive years without further filing as long as the 7 31 property is used for the purposes specified in the original 7 32 claim for exemption. When the property is sold or 7 33 transferred, the county recorder shall provide notice of the 7 34 transfer to the assessor. The notice shall describe the 7 35 property transferred and the name of the person to whom title 8 1 to the property is transferred. 8 2 Sec. 12. Section 427.1, subsection 20, Code 2001, is 8 3 amended to read as follows: 8 4 20. IMPOUNDMENT STRUCTURES. The impoundment structure and 8 5 any land underlying an impoundment located outside an 8 6 incorporated city, which are not developed or used directly or 8 7 indirectly for nonagricultural income-producing purposes and 8 8 which are maintained in a condition satisfactory to the soil 8 9 and water conservation district commissioners of the county in 8 10 which the impoundment structure and the impoundment are 8 11 located. A person owning land which qualifies for a property 8 12 tax exemption under this subsection shall apply to the county 8 13 assessor each yearbefore the first of Julynot later than 8 14 February 1 for the exemption. The application shall be made 8 15 on forms prescribed by the department of revenue and finance. 8 16 The first application shall be accompanied by a copy of the 8 17 water storage permit approved by the administrator of the 8 18 environmental protection division of the department of natural 8 19 resources and a copy of the plan for the construction of the 8 20 impoundment structure and the impoundment. The construction 8 21 plan shall be used to determine the total acre-feet of the 8 22 impoundment and the amount of land which is eligible for the 8 23 property tax exemptionstatus. The county assessor shall 8 24 annually review each application for the property tax 8 25 exemption under this subsection and submit it, with the 8 26 recommendation of the soil and water conservation district 8 27 commissioners, to the board of supervisors for approval or 8 28 denial. An applicant for a property tax exemption under this 8 29 subsection may appeal the decision of the board of supervisors 8 30 to the district court. 8 31 PARAGRAPH DIVIDED. As used in this subsection, 8 32 "impoundment" means a reservoir or pond which has a storage 8 33 capacity of at least eighteen acre-feet of water or sediment 8 34 at the time of construction; "storage capacity" means the 8 35 total area below the crest elevation of the principal spillway 9 1 including the volume of any excavation in the area; and 9 2 "impoundment structure" means a dam, earthfill, or other 9 3 structure used to create an impoundment. 9 4 Sec. 13. Section 427.1, subsection 22, unnumbered 9 5 paragraph 2, Code 2001, is amended to read as follows: 9 6 Application for this exemption shall be filed with the 9 7 commissioners of the soil and water conservation district in 9 8 which the property is located, not later thanApril 159 9 February 1 of the assessment year, on forms provided by the 9 10 department of revenue and finance. The application shall 9 11 describe and locate the property to be exempted and have 9 12 attached to it an aerial photo of that property on which is 9 13 outlined the boundaries of the property to be exempted. In 9 14 the case of an open prairie which is or includes a gully area 9 15 susceptible to severe erosion, an approved erosion control 9 16 plan must accompany the application. Upon receipt of the 9 17 application, the commissioners shall certify whether the 9 18 property is eligible to receive the exemption. The 9 19 commissioners shall not withhold certification of the 9 20 eligibility of property because of the existence upon the 9 21 property of an abandoned building or structure which is not 9 22 used for economic gain. If the commissioners certify that the 9 23 property is eligible, the application shall be forwarded to 9 24 the board of supervisors by May 1 of that assessment year with 9 25 the certification of the eligible acreage. An application 9 26 must be accompanied by an affidavit signed by the applicant 9 27 that if an exemption is granted, the property will not be used 9 28 for economic gain during the assessment year in which the 9 29 exemption is granted. 9 30 Sec. 14. Section 427.1, subsection 30, Code 2001, is 9 31 amended to read as follows: 9 32 30. MOBILE HOME PARK STORM SHELTER. A structure 9 33 constructed as a storm shelter at a mobile home park as 9 34 defined in section 435.1. An application for this exemption 9 35 shall be filed with the assessing authority not later than 10 1April fifteenthFebruary 1 of the first year for which the 10 2 exemption is requested, on forms provided by the department of 10 3 revenue and finance. The application shall describe and 10 4 locate the storm shelter to be exempted. If the storm shelter 10 5 structure is used exclusively as a storm shelter, all of the 10 6 structure's assessed value shall be exempt from taxation. If 10 7 the storm shelter structure is not used exclusively as a storm 10 8 shelter, the storm shelter structure shall be assessed for 10 9 taxation at seventy-five percent of its value as commercial 10 10 property. 10 11 Sec. 15. Section 427.16, subsection 2, Code 2001, is 10 12 amended to read as follows: 10 13 2. Application for the exemption shall be filed with the 10 14 assessor, not later thanMarch 1February 1 of the assessment 10 15 year, on forms provided by the department of revenue and 10 16 finance. The exemption application shall include an approved 10 17 application for certified substantial rehabilitation from the 10 18 state historic preservation officer and documentation of 10 19 additional property tax relief or financial assistance 10 20 currently allowed for the real property. Upon receipt of the 10 21 application, the assessor shall certify whether or not the 10 22 property is eligible to receive the exemption and shall 10 23 forward the application to the board. 10 24 Sec. 16. Section 427C.3, Code 2001, is amended to read as 10 25 follows: 10 26 427C.3 FOREST RESERVATION. 10 27 A forest reservation shall contain not less than two 10 28 hundred growing forest trees on each acre. If the area 10 29 selected is a forest containing the required number of growing 10 30 forest trees, it shall be accepted as a forest reservation 10 31 under this chapter provided application is made or on file on 10 32 or beforeApril 15February 1 of the exemption year. If any 10 33 buildings are standing on an area selected as a forest 10 34 reservation under this section or a fruit-tree reservation 10 35 under section 427C.7, one acre of that area shall be excluded 11 1 from the tax exemption. However, the exclusion of that acre 11 2 shall not affect the area's meeting the acreage requirement of 11 3 section 427C.2. 11 4 Sec. 17. Section 427C.7, Code 2001, is amended to read as 11 5 follows: 11 6 427C.7 FRUIT-TREE RESERVATION – DURATION OF EXEMPTION. 11 7 A fruit-tree reservation shall contain on each acre, at 11 8 least forty apple trees, or seventy other fruit trees, growing 11 9 under proper care and annually pruned and sprayed. A 11 10 reservation may be claimed as a fruit-tree reservation, under 11 11 this chapter, for a period of eight years after planting 11 12 provided application is made or on file on or beforeApril 1511 13 February 1 of the exemption year. 11 14 Sec. 18. Section 428A.8, Code 2001, is amended by adding 11 15 the following new unnumbered paragraph: 11 16 NEW UNNUMBERED PARAGRAPH. Any tax or additional tax found 11 17 to be due shall be collected by the county recorder. If the 11 18 county recorder is unable to collect the tax, the director of 11 19 revenue and finance shall collect the tax in the same manner 11 20 as taxes are collected in chapter 422, division III. If 11 21 collected by the director of revenue and finance, the director 11 22 shall pay the county its proportionate share of the tax. 11 23 Section 422.25, subsections 1, 2, 3, and 4, and sections 11 24 422.26, 422.28 to 422.30, and 422.73, consistent with this 11 25 chapter, apply with respect to the collection of any tax or 11 26 additional tax found to be due, in the same manner and with 11 27 the same effect as if the deed, instrument, or writing were an 11 28 income tax return within the meaning of those statutes. 11 29 Sec. 19. NEW SECTION. 428A.9 REFUND OF TAX. 11 30 To receive a refund from the state the taxpayer shall 11 31 petition the state appeal board for a refund of the amount of 11 32 overpayment of the tax paid to the treasurer of state. To 11 33 receive a refund from the county the taxpayer shall petition 11 34 the board of supervisors for a refund of the remaining portion 11 35 of the overpayment paid to that county. 12 1 Sec. 20. Section 450.4, subsection 5, Code 2001, is 12 2 amended to read as follows: 12 3 5. On the value of that portion of any lump sum or 12 4 installment payments which will be includable as net income as 12 5 defined in section 422.7 as received by a beneficiary under an 12 6 annuity which was purchased under an employees pension or 12 7 retirement plan. 12 8 Sec. 21. Section 450.4, Code 2001, is amended by adding 12 9 the following new subsections: 12 10 NEW SUBSECTION. 7. On the value of that portion of any 12 11 lump sum or installment payments which are received by a 12 12 beneficiary under an annuity which was purchased under an 12 13 employee's pension or retirement plan where the employee is a 12 14 nonresident of Iowa at the time of death. 12 15 NEW SUBSECTION. 8. On the value of that portion of any 12 16 lump sum or installment payments which are received by a 12 17 beneficiary under an annuity which was purchased under an 12 18 employee's pension or retirement plan which was excluded from 12 19 net income as set forth in section 422.7, subsection 31. 12 20 Sec. 22. Section 452A.2, Code 2001, is amended by adding 12 21 the following new subsections: 12 22 NEW SUBSECTION. 4A. "Denatured ethanol" means ethanol 12 23 that is to be blended with gasoline, has been derived from 12 24 cereal grains, complies with American society of testing 12 25 materials designation D-4806-95b, and may be denatured only as 12 26 specified in Code of Federal Regulations, Titles 20, 21, and 12 27 27. Alcohol and denatured ethanol have the same meaning in 12 28 this chapter. 12 29 NEW SUBSECTION. 18A. "Racing fuel" means leaded gasoline 12 30 of one hundred ten octane or more that does not meet American 12 31 society of testing materials designation D-4814 for gasoline 12 32 and is sold in bulk for use in nonregistered motor vehicles. 12 33 Sec. 23. Section 452A.2, subsection 17, paragraph a, Code 12 34 2001, is amended to read as follows: 12 35 a. All products commonly or commercially known or sold as 13 1 gasoline, including ethanol blended gasoline, casinghead, and 13 2 absorption or natural gasoline, regardless of their 13 3 classifications or uses, and including transmix which serves 13 4 as a buffer between fuel products in the pipeline distribution 13 5 process. 13 6 Sec. 24. Section 452A.3, subsection 5, paragraph a, Code 13 7 2001, is amended by adding the following new unnumbered 13 8 paragraph: 13 9 NEW UNNUMBERED PARAGRAPH. Tax shall not be paid when the 13 10 sale of alcohol occurs within a terminal from an alcohol 13 11 manufacturer to an Iowa licensed supplier. The tax shall be 13 12 paid by the Iowa licensed supplier when the invoiced gross 13 13 gallonage of the alcohol or the alcohol part of ethanol 13 14 blended gasoline is withdrawn from a terminal for delivery in 13 15 this state. 13 16 Sec. 25. Section 452A.17, subsection 1, paragraph a, Code 13 17 2001, is amended by adding the following new subparagraph: 13 18 NEW SUBPARAGRAPH. (10) Racing fuel. 13 19 Sec. 26. EFFECTIVE AND APPLICABILITY DATES. 13 20 1. The sections of this Act amending Code section 422.45, 13 21 subsections 3 and 8, take effect January 1, 2002. 13 22 2. The sections of this Act amending Code sections 427.1, 13 23 427.16, 427C.3, and 427C.7 take effect January 1, 2002, and 13 24 apply to claims filed on or after that date. 13 25 13 26 13 27 13 28 BRENT SIEGRIST 13 29 Speaker of the House 13 30 13 31 13 32 13 33 MARY E. KRAMER 13 34 President of the Senate 13 35 14 1 I hereby certify that this bill originated in the House and 14 2 is known as House File 736, Seventy-ninth General Assembly. 14 3 14 4 14 5 14 6 MARGARET THOMSON 14 7 Chief Clerk of the House 14 8 Approved , 2001 14 9 14 10 14 11 14 12 THOMAS J. VILSACK 14 13 Governor
Text: HF00735 Text: HF00737 Text: HF00700 - HF00799 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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