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1 1 Section 1. NEW SECTION. 421A.1 TITLE.
1 2 This chapter shall be known and referred to as the
1 3 "Simplified Sales and Use Tax Administration Act".
1 4 Sec. 2. NEW SECTION. 421A.2 DEFINITIONS.
1 5 As used in this chapter, unless the context otherwise
1 6 requires:
1 7 1. "Agreement" means the streamlined sales and use tax
1 8 agreement as amended and adopted by the special task force and
1 9 the executive committee of the national conference of state
1 10 legislatures on January 27, 2001.
1 11 2. "Certified automated system" means software certified
1 12 jointly by the states that are signatories to the agreement to
1 13 calculate the tax imposed by each jurisdiction on a
1 14 transaction, determine the amount of tax to remit to the
1 15 appropriate state, and maintain a record of the transaction.
1 16 3. "Certified service provider" means an agent certified
1 17 jointly by the states that are signatories to the agreement to
1 18 perform all of the seller's sales tax functions.
1 19 4. "Director" means the director of revenue and finance.
1 20 5. "Person" means an individual, trust, estate, fiduciary,
1 21 partnership, limited liability company, limited liability
1 22 partnership, corporation, or any other legal entity.
1 23 6. "Sales tax" means the tax levied under chapter 422,
1 24 division IV.
1 25 7. "Seller" means any person making sales, leases, or
1 26 rentals of personal property or services.
1 27 8. "State" means any state of the United States and the
1 28 District of Columbia.
1 29 9. "Use tax" means the tax levied under chapter 423 for
1 30 which the retailer collects and remits tax to the department
1 31 of revenue and finance.
1 32 Sec. 3. NEW SECTION. 421A.3 LEGISLATIVE FINDINGS.
1 33 The general assembly finds that a simplified sales and use
1 34 tax system will reduce and over time eliminate the burden and
1 35 cost for all sellers to collect this state's sales and use
2 1 taxes. The general assembly further finds that this state
2 2 should participate in multistate discussions to review or
2 3 amend the terms of the agreement to simplify and modernize
2 4 sales and use tax administration in order to substantially
2 5 reduce the burden of tax compliance for all sellers and for
2 6 all types of commerce.
2 7 Sec. 4. NEW SECTION. 421A.4 AUTHORITY TO PARTICIPATE IN
2 8 MULTISTATE NEGOTIATIONS.
2 9 For the purposes of reviewing or amending the agreement
2 10 embodying the simplification requirements as contained in
2 11 section 421A.7, the state shall enter into multistate
2 12 discussions. For purposes of these discussions, the state
2 13 shall be represented by no more than four delegates appointed
2 14 by the director in consultation with the leaders of the
2 15 general assembly.
2 16 Sec. 5. NEW SECTION. 421A.5 AUTHORITY TO ENTER
2 17 AGREEMENT.
2 18 The director is authorized and directed to enter into the
2 19 streamlined sales and use tax agreement with one or more
2 20 states to simplify and modernize sales and use tax
2 21 administration in order to substantially reduce the burden of
2 22 tax compliance for all sellers and for all types of commerce.
2 23 In furtherance of the agreement, the director is authorized to
2 24 act jointly with other states that are signatories to the
2 25 agreement to establish standards for certification of a
2 26 certified service provider and certified automated system and
2 27 to establish performance standards for multistate sellers.
2 28 The director is authorized to take other actions reasonably
2 29 required to implement and administer the provisions set forth
2 30 in this chapter. Other actions authorized by this section
2 31 include, but are not limited to, the adoption of rules and the
2 32 joint procurement, with other signatory states, of goods and
2 33 services in furtherance of the agreement.
2 34 The director or the director's designee is authorized to
2 35 represent this state before the other states that are
3 1 signatories to the agreement.
3 2 Sec. 6. NEW SECTION. 421A.6 RELATIONSHIP TO STATE LAW.
3 3 Any provision of the agreement authorized by this chapter
3 4 does not, in whole or part, invalidate or amend any provision
3 5 of the law of this state. Adoption of the agreement by this
3 6 state does not amend or modify any law of this state.
3 7 Implementation of any condition of the agreement in this
3 8 state, whenever adopted, must be by an Act of the general
3 9 assembly and approved by the governor.
3 10 Sec. 7. NEW SECTION. 421A.7 AGREEMENT REQUIREMENTS.
3 11 The director shall not enter into the agreement unless the
3 12 agreement requires each state to abide by all of the following
3 13 requirements:
3 14 1. SIMPLIFIED STATE RATE. The agreement must set
3 15 restrictions to limit over time the number of state rates.
3 16 2. UNIFORM STANDARDS. The agreement must establish
3 17 uniform standards for all of the following:
3 18 a. The sourcing of transactions to taxing jurisdictions.
3 19 b. The administration of exempt sales.
3 20 c. Sales and use tax returns and remittances.
3 21 3. CENTRAL REGISTRATION. The agreement must provide a
3 22 central, electronic registration system that allows a seller
3 23 to register to collect and remit sales and use taxes for all
3 24 signatory states.
3 25 4. NO NEXUS ATTRIBUTION. The agreement must provide that
3 26 registration with the central registration system and the
3 27 collection of sales and use taxes in the signatory states will
3 28 not be used as a factor in determining whether the seller has
3 29 nexus with a state for any tax.
3 30 5. LOCAL SALES AND USE TAXES. The agreement must provide
3 31 for reduction of the burdens of complying with local sales and
3 32 use taxes through the following:
3 33 a. Restricting variances between the state and local tax
3 34 bases.
3 35 b. Requiring states to administer any local sales and use
4 1 taxes levied by local taxing jurisdictions within the state so
4 2 that sellers collecting and remitting these taxes will not
4 3 have to register or file returns with, remit funds to, or be
4 4 subject to independent audits from local taxing jurisdictions.
4 5 c. Restricting the frequency of changes in the local sales
4 6 and use tax rates and setting effective dates for the
4 7 application of local taxing jurisdictional boundary changes to
4 8 local sales and use taxes.
4 9 d. Providing notice of changes in local sales and use tax
4 10 rates and of changes in the boundaries of local taxing
4 11 jurisdictions.
4 12 6. MONETARY ALLOWANCES. The agreement must outline any
4 13 monetary allowances that are to be provided by the states to
4 14 sellers or certified service providers. The agreement must
4 15 allow for a joint public and private sector study of the
4 16 compliance cost on sellers and certified service providers to
4 17 collect sales and use taxes for state and local governments
4 18 under various levels of complexity to be completed by January
4 19 1, 2003.
4 20 7. STATE COMPLIANCE. The agreement must require each
4 21 state to certify compliance with the terms of the agreement
4 22 prior to joining and to maintain compliance, under the laws of
4 23 the signatory state, with all provisions of the agreement
4 24 while a signatory.
4 25 8. CONSUMER PRIVACY. The agreement must require each
4 26 state to adopt a uniform policy for certified service
4 27 providers that protects the privacy of consumers and maintains
4 28 the confidentiality of tax information.
4 29 9. ADVISORY COUNCILS. The agreement must provide for the
4 30 appointment of an advisory council of private sector
4 31 representatives and an advisory council of nonsignatory state
4 32 representatives to consult with in the administration of the
4 33 agreement.
4 34 Sec. 8. NEW SECTION. 421A.8 COOPERATING SOVEREIGNS.
4 35 The agreement authorized by this chapter is an accord among
5 1 individual cooperating sovereigns in furtherance of their
5 2 governmental functions. The agreement provides a mechanism
5 3 among the signatory states to establish and maintain a
5 4 cooperative, simplified system for the application and
5 5 administration of sales and use taxes under the duly adopted
5 6 law of each signatory state.
5 7 Sec. 9. NEW SECTION. 421A.9 LIMITED BINDING AND
5 8 BENEFICIAL EFFECT.
5 9 1. The agreement authorized by this chapter binds and
5 10 inures only to the benefit of this state and the other
5 11 signatory states. No person, other than a signatory state, is
5 12 an intended beneficiary of the agreement. Any benefit to a
5 13 person other than a state must be established by the law of
5 14 this state and the other signatory states and not by the terms
5 15 of the agreement.
5 16 2. Consistent with subsection 1, a person shall not have
5 17 any cause of action or defense under the agreement or by
5 18 virtue of this state's approval of the agreement. A person
5 19 shall not challenge, in any action brought under any provision
5 20 of law, any action or inaction by any department, agency, or
5 21 other instrumentality of this state, or by any political
5 22 subdivision of this state, on the ground that the action or
5 23 inaction is inconsistent with the agreement.
5 24 3. A law of this state, or the application of the law,
5 25 shall not be declared invalid as to any person or circumstance
5 26 on the ground that the law or application of the law is
5 27 inconsistent with the agreement.
5 28 Sec. 10. NEW SECTION. 421A.10 SELLER AND THIRD-PARTY
5 29 LIABILITY.
5 30 1. A certified service provider is the agent of a seller,
5 31 with whom the certified service provider has contracted, for
5 32 the collection and remittance of sales and use taxes. As the
5 33 seller's agent, the certified service provider is liable for
5 34 sales and use taxes due each signatory state on all sales
5 35 transactions the certified service provider processes for the
6 1 seller except as set out in this section.
6 2 A seller that contracts with a certified service provider
6 3 is not liable to the state for sales or use taxes due on
6 4 transactions processed by the certified service provider
6 5 unless the seller misrepresented the type of items the seller
6 6 sells or committed fraud. In the absence of probable cause to
6 7 believe that the seller has committed fraud or made a material
6 8 misrepresentation, the seller is not subject to audit on the
6 9 transactions processed by the certified service provider. A
6 10 seller is subject to audit for transactions not processed by
6 11 the certified service provider. The signatory states acting
6 12 jointly may perform a system check of the seller and review
6 13 the seller's procedures to determine if the certified service
6 14 provider's system is functioning properly and the extent to
6 15 which the seller's transactions are being properly processed
6 16 by the certified service provider.
6 17 2. A person that provides a certified automated system is
6 18 responsible for the proper functioning of the system and is
6 19 liable to the state for underpayments of tax attributable to
6 20 errors in the functioning of the certified automated system.
6 21 A seller that uses a certified automated system remains
6 22 responsible and is liable to the state for reporting and
6 23 remitting tax.
6 24 3. A seller that has a proprietary system for determining
6 25 the amount of tax due on transactions and has signed an
6 26 agreement establishing a performance standard for the system
6 27 is liable for the failure of the system to meet the
6 28 performance standard.
6 29 Sec. 11. EFFECTIVE DATE. This Act, being deemed of
6 30 immediate importance, takes effect upon enactment.
6 31 EXPLANATION
6 32 This bill enables Iowa to negotiate with other states with
6 33 the aim of entering into an agreement to simplify and
6 34 modernize its sales and use tax laws. The purpose of this
6 35 simplification and modernization is to substantially reduce
7 1 the burden of tax compliance for all sellers and all types of
7 2 commerce. The bill requires that any agreement contain
7 3 uniformity of standards in the areas of sourcing transactions,
7 4 administration of exempt sales, and of sales and use tax
7 5 returns and remittances. The bill also provides that any
7 6 agreement provide for central registering as a seller and for
7 7 a reduction of local option sales and use tax burdens. The
7 8 bill also provides that the use by the seller of the central
7 9 registration system will not be used in determining whether
7 10 the seller has a nexus with a state for any tax.
7 11 The bill takes effect upon enactment.
7 12 LSB 6357XS 79
7 13 mg/sh/8
Text: SF02079 Text: SF02081 Text: SF02000 - SF02099 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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