Text: SF02079 Text: SF02081 Text: SF02000 - SF02099 Text: SF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 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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