Text: H01516 Text: H01518 Text: H01500 - H01599 Text: H Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Amend House File 683 as follows: 1 2 #1. Page 40, by inserting after line 35 the 1 3 following: 1 4 "DIVISION 1 5 STREAMLINED SALES AND USE TAXES 1 6 SUBCHAPTER I 1 7 DEFINITIONS 1 8 Sec. . NEW SECTION. 423.1 DEFINITIONS. 1 9 As used in this chapter the following words, terms, 1 10 and phrases have the meanings ascribed to them by this 1 11 section, except where the context clearly indicates 1 12 that a different meaning is intended: 1 13 1. "Agent" means a person appointed by a seller to 1 14 represent the seller before the member states. 1 15 2. "Agreement" means the streamlined sales and use 1 16 tax agreement authorized by subchapter IV of this 1 17 chapter to provide a mechanism for establishing and 1 18 maintaining a cooperative, simplified system for the 1 19 application and administration of sales and use taxes. 1 20 3. "Agricultural production" includes the 1 21 production of flowering, ornamental, or vegetable 1 22 plants in commercial greenhouses or otherwise, and 1 23 production from aquaculture. "Agricultural products" 1 24 includes flowering, ornamental, or vegetable plants 1 25 and those products of aquaculture. 1 26 4. "Business" includes any activity engaged in by 1 27 any person or caused to be engaged in by the person 1 28 with the object of gain, benefit, or advantage, either 1 29 direct or indirect. 1 30 5. "Certificate of title" means a certificate of 1 31 title issued for a vehicle or for manufactured housing 1 32 under chapter 321. 1 33 6. "Certified automated system" means software 1 34 certified under the agreement to calculate the tax 1 35 imposed by each jurisdiction on a transaction, 1 36 determine the amount of tax to remit to the 1 37 appropriate state, and maintain a record of the 1 38 transaction. 1 39 7. "Certified service provider" means an agent 1 40 certified under the agreement to perform all of a 1 41 seller's sales or use tax functions, other than the 1 42 seller's obligation to remit tax on its own purchases. 1 43 8. "Computer" means an electronic device that 1 44 accepts information in digital or similar form and 1 45 manipulates the information for a result based on a 1 46 sequence of instructions. 1 47 9. "Computer software" means a set of coded 1 48 instructions designed to cause a computer or automatic 1 49 data processing equipment to perform a task. 1 50 10. "Delivered electronically" means delivered to 2 1 the purchaser by means other than tangible storage 2 2 media. 2 3 11. "Delivery charges" means charges assessed by a 2 4 seller of personal property or services for 2 5 preparation and delivery to a location designated by 2 6 the purchaser of personal property or services 2 7 including, but not limited to, transportation, 2 8 shipping, postage, handling, crating, and packing 2 9 charges. 2 10 12. "Department" means the department of revenue 2 11 and finance. 2 12 13. "Direct mail" means printed material delivered 2 13 or distributed by United States mail or other delivery 2 14 service to a mass audience or to addressees on a 2 15 mailing list provided by the purchaser or at the 2 16 direction of the purchaser when the cost of the items 2 17 is not billed directly to the recipients. "Direct 2 18 mail" includes tangible personal property supplied 2 19 directly or indirectly by the purchaser to the direct 2 20 mail seller for inclusion in the package containing 2 21 the printed material. "Direct mail" does not include 2 22 multiple items of printed material delivered to a 2 23 single address. 2 24 14. "Director" means the director of revenue and 2 25 finance. 2 26 15. "Electronic" means relating to technology 2 27 having electrical, digital, magnetic, wireless, 2 28 optical, electromagnetic, or similar capabilities. 2 29 16. "Farm deer" means the same as defined in 2 30 section 189A.2. 2 31 17. "Farm machinery and equipment" means machinery 2 32 and equipment used in agricultural production. 2 33 18. "First use of a service". A "first use of a 2 34 service" occurs, for the purposes of this chapter, 2 35 when a service is rendered, furnished, or performed in 2 36 Iowa or if rendered, furnished, or performed outside 2 37 of Iowa, when the product or result of the service is 2 38 used in Iowa. 2 39 19. "Goods, wares, or merchandise" means the same 2 40 as tangible personal property. 2 41 20. "Governing board" means the group comprised of 2 42 representatives of the member states of the agreement 2 43 which is created by the agreement to be responsible 2 44 for the agreement's administration and operation. 2 45 21. "Installed purchase price" is the amount 2 46 charged, valued in money whether paid in money or 2 47 otherwise, by a building contractor to convert 2 48 manufactured housing from tangible personal property 2 49 into realty. "Installed purchase price" includes, but 2 50 is not limited to, amounts charged for installing a 3 1 foundation and electrical and plumbing hookups. 3 2 "Installed purchase price" excludes any amount charged 3 3 for landscaping in connection with the conversion. 3 4 22. "Lease or rental". 3 5 a. "Lease or rental" means any transfer of 3 6 possession or control of tangible personal property 3 7 for a fixed or indeterminate term for consideration. 3 8 A "lease or rental" may include future options to 3 9 purchase or extend. 3 10 b. "Lease or rental" includes agreements covering 3 11 motor vehicles and trailers when the amount of 3 12 consideration may be increased or decreased by 3 13 reference to the amount realized upon sale or 3 14 disposition of the property as defined in 26 U.S.C. } 3 15 7701(h)(1). 3 16 c. "Lease or rental" does not include any of the 3 17 following: 3 18 (1) A transfer of possession or control of 3 19 property under a security agreement or deferred 3 20 payment plan that requires the transfer of title upon 3 21 completion of the required payments. 3 22 (2) A transfer of possession or control of 3 23 property under an agreement that requires the transfer 3 24 of title upon completion of required payments, and 3 25 payment of any option price does not exceed the 3 26 greater of one hundred dollars or one percent of the 3 27 total required payments. 3 28 (3) Providing tangible personal property along 3 29 with an operator for a fixed or indeterminate period 3 30 of time. A condition of this exclusion is that the 3 31 operator is necessary for the equipment to perform as 3 32 designed. For the purpose of this subparagraph, an 3 33 operator must do more than maintain, inspect, or set 3 34 up the tangible personal property. 3 35 d. This definition shall be used for sales and use 3 36 tax purposes regardless of whether a transaction is 3 37 characterized as a lease or rental under generally 3 38 accepted accounting principles, the Internal Revenue 3 39 Code, the Uniform Commercial Code, or other provisions 3 40 of federal, state, or local law. 3 41 23. "Livestock" includes but is not limited to an 3 42 animal classified as an ostrich, rhea, emu, bison, or 3 43 farm deer. 3 44 24. "Manufactured housing" means "manufactured 3 45 home" as defined in section 321.1. 3 46 25. "Member state" is any state which has signed 3 47 the agreement. 3 48 26. "Mobile home" means "manufactured or mobile 3 49 home" as defined in section 321.1. 3 50 27. "Model 1 seller" is a seller that has selected 4 1 a certified service provider as its agent to perform 4 2 all the seller's sales and use tax functions, other 4 3 than the seller's obligation to remit tax on its own 4 4 purchases. 4 5 28. "Model 2 seller" is a seller that has selected 4 6 a certified automated system to perform part of its 4 7 sales and use tax functions, but retains 4 8 responsibility for remitting the tax. 4 9 29. "Model 3 seller" is a seller that has sales in 4 10 at least five member states, has total annual sales 4 11 revenue of at least five hundred million dollars, has 4 12 a proprietary system that calculates the amount of tax 4 13 due each jurisdiction, and has entered into a 4 14 performance agreement with the member states that 4 15 establishes a tax performance standard for the seller. 4 16 As used in this definition, a "seller" includes an 4 17 affiliated group of sellers using the same proprietary 4 18 system. 4 19 30. "Nonresidential commercial operations" means 4 20 industrial, commercial, mining, or agricultural 4 21 operations, whether for profit or not, but does not 4 22 include apartment complexes or mobile home parks. 4 23 31. "Not registered under the agreement" means 4 24 lack of registration by a seller with the member 4 25 states under the central registration system 4 26 referenced in section 423.11, subsection 4. 4 27 32. "Person" means an individual, trust, estate, 4 28 fiduciary, partnership, limited liability company, 4 29 limited liability partnership, corporation, or any 4 30 other legal entity. 4 31 33. "Place of business" means any warehouse, 4 32 store, place, office, building, or structure where 4 33 goods, wares, or merchandise are offered for sale at 4 34 retail or where any taxable amusement is conducted, or 4 35 each office where gas, water, heat, communication, or 4 36 electric services are offered for sale at retail. 4 37 When a retailer or amusement operator sells 4 38 merchandise by means of vending machines or operates 4 39 music or amusement devices by coin-operated machines 4 40 at more than one location within the state, the 4 41 office, building, or place where the books, papers, 4 42 and records of the taxpayer are kept shall be deemed 4 43 to be the taxpayer's place of business. 4 44 34. "Prewritten computer software" includes 4 45 software designed and developed by the author or other 4 46 creator to the specifications of a specific purchaser 4 47 when it is sold to a person other than the purchaser. 4 48 The combining of two or more prewritten computer 4 49 software programs or prewritten portions of prewritten 4 50 programs does not cause the combination to be other 5 1 than prewritten computer software. "Prewritten 5 2 computer software" also means computer software, 5 3 including prewritten upgrades, which is not designed 5 4 and developed by the author or other creator to the 5 5 specifications of a specific purchaser. 5 6 When a person modifies or enhances computer 5 7 software of which the person is not the author or 5 8 creator, the person shall be deemed to be the author 5 9 or creator only of such person's modifications or 5 10 enhancements. Prewritten computer software or a 5 11 prewritten portion of the prewritten software that is 5 12 modified or enhanced to any degree, when such 5 13 modification or enhancement is designed and developed 5 14 to the specifications of a specific purchaser, remains 5 15 prewritten computer software. However, when there is 5 16 a reasonable, separately stated charge or an invoice 5 17 or other statement of the price given to the purchaser 5 18 for such modification or enhancement, such 5 19 modification or enhancement shall not constitute 5 20 prewritten computer software. 5 21 35. "Property purchased for resale in connection 5 22 with the performance of a service" means property 5 23 which is purchased for resale in connection with the 5 24 rendition, furnishing, or performance of a service by 5 25 a person who renders, furnishes, or performs the 5 26 service if all of the following occur: 5 27 a. The provider and user of the service intend 5 28 that a sale of the property will occur. 5 29 b. The property is transferred to the user of the 5 30 service in connection with the performance of the 5 31 service in a form or quantity capable of a fixed or 5 32 definite price value. 5 33 c. The sale is evidenced by a separate charge for 5 34 the identifiable piece of property. 5 35 36. "Purchase" means any transfer, exchange, or 5 36 barter, conditional or otherwise, in any manner or by 5 37 any means whatsoever, for a consideration. 5 38 37. "Purchase price" means the same as "sales 5 39 price" as defined in this section. 5 40 38. "Purchaser" is a person to whom a sale of 5 41 personal property is made or to whom a service is 5 42 furnished. 5 43 39. "Receive" and "receipt" mean any of the 5 44 following: 5 45 a. Taking possession of tangible personal 5 46 property. 5 47 b. Making first use of a service. 5 48 c. Taking possession or making first use of 5 49 digital goods, whichever comes first. 5 50 "Receive" and "receipt" do not include possession 6 1 by a shipping company on behalf of a purchaser. 6 2 40. "Registered under the agreement" means 6 3 registration by a seller under the central 6 4 registration system referenced in section 423.11, 6 5 subsection 4. 6 6 41. "Relief agency" means the state, any county, 6 7 city and county, city, or district thereof, or any 6 8 agency engaged in actual relief work. 6 9 42. "Retailer" means and includes every person 6 10 engaged in the business of selling tangible personal 6 11 property or taxable services at retail, or the 6 12 furnishing of gas, electricity, water, or 6 13 communication service, and tickets or admissions to 6 14 places of amusement and athletic events or operating 6 15 amusement devices or other forms of commercial 6 16 amusement from which revenues are derived. However, 6 17 when in the opinion of the director it is necessary 6 18 for the efficient administration of this chapter to 6 19 regard any salespersons, representatives, truckers, 6 20 peddlers, or canvassers as agents of the dealers, 6 21 distributors, supervisors, employers, or persons under 6 22 whom they operate or from whom they obtain tangible 6 23 personal property sold by them irrespective of whether 6 24 or not they are making sales on their own behalf or on 6 25 behalf of such dealers, distributors, supervisors, 6 26 employers, or persons, the director may so regard 6 27 them, and may regard such dealers, distributors, 6 28 supervisors, employers, or persons as retailers for 6 29 the purposes of this chapter. "Retailer" includes a 6 30 seller obligated to collect sales or use tax. 6 31 43. "Retailer maintaining a place of business in 6 32 this state" or any like term includes any retailer 6 33 having or maintaining within this state, directly or 6 34 by a subsidiary, an office, distribution house, sales 6 35 house, warehouse, or other place of business, or any 6 36 representative operating within this state under the 6 37 authority of the retailer or its subsidiary, 6 38 irrespective of whether that place of business or 6 39 representative is located here permanently or 6 40 temporarily, or whether the retailer or subsidiary is 6 41 admitted to do business within this state pursuant to 6 42 chapter 490. 6 43 44. "Retailers who are not model sellers" means 6 44 all retailers other than model 1, model 2, or model 3 6 45 sellers. 6 46 45. "Retail sale" or "sale at retail" means any 6 47 sale, lease, or rental for any purpose other than 6 48 resale, sublease, or subrent. 6 49 46. "Sales" or "sale" means any transfer, 6 50 exchange, or barter, conditional or otherwise, in any 7 1 manner or by any means whatsoever, for consideration. 7 2 47. "Sales price" applies to the measure subject 7 3 to sales tax. 7 4 a. "Sales price" means the total amount of 7 5 consideration, including cash, credit, property, and 7 6 services, for which personal property or services are 7 7 sold, leased, or rented, valued in money, whether 7 8 received in money or otherwise, without any deduction 7 9 for any of the following: 7 10 (1) The seller's cost of the property sold. 7 11 (2) The cost of materials used, labor or service 7 12 cost, interest, losses, all costs of transportation to 7 13 the seller, all taxes imposed on the seller, and any 7 14 other expenses of the seller. 7 15 (3) Charges by the seller for any services 7 16 necessary to complete the sale, other than delivery 7 17 and installation charges. 7 18 (4) Delivery charges. 7 19 (5) Installation charges. 7 20 (6) The value of exempt personal property given to 7 21 the purchaser where taxable and exempt personal 7 22 property have been bundled together and sold by the 7 23 seller as a single product or piece of merchandise. 7 24 (7) Credit for any trade-in authorized by section 7 25 423.3, subsection 58. 7 26 b. "Sales price" does not include: 7 27 (1) Discounts, including cash, term, or coupons 7 28 that are not reimbursed by a third party that are 7 29 allowed by a seller and taken by a purchaser on a 7 30 sale. 7 31 (2) Interest, financing, and carrying charges from 7 32 credit extended on the sale of personal property or 7 33 services, if the amount is separately stated on the 7 34 invoice, bill of sale, or similar document given to 7 35 the purchaser. 7 36 (3) Any taxes legally imposed directly on the 7 37 consumer that are separately stated on the invoice, 7 38 bill of sale, or similar document given to the 7 39 purchaser. 7 40 (4) The amounts received for charges included in 7 41 paragraph "a", subparagraphs (3) through (7), if they 7 42 are separately contracted for and separately stated on 7 43 the invoice, billing, or similar document given to the 7 44 purchaser. 7 45 48. "Sales tax" means the tax levied under 7 46 subchapter II of this chapter. 7 47 49. "Seller" means any person making sales, 7 48 leases, or rentals of personal property or services. 7 49 50. "Services" means all acts or services 7 50 rendered, furnished, or performed, other than services 8 1 used in processing of tangible personal property for 8 2 use in retail sales or services, for an employer, as 8 3 defined in section 422.4, subsection 3, for a valuable 8 4 consideration by any person engaged in any business or 8 5 occupation specifically enumerated in section 423.2. 8 6 The tax shall be due and collectible when the service 8 7 is rendered, furnished, or performed for the ultimate 8 8 user of the service. 8 9 51. "Services used in the processing of tangible 8 10 personal property" includes the reconditioning or 8 11 repairing of tangible personal property of the type 8 12 normally sold in the regular course of the retailer's 8 13 business and which is held for sale. 8 14 52. "State" means any state of the United States 8 15 and the District of Columbia. 8 16 53. "System" means the central electronic 8 17 registration system maintained by Iowa and other 8 18 states which are signatories to the agreement. 8 19 54. "Tangible personal property" means personal 8 20 property that can be seen, weighed, measured, felt, or 8 21 touched, or that is in any other manner perceptible to 8 22 the senses. "Tangible personal property" includes 8 23 electricity, water, gas, steam, and prewritten 8 24 computer software. 8 25 55. "Taxpayer" includes any person who is subject 8 26 to a tax imposed by this chapter, whether acting on 8 27 the person's own behalf or as a fiduciary. 8 28 56. "Trailer" shall mean every trailer, as is now 8 29 or may be hereafter so defined by chapter 321, which 8 30 is required to be registered or is subject only to the 8 31 issuance of a certificate of title under chapter 321. 8 32 57. "Use" means and includes the exercise by any 8 33 person of any right or power over tangible personal 8 34 property incident to the ownership of that property. 8 35 A retailer's or building contractor's sale of 8 36 manufactured housing for use in this state, whether in 8 37 the form of tangible personal property or of realty, 8 38 is a use of that property for the purposes of this 8 39 chapter. 8 40 58. "Use tax" means the tax levied under 8 41 subchapter III of this chapter for which the retailer 8 42 collects and remits tax to the department. 8 43 59. "User" means the immediate recipient of the 8 44 services who is entitled to exercise a right of power 8 45 over the product of such services. 8 46 60. "Value of services" means the price to the 8 47 user exclusive of any direct tax imposed by the 8 48 federal government or by this chapter. 8 49 61. "Vehicles subject to registration" means any 8 50 vehicle subject to registration pursuant to section 9 1 321.18. 9 2 SUBCHAPTER II 9 3 SALES TAX 9 4 Sec. . NEW SECTION. 423.2 TAX IMPOSED. 9 5 1. There is imposed a tax of five percent upon the 9 6 sales price of all sales of tangible personal 9 7 property, consisting of goods, wares, or merchandise, 9 8 sold at retail in the state to consumers or users 9 9 except as otherwise provided in this subchapter. 9 10 a. For the purposes of this subchapter, sales of 9 11 the following services are treated as if they were 9 12 sales of tangible personal property: 9 13 (1) Sales of engraving, photography, retouching, 9 14 printing, and binding services. 9 15 (2) Sales of vulcanizing, recapping, and 9 16 retreading services. 9 17 (3) Sales of prepaid telephone calling cards and 9 18 prepaid authorization numbers. 9 19 (4) Sales of optional service or warranty 9 20 contracts, except residential service contracts 9 21 regulated under chapter 523C, which provide for the 9 22 furnishing of labor and materials and require the 9 23 furnishing of any taxable service enumerated under 9 24 this section. The sales price is subject to tax even 9 25 if some of the services furnished are not enumerated 9 26 under this section. Additional sales, services, or 9 27 use taxes shall not be levied on services, parts, or 9 28 labor provided under optional service or warranty 9 29 contracts which are subject to tax under this 9 30 subsection. 9 31 If the optional service or warranty contract is a 9 32 computer software maintenance or support service 9 33 contract and there is no separately stated fee for the 9 34 taxable personal property or for the nontaxable 9 35 service, the tax imposed by this subsection shall be 9 36 imposed on fifty percent of the sales price from the 9 37 sale of such contract. If the contract provides for 9 38 technical support services only, no tax shall be 9 39 imposed under this subsection. The provisions of this 9 40 subparagraph (4) also apply to the use tax. 9 41 (5) Renting of rooms, apartments, or sleeping 9 42 quarters in a hotel, motel, inn, public lodging house, 9 43 rooming house, mobile home which is tangible personal 9 44 property, or tourist court, or in any place where 9 45 sleeping accommodations are furnished to transient 9 46 guests for rent, whether with or without meals. 9 47 "Renting" and "rent" include any kind of direct or 9 48 indirect charge for such rooms, apartments, or 9 49 sleeping quarters, or their use. However, the tax 9 50 does not apply to the sales price from the renting of 10 1 a room, apartment, or sleeping quarters while rented 10 2 by the same person for a period of more than thirty- 10 3 one consecutive days. 10 4 b. Sales of building materials, supplies, and 10 5 equipment to owners, contractors, subcontractors, or 10 6 builders for the erection of buildings or the 10 7 alteration, repair, or improvement of real property 10 8 are retail sales of tangible personal property in 10 9 whatever quantity sold. Where the owner, contractor, 10 10 subcontractor, or builder is also a retailer holding a 10 11 retail sales tax permit and transacting retail sales 10 12 of building materials, supplies, and equipment, the 10 13 person shall purchase such items of tangible personal 10 14 property without liability for the tax if such 10 15 property will be subject to the tax at the time of 10 16 resale or at the time it is withdrawn from inventory 10 17 for construction purposes. The sales tax shall be due 10 18 in the reporting period when the materials, supplies, 10 19 and equipment are withdrawn from inventory for 10 20 construction purposes or when sold at retail. The tax 10 21 shall not be due when materials are withdrawn from 10 22 inventory for use in construction outside of Iowa and 10 23 the tax shall not apply to tangible personal property 10 24 purchased and consumed by the manufacturer as building 10 25 materials in the performance by the manufacturer or 10 26 its subcontractor of construction outside of Iowa. 10 27 The sale of carpeting is not a sale of building 10 28 materials. The sale of carpeting to owners, 10 29 contractors, subcontractors, or builders shall be 10 30 treated as the sale of ordinary tangible personal 10 31 property and subject to the tax imposed under this 10 32 subsection and the use tax. 10 33 c. The use within this state of tangible personal 10 34 property by the manufacturer thereof, as building 10 35 materials, supplies, or equipment, in the performance 10 36 of construction contracts in Iowa, shall, for the 10 37 purpose of this subchapter, be construed as a sale at 10 38 retail of tangible personal property by the 10 39 manufacturer who shall be deemed to be the consumer of 10 40 such tangible personal property. The tax shall be 10 41 computed upon the cost to the manufacturer of the 10 42 fabrication or production of the tangible personal 10 43 property. 10 44 2. A tax of five percent is imposed upon the sales 10 45 price of the sale or furnishing of gas, electricity, 10 46 water, heat, pay television service, and communication 10 47 service, including the sales price from such sales by 10 48 any municipal corporation or joint water utility 10 49 furnishing gas, electricity, water, heat, pay 10 50 television service, and communication service to the 11 1 public in its proprietary capacity, except as 11 2 otherwise provided in this subchapter, when sold at 11 3 retail in the state to consumers or users. 11 4 3. A tax of five percent is imposed upon the sales 11 5 price of all sales of tickets or admissions to places 11 6 of amusement, fairs, and athletic events except those 11 7 of elementary and secondary educational institutions. 11 8 A tax of five percent is imposed on the sales price of 11 9 an entry fee or like charge imposed solely for the 11 10 privilege of participating in an activity at a place 11 11 of amusement, fair, or athletic event unless the sales 11 12 price of tickets or admissions charges for observing 11 13 the same activity are taxable under this subchapter. 11 14 A tax of five percent is imposed upon that part of 11 15 private club membership fees or charges paid for the 11 16 privilege of participating in any athletic sports 11 17 provided club members. 11 18 4. A tax of five percent is imposed upon the sales 11 19 price derived from the operation of all forms of 11 20 amusement devices and games of skill, games of chance, 11 21 raffles, and bingo games as defined in chapter 99B, 11 22 operated or conducted within the state, the tax to be 11 23 collected from the operator in the same manner as for 11 24 the collection of taxes upon the sales price of 11 25 tickets or admission as provided in this section. The 11 26 tax shall also be imposed upon the sales price derived 11 27 from the sale of lottery tickets or shares pursuant to 11 28 chapter 99E. The tax on the lottery tickets or shares 11 29 shall be included in the sales price and distributed 11 30 to the general fund of the state as provided in 11 31 section 99E.10. Nothing in this subsection shall 11 32 legalize any games of skill or chance or slot-operated 11 33 devices which are now prohibited by law. 11 34 The tax imposed under this subsection covers the 11 35 total amount from the operation of games of skill, 11 36 games of chance, raffles, and bingo games as defined 11 37 in chapter 99B, and musical devices, weighing 11 38 machines, shooting galleries, billiard and pool 11 39 tables, bowling alleys, pinball machines, slot- 11 40 operated devices selling merchandise not subject to 11 41 the general sales taxes and on the total amount from 11 42 devices or systems where prizes are in any manner 11 43 awarded to patrons and upon the receipts from fees 11 44 charged for participation in any game or other form of 11 45 amusement, and generally upon the sales price from any 11 46 source of amusement operated for profit, not specified 11 47 in this section, and upon the sales price from which 11 48 tax is not collected for tickets or admission, but tax 11 49 shall not be imposed upon any activity exempt from 11 50 sales tax under section 423.3, subsection 78. Every 12 1 person receiving any sales price from the sources 12 2 described in this section is subject to all provisions 12 3 of this subchapter relating to retail sales tax and 12 4 other provisions of this chapter as applicable. 12 5 5. There is imposed a tax of five percent upon the 12 6 sales price from the furnishing of services as defined 12 7 in section 423.1. 12 8 6. The sales price of any of the following 12 9 enumerated services is subject to the tax imposed by 12 10 subsection 5: alteration and garment repair; armored 12 11 car; vehicle repair; battery, tire, and allied; 12 12 investment counseling; service charges of all 12 13 financial institutions; barber and beauty; boat 12 14 repair; vehicle wash and wax; campgrounds; carpentry; 12 15 roof, shingle, and glass repair; dance schools and 12 16 dance studios; dating services; dry cleaning, 12 17 pressing, dyeing, and laundering; electrical and 12 18 electronic repair and installation; excavating and 12 19 grading; farm implement repair of all kinds; flying 12 20 service; furniture, rug, carpet, and upholstery repair 12 21 and cleaning; fur storage and repair; golf and country 12 22 clubs and all commercial recreation; gun and camera 12 23 repair; house and building moving; household 12 24 appliance, television, and radio repair; janitorial 12 25 and building maintenance or cleaning; jewelry and 12 26 watch repair; lawn care, landscaping, and tree 12 27 trimming and removal; limousine service, including 12 28 driver; machine operator; machine repair of all kinds; 12 29 motor repair; motorcycle, scooter, and bicycle repair; 12 30 oilers and lubricators; office and business machine 12 31 repair; painting, papering, and interior decorating; 12 32 parking facilities; pay television; pet grooming; pipe 12 33 fitting and plumbing; wood preparation; executive 12 34 search agencies; private employment agencies, 12 35 excluding services for placing a person in employment 12 36 where the principal place of employment of that person 12 37 is to be located outside of the state; reflexology; 12 38 security and detective services; sewage services for 12 39 nonresidential commercial operations; sewing and 12 40 stitching; shoe repair and shoeshine; sign 12 41 construction and installation; storage of household 12 42 goods, mini-storage, and warehousing of raw 12 43 agricultural products; swimming pool cleaning and 12 44 maintenance; tanning beds or salons; taxidermy 12 45 services; telephone answering service; test 12 46 laboratories, including mobile testing laboratories 12 47 and field testing by testing laboratories, and 12 48 excluding tests on humans or animals; termite, bug, 12 49 roach, and pest eradicators; tin and sheet metal 12 50 repair; Turkish baths, massage, and reducing salons, 13 1 excluding services provided by massage therapists 13 2 licensed under chapter 152C; water conditioning and 13 3 softening; weighing; welding; well drilling; wrapping, 13 4 packing, and packaging of merchandise other than 13 5 processed meat, fish, fowl, and vegetables; wrecking 13 6 service; wrecker and towing. 13 7 For the purposes of this subsection, the sales 13 8 price of a lease or rental includes rents, royalties, 13 9 and copyright and license fees. For the purposes of 13 10 this subsection, "financial institutions" means all 13 11 national banks, federally chartered savings and loan 13 12 associations, federally chartered savings banks, 13 13 federally chartered credit unions, banks organized 13 14 under chapter 524, savings and loan associations and 13 15 savings banks organized under chapter 534, and credit 13 16 unions organized under chapter 533. 13 17 7. a. A tax of five percent is imposed upon the 13 18 sales price from the sales, furnishing, or service of 13 19 solid waste collection and disposal service. 13 20 For purposes of this subsection, "solid waste" 13 21 means garbage, refuse, sludge from a water supply 13 22 treatment plant or air contaminant treatment facility, 13 23 and other discarded waste materials and sludges, in 13 24 solid, semisolid, liquid, or contained gaseous form, 13 25 resulting from nonresidential commercial operations, 13 26 but does not include auto hulks; street sweepings; 13 27 ash; construction debris; mining waste; trees; tires; 13 28 lead acid batteries; used oil; hazardous waste; animal 13 29 waste used as fertilizer; earthen fill, boulders, or 13 30 rock; foundry sand used for daily cover at a sanitary 13 31 landfill; sewage sludge; solid or dissolved material 13 32 in domestic sewage or other common pollutants in water 13 33 resources, such as silt, dissolved or suspended solids 13 34 in industrial waste water effluents or discharges 13 35 which are point sources subject to permits under 13 36 section 402 of the federal Water Pollution Control 13 37 Act, or dissolved materials in irrigation return 13 38 flows; or source, special nuclear, or by-product 13 39 material defined by the federal Atomic Energy Act of 13 40 1954. 13 41 A recycling facility that separates or processes 13 42 recyclable materials and that reduces the volume of 13 43 the waste by at least eighty-five percent is exempt 13 44 from the tax imposed by this subsection if the waste 13 45 exempted is collected and disposed of separately from 13 46 other solid waste. 13 47 b. A person who transports solid waste generated 13 48 by that person or another person without compensation 13 49 shall pay the tax imposed by this subsection at the 13 50 collection or disposal facility based on the disposal 14 1 charge or tipping fee. However, the costs of a 14 2 service or portion of a service to collect and manage 14 3 recyclable materials separated from solid waste by the 14 4 waste generator are exempt from the tax imposed by 14 5 this subsection. 14 6 8. a. A tax of five percent is imposed upon the 14 7 sales price from sales of bundled services contracts. 14 8 For purposes of this subsection, a "bundled services 14 9 contract" means an agreement providing for a 14 10 retailer's performance of services, one or more of 14 11 which is a taxable service enumerated in this section 14 12 and one or more of which is not, in return for a 14 13 consumer's or user's single payment for the 14 14 performance of the services, with no separate 14 15 statement to the consumer or user of what portion of 14 16 that payment is attributable to any one service which 14 17 is a part of the contract. 14 18 b. For purposes of the administration of the tax 14 19 on bundled services contracts, the director may enter 14 20 into agreements of limited duration with individual 14 21 retailers, groups of retailers, or organizations 14 22 representing retailers of bundled services contracts. 14 23 Such an agreement shall impose the tax rate only upon 14 24 that portion of the sales price from a bundled 14 25 services contract which is attributable to taxable 14 26 services provided under the contract. 14 27 9. A tax of five percent is imposed upon the sales 14 28 price from any mobile telecommunications service which 14 29 this state is allowed to tax by the provisions of the 14 30 federal Mobile Telecommunications Sourcing Act, Pub. 14 31 L. No. 106-252, 4 U.S.C. } 116 et seq. For purposes 14 32 of this subsection, taxes on mobile telecommunications 14 33 service, as defined under the federal Mobile 14 34 Telecommunications Sourcing Act that are deemed to be 14 35 provided by the customer's home service provider, 14 36 shall be paid to the taxing jurisdiction whose 14 37 territorial limits encompass the customer's place of 14 38 primary use, regardless of where the mobile 14 39 telecommunications service originates, terminates, or 14 40 passes through and shall in all other respects be 14 41 taxed in conformity with the federal Mobile 14 42 Telecommunications Sourcing Act. All other provisions 14 43 of the federal Mobile Telecommunications Sourcing Act 14 44 are adopted by the state of Iowa and incorporated into 14 45 this subsection by reference. With respect to mobile 14 46 telecommunications service under the federal Mobile 14 47 Telecommunications Sourcing Act, the director shall, 14 48 if requested, enter into agreements consistent with 14 49 the provisions of the federal Act. 14 50 10. All revenues arising under the operation of 15 1 the provisions of this section shall be deposited into 15 2 the general fund of the state. 15 3 Sec. . NEW SECTION. 423.3 EXEMPTIONS. 15 4 There is exempted from the provisions of this 15 5 subchapter and from the computation of the amount of 15 6 tax imposed by it the following: 15 7 1. The sales price from sales of tangible personal 15 8 property and services furnished which this state is 15 9 prohibited from taxing under the Constitution or laws 15 10 of the United States or under the Constitution of this 15 11 state. 15 12 2. The sales price of sales for resale of tangible 15 13 personal property or taxable services, or for resale 15 14 of tangible personal property in connection with the 15 15 furnishing of taxable services. 15 16 3. The sales price of agricultural breeding 15 17 livestock and domesticated fowl. 15 18 4. The sales price of commercial fertilizer. 15 19 5. The sales price of agricultural limestone, 15 20 herbicide, pesticide, insecticide, including 15 21 adjuvants, surfactants, and other products directly 15 22 related to the application enhancement of those 15 23 products, food, medication, or agricultural drain 15 24 tile, including installation of agricultural drain 15 25 tile, any of which are to be used in disease control, 15 26 weed control, insect control, or health promotion of 15 27 plants or livestock produced as part of agricultural 15 28 production for market. 15 29 6. The sales price of tangible personal property 15 30 which will be consumed as fuel in creating heat, 15 31 power, or steam for grain drying, or for providing 15 32 heat or cooling for livestock buildings or for 15 33 greenhouses or buildings or parts of buildings 15 34 dedicated to the production of flowering, ornamental, 15 35 or vegetable plants intended for sale in the ordinary 15 36 course of business, or for use in cultivation of 15 37 agricultural products by aquaculture, or in implements 15 38 of husbandry engaged in agricultural production. 15 39 7. The sales price of services furnished by 15 40 specialized flying implements of husbandry used for 15 41 agricultural aerial spraying. 15 42 8. The sales price exclusive of services of farm 15 43 machinery and equipment, including auxiliary 15 44 attachments which improve the performance, safety, 15 45 operation, or efficiency of the machinery and 15 46 equipment and replacement parts, if the following 15 47 conditions are met: 15 48 a. The farm machinery and equipment shall be 15 49 directly and primarily used in production of 15 50 agricultural products. 16 1 b. The farm machinery and equipment shall 16 2 constitute self-propelled implements or implements 16 3 customarily drawn or attached to self-propelled 16 4 implements or the farm machinery or equipment is a 16 5 grain dryer. 16 6 c. The replacement part is essential to any repair 16 7 or reconstruction necessary to the farm machinery's or 16 8 equipment's exempt use in the production of 16 9 agricultural products. 16 10 Vehicles subject to registration, as defined in 16 11 section 423.1, or replacement parts for such vehicles, 16 12 are not eligible for this exemption. 16 13 9. The sales price of wood chips, sawdust, hay, 16 14 straw, paper, or other materials used for bedding in 16 15 the production of agricultural livestock or fowl. 16 16 10. The sales price of gas, electricity, water, or 16 17 heat to be used in implements of husbandry engaged in 16 18 agricultural production. 16 19 11. The sales price exclusive of services of farm 16 20 machinery and equipment, including auxiliary 16 21 attachments which improve the performance, safety, 16 22 operation, or efficiency of the machinery and 16 23 equipment and replacement parts, if all of the 16 24 following conditions are met: 16 25 a. The implement, machinery, or equipment is 16 26 directly and primarily used in livestock or dairy 16 27 production, aquaculture production, or the production 16 28 of flowering, ornamental, or vegetable plants. 16 29 b. The implement is not a self-propelled implement 16 30 or implement customarily drawn or attached to self- 16 31 propelled implements. 16 32 c. The replacement part is essential to any repair 16 33 or reconstruction necessary to the farm machinery's or 16 34 equipment's exempt use in livestock or dairy 16 35 production, aquaculture production, or the production 16 36 of flowering, ornamental, or vegetable plants. 16 37 12. The sales price, exclusive of services, from 16 38 sales of irrigation equipment used in farming 16 39 operations. 16 40 13. The sales price from the sale or rental of 16 41 irrigation equipment, whether installed above or below 16 42 ground, to a contractor or farmer if the equipment 16 43 will be primarily used in agricultural operations. 16 44 14. The sales price from the sales of horses, 16 45 commonly known as draft horses, when purchased for use 16 46 and so used as draft horses. 16 47 15. The sales price from the sale of property 16 48 which is a container, label, carton, pallet, packing 16 49 case, wrapping, baling wire, twine, bag, bottle, 16 50 shipping case, or other similar article or receptacle 17 1 sold for use in agricultural, livestock, or dairy 17 2 production. 17 3 16. The sales price from the sale of feed and feed 17 4 supplements and additives when used for consumption by 17 5 farm deer or bison. 17 6 17. The sales price of all goods, wares, or 17 7 merchandise, or services, used for educational 17 8 purposes sold to any private nonprofit educational 17 9 institution in this state. For the purpose of this 17 10 subsection, "educational institution" means an 17 11 institution which primarily functions as a school, 17 12 college, or university with students, faculty, and an 17 13 established curriculum. The faculty of an educational 17 14 institution must be associated with the institution 17 15 and the curriculum must include basic courses which 17 16 are offered every year. "Educational institution" 17 17 includes an institution primarily functioning as a 17 18 library. 17 19 18. The sales price of tangible personal property 17 20 sold, or of services furnished, to the following 17 21 nonprofit corporations: 17 22 a. Residential care facilities and intermediate 17 23 care facilities for persons with mental retardation 17 24 and residential care facilities for persons with 17 25 mental illness licensed by the department of 17 26 inspections and appeals under chapter 135C. 17 27 b. Residential facilities licensed by the 17 28 department of human services pursuant to chapter 237, 17 29 other than those maintained by individuals as defined 17 30 in section 237.1, subsection 7. 17 31 c. Rehabilitation facilities that provide 17 32 accredited rehabilitation services to persons with 17 33 disabilities which are accredited by the commission on 17 34 accreditation of rehabilitation facilities or the 17 35 accreditation council for services for persons with 17 36 mental retardation and other persons with 17 37 developmental disabilities and adult day care services 17 38 approved for reimbursement by the state department of 17 39 human services. 17 40 d. Community mental health centers accredited by 17 41 the department of human services pursuant to chapter 17 42 225C. 17 43 e. Community health centers as defined in 42 17 44 U.S.C. } 254(c) and migrant health centers as defined 17 45 in 42 U.S.C. } 254(b). 17 46 19. The sales price of tangible personal property 17 47 sold to a nonprofit organization which was organized 17 48 for the purpose of lending the tangible personal 17 49 property to the general public for use by them for 17 50 nonprofit purposes. 18 1 20. The sales price of tangible personal property 18 2 sold, or of services furnished, to nonprofit legal aid 18 3 organizations. 18 4 21. The sales price of goods, wares, or 18 5 merchandise, or of services, used for educational, 18 6 scientific, historic preservation, or aesthetic 18 7 purpose sold to a nonprofit private museum. 18 8 22. The sales price from sales of goods, wares, or 18 9 merchandise, or from services furnished, to a 18 10 nonprofit private art center to be used in the 18 11 operation of the art center. 18 12 23. The sales price of tangible personal property 18 13 sold, or of services furnished, by a fair society 18 14 organized under chapter 174. 18 15 24. The sales price from services furnished by the 18 16 notification center established pursuant to section 18 17 480.3, and the vendor selected pursuant to section 18 18 480.3 to provide the notification service. 18 19 25. The sales price of food and beverages sold for 18 20 human consumption by a nonprofit organization which 18 21 principally promotes a food or beverage product for 18 22 human consumption produced, grown, or raised in this 18 23 state and whose income is exempt from federal taxation 18 24 under section 501(c) of the Internal Revenue Code. 18 25 26. The sales price of tangible personal property 18 26 sold, or of services furnished, to a statewide 18 27 nonprofit organ procurement organization, as defined 18 28 in section 142C.2. 18 29 27. The sales price of tangible personal property 18 30 sold, or of services furnished, to a nonprofit 18 31 hospital licensed pursuant to chapter 135B to be used 18 32 in the operation of the hospital. 18 33 28. The sales price of tangible personal property 18 34 sold, or of services furnished, to a freestanding 18 35 nonprofit hospice facility which operates a hospice 18 36 program as defined in 42 C.F.R., ch. IV, } 418.3, 18 37 which property or services are to be used in the 18 38 hospice program. 18 39 29. The sales price of all goods, wares, or 18 40 merchandise sold, or of services furnished, which are 18 41 used in the fulfillment of a written construction 18 42 contract with a nonprofit hospital licensed pursuant 18 43 to chapter 135B if all of the following apply: 18 44 a. The sales and delivery of the goods, wares, or 18 45 merchandise, or the services furnished occurred 18 46 between July 1, 1998, and December 31, 2001. 18 47 b. The written construction contract was entered 18 48 into prior to December 31, 1999, or bonds to fund the 18 49 construction were issued prior to December 31, 1999. 18 50 c. The sales or services were purchased by a 19 1 contractor as the agent for the hospital or were 19 2 purchased directly by the hospital. 19 3 30. The sales price of livestock ear tags sold by 19 4 a nonprofit organization whose income is exempt from 19 5 federal taxation under section 501(c)(6) of the 19 6 Internal Revenue Code where the proceeds are used in 19 7 bovine research programs selected or approved by such 19 8 organization. 19 9 31. The sales price of goods, wares, or 19 10 merchandise sold to and of services furnished, and 19 11 used for public purposes sold to a tax-certifying or 19 12 tax-levying body of the state or a governmental 19 13 subdivision of the state, including regional transit 19 14 systems, as defined in section 324A.1, the state board 19 15 of regents, department of human services, state 19 16 department of transportation, any municipally owned 19 17 solid waste facility which sells all or part of its 19 18 processed waste as fuel to a municipally owned public 19 19 utility, and all divisions, boards, commissions, 19 20 agencies, or instrumentalities of state, federal, 19 21 county, or municipal government which have no earnings 19 22 going to the benefit of an equity investor or 19 23 stockholder, except any of the following: 19 24 a. The sales price of goods, wares, or merchandise 19 25 sold to, or of services furnished, and used by or in 19 26 connection with the operation of any municipally owned 19 27 public utility engaged in selling gas, electricity, 19 28 heat, or pay television service to the general public. 19 29 b. The sales price of furnishing of sewage 19 30 services to a county or municipality on behalf of 19 31 nonresidential commercial operations. 19 32 c. The furnishing of solid waste collection and 19 33 disposal service to a county or municipality on behalf 19 34 of nonresidential commercial operations located within 19 35 the county or municipality. 19 36 The exemption provided by this subsection shall 19 37 also apply to all such sales of goods, wares, or 19 38 merchandise or of services furnished and subject to 19 39 use tax. 19 40 32. The sales price of tangible personal property 19 41 sold, or of services furnished, by a county or city. 19 42 This exemption does not apply to any of the following: 19 43 a. The tax specifically imposed under section 19 44 423.2 on the sales price from sales or furnishing of 19 45 gas, electricity, water, heat, pay television service, 19 46 or communication service to the public by a municipal 19 47 corporation in its proprietary capacity. 19 48 b. The sale or furnishing of solid waste 19 49 collection and disposal service to nonresidential 19 50 commercial operations. 20 1 c. The sale or furnishing of sewage service for 20 2 nonresidential commercial operations. 20 3 d. Fees paid to cities and counties for the 20 4 privilege of participating in any athletic sports. 20 5 33. The sales price of mementos and other items 20 6 relating to Iowa history and historic sites, the 20 7 general assembly, and the state capitol, sold by the 20 8 legislative service bureau and its legislative 20 9 information office on the premises of property under 20 10 the control of the legislative council, at the state 20 11 capitol, and on other state property. 20 12 34. The sales price from sales of mementos and 20 13 other items relating to Iowa history and historic 20 14 sites by the department of cultural affairs on the 20 15 premises of property under its control and at the 20 16 state capitol. 20 17 35. The sales price from sales or services 20 18 furnished by the state fair organized under chapter 20 19 173. 20 20 36. The sales price from sales of tangible 20 21 personal property or of the sale or furnishing of 20 22 electrical energy, natural or artificial gas, or 20 23 communication service to another state or political 20 24 subdivision of another state if the other state 20 25 provides a similar reciprocal exemption for this state 20 26 and political subdivision of this state. 20 27 37. The sales price of services on or connected 20 28 with new construction, reconstruction, alteration, 20 29 expansion, remodeling, or the services of a general 20 30 building contractor, architect, or engineer. 20 31 38. The sales price from the sale of building 20 32 materials, supplies, or equipment sold to rural water 20 33 districts organized under chapter 504A as provided in 20 34 chapter 357A and used for the construction of 20 35 facilities of a rural water district. 20 36 39. The sales price from "casual sales". 20 37 "Casual sales" means: 20 38 a. Sales of tangible personal property, or the 20 39 furnishing of services, of a nonrecurring nature, by 20 40 the owner, if the seller, at the time of the sale, is 20 41 not engaged for profit in the business of selling 20 42 tangible personal property or services taxed under 20 43 section 423.2. 20 44 b. The sale of all or substantially all of the 20 45 tangible personal property or services held or used by 20 46 a seller in the course of the seller's trade or 20 47 business for which the seller is required to hold a 20 48 sales tax permit when the seller sells or otherwise 20 49 transfers the trade or business to another person who 20 50 shall engage in a similar trade or business. 21 1 40. The sales price from the sale of automotive 21 2 fluids to a retailer to be used either in providing a 21 3 service which includes the installation or application 21 4 of the fluids in or on a motor vehicle, which service 21 5 is subject to section 423.2, subsection 6, or to be 21 6 installed in or applied to a motor vehicle which the 21 7 retailer intends to sell, which sale is subject to 21 8 section 423.26. For purposes of this subsection, 21 9 automotive fluids are all those which are refined, 21 10 manufactured, or otherwise processed and packaged for 21 11 sale prior to their installation in or application to 21 12 a motor vehicle. They include but are not limited to 21 13 motor oil and other lubricants, hydraulic fluids, 21 14 brake fluid, transmission fluid, sealants, 21 15 undercoatings, antifreeze, and gasoline additives. 21 16 41. The sales price from the rental of motion 21 17 picture films, video and audio tapes, video and audio 21 18 discs, records, photos, copy, scripts, or other media 21 19 used for the purpose of transmitting that which can be 21 20 seen, heard, or read, if either of the following 21 21 conditions are met: 21 22 a. The lessee imposes a charge for the viewing of 21 23 such media and the charge for the viewing is subject 21 24 to taxation under this subchapter or is subject to use 21 25 tax. 21 26 b. The lessee broadcasts the contents of such 21 27 media for public viewing or listening. 21 28 42. The sales price from the sale of tangible 21 29 personal property consisting of advertising material 21 30 including paper to a person in Iowa if that person or 21 31 that person's agent will, subsequent to the sale, send 21 32 that advertising material outside this state and the 21 33 material is subsequently used solely outside of Iowa. 21 34 For the purpose of this subsection, "advertising 21 35 material" means any brochure, catalog, leaflet, flyer, 21 36 order form, return envelope, or similar item used to 21 37 promote sales of property or services. 21 38 43. The sales price from the sale of property or 21 39 of services performed on property which the retailer 21 40 transfers to a carrier for shipment to a point outside 21 41 of Iowa, places in the United States mail or parcel 21 42 post directed to a point outside of Iowa, or 21 43 transports to a point outside of Iowa by means of the 21 44 retailer's own vehicles, and which is not thereafter 21 45 returned to a point within Iowa, except solely in the 21 46 course of interstate commerce or transportation. This 21 47 exemption shall not apply if the purchaser, consumer, 21 48 or their agent, other than a carrier, takes physical 21 49 possession of the property in Iowa. 21 50 44. The sales price from the sale of property 22 1 which is a container, label, carton, pallet, packing 22 2 case, wrapping paper, twine, bag, bottle, shipping 22 3 case, or other similar article or receptacle sold to 22 4 retailers or manufacturers for the purpose of 22 5 packaging or facilitating the transportation of 22 6 tangible personal property sold at retail or 22 7 transferred in association with the maintenance or 22 8 repair of fabric or clothing. 22 9 45. The sales price from sales or rentals to a 22 10 printer or publisher of the following: acetate; anti- 22 11 halation backing; antistatic spray; back lining; base 22 12 material used as a carrier for light sensitive 22 13 emulsions; blankets; blow-ups; bronze powder; carbon 22 14 tissue; codas; color filters; color separations; 22 15 contacts; continuous tone separations; creative art; 22 16 custom dies and die cutting materials; dampener 22 17 sleeves; dampening solution; design and styling; diazo 22 18 coating; dot etching; dot etching solutions; drawings; 22 19 drawsheets; driers; duplicate films or prints; 22 20 electronically digitized images; electrotypes; end 22 21 product of image modulation; engravings; etch 22 22 solutions; film; finished art or final art; fix; 22 23 fixative spray; flats; flying pasters; foils; 22 24 goldenrod paper; gum; halftones; illustrations; ink; 22 25 ink paste; keylines; lacquer; lasering images; 22 26 layouts; lettering; line negatives and positives; 22 27 linotypes; lithographic offset plates; magnesium and 22 28 zinc etchings; masking paper; masks; masters; mats; 22 29 mat service; metal toner; models and modeling; mylar; 22 30 negatives; nonoffset spray; opaque film process paper; 22 31 opaquing; padding compound; paper stock; photographic 22 32 materials: acids, plastic film, desensitizer 22 33 emulsion, exposure chemicals, fix, developers, and 22 34 paper; photography, day rate; photopolymer coating; 22 35 photographs; photostats; photo-display tape; 22 36 phototypesetter materials; ph-indicator sticks; 22 37 positives; press pack; printing cylinders; printing 22 38 plates, all types; process lettering; proof paper; 22 39 proofs and proof processes, all types; pumice powder; 22 40 purchased author alterations; purchased composition; 22 41 purchased phototypesetting; purchased stripping and 22 42 pasteups; red litho tape; reducers; roller covering; 22 43 screen tints; sketches; stepped plates; stereotypes; 22 44 strip types; substrate; tints; tissue overlays; 22 45 toners; transparencies; tympan; typesetting; 22 46 typography; varnishes; veloxes; wood mounts; and any 22 47 other items used in a like capacity to any of the 22 48 above enumerated items by the printer or publisher to 22 49 complete a finished product for sale at retail. 22 50 Expendable tools and supplies which are not enumerated 23 1 in this subsection are excluded from the exemption. 23 2 "Printer" means that portion of a person's business 23 3 engaged in printing that completes a finished product 23 4 for ultimate sale at retail or means that portion of a 23 5 person's business used to complete a finished printed 23 6 packaging material used to package a product for 23 7 ultimate sale at retail. "Printer" does not mean an 23 8 in-house printer who prints or copyrights its own 23 9 materials. 23 10 46. a. The sales price from the sale or rental of 23 11 computers, machinery, and equipment, including 23 12 replacement parts, and materials used to construct or 23 13 self-construct computers, machinery, and equipment if 23 14 such items are any of the following: 23 15 (1) Directly and primarily used in processing by a 23 16 manufacturer. 23 17 (2) Directly and primarily used to maintain the 23 18 integrity of the product or to maintain unique 23 19 environmental conditions required for either the 23 20 product or the computers, machinery, and equipment 23 21 used in processing by a manufacturer, including test 23 22 equipment used to control quality and specifications 23 23 of the product. 23 24 (3) Directly and primarily used in research and 23 25 development of new products or processes of 23 26 processing. 23 27 (4) Computers used in processing or storage of 23 28 data or information by an insurance company, financial 23 29 institution, or commercial enterprise. 23 30 (5) Directly and primarily used in recycling or 23 31 reprocessing of waste products. 23 32 (6) Pollution-control equipment used by a 23 33 manufacturer, including but not limited to that 23 34 required or certified by an agency of this state or of 23 35 the United States government. 23 36 b. The sales price from the sale of fuel used in 23 37 creating heat, power, steam, or for generating 23 38 electrical current, or from the sale of electricity, 23 39 consumed by computers, machinery, or equipment used in 23 40 an exempt manner described in paragraph "a", 23 41 subparagraph (1), (2), (3), (5), or (6). 23 42 c. The sales price from the sale or rental of the 23 43 following shall not be exempt from the tax imposed by 23 44 this subchapter: 23 45 (1) Hand tools. 23 46 (2) Point-of-sale equipment and computers. 23 47 (3) Industrial machinery, equipment, and 23 48 computers, including pollution-control equipment 23 49 within the scope of section 427A.1, subsection 1, 23 50 paragraphs "h" and "i". 24 1 (4) Vehicles subject to registration, except 24 2 vehicles subject to registration which are directly 24 3 and primarily used in recycling or reprocessing of 24 4 waste products. 24 5 d. As used in this subsection: 24 6 (1) "Commercial enterprise" includes businesses 24 7 and manufacturers conducted for profit and centers for 24 8 data processing services to insurance companies, 24 9 financial institutions, businesses, and manufacturers, 24 10 but excludes professions and occupations and nonprofit 24 11 organizations. 24 12 (2) "Financial institution" means as defined in 24 13 section 527.2. 24 14 (3) "Insurance company" means an insurer organized 24 15 or operating under chapter 508, 514, 515, 518, 518A, 24 16 519, or 520, or authorized to do business in Iowa as 24 17 an insurer or an insurance producer under chapter 24 18 522B. 24 19 (4) "Manufacturer" means as defined in section 24 20 428.20, but also includes contract manufacturers. A 24 21 contract manufacturer is a manufacturer that otherwise 24 22 falls within the definition of manufacturer under 24 23 section 428.20, except that a contract manufacturer 24 24 does not sell the tangible personal property the 24 25 contract manufacturer processes on behalf of other 24 26 manufacturers. A business engaged in activities 24 27 subsequent to the extractive process of quarrying or 24 28 mining, such as crushing, washing, sizing, or blending 24 29 of aggregate materials, is a manufacturer with respect 24 30 to these activities. 24 31 (5) "Processing" means a series of operations in 24 32 which materials are manufactured, refined, purified, 24 33 created, combined, or transformed by a manufacturer, 24 34 ultimately into tangible personal property. 24 35 Processing encompasses all activities commencing with 24 36 the receipt or producing of raw materials by the 24 37 manufacturer and ending at the point products are 24 38 delivered for shipment or transferred from the 24 39 manufacturer. Processing includes but is not limited 24 40 to refinement or purification of materials; treatment 24 41 of materials to change their form, context, or 24 42 condition; maintenance of the quality or integrity of 24 43 materials, components, or products; maintenance of 24 44 environmental conditions necessary for materials, 24 45 components, or products; quality control activities; 24 46 and construction of packaging and shipping devices, 24 47 placement into shipping containers or any type of 24 48 shipping devices or medium, and the movement of 24 49 materials, components, or products until shipment from 24 50 the processor. 25 1 (6) "Receipt or producing of raw materials" means 25 2 activities performed upon tangible personal property 25 3 only. With respect to raw materials produced from or 25 4 upon real estate, the receipt or producing of raw 25 5 materials is deemed to occur immediately following the 25 6 severance of the raw materials from the real estate. 25 7 47. The sales price from the furnishing of the 25 8 design and installation of new industrial machinery or 25 9 equipment, including electrical and electronic 25 10 installation. 25 11 48. The sales price from the sale of carbon 25 12 dioxide in a liquid, solid, or gaseous form, 25 13 electricity, steam, and other taxable services when 25 14 used by a manufacturer of food products to produce 25 15 marketable food products for human consumption, 25 16 including but not limited to treatment of material to 25 17 change its form, context, or condition, in order to 25 18 produce the food product, maintenance of quality or 25 19 integrity of the food product, changing or maintenance 25 20 of temperature levels necessary to avoid spoilage or 25 21 to hold the food product in marketable condition, 25 22 maintenance of environmental conditions necessary for 25 23 the safe or efficient use of machinery and material 25 24 used to produce the food product, sanitation and 25 25 quality control activities, formation of packaging, 25 26 placement into shipping containers, and movement of 25 27 the material or food product until shipment from the 25 28 building of manufacture. 25 29 49. The sales price of sales of electricity, 25 30 steam, or any taxable service when purchased and used 25 31 in the processing of tangible personal property 25 32 intended to be sold ultimately at retail. 25 33 50. The sales price of tangible personal property 25 34 sold for processing. Tangible personal property is 25 35 sold for processing within the meaning of this 25 36 subsection only when it is intended that the property 25 37 will, by means of fabrication, compounding, 25 38 manufacturing, or germination, become an integral part 25 39 of other tangible personal property intended to be 25 40 sold ultimately at retail; or for generating electric 25 41 current; or the property is a chemical, solvent, 25 42 sorbent, or reagent, which is directly used and is 25 43 consumed, dissipated, or depleted, in processing 25 44 tangible personal property which is intended to be 25 45 sold ultimately at retail or consumed in the 25 46 maintenance or repair of fabric or clothing, and which 25 47 may not become a component or integral part of the 25 48 finished product. The distribution to the public of 25 49 free newspapers or shoppers guides is a retail sale 25 50 for purposes of the processing exemption set out in 26 1 this subsection and in subsection 49. 26 2 51. The sales price from the sale of argon and 26 3 other similar gases to be used in the manufacturing 26 4 process. 26 5 52. The sales price from the sale of electricity 26 6 to water companies assessed for property tax pursuant 26 7 to sections 428.24, 428.26, and 428.28 which is used 26 8 solely for the purpose of pumping water from a river 26 9 or well. 26 10 53. The sales price from the sale of wind energy 26 11 conversion property to be used as an electric power 26 12 source and the sale of the materials used to 26 13 manufacture, install, or construct wind energy 26 14 conversion property used or to be used as an electric 26 15 power source. 26 16 For purposes of this subsection, "wind energy 26 17 conversion property" means any device, including, but 26 18 not limited to, a wind charger, windmill, wind 26 19 turbine, tower and electrical equipment, pad mount 26 20 transformers, power lines, and substation, which 26 21 converts wind energy to a form of usable energy. 26 22 54. The sales price from the sales of newspapers, 26 23 free newspapers, or shoppers guides and the printing 26 24 and publishing of such newspapers and shoppers guides, 26 25 and envelopes for advertising. 26 26 55. The sales price from the sale of motor fuel 26 27 and special fuel consumed for highway use or in 26 28 watercraft or aircraft where the fuel tax has been 26 29 imposed and paid and no refund has been or will be 26 30 allowed and the sales price from the sales of ethanol 26 31 blended gasoline, as defined in section 452A.2. 26 32 56. The sales price from all sales of food and 26 33 food ingredients. However, as used in this 26 34 subsection, "food" does not include alcoholic 26 35 beverages, candy, dietary supplements, food sold 26 36 through vending machines, prepared food, soft drinks, 26 37 and tobacco. 26 38 For the purposes of this subsection: 26 39 a. "Alcoholic beverages" means beverages that are 26 40 suitable for human consumption and contain one-half of 26 41 one percent or more of alcohol by volume. 26 42 b. "Candy" means a preparation of sugar, honey, or 26 43 other natural or artificial sweeteners in combination 26 44 with chocolate, fruits, nuts, or other ingredients or 26 45 flavorings in the form of bars, drops, or pieces. 26 46 Candy shall not include any preparation containing 26 47 flour and shall require no refrigeration. 26 48 c. "Dietary supplement" means any product, other 26 49 than tobacco, intended to supplement the diet that 26 50 contains one or more of the following dietary 27 1 ingredients: 27 2 (1) A vitamin. 27 3 (2) A mineral. 27 4 (3) An herb or other botanical. 27 5 (4) An amino acid. 27 6 (5) A dietary substance for use by humans to 27 7 supplement the diet by increasing the total dietary 27 8 intake. 27 9 (6) A concentrate, metabolite, constituent, 27 10 extract, or combination of any of the ingredients in 27 11 subparagraphs (1) through (5) that is intended for 27 12 ingestion in tablet, capsule, powder, softgel, gelcap, 27 13 or liquid form, or if not intended for ingestion in 27 14 such a form, is not represented as conventional food 27 15 and is not represented for use as a sole item of a 27 16 meal or of the diet; and is required to be labeled as 27 17 a dietary supplement, identifiable by the "supplement 27 18 facts" box found on the label and as required pursuant 27 19 to 21 C.F.R. } 101.36. 27 20 d. "Food and food ingredients" means substances, 27 21 whether in liquid, concentrated, solid, frozen, dried, 27 22 or dehydrated form, that are sold for ingestion or 27 23 chewing by humans and are consumed for their taste or 27 24 nutritional value. 27 25 e. "Food sold through vending machines" means food 27 26 dispensed from a machine or other mechanical device 27 27 that accepts payment. 27 28 f. "Prepared food" means any of following: 27 29 (1) Food sold in a heated state or heated by the 27 30 seller. 27 31 (2) Two or more food ingredients mixed or combined 27 32 by the seller for sale as a single item. "Prepared 27 33 food", for the purposes of this subparagraph, does not 27 34 include food that is only cut, repackaged, or 27 35 pasteurized by the seller, and eggs, fish, meat, 27 36 poultry, and foods containing these raw animal foods 27 37 requiring cooking by the consumer as recommended by 27 38 the United States food and drug administration in 27 39 chapter 3, part 401.11 of its food code so as to 27 40 prevent food borne illnesses. 27 41 (3) Food sold with eating utensils provided by the 27 42 seller, including plates, knives, forks, spoons, 27 43 glasses, cups, napkins, or straws. A plate does not 27 44 include a container or packaging used to transport 27 45 food. 27 46 g. "Soft drinks" means nonalcoholic beverages that 27 47 contain natural or artificial sweeteners. "Soft 27 48 drinks" does not include beverages that contain milk 27 49 or milk products; soy, rice, or similar milk 27 50 substitutes; or greater than fifty percent of 28 1 vegetable or fruit juice by volume. 28 2 f. "Tobacco" means cigarettes, cigars, chewing or 28 3 pipe tobacco, or any other item that contains tobacco. 28 4 57. The sales price from the sale of items 28 5 purchased with coupons issued under the federal Food 28 6 Stamp Act of 1977, 7 U.S.C. } 2011 et seq. 28 7 58. In transactions in which tangible personal 28 8 property is traded toward the sales price of other 28 9 tangible personal property, that portion of the sales 28 10 price which is not payable in money to the retailer is 28 11 exempted from the taxable amount if the following 28 12 conditions are met: 28 13 a. The tangible personal property traded to the 28 14 retailer is the type of property normally sold in the 28 15 regular course of the retailer's business. 28 16 b. The tangible personal property traded to the 28 17 retailer is intended by the retailer to be ultimately 28 18 sold at retail or is intended to be used by the 28 19 retailer or another in the remanufacturing of a like 28 20 item. 28 21 59. The sales price from the sale or rental of 28 22 prescription drugs or medical devices intended for 28 23 human use or consumption. 28 24 For the purposes of this subsection: 28 25 a. "Drug" means a compound, substance, or 28 26 preparation, and any component of a compound, 28 27 substance, or preparation, other than food and food 28 28 ingredients, dietary supplements, or alcoholic 28 29 beverages which is any of the following: 28 30 (1) Recognized in the official United States 28 31 pharmacopoeia, official homeopathic pharmacopoeia of 28 32 the United States, or official national formulary, and 28 33 supplement to any of them. 28 34 (2) Intended for use in the diagnosis, cure, 28 35 mitigation, treatment, or prevention of disease. 28 36 (3) Intended to affect the structure or any 28 37 function of the body. 28 38 b. "Medical device" means equipment or a supply, 28 39 intended to be prescribed by a practitioner, including 28 40 orthopedic or orthotic devices. However, "medical 28 41 device" also includes prosthetic devices, ostomy, 28 42 urological, and tracheostomy equipment and supplies, 28 43 and diabetic testing materials, hypodermic syringes 28 44 and needles, anesthesia trays, biopsy trays and biopsy 28 45 needles, cannula systems, catheter trays and invasive 28 46 catheters, dialyzers, drug infusion devices, fistula 28 47 sets, hemodialysis devices, insulin infusion devices, 28 48 intraocular lenses, irrigation solutions, intravenous 28 49 administering sets, solutions and stopcocks, myelogram 28 50 trays, nebulizers, small vein infusion kits, spinal 29 1 puncture trays, transfusion sets, venous blood sets, 29 2 and oxygen equipment, intended to be dispensed for 29 3 human use with or without a prescription to an 29 4 ultimate user. 29 5 c. "Practitioner" means a practitioner as defined 29 6 in section 155A.3, or a person licensed to prescribe 29 7 drugs. 29 8 d. "Prescription drug" means a drug intended to be 29 9 dispensed to an ultimate user pursuant to a 29 10 prescription drug order, formula, or recipe issued in 29 11 any form of oral, written, electronic, or other means 29 12 of transmission by a duly licensed practitioner, or 29 13 oxygen or insulin dispensed for human consumption with 29 14 or without a prescription drug order or medication 29 15 order. 29 16 e. "Prosthetic device" means a replacement, 29 17 corrective, or supportive device including repair and 29 18 replacement parts for the same worn on or in the body 29 19 to do any of the following: 29 20 (1) Artificially replace a missing portion of the 29 21 body. 29 22 (2) Prevent or correct physical deformity or 29 23 malfunction. 29 24 (3) Support a weak or deformed portion of the 29 25 body. 29 26 f. "Ultimate user" means an individual who has 29 27 lawfully obtained and possesses a prescription drug or 29 28 medical device for the individual's own use or for the 29 29 use of a member of the individual's household, or an 29 30 individual to whom a prescription drug or medical 29 31 device has been lawfully supplied, administered, 29 32 dispensed, or prescribed. 29 33 60. The sales price from services furnished by 29 34 aerial commercial and charter transportation services. 29 35 61. The sales price from the sale of raffle 29 36 tickets for a raffle licensed pursuant to section 29 37 99B.5. 29 38 62. The sales price from the sale of tangible 29 39 personal property which will be given as prizes to 29 40 players in games of skill, games of chance, raffles, 29 41 and bingo games as defined in chapter 99B. 29 42 63. The sales price from the sale of a modular 29 43 home, as defined in section 435.1, to the extent of 29 44 the portion of the purchase price of the modular home 29 45 which is not attributable to the cost of the tangible 29 46 personal property used in the processing of the 29 47 modular home. For purposes of this exemption, the 29 48 portion of the purchase price which is not 29 49 attributable to the cost of the tangible personal 29 50 property used in the processing of the modular home is 30 1 forty percent. 30 2 64. The sales price from charges paid to a 30 3 provider for access to on-line computer services. For 30 4 purposes of this subsection, "on-line computer 30 5 service" means a service that provides or enables 30 6 computer access by multiple users to the internet or 30 7 to other information made available through a computer 30 8 server. 30 9 65. The sales price from the sale or rental of 30 10 information services. "Information services" means 30 11 every business activity, process, or function by which 30 12 a seller or its agent accumulates, prepares, 30 13 organizes, or conveys data, facts, knowledge, 30 14 procedures, and like services to a buyer or its agent 30 15 of such information through any tangible or intangible 30 16 medium. Information accumulated, prepared, or 30 17 organized for a buyer or its agent is an information 30 18 service even though it may incorporate preexisting 30 19 components of data or other information. "Information 30 20 services" includes, but is not limited to, database 30 21 files, mailing lists, subscription files, market 30 22 research, credit reports, surveys, real estate 30 23 listings, bond rating reports, abstracts of title, bad 30 24 check lists, broadcasting rating services, wire 30 25 services, and scouting reports, or other similar 30 26 items. 30 27 66. The sales price of a sale at retail if the 30 28 substance of the transaction is delivered to the 30 29 purchaser digitally, electronically, or utilizing 30 30 cable, or by radio waves, microwaves, satellites, or 30 31 fiber optics. 30 32 67. a. The sales price from the sale of an 30 33 article of clothing designed to be worn on or about 30 34 the human body if all of the following apply: 30 35 (1) The sales price of the article is less than 30 36 one hundred dollars. 30 37 (2) The sale takes place during a period beginning 30 38 at 12:01 a.m. on the first Friday in August and ending 30 39 at midnight on the following Saturday. 30 40 b. This subsection does not apply to any of the 30 41 following: 30 42 (1) Sport or recreational equipment and protective 30 43 equipment. 30 44 (2) Clothing accessories or equipment. 30 45 (3) The rental of clothing. 30 46 c. For purposes of this subsection: 30 47 (1) "Clothing" means all human wearing apparel 30 48 suitable for general use. "Clothing" includes, but is 30 49 not limited to the following: aprons, household and 30 50 shop; athletic supporters; baby receiving blankets; 31 1 bathing suits and caps; beach capes and coats; belts 31 2 and suspenders; boots; coats and jackets; costumes; 31 3 diapers (children and adults, including disposable 31 4 diapers); earmuffs; footlets; formal wear; garters and 31 5 garter belts; girdles; gloves and mittens for general 31 6 use; hats and caps; hosiery; insoles for shoes; lab 31 7 coats; neckties; overshoes; pantyhose; rainwear; 31 8 rubber pants; sandals; scarves; shoes and shoelaces; 31 9 slippers; sneakers; socks and stockings; steel-toed 31 10 shoes; underwear; uniforms, athletic and nonathletic; 31 11 and wedding apparel. 31 12 "Clothing" does not include the following: belt 31 13 buckles sold separately; costume masks sold 31 14 separately; patches and emblems sold separately; 31 15 sewing equipment and supplies (including, but not 31 16 limited to, knitting needles, patterns, pins, 31 17 scissors, sewing machines, sewing needles, tape 31 18 measures, and thimbles); and sewing materials that 31 19 become part of clothing (including, but not limited 31 20 to, buttons, fabric, lace, thread, yarn, and zippers). 31 21 (2) "Clothing accessories or equipment" means 31 22 incidental items worn on the person or in conjunction 31 23 with clothing. "Clothing accessories or equipment" 31 24 includes, but is not limited to, the following: 31 25 briefcases; cosmetics; hair notions (including, but 31 26 not limited to, barrettes, hair bows, and hair nets); 31 27 handbags; handkerchiefs; jewelry; sunglasses, 31 28 nonprescription; umbrellas; wallets; watches; and wigs 31 29 and hairpieces. 31 30 (3) "Protective equipment" means items for human 31 31 wear and designed as protection for the wearer against 31 32 injury or disease or as protection against damage or 31 33 injury of other persons or property but not suitable 31 34 for general use. "Protective equipment" includes, but 31 35 is not limited to, the following: breathing masks; 31 36 clean room apparel and equipment; ear and hearing 31 37 protectors; face shields; hard hats; helmets; paint or 31 38 dust respirators; protective gloves; safety glasses 31 39 and goggles; safety belts; tool belts; and welders 31 40 gloves and masks. 31 41 (4) "Sport or recreational equipment" means items 31 42 designed for human use and worn in conjunction with an 31 43 athletic or recreational activity that are not 31 44 suitable for general use. "Sport or recreational 31 45 equipment" includes, but is not limited to, the 31 46 following: ballet and tap shoes; cleated or spiked 31 47 athletic shoes; gloves (including, but not limited to, 31 48 baseball, bowling, boxing, hockey, and golf); goggles; 31 49 hand and elbow guards; life preservers and vests; 31 50 mouth guards; roller and ice skates; shin guards; 32 1 shoulder pads; ski boots; waders; and wetsuits and 32 2 fins. 32 3 68. a. Subject to paragraph "b", the sales price 32 4 from the sale or furnishing of metered gas, 32 5 electricity, and fuel, including propane and heating 32 6 oil, to residential customers which is used to provide 32 7 energy for residential dwellings and units of 32 8 apartment and condominium complexes used for human 32 9 occupancy. 32 10 b. The exemption in this subsection shall be 32 11 phased in by means of a reduction in the tax rate as 32 12 follows: 32 13 (1) If the date of the utility billing or meter 32 14 reading cycle of the residential customer for the sale 32 15 or furnishing of metered gas and electricity is on or 32 16 after January 1, 2002, through December 31, 2002, or 32 17 if the sale or furnishing of fuel for purposes of 32 18 residential energy and the delivery of the fuel occurs 32 19 on or after January 1, 2002, through December 31, 32 20 2002, the rate of tax is four percent of the sales 32 21 price. 32 22 (2) If the date of the utility billing or meter 32 23 reading cycle of the residential customer for the sale 32 24 or furnishing of metered gas and electricity is on or 32 25 after January 1, 2003, through December 31, 2003, or 32 26 if the sale or furnishing of fuel for purposes of 32 27 residential energy and the delivery of the fuel occurs 32 28 on or after January 1, 2003, through December 31, 32 29 2003, the rate of tax is three percent of the sales 32 30 price. 32 31 (3) If the date of the utility billing or meter 32 32 reading cycle of the residential customer for the sale 32 33 or furnishing of metered gas and electricity is on or 32 34 after January 1, 2004, through December 31, 2004, or 32 35 if the sale or furnishing of fuel for purposes of 32 36 residential energy and the delivery of the fuel occurs 32 37 on or after January 1, 2004, through December 31, 32 38 2004, the rate of tax is two percent of the sales 32 39 price. 32 40 (4) If the date of the utility billing or meter 32 41 reading cycle of the residential customer for the sale 32 42 or furnishing of metered gas and electricity is on or 32 43 after January 1, 2005, through December 31, 2005, or 32 44 if the sale or furnishing of fuel for purposes of 32 45 residential energy and the delivery of the fuel occurs 32 46 on or after January 1, 2005, through December 31, 32 47 2005, the rate of tax is one percent of the sales 32 48 price. 32 49 (5) If the date of the utility billing or meter 32 50 reading cycle of the residential customer for the sale 33 1 or furnishing of metered gas and electricity is on or 33 2 after January 1, 2006, or if the sale, furnishing, or 33 3 service of fuel for purposes of residential energy and 33 4 the delivery of the fuel occurs on or after January 1, 33 5 2006, the rate of tax is zero percent of the sales 33 6 price. 33 7 c. The exemption in this subsection does not apply 33 8 to local option sales and services tax imposed 33 9 pursuant to chapters 423B and 423E. 33 10 69. The sales price from charges paid for the 33 11 delivery of electricity or natural gas if the sale or 33 12 furnishing of the electricity or natural gas or its 33 13 use is exempt from the tax on sales prices imposed 33 14 under this subchapter or from the use tax imposed 33 15 under subchapter III. 33 16 70. The sales price from the sales, furnishing, or 33 17 service of transportation service except the rental of 33 18 recreational vehicles or recreational boats, except 33 19 the rental of motor vehicles subject to registration 33 20 which are registered for a gross weight of thirteen 33 21 tons or less for a period of sixty days or less, and 33 22 except the rental of aircraft for a period of sixty 33 23 days or less. This exemption does not apply to the 33 24 transportation of electric energy or natural gas. 33 25 71. The sales price from sales of tangible 33 26 personal property used or to be used as railroad 33 27 rolling stock for transporting persons or property, or 33 28 as materials or parts therefor. 33 29 72. The sales price from the sales of special fuel 33 30 for diesel engines consumed or used in the operation 33 31 of ships, barges, or waterborne vessels which are used 33 32 primarily in or for the transportation of property or 33 33 cargo, or the conveyance of persons for hire on rivers 33 34 bordering on the state if the fuel is delivered by the 33 35 seller to the purchaser's barge, ship, or waterborne 33 36 vessel while it is afloat upon such a river. 33 37 73. The sales price from sales of vehicles subject 33 38 to registration or subject only to the issuance of a 33 39 certificate of title and sales of aircraft subject to 33 40 registration under section 328.20. 33 41 74. The sales price from the sale of aircraft for 33 42 use in a scheduled interstate federal aviation 33 43 administration certificated air carrier operation. 33 44 75. The sales price from the sale or rental of 33 45 aircraft; the sale or rental of tangible personal 33 46 property permanently affixed or attached as a 33 47 component part of the aircraft, including but not 33 48 limited to repair or replacement materials or parts; 33 49 and the sales price of all services used for aircraft 33 50 repair, remodeling, and maintenance services when such 34 1 services are performed on aircraft, aircraft engines, 34 2 or aircraft component materials or parts. For the 34 3 purposes of this exemption, "aircraft" means aircraft 34 4 used in a scheduled interstate federal aviation 34 5 administration certificated air carrier operation. 34 6 76. The sales price from the sale or rental of 34 7 tangible personal property permanently affixed or 34 8 attached as a component part of the aircraft, 34 9 including but not limited to repair or replacement 34 10 materials or parts; and the sales price of all 34 11 services used for aircraft repair, remodeling, and 34 12 maintenance services when such services are performed 34 13 on aircraft, aircraft engines, or aircraft component 34 14 materials or parts. For the purposes of this 34 15 exemption, "aircraft" means aircraft used in 34 16 nonscheduled interstate federal aviation 34 17 administration certificated air carrier operation 34 18 operating under 14 C.F.R. ch. 1, pt. 135. 34 19 77. The sales price from the sale of aircraft to 34 20 an aircraft dealer who in turn rents or leases the 34 21 aircraft if all of the following apply: 34 22 a. The aircraft is kept in the inventory of the 34 23 dealer for sale at all times. 34 24 b. The dealer reserves the right to immediately 34 25 take the aircraft from the renter or lessee when a 34 26 buyer is found. 34 27 c. The renter or lessee is aware that the dealer 34 28 will immediately take the aircraft when a buyer is 34 29 found. 34 30 If an aircraft exempt under this subsection is used 34 31 for any purpose other than leasing or renting, or the 34 32 conditions in paragraphs "a", "b", and "c" are not 34 33 continuously met, the dealer claiming the exemption 34 34 under this subsection is liable for the tax that would 34 35 have been due except for this subsection. The tax 34 36 shall be computed upon the original purchase price. 34 37 78. The sales price from sales or rental of 34 38 tangible personal property, or services rendered by 34 39 any entity where the profits from the sales or rental 34 40 of the tangible personal property, or services 34 41 rendered are used by or donated to a nonprofit entity 34 42 which is exempt from federal income taxation pursuant 34 43 to section 501(c)(3) of the Internal Revenue Code, a 34 44 government entity, or a nonprofit private educational 34 45 institution, and where the entire proceeds from the 34 46 sales, rental, or services are expended for any of the 34 47 following purposes: 34 48 a. Educational. 34 49 b. Religious. 34 50 c. Charitable. A charitable act is an act done 35 1 out of goodwill, benevolence, and a desire to add to 35 2 or to improve the good of humankind in general or any 35 3 class or portion of humankind, with no pecuniary 35 4 profit inuring to the person performing the service or 35 5 giving the gift. 35 6 This exemption does not apply to the sales price 35 7 from games of skill, games of chance, raffles, and 35 8 bingo games as defined in chapter 99B. This exemption 35 9 is disallowed on the amount of the sales price only to 35 10 the extent the profits from the sales, rental, or 35 11 services are not used by or donated to the appropriate 35 12 entity and expended for educational, religious, or 35 13 charitable purposes. 35 14 79. The sales price from the sale or rental of 35 15 tangible personal property or from services furnished 35 16 to a recognized community action agency as provided in 35 17 section 216A.93 to be used for the purposes of the 35 18 agency. 35 19 80. a. For purposes of this subsection, 35 20 "designated exempt entity" means an entity which is 35 21 designated in section 423.4, subsection 1. 35 22 b. If a contractor, subcontractor, or builder is 35 23 to use building materials, supplies, and equipment in 35 24 the performance of a construction contract with a 35 25 designated exempt entity, the person shall purchase 35 26 such items of tangible personal property without 35 27 liability for the tax if such property will be used in 35 28 the performance of the construction contract and a 35 29 purchasing agent authorization letter and an exemption 35 30 certificate, issued by the designated exempt entity, 35 31 are presented to the retailer. 35 32 c. Where the owner, contractor, subcontractor, or 35 33 builder is also a retailer holding a retail sales tax 35 34 permit and transacting retail sales of building 35 35 materials, supplies, and equipment, the tax shall not 35 36 be due when materials are withdrawn from inventory for 35 37 use in construction performed for a designated exempt 35 38 entity if an exemption certificate is received from 35 39 such entity. 35 40 d. Tax shall not apply to tangible personal 35 41 property purchased and consumed by a manufacturer as 35 42 building materials, supplies, or equipment in the 35 43 performance of a construction contract for a 35 44 designated exempt entity, if a purchasing agent 35 45 authorization letter and an exemption certificate are 35 46 received from such entity and presented to a retailer. 35 47 Sec. . NEW SECTION. 423.4 REFUNDS. 35 48 1. A private nonprofit educational institution in 35 49 this state, nonprofit private museum in this state, 35 50 tax-certifying or tax-levying body or governmental 36 1 subdivision of the state, including the state board of 36 2 regents, state department of human services, state 36 3 department of transportation, a municipally owned 36 4 solid waste facility which sells all or part of its 36 5 processed waste as fuel to a municipally owned public 36 6 utility, and all divisions, boards, commissions, 36 7 agencies, or instrumentalities of state, federal, 36 8 county, or municipal government which do not have 36 9 earnings going to the benefit of an equity investor or 36 10 stockholder, may make application to the department 36 11 for the refund of the sales or use tax upon the sales 36 12 price of all sales of goods, wares, or merchandise, or 36 13 from services furnished to a contractor, used in the 36 14 fulfillment of a written contract with the state of 36 15 Iowa, any political subdivision of the state, or a 36 16 division, board, commission, agency, or 36 17 instrumentality of the state or a political 36 18 subdivision, a private nonprofit educational 36 19 institution in this state, or a nonprofit private 36 20 museum in this state if the property becomes an 36 21 integral part of the project under contract and at the 36 22 completion of the project becomes public property, is 36 23 devoted to educational uses, or becomes a nonprofit 36 24 private museum; except goods, wares, or merchandise, 36 25 or services furnished which are used in the 36 26 performance of any contract in connection with the 36 27 operation of any municipal utility engaged in selling 36 28 gas, electricity, or heat to the general public or in 36 29 connection with the operation of a municipal pay 36 30 television system; and except goods, wares, and 36 31 merchandise used in the performance of a contract for 36 32 a "project" under chapter 419 as defined in that 36 33 chapter other than goods, wares, or merchandise used 36 34 in the performance of a contract for a "project" under 36 35 chapter 419 for which a bond issue was approved by a 36 36 municipality prior to July 1, 1968, or for which the 36 37 goods, wares, or merchandise becomes an integral part 36 38 of the project under contract and at the completion of 36 39 the project becomes public property or is devoted to 36 40 educational uses. 36 41 a. Such contractor shall state under oath, on 36 42 forms provided by the department, the amount of such 36 43 sales of goods, wares, or merchandise, or services 36 44 furnished and used in the performance of such 36 45 contract, and upon which sales or use tax has been 36 46 paid, and shall file such forms with the governmental 36 47 unit, private nonprofit educational institution, or 36 48 nonprofit private museum which has made any written 36 49 contract for performance by the contractor. The forms 36 50 shall be filed by the contractor with the governmental 37 1 unit, educational institution, or nonprofit private 37 2 museum before final settlement is made. 37 3 b. Such governmental unit, educational 37 4 institution, or nonprofit private museum shall, not 37 5 more than one year after the final settlement has been 37 6 made, make application to the department for any 37 7 refund of the amount of the sales or use tax which 37 8 shall have been paid upon any goods, wares, or 37 9 merchandise, or services furnished, the application to 37 10 be made in the manner and upon forms to be provided by 37 11 the department, and the department shall forthwith 37 12 audit the claim and, if approved, issue a warrant to 37 13 the governmental unit, educational institution, or 37 14 nonprofit private museum in the amount of the sales or 37 15 use tax which has been paid to the state of Iowa under 37 16 the contract. 37 17 Refunds authorized under this subsection shall 37 18 accrue interest at the rate in effect under section 37 19 421.7 from the first day of the second calendar month 37 20 following the date the refund claim is received by the 37 21 department. 37 22 c. Any contractor who willfully makes a false 37 23 report of tax paid under the provisions of this 37 24 subsection is guilty of a simple misdemeanor and in 37 25 addition shall be liable for the payment of the tax 37 26 and any applicable penalty and interest. 37 27 2. The refund of sales and use tax paid on 37 28 transportation construction projects let by the state 37 29 department of transportation is subject to the special 37 30 provisions of this subsection. 37 31 a. A contractor awarded a contract for a 37 32 transportation construction project is considered the 37 33 consumer of all building materials, building supplies, 37 34 and equipment and shall pay sales tax to the supplier 37 35 or remit consumer use tax directly to the department. 37 36 b. The contractor is not required to file 37 37 information with the state department of 37 38 transportation stating the amount of goods, wares, or 37 39 merchandise, or services rendered, furnished, or 37 40 performed and used in the performance of the contract 37 41 or the amount of sales or use tax paid. 37 42 c. The state department of transportation shall 37 43 file a refund claim based on a formula that considers 37 44 the following: 37 45 (1) The quantity of material to complete the 37 46 contract, and quantities of items of work. 37 47 (2) The estimated cost of these materials included 37 48 in the items of work, and the state sales or use tax 37 49 to be paid on the tax rate in effect in section 423.2. 37 50 The quantity of materials shall be determined after 38 1 each letting based on the contract quantities of all 38 2 items of work let to contract. The quantity of 38 3 individual component materials required for each item 38 4 shall be determined and maintained in a database. The 38 5 total quantities of materials shall be determined by 38 6 multiplying the quantities of component materials for 38 7 each contract item of work by the total quantities of 38 8 each contract item for each letting. Where variances 38 9 exist in the cost of materials, the lowest cost shall 38 10 be used as the base cost. 38 11 d. Only the state sales or use tax is refundable. 38 12 Local option taxes paid by the contractor are not 38 13 refundable. 38 14 3. A relief agency may apply to the director for 38 15 refund of the amount of sales or use tax imposed and 38 16 paid upon sales to it of any goods, wares, 38 17 merchandise, or services furnished, used for free 38 18 distribution to the poor and needy. 38 19 a. The refunds may be obtained only in the 38 20 following amounts and manner and only under the 38 21 following conditions: 38 22 (1) On forms furnished by the department, and 38 23 filed within the time as the director shall provide by 38 24 rule, the relief agency shall report to the department 38 25 the total amount or amounts, valued in money, expended 38 26 directly or indirectly for goods, wares, merchandise, 38 27 or services furnished, used for free distribution to 38 28 the poor and needy. 38 29 (2) On these forms the relief agency shall 38 30 separately list the persons making the sales to it or 38 31 to its order, together with the dates of the sales, 38 32 and the total amount so expended by the relief agency. 38 33 (3) The relief agency must prove to the 38 34 satisfaction of the director that the person making 38 35 the sales has included the amount thereof in the 38 36 computation of the sales price of such person and that 38 37 such person has paid the tax levied by this subchapter 38 38 or subchapter III, based upon such computation of the 38 39 sales price. 38 40 b. If satisfied that the foregoing conditions and 38 41 requirements have been complied with, the director 38 42 shall refund the amount claimed by the relief agency. 38 43 SUBCHAPTER III 38 44 USE TAX 38 45 Sec. . NEW SECTION. 423.5 IMPOSITION OF TAX. 38 46 An excise tax at the rate of five percent of the 38 47 purchase price or installed purchase price is imposed 38 48 on the following: 38 49 1. The use in this state of tangible personal 38 50 property as defined in section 423.1, including 39 1 aircraft subject to registration under section 328.20, 39 2 purchased for use in this state. For the purposes of 39 3 this subchapter, the furnishing or use of the 39 4 following services is also treated as the use of 39 5 tangible personal property: optional service or 39 6 warranty contracts, except residential service 39 7 contracts regulated under chapter 523C, vulcanizing, 39 8 recapping, or retreading services, engraving, 39 9 photography, retouching, printing, or binding 39 10 services, and communication service when furnished or 39 11 delivered to consumers or users within this state. 39 12 2. The use of manufactured housing in this state, 39 13 on the purchase price if the manufactured housing is 39 14 sold in the form of tangible personal property or on 39 15 the installed purchase price if the manufactured 39 16 housing is sold in the form of realty. 39 17 3. The use of leased vehicles, on the amount 39 18 subject to tax as calculated pursuant to section 39 19 423.27. 39 20 4. Purchases of tangible personal property made 39 21 from the government of the United States or any of its 39 22 agencies by ultimate consumers shall be subject to the 39 23 tax imposed by this section. Services purchased from 39 24 the same source or sources shall be subject to the 39 25 service tax imposed by this subchapter and apply to 39 26 the user of the services. 39 27 5. The use in this state of services enumerated in 39 28 section 423.2. This tax is applicable where services 39 29 are furnished in this state or where the product or 39 30 result of the service is used in this state. 39 31 6. The excise tax is imposed upon every person 39 32 using the property within this state until the tax has 39 33 been paid directly to the county treasurer, the state 39 34 department of transportation, a retailer, or the 39 35 department. This tax is imposed on every person using 39 36 the services or the product of the services in this 39 37 state until the user has paid the tax either to an 39 38 Iowa use tax permit holder or to the department. 39 39 7. For the purpose of the proper administration of 39 40 the use tax and to prevent its evasion, evidence that 39 41 tangible personal property was sold by any person for 39 42 delivery in this state shall be prima facie evidence 39 43 that such tangible personal property was sold for use 39 44 in this state. 39 45 Sec. . NEW SECTION. 423.6 EXEMPTIONS. 39 46 The use in this state of the following tangible 39 47 personal property and services is exempted from the 39 48 tax imposed by this subchapter: 39 49 1. Tangible personal property and enumerated 39 50 services, the sales price from the sale of which are 40 1 required to be included in the measure of the sales 40 2 tax, if that tax has been paid to the department or 40 3 the retailer. This exemption does not include 40 4 vehicles subject to registration or subject only to 40 5 the issuance of a certificate of title. 40 6 2. The sale of tangible personal property or the 40 7 furnishing of services in the regular course of 40 8 business. 40 9 3. Property used in processing. The use of 40 10 property in processing within the meaning of this 40 11 subsection shall mean and include any of the 40 12 following: 40 13 a. Any tangible personal property including 40 14 containers which it is intended shall, by means of 40 15 fabrication, compounding, manufacturing, or 40 16 germination, become an integral part of other tangible 40 17 personal property intended to be sold ultimately at 40 18 retail, and containers used in the collection, 40 19 recovery, or return of empty beverage containers 40 20 subject to chapter 455C. 40 21 b. Fuel which is consumed in creating power, heat, 40 22 or steam for processing or for generating electric 40 23 current. 40 24 c. Chemicals, solvents, sorbents, or reagents, 40 25 which are directly used and are consumed, dissipated, 40 26 or depleted in processing tangible personal property 40 27 which is intended to be sold ultimately at retail, and 40 28 which may not become a component or integral part of 40 29 the finished product. 40 30 d. The distribution to the public of free 40 31 newspapers or shoppers guides shall be deemed a retail 40 32 sale for purposes of the processing exemption in this 40 33 subsection. 40 34 4. All articles of tangible personal property 40 35 brought into the state of Iowa by a nonresident 40 36 individual for the individual's use or enjoyment while 40 37 within the state. 40 38 5. Services exempt from taxation by the provisions 40 39 of section 423.3. 40 40 6. Tangible personal property or services the 40 41 sales price of which is exempt from the sales tax 40 42 under section 423.3, except subsections 39 and 73, as 40 43 it relates to the sale, but not the lease or rental, 40 44 of vehicles subject to registration or subject only to 40 45 the issuance of a certificate of title and as it 40 46 relates to aircraft subject to registration under 40 47 section 328.20. 40 48 7. Advertisement and promotional material and 40 49 matter, seed catalogs, envelopes for same, and other 40 50 similar material temporarily stored in this state 41 1 which are acquired outside of Iowa and which, 41 2 subsequent to being brought into this state, are sent 41 3 outside of Iowa, either singly or physically attached 41 4 to other tangible personal property sent outside of 41 5 Iowa. 41 6 8. Vehicles, as defined in section 321.1, 41 7 subsections 41, 64A, 71, 85, and 88, except such 41 8 vehicles subject to registration which are designed 41 9 primarily for carrying persons, when purchased for 41 10 lease and actually leased to a lessee for use outside 41 11 the state of Iowa and the subsequent sole use in Iowa 41 12 is in interstate commerce or interstate 41 13 transportation. 41 14 9. Tangible personal property which, by means of 41 15 fabrication, compounding, or manufacturing, becomes an 41 16 integral part of vehicles, as defined in section 41 17 321.1, subsections 41, 64A, 71, 85, and 88, 41 18 manufactured for lease and actually leased to a lessee 41 19 for use outside the state of Iowa and the subsequent 41 20 sole use in Iowa is in interstate commerce or 41 21 interstate transportation. Vehicles subject to 41 22 registration which are designed primarily for carrying 41 23 persons are excluded from this subsection. 41 24 10. Vehicles subject to registration which are 41 25 transferred from a business or individual conducting a 41 26 business within this state as a sole proprietorship, 41 27 partnership, or limited liability company to a 41 28 corporation formed by the sole proprietorship, 41 29 partnership, or limited liability company for the 41 30 purpose of continuing the business when all of the 41 31 stock of the corporation so formed is owned by the 41 32 sole proprietor and the sole proprietor's spouse, by 41 33 all the partners in the case of a partnership, or by 41 34 all the members in the case of a limited liability 41 35 company. This exemption is equally available where 41 36 the vehicles subject to registration are transferred 41 37 from a corporation to a sole proprietorship, 41 38 partnership, or limited liability company formed by 41 39 that corporation for the purpose of continuing the 41 40 business when all of the incidents of ownership are 41 41 owned by the same person or persons who were 41 42 stockholders of the corporation. 41 43 This exemption also applies where the vehicles 41 44 subject to registration are transferred from a 41 45 corporation as part of the liquidation of the 41 46 corporation to its stockholders if within three months 41 47 of such transfer the stockholders retransfer those 41 48 vehicles subject to registration to a sole 41 49 proprietorship, partnership, or limited liability 41 50 company for the purpose of continuing the business of 42 1 the corporation when all of the incidents of ownership 42 2 are owned by the same person or persons who were 42 3 stockholders of the corporation. 42 4 11. Vehicles registered or operated under chapter 42 5 326 and used substantially in interstate commerce, 42 6 section 423.5, subsection 7, notwithstanding. For 42 7 purposes of this subsection, "substantially in 42 8 interstate commerce" means that a minimum of twenty- 42 9 five percent of the miles operated by the vehicle 42 10 accrues in states other than Iowa. This subsection 42 11 applies only to vehicles which are registered for a 42 12 gross weight of thirteen tons or more. 42 13 For purposes of this subsection, trailers and 42 14 semitrailers registered or operated under chapter 326 42 15 are deemed to be used substantially in interstate 42 16 commerce and to be registered for a gross weight of 42 17 thirteen tons or more. 42 18 For the purposes of this subsection, if a vehicle 42 19 meets the requirement that twenty-five percent of the 42 20 miles operated accrues in states other than Iowa in 42 21 each year of the first four-year period of operation, 42 22 the exemption from use tax shall continue until the 42 23 vehicle is sold or transferred. If the vehicle is 42 24 found to have not met the exemption requirements or 42 25 the exemption was revoked, the value of the vehicle 42 26 upon which the use tax shall be imposed is the book or 42 27 market value, whichever is less, at the time the 42 28 exemption requirements were not met or the exemption 42 29 was revoked. 42 30 12. Mobile homes and manufactured housing the use 42 31 of which has previously been subject to the tax 42 32 imposed under this subchapter and for which that tax 42 33 has been paid. 42 34 13. Mobile homes to the extent of the portion of 42 35 the purchase price of the mobile home which is not 42 36 attributable to the cost of the tangible personal 42 37 property used in the processing of the mobile home, 42 38 and manufactured housing to the extent of the purchase 42 39 price or the installed purchase price of the 42 40 manufactured housing which is not attributable to the 42 41 cost of the tangible personal property used in the 42 42 processing of the manufactured housing. For purposes 42 43 of this exemption, the portion of the purchase price 42 44 which is not attributable to the cost of the tangible 42 45 personal property used in the processing of the mobile 42 46 home is forty percent and the portion of the purchase 42 47 price or installed purchase price which is not 42 48 attributable to the cost of the tangible personal 42 49 property used in the processing of the manufactured 42 50 housing is forty percent. 43 1 14. Tangible personal property used or to be used 43 2 as a ship, barge, or waterborne vessel which is used 43 3 or to be used primarily in or for the transportation 43 4 of property or cargo for hire on the rivers bordering 43 5 the state or as materials or parts of such ship, 43 6 barge, or waterborne vessel. 43 7 15. Vehicles subject to registration in any state 43 8 when purchased for rental or registered and titled by 43 9 a motor vehicle dealer licensed pursuant to chapter 43 10 322 for rental use, and held for rental for a period 43 11 of one hundred twenty days or more and actually rented 43 12 for periods of sixty days or less by a person 43 13 regularly engaged in the business of renting vehicles 43 14 including, but not limited to, motor vehicle dealers 43 15 licensed pursuant to chapter 322 who rent automobiles 43 16 to users, if the rental of the vehicles is subject to 43 17 taxation under chapter 423C. 43 18 16. Motor vehicles subject to registration which 43 19 were registered and titled between July 1, 1982, and 43 20 July 1, 1992, to a motor vehicle dealer licensed under 43 21 chapter 322 and which were rented to a user as defined 43 22 in section 423C.2 if the following occurred: 43 23 a. The dealer kept the vehicle on the inventory of 43 24 vehicles for sale at all times. 43 25 b. The vehicle was to be immediately taken from 43 26 the user of the vehicle when a buyer was found. 43 27 c. The user was aware of this situation. 43 28 17. Vehicles subject to registration under chapter 43 29 321, with a gross vehicle weight rating of less than 43 30 sixteen thousand pounds, excluding motorcycles and 43 31 motorized bicycles, when purchased for lease and 43 32 titled by the lessor licensed pursuant to chapter 321F 43 33 and actually leased for a period of twelve months or 43 34 more if the lease of the vehicle is subject to 43 35 taxation under section 423.27. 43 36 A lessor may maintain the exemption from use tax 43 37 under this subsection for a qualifying lease that 43 38 terminates at the conclusion or prior to the 43 39 contracted expiration date, if the lessor does not use 43 40 the vehicle for any purpose other than for lease. 43 41 Once the vehicle is used by the lessor for a purpose 43 42 other than for lease, the exemption from use tax under 43 43 this subsection no longer applies and, unless there is 43 44 an exemption from the use tax, use tax is due on the 43 45 fair market value of the vehicle determined at the 43 46 time the lessor uses the vehicle for a purpose other 43 47 than for lease, payable to the department. If the 43 48 lessor holds the vehicle exclusively for sale, use tax 43 49 is due and payable on the purchase price of the 43 50 vehicle at the time of purchase pursuant to this 44 1 subchapter. 44 2 18. Aircraft for use in a scheduled interstate 44 3 federal aviation administration certificated air 44 4 carrier operation. 44 5 19. Aircraft; tangible personal property 44 6 permanently affixed or attached as a component part of 44 7 the aircraft, including but not limited to repair or 44 8 replacement materials or parts; and all services used 44 9 for aircraft repair, remodeling, and maintenance 44 10 services when such services are performed on aircraft, 44 11 aircraft engines, or aircraft component materials or 44 12 parts. For the purposes of this exemption, "aircraft" 44 13 means aircraft used in a scheduled interstate federal 44 14 aviation administration certificated air carrier 44 15 operation. 44 16 20. Tangible personal property permanently affixed 44 17 or attached as a component part of the aircraft, 44 18 including but not limited to repair or replacement 44 19 materials or parts; and all services used for aircraft 44 20 repair, remodeling, and maintenance services when such 44 21 services are performed on aircraft, aircraft engines, 44 22 or aircraft component materials or parts. For the 44 23 purposes of this exemption, "aircraft" means aircraft 44 24 used in a nonscheduled interstate federal aviation 44 25 administration certificated air carrier operation 44 26 operating under 14 C.F.R., ch. 1, pt. 135. 44 27 21. Aircraft sold to an aircraft dealer who in 44 28 turn rents or leases the aircraft if all of the 44 29 following apply: 44 30 a. The aircraft is kept in the inventory of the 44 31 dealer for sale at all times. 44 32 b. The dealer reserves the right to immediately 44 33 take the aircraft from the renter or lessee when a 44 34 buyer is found. 44 35 c. The renter or lessee is aware that the dealer 44 36 will immediately take the aircraft when a buyer is 44 37 found. 44 38 If an aircraft exempt under this subsection is used 44 39 for any purpose other than leasing or renting, or the 44 40 conditions in paragraphs "a", "b", and "c" are not 44 41 continuously met, the dealer claiming the exemption 44 42 under this subsection is liable for the tax that would 44 43 have been due except for this subsection. The tax 44 44 shall be computed upon the original purchase price. 44 45 22. The use in this state of building materials, 44 46 supplies, or equipment, the sale or use of which is 44 47 not treated as a retail sale or a sale at retail under 44 48 section 423.2, subsection 1. 44 49 23. Exempted from the purchase price of any 44 50 vehicle subject to registration is: 45 1 a. The amount of any cash rebate which is provided 45 2 by a motor vehicle manufacturer to the purchaser of 45 3 the vehicle subject to registration so long as the 45 4 rebate is applied to the purchase price of the 45 5 vehicle. 45 6 b. In a transaction between persons, neither of 45 7 which is a retailer of vehicles subject to 45 8 registration, in which a vehicle subject to 45 9 registration is traded toward the purchase price of 45 10 another vehicle subject to registration, the amount of 45 11 the trade-in value allowed on the vehicle subject to 45 12 registration traded. 45 13 SUBCHAPTER IV 45 14 UNIFORM SALES AND USE TAX ADMINISTRATION ACT 45 15 Sec. . NEW SECTION. 423.7 TITLE. 45 16 This subchapter shall be known and may be cited as 45 17 the "Uniform Sales and Use Tax Administration Act". 45 18 Sec. . NEW SECTION. 423.8 LEGISLATIVE FINDING 45 19 AND INTENT. 45 20 The general assembly finds that Iowa should enter 45 21 into an agreement with one or more states to simplify 45 22 and modernize sales and use tax administration in 45 23 order to substantially reduce the burden of tax 45 24 compliance for all sellers and for all types of 45 25 commerce. It is the intent of the general assembly 45 26 that entering into this agreement will lead to 45 27 simplification and modernization of the sales and use 45 28 tax law and not to the imposition of new taxes or an 45 29 increase or decrease in the existing number of 45 30 exemptions, unless such a result is unavoidable under 45 31 the terms of the agreement. 45 32 Sec. . NEW SECTION. 423.9 AUTHORITY TO ENTER 45 33 AGREEMENT AND TO REPRESENT THE STATE. 45 34 The director is authorized and directed to enter 45 35 into the streamlined sales and use tax agreement with 45 36 one or more states to simplify and modernize sales and 45 37 use tax administration in order to substantially 45 38 reduce the burden of tax compliance for all sellers 45 39 and for all types of commerce. 45 40 The director is further authorized to take other 45 41 actions reasonably required to implement the 45 42 provisions set forth in this chapter. Other actions 45 43 authorized by this section include, but are not 45 44 limited to, the adoption of rules and the joint 45 45 procurement, with other member states, of goods and 45 46 services in furtherance of the cooperative agreement. 45 47 The director or the director's designee is 45 48 authorized to be a member of the governing board 45 49 established pursuant to the agreement and to represent 45 50 Iowa before that body. 46 1 Sec. . NEW SECTION. 423.10 RELATIONSHIP TO 46 2 STATE LAW. 46 3 Entry into the agreement by the director does not 46 4 amend or modify any law of this state. Implementation 46 5 of any condition of the agreement in this state, 46 6 whether adopted before, at, or after membership of 46 7 this state in the agreement, shall be by action of the 46 8 general assembly. 46 9 Sec. . NEW SECTION. 423.11 AGREEMENT 46 10 REQUIREMENTS. 46 11 The director shall not enter into the agreement 46 12 unless the agreement requires each state to abide by 46 13 the following requirements: 46 14 1. UNIFORM STATE RATE. The agreement must set 46 15 restrictions to achieve more uniform state rates 46 16 through the following: 46 17 a. Limiting the number of state rates. 46 18 b. Limiting the application of maximums on the 46 19 amount of state tax that is due on a transaction. 46 20 c. Limiting the application of thresholds on the 46 21 application of state tax. 46 22 2. UNIFORM STANDARDS. The agreement must 46 23 establish uniform standards for the following: 46 24 a. The sourcing of transactions to taxing 46 25 jurisdictions. 46 26 b. The administration of exempt sales. 46 27 c. The allowances a seller can take for bad debts. 46 28 d. Sales and use tax returns and remittances. 46 29 3. UNIFORM DEFINITIONS. The agreement must 46 30 require states to develop and adopt uniform 46 31 definitions of sales and use tax terms. The 46 32 definitions must enable a state to preserve its 46 33 ability to make policy choices not inconsistent with 46 34 the uniform definitions. 46 35 4. CENTRAL REGISTRATION. The agreement must 46 36 provide a central, electronic registration system that 46 37 allows a seller to register to collect and remit sales 46 38 and use taxes for all member states. 46 39 5. NO NEXUS ATTRIBUTION. The agreement must 46 40 provide that registration with the central 46 41 registration system and the collection of sales and 46 42 use taxes in the member states must not be used as a 46 43 factor in determining whether the seller has nexus 46 44 with a state for any tax. 46 45 6. LOCAL SALES AND USE TAXES. The agreement must 46 46 provide for reduction of the burdens of complying with 46 47 local sales and use taxes through the following: 46 48 a. Restricting variances between the state and 46 49 local tax bases. 46 50 b. Requiring states to administer any sales and 47 1 use taxes levied by local jurisdictions within the 47 2 state so that sellers collecting and remitting these 47 3 taxes must not have to register or file returns with, 47 4 remit funds to, or be subject to independent audits 47 5 from local taxing jurisdictions. 47 6 c. Restricting the frequency of changes in the 47 7 local sales and use tax rates and setting effective 47 8 dates for the application of local jurisdictional 47 9 boundary changes to local sales and use taxes. 47 10 d. Providing notice of changes in local sales and 47 11 use tax rates and of changes in the boundaries of 47 12 local taxing jurisdictions. 47 13 7. MONETARY ALLOWANCES. The agreement must 47 14 outline any monetary allowances that are to be 47 15 provided by the states to sellers or certified service 47 16 providers. 47 17 8. STATE COMPLIANCE. The agreement must require 47 18 each state to certify compliance with the terms of the 47 19 agreement prior to joining and to maintain compliance, 47 20 under the laws of the member state, with all 47 21 provisions of the agreement while a member. 47 22 9. CONSUMER PRIVACY. The agreement must require 47 23 each state to adopt a uniform policy for certified 47 24 service providers that protects the privacy of 47 25 consumers and maintains the confidentiality of tax 47 26 information. 47 27 10. ADVISORY COUNCILS. The agreement must provide 47 28 for the appointment of an advisory council of private 47 29 sector representatives and an advisory council of 47 30 nonmember state representatives to consult with in the 47 31 administration of the agreement. 47 32 Sec. . NEW SECTION. 423.12 LIMITED BINDING 47 33 AND BENEFICIAL EFFECT. 47 34 1. The agreement binds and inures only to the 47 35 benefit of Iowa and the other member states. A 47 36 person, other than a member state, is not an intended 47 37 beneficiary of the agreement. Any benefit to a person 47 38 other than a member state is established by the law of 47 39 Iowa and not by the terms of the agreement. 47 40 2. A person shall not have any cause of action or 47 41 defense under the agreement or by virtue of this 47 42 state's entry into the agreement. A person may not 47 43 challenge, in any action brought under any provision 47 44 of law, any action or inaction by any department, 47 45 agency, or other instrumentality of this state, or any 47 46 political subdivision of this state on the ground that 47 47 the action or inaction is inconsistent with the 47 48 agreement. 47 49 3. A law of this state, or the application of it, 47 50 shall not be declared invalid as to any such person or 48 1 circumstance on the ground that the provision or 48 2 application is inconsistent with the agreement. 48 3 SUBCHAPTER V 48 4 SALES AND USE TAX ACT – ADMINISTRATION OF 48 5 RETAILERS NOT REGISTERED UNDER THE AGREEMENT AND OF 48 6 CONSUMERS OBLIGATED TO PAY USE TAX DIRECTLY 48 7 Sec. . NEW SECTION. 423.13 PURPOSE OF THIS 48 8 SUBCHAPTER. 48 9 The purpose of this subchapter is to provide for 48 10 the administration and collection of sales or use tax 48 11 on the part of retailers who are not registered under 48 12 the agreement and for the collection of use tax on the 48 13 part of consumers who are obligated to pay that tax 48 14 directly. Any application of the sections of this 48 15 subchapter to retailers registered under the agreement 48 16 is only by way of incorporation by reference into 48 17 subchapter VI of this chapter. 48 18 Sec. . NEW SECTION. 423.14 SALES AND USE TAX 48 19 COLLECTION. 48 20 1. a. Sales tax, other than that described in 48 21 paragraph "c", shall be collected by sellers who are 48 22 retailers or by their agents. Sellers or their agents 48 23 shall, as far as practicable, add the sales tax, or 48 24 the average equivalent thereof, to the sales price or 48 25 charge, less trade-ins allowed and taken and when 48 26 added such tax shall constitute a part of the sales 48 27 price or charge, shall be a debt from consumer or user 48 28 to seller or agent until paid, and shall be 48 29 recoverable at law in the same manner as other debts. 48 30 b. In computing the tax to be collected as the 48 31 result of any transaction, the tax computation must be 48 32 carried to the third decimal place. Whenever the 48 33 third decimal place is greater than four, the tax must 48 34 be rounded up to the next whole cent; whenever the 48 35 third decimal place is four or less, the tax must be 48 36 rounded downward to a whole cent. Sellers may elect 48 37 to compute the tax due on transactions on an item or 48 38 invoice basis. Sellers are not required to use a 48 39 bracket system. 48 40 c. The tax imposed upon those sales of motor 48 41 vehicle fuel which are subject to tax and refund under 48 42 chapter 452A shall be collected by the state treasurer 48 43 by way of deduction from refunds otherwise allowable 48 44 under that chapter. The treasurer shall transfer the 48 45 amount of such deductions from the motor vehicle fuel 48 46 tax fund to the special tax fund. 48 47 2. Use tax shall be collected in the following 48 48 manner: 48 49 a. The tax upon the use of all vehicles subject to 48 50 registration or subject only to the issuance of a 49 1 certificate of title or the tax upon the use of 49 2 manufactured housing shall be collected by the county 49 3 treasurer or the state department of transportation 49 4 pursuant to sections 423.26 and 423.27. The county 49 5 treasurer shall retain one dollar from each tax 49 6 payment collected, to be credited to the county 49 7 general fund. 49 8 b. The tax upon the use of all tangible personal 49 9 property other than that enumerated in paragraph "a", 49 10 which is sold by a seller who is a retailer 49 11 maintaining a place of business in this state, or by 49 12 such other retailer or agent as the director shall 49 13 authorize pursuant to section 423.30, shall be 49 14 collected by the retailer or agent and remitted to the 49 15 department, pursuant to the provisions of paragraph 49 16 "e", and sections 423.24, 423.29, 423.30, 423.32, and 49 17 423.33. 49 18 c. The tax upon the use of all tangible personal 49 19 property not paid pursuant to paragraphs "a" and "b" 49 20 shall be paid to the department directly by any person 49 21 using the property within this state, pursuant to the 49 22 provisions of section 423.34. 49 23 d. The tax imposed on the use of services 49 24 enumerated in section 423.5 shall be collected, 49 25 remitted, and paid to the department of revenue and 49 26 finance in the same manner as use tax on tangible 49 27 personal property is collected, remitted, and paid 49 28 under this subchapter. 49 29 e. All persons obligated by paragraph "a", "b", or 49 30 "d", to collect use tax shall, as far as practicable, 49 31 add that tax, or the average equivalent thereof, to 49 32 the purchase price, less trade-ins allowed and taken, 49 33 and when added the tax shall constitute a part of the 49 34 purchase price. Use tax which this section requires 49 35 to be collected by a retailer and any tax collected 49 36 pursuant to this section by a retailer shall 49 37 constitute a debt owed by the retailer to this state. 49 38 Tax which must be paid directly to the department, 49 39 pursuant to paragraph "c" or "d", is to be computed 49 40 and added by the consumer or user to the purchase 49 41 price in the same manner as this paragraph requires a 49 42 seller to compute and add the tax. The tax shall be a 49 43 debt from the consumer or user to the department until 49 44 paid, and shall be recoverable at law in the same 49 45 manner as other debts. 49 46 Sec. . NEW SECTION. 423.15 GENERAL SOURCING 49 47 RULES. 49 48 All sellers obligated to collect Iowa sales or use 49 49 tax shall use the standards set out in this section to 49 50 determine where sales of products occur, excluding 50 1 sales enumerated in section 423.16. These provisions 50 2 apply regardless of the characterization of a product 50 3 as tangible personal property, a digital good, or a 50 4 service, excluding telecommunications services. This 50 5 section only applies to determine a seller's 50 6 obligation to pay or collect and remit a sales or use 50 7 tax with respect to the seller's sale of a product. 50 8 This section does not affect the obligation of a 50 9 purchaser or lessee to remit tax on the use of the 50 10 product to the taxing jurisdictions in which the use 50 11 occurs. A seller's obligation to collect Iowa sales 50 12 tax or Iowa use tax only occurs if the sale is sourced 50 13 to this state. The application of whether Iowa sales 50 14 tax applies to sales sourced to Iowa depends upon 50 15 where the sale is consummated by delivery. 50 16 1. Sales, excluding leases or rentals other than 50 17 leases or rentals set out in subsection 2, of products 50 18 shall be sourced as follows. 50 19 a. When the product is received by the purchaser 50 20 at a business location of the seller, the sale is 50 21 sourced to that business location. 50 22 b. When the product is not received by the 50 23 purchaser at a business location of the seller, the 50 24 sale is sourced to the location where receipt by the 50 25 purchaser or the purchaser's donee, designated as such 50 26 by the purchaser, occurs, including the location 50 27 indicated by instructions for delivery to the 50 28 purchaser or donee, known to the seller. 50 29 c. When paragraphs "a" and "b" do not apply, the 50 30 sale is sourced to the location indicated by an 50 31 address for the purchaser that is available from the 50 32 business records of the seller that are maintained in 50 33 the ordinary course of the seller's business when use 50 34 of this address does not constitute bad faith. 50 35 d. When paragraphs "a", "b", and "c" do not apply, 50 36 the sale is sourced to the location indicated by an 50 37 address for the purchaser obtained during the 50 38 consummation of the sale, including the address of a 50 39 purchaser's payment instrument, if no other address is 50 40 available, when use of this address does not 50 41 constitute bad faith. 50 42 e. When paragraphs "a", "b", "c", and "d" do not 50 43 apply, including the circumstance where the seller is 50 44 without sufficient information to apply the previous 50 45 rules, then the location will be determined by the 50 46 address from which tangible personal property was 50 47 shipped, from which the digital good or the computer 50 48 software delivered electronically was first available 50 49 for transmission by the seller, or from which the 50 50 service was provided disregarding for these purposes 51 1 any location that merely provided the digital transfer 51 2 of the product sold. 51 3 2. The lease or rental of tangible personal 51 4 property, other than property identified in subsection 51 5 3 or section 423.16, shall be sourced as follows: 51 6 a. For a lease or rental that requires recurring 51 7 periodic payments, the first periodic payment is 51 8 sourced the same as a retail sale in accordance with 51 9 the provisions of subsection 1. Periodic payments 51 10 made subsequent to the first payment are sourced to 51 11 the primary property location for each period covered 51 12 by the payment. The primary property location shall 51 13 be as indicated by an address for the property 51 14 provided by the lessee that is available to the lessor 51 15 from its records maintained in the ordinary course of 51 16 business, when use of this address does not constitute 51 17 bad faith. The property location shall not be altered 51 18 by intermittent use at different locations, such as 51 19 use of business property that accompanies employees on 51 20 business trips and service calls. 51 21 b. For a lease or rental that does not require 51 22 recurring periodic payments, the payment is sourced 51 23 the same as a retail sale in accordance with the 51 24 provisions of subsection 1. 51 25 c. This subsection does not affect the imposition 51 26 or computation of sales or use tax on leases or 51 27 rentals based on a lump sum or accelerated basis, or 51 28 on the acquisition of property for lease. 51 29 3. The retail sale, including lease or rental, of 51 30 transportation equipment shall be sourced the same as 51 31 a retail sale in accordance with the provisions of 51 32 subsection 1, notwithstanding the exclusion of lease 51 33 or rental in that subsection. "Transportation 51 34 equipment" means any of the following: 51 35 a. Locomotives or railcars that are utilized for 51 36 the carriage of persons or property in interstate 51 37 commerce. 51 38 b. Trucks and truck-tractors with a gross vehicle 51 39 weight rating of ten thousand one pounds or greater, 51 40 trailers, semitrailers, or passenger buses that meet 51 41 both of the following requirements: 51 42 (1) Are registered through the international 51 43 registration plan. 51 44 (2) Are operated under authority of a carrier 51 45 authorized and certificated by the United States 51 46 department of transportation or another federal 51 47 authority to engage in the carriage of persons or 51 48 property in interstate commerce. 51 49 c. Aircraft that are operated by air carriers 51 50 authorized and certificated by the United States 52 1 department of transportation or another federal or a 52 2 foreign authority to engage in the carriage of persons 52 3 or property in interstate or foreign commerce. 52 4 d. Containers designed for use on and component 52 5 parts attached or secured on the items set forth in 52 6 paragraphs "a" through "c". 52 7 Sec. . NEW SECTION. 423.16 TRANSACTIONS TO 52 8 WHICH THE GENERAL SOURCING RULES DO NOT APPLY. 52 9 Section 423.15 does not apply to sales or use taxes 52 10 levied on the following: 52 11 1. The retail sale or transfer of watercraft, 52 12 modular homes, manufactured housing, or mobile homes, 52 13 and the retail sale, excluding lease or rental, of 52 14 motor vehicles, trailers, semitrailers, or aircraft 52 15 that do not qualify as transportation equipment, as 52 16 defined in section 423.15, subsection 3. 52 17 2. The lease or rental of motor vehicles, 52 18 trailers, semitrailers, or aircraft that do not 52 19 qualify as transportation equipment, as defined in 52 20 section 423.15, subsection 3, which shall be sourced 52 21 in accordance with section 423.17. 52 22 3. Transactions to which the multiple points use 52 23 exemption is applicable, which shall be sourced in 52 24 accordance with section 423.18. 52 25 4. Transactions to which direct mail sourcing is 52 26 applicable, which shall be sourced in accordance with 52 27 section 423.19. 52 28 5. Telecommunications services, as set out in 52 29 section 423.20, which shall be sourced in accordance 52 30 with section 423.20, subsection 2. 52 31 Sec. . NEW SECTION. 423.17 SOURCING RULES FOR 52 32 VARIOUS TYPES OF LEASED OR RENTED EQUIPMENT WHICH IS 52 33 NOT TRANSPORTATION EQUIPMENT. 52 34 The lease or rental of motor vehicles, trailers, 52 35 semitrailers, or aircraft that do not qualify as 52 36 transportation equipment, as defined in section 52 37 423.15, subsection 3, shall be sourced as follows: 52 38 1. For a lease or rental that requires recurring 52 39 periodic payments, each periodic payment is sourced to 52 40 the primary property location. The primary property 52 41 location shall be as indicated by an address for the 52 42 property provided by the lessee that is available to 52 43 the lessor from its records maintained in the ordinary 52 44 course of business, when use of this address does not 52 45 constitute bad faith. This location shall not be 52 46 altered by intermittent use at different locations. 52 47 2. For a lease or rental that does not require 52 48 recurring periodic payments, the payment is sourced 52 49 the same as a retail sale in accordance with the 52 50 provisions of section 423.15, subsection 1. 53 1 3. This section does not affect the imposition or 53 2 computation of sales or use tax on leases or rentals 53 3 based on a lump sum or accelerated basis, or on the 53 4 acquisition of property for lease. 53 5 Sec. . NEW SECTION. 423.18 MULTIPLE POINTS OF 53 6 USE EXEMPTION FORMS. 53 7 A business purchaser that is not a holder of a 53 8 direct pay tax permit pursuant to section 423.36 that 53 9 knows at the time of its purchase of a digital good, 53 10 computer software delivered electronically, or a 53 11 service that the digital good, computer software 53 12 delivered electronically, or service will be 53 13 concurrently available for use in more than one 53 14 jurisdiction shall deliver to the seller in 53 15 conjunction with its purchase a "multiple points of 53 16 use" or "MPU" exemption form disclosing this fact. 53 17 1. Upon receipt of the MPU exemption form, the 53 18 seller is relieved of all obligation to collect, pay, 53 19 or remit the applicable tax and the purchaser shall be 53 20 obligated to collect, pay, or remit the applicable tax 53 21 on a direct pay basis. 53 22 2. A purchaser delivering the MPU exemption form 53 23 may use any reasonable, but consistent and uniform, 53 24 method of apportionment that is supported by the 53 25 purchaser's business records as they exist at the time 53 26 of the consummation of the sale. 53 27 3. The MPU exemption form will remain in effect 53 28 for all future sales by the seller to the purchaser 53 29 except as to the subsequent sale's specific 53 30 apportionment that is governed by the principle of 53 31 subsection 2 and the facts existing at the time of the 53 32 sale until it is revoked in writing. 53 33 4. A holder of a direct pay tax permit under 53 34 section 423.36 shall not be required to deliver an MPU 53 35 exemption form to the seller. A direct pay tax permit 53 36 holder shall follow the provisions of subsection 2 in 53 37 apportioning the tax due on a digital good, computer 53 38 software delivered electronically, or service that 53 39 will be concurrently available for use in more than 53 40 one jurisdiction. 53 41 Sec. . NEW SECTION. 423.19 DIRECT MAIL 53 42 SOURCING. 53 43 1. Notwithstanding section 423.15, a purchaser of 53 44 direct mail that is not a holder of a direct pay tax 53 45 permit pursuant to section 423.36 shall provide to the 53 46 seller in conjunction with the purchase either a 53 47 direct mail form or information to show the 53 48 jurisdictions to which the direct mail is delivered to 53 49 recipients. 53 50 a. Upon receipt of the direct mail form, the 54 1 seller is relieved of all obligations to collect, pay, 54 2 or remit the applicable tax and the purchaser is 54 3 obligated to pay or remit the applicable tax on a 54 4 direct pay basis. A direct mail form shall remain in 54 5 effect for all future sales of direct mail by the 54 6 seller to the purchaser until it is revoked in 54 7 writing. 54 8 b. Upon receipt of information from the purchaser 54 9 showing the jurisdictions to which the direct mail is 54 10 delivered to recipients, the seller shall collect the 54 11 tax according to the delivery information provided by 54 12 the purchaser. In the absence of bad faith, the 54 13 seller is relieved of any further obligation to 54 14 collect tax on any transaction where the seller has 54 15 collected tax pursuant to the delivery information 54 16 provided by the purchaser. 54 17 2. If the purchaser of direct mail does not have a 54 18 direct pay tax permit and does not provide the seller 54 19 with either a direct mail form or delivery 54 20 information, as required by subsection 1, the seller 54 21 shall collect the tax according to section 423.15, 54 22 subsection 1, paragraph "e". Nothing in this 54 23 subsection shall limit a purchaser's obligation for 54 24 sales or use tax to any state to which the direct mail 54 25 is delivered. 54 26 3. If a purchaser of direct mail provides the 54 27 seller with documentation of direct pay authority, the 54 28 purchaser shall not be required to provide a direct 54 29 mail form or delivery information to the seller. 54 30 Sec. . NEW SECTION. 423.20 TELECOMMUNICATIONS 54 31 SERVICE SOURCING. 54 32 1. As used in this section: 54 33 a. "Air-to-ground radiotelephone service" means a 54 34 radio service, as that term is used in 47 C.F.R. } 54 35 22.99, in which common carriers are authorized to 54 36 offer and provide radio telecommunications service for 54 37 hire to subscribers in aircraft. 54 38 b. "Call-by-call basis" means any method of 54 39 charging for the telecommunications service where the 54 40 price is measured by individual calls. 54 41 c. "Communications channel" means a physical or 54 42 virtual path of communications over which signals are 54 43 transmitted between or among customer channel 54 44 termination points. 54 45 d. "Customer" means the person or entity that 54 46 contracts with the seller of the telecommunications 54 47 service. If the end user of the telecommunications 54 48 service is not the contracting party, the end user of 54 49 the telecommunications service is the customer of the 54 50 telecommunications service, but this sentence only 55 1 applies for the purpose of sourcing sales of the 55 2 telecommunications service under this section. 55 3 "Customer" does not include a reseller of a 55 4 telecommunications service or for mobile 55 5 telecommunications service of a serving carrier under 55 6 an agreement to serve the customer outside the home 55 7 service provider's licensed service area. 55 8 e. "Customer channel termination point" means the 55 9 location where the customer either inputs or receives 55 10 the communications. 55 11 f. "End user" means the person who utilizes the 55 12 telecommunications service. In the case of an entity, 55 13 "end user" means the individual who utilizes the 55 14 service on behalf of the entity. 55 15 g. "Home service provider" means the same as that 55 16 term is defined in the federal Mobile 55 17 Telecommunications Sourcing Act, Pub. L. No. 106-252, 55 18 4 U.S.C. } 124(5). 55 19 h. "Mobile telecommunications service" means the 55 20 same as that term is defined in federal Mobile 55 21 Telecommunications Sourcing Act, Pub. L. No. 106-252, 55 22 4 U.S.C. } 124(7). 55 23 i. "Place of primary use" means the street address 55 24 representative of where the customer's use of the 55 25 telecommunications service primarily occurs, which 55 26 must be the residential street address or the primary 55 27 business street address of the customer. In the case 55 28 of mobile telecommunications service, "place of 55 29 primary use" must be within the licensed service area 55 30 of the home service provider. 55 31 j. "Postpaid calling service" means the 55 32 telecommunications service obtained by making a 55 33 payment on a call-by-call basis either through the use 55 34 of a credit card or payment mechanism such as a bank 55 35 card, travel card, credit card, or debit card, or by 55 36 charge made to a telephone number which is not 55 37 associated with the origination or termination of the 55 38 telecommunications service. A "postpaid calling 55 39 service" includes a telecommunications service that 55 40 would be a prepaid calling service except it is not 55 41 exclusively a telecommunications service. 55 42 k. "Prepaid calling service" means the right to 55 43 access exclusively telecommunications services, which 55 44 must be paid for in advance and which enables the 55 45 origination of calls using an access number or 55 46 authorization code, whether manually or electronically 55 47 dialed, and that is sold in predetermined units or 55 48 dollars of which the amount declines with use in a 55 49 known amount. 55 50 l. "Private communication service" means a 56 1 telecommunications service that entitles the customer 56 2 to exclusive or priority use of a communications 56 3 channel or group of channels between or among 56 4 termination points, regardless of the manner in which 56 5 such channel or channels are connected, and includes 56 6 switching capacity, extension lines, stations, and any 56 7 other associated services that are provided in 56 8 connection with the use of such channel or channels. 56 9 m. "Service address" means one of the following: 56 10 (1) The location of the telecommunications 56 11 equipment to which a customer's call is charged and 56 12 from which the call originates or terminates, 56 13 regardless of where the call is billed or paid. 56 14 (2) If the location in subparagraph (1) is not 56 15 known, "service address" means the origination point 56 16 of the signal of the telecommunications service first 56 17 identified by either the seller's telecommunications 56 18 system or in information received by the seller from 56 19 its service provider, where the system used to 56 20 transport such signals is not that of the seller. 56 21 (3) If the locations in subparagraphs (1) and (2) 56 22 are not known, the "service address" means the 56 23 location of the customer's place of primary use. 56 24 2. Sales of telecommunications services shall be 56 25 sourced in the following manner: 56 26 a. Except for the defined telecommunications 56 27 services in paragraph "c", the sale of 56 28 telecommunications services sold on a call-by-call 56 29 basis shall be sourced to one of the following: 56 30 (1) Each level of taxing jurisdiction where the 56 31 call originates and terminates in that jurisdiction. 56 32 (2) Each level of taxing jurisdiction where the 56 33 call either originates or terminates and in which the 56 34 service address is also located. 56 35 b. Except for the defined telecommunications 56 36 services in paragraph "c", a sale of 56 37 telecommunications services sold on a basis other than 56 38 a call-by-call basis is sourced to the customer's 56 39 place of primary use. 56 40 c. Sale of the following telecommunications 56 41 services shall be sourced to each level of taxing 56 42 jurisdiction as follows: 56 43 (1) A sale of mobile telecommunications services 56 44 other than air-to-ground radiotelephone service or 56 45 prepaid calling service is sourced to the customer's 56 46 place of primary use as required by the federal Mobile 56 47 Telecommunications Sourcing Act. 56 48 (2) A sale of postpaid calling service is sourced 56 49 to the origination point of the telecommunications 56 50 signal as first identified by either of the following: 57 1 (a) The seller's telecommunications system. 57 2 (b) Information received by the seller from its 57 3 service provider, where the system used to transport 57 4 such signals is not that of the seller. 57 5 (3) A sale of prepaid calling service is sourced 57 6 in accordance with section 423.15. However, in the 57 7 case of a sale of mobile telecommunications services 57 8 that is a prepaid telecommunications service, the rule 57 9 provided in section 423.15, subsection 1, paragraph 57 10 "e", shall include as an option the location 57 11 associated with the mobile telephone number. 57 12 (4) A sale of a private telecommunications service 57 13 is sourced as follows: 57 14 (a) Service for a separate charge related to a 57 15 customer channel termination point is sourced to each 57 16 level of jurisdiction in which such customer channel 57 17 termination point is located. 57 18 (b) Service where all customer termination points 57 19 are located entirely within one jurisdiction or level 57 20 of jurisdiction is sourced in such jurisdiction in 57 21 which the customer channel termination points are 57 22 located. 57 23 (c) Service for segments of a channel between two 57 24 customer channel termination points located in 57 25 different jurisdictions and which segments of a 57 26 channel are separately charged is sourced fifty 57 27 percent in each level of jurisdiction in which the 57 28 customer channel termination points are located. 57 29 (d) Service for segments of a channel located in 57 30 more than one jurisdiction or levels of jurisdiction 57 31 and which segments are not separately billed is 57 32 sourced in each jurisdiction based on the percentage 57 33 determined by dividing the number of customer channel 57 34 termination points in such jurisdiction by the total 57 35 number of customer channel termination points. 57 36 Sec. . NEW SECTION. 423.21 BAD DEBT 57 37 DEDUCTIONS. 57 38 1. For the purposes of this section, "bad debt" 57 39 means an amount properly calculated pursuant to 57 40 section 166 of the Internal Revenue Code then adjusted 57 41 to exclude financing charges or interest, sales or use 57 42 taxes charged on the purchase price, uncollectible 57 43 amounts on property that remain in the possession of 57 44 the seller until the full purchase price is paid, 57 45 expenses incurred in attempting to collect any debt, 57 46 and repossessed property. 57 47 2. In computing the amount of tax due, a seller 57 48 may deduct bad debts from the total amount upon which 57 49 the tax is calculated for any return. Any deduction 57 50 taken or refund paid which is attributed to bad debts 58 1 shall not include interest. 58 2 3. A seller may deduct bad debts on the return for 58 3 the period during which the bad debt is written off as 58 4 uncollectible in the seller's books and records and is 58 5 eligible to be deducted for federal income tax 58 6 purposes. For purposes of this subsection, a seller 58 7 who is not required to file federal income tax returns 58 8 may deduct a bad debt on a return filed for the period 58 9 in which the bad debt is written off as uncollectible 58 10 in the seller's books and records and would be 58 11 eligible for a bad debt deduction for federal income 58 12 tax purposes if the seller were required to file a 58 13 federal income tax return. 58 14 4. If a deduction is taken for a bad debt and the 58 15 seller subsequently collects the debt in whole or in 58 16 part, the tax on the amount so collected must be paid 58 17 and reported on the return filed for the period in 58 18 which the collection is made. 58 19 5. A seller may obtain a refund of tax on any 58 20 amount of bad debt that exceeds the amount of taxable 58 21 sales within the period allowed for refund claims by 58 22 section 423.47. However, the period allowed for 58 23 refund claims shall be measured from the due date of 58 24 the return on which the bad debt could first be 58 25 claimed. 58 26 6. For the purposes of computing a bad debt 58 27 deduction or reporting a payment received on a 58 28 previously claimed bad debt, any payments made on a 58 29 debt or account shall be applied first to the price of 58 30 the property or service and tax thereon, 58 31 proportionally, and secondly to interest, service 58 32 charges, and any other charges. 58 33 Sec. . NEW SECTION. 423.22 TAXATION IN 58 34 ANOTHER STATE. 58 35 If any person who causes tangible personal property 58 36 to be brought into this state or who uses in this 58 37 state services enumerated in section 423.2 has already 58 38 paid a tax in another state in respect to the sale or 58 39 use of the property or the performance of the service, 58 40 or an occupation tax in respect to the property or 58 41 service, in an amount less than the tax imposed by 58 42 subchapter II or III, the provisions of those 58 43 subchapters shall apply, but at a rate measured by the 58 44 difference only between the rate fixed by subchapter 58 45 II or III and the rate by which the previous tax on 58 46 the sale or use, or the occupation tax, was computed. 58 47 If the tax imposed and paid in the other state is 58 48 equal to or more than the tax imposed by those 58 49 subchapters, then a tax is not due in this state on 58 50 the personal property or service. 59 1 Sec. . NEW SECTION. 423.23 SELLERS' 59 2 AGREEMENTS. 59 3 Agreements between competing sellers, or the 59 4 adoption of appropriate rules and regulations by 59 5 organizations or associations of sellers to provide 59 6 uniform methods for adding sales or use tax or the 59 7 average equivalent thereof, and which do not involve 59 8 price-fixing agreements otherwise unlawful, are 59 9 expressly authorized and shall be held not in 59 10 violation of chapter 553 or other antitrust laws of 59 11 this state. The director shall cooperate with 59 12 sellers, organizations, or associations in formulating 59 13 agreements and rules. 59 14 Sec. . NEW SECTION. 423.24 ABSORBING TAX 59 15 PROHIBITED. 59 16 A seller shall not advertise or hold out or state 59 17 to the public or to any purchaser, consumer, or user, 59 18 directly or indirectly, that the taxes or any parts 59 19 thereof imposed by subchapter II or III will be 59 20 assumed or absorbed by the seller or the taxes will 59 21 not be added to the sales price of the property sold, 59 22 or if added that the taxes or any part thereof will be 59 23 refunded. Any person violating any of the provisions 59 24 of this section within this state is guilty of a 59 25 simple misdemeanor. 59 26 Sec. . NEW SECTION. 423.25 DIRECTOR'S POWER 59 27 TO ADOPT RULES. 59 28 The director shall have the power to adopt rules 59 29 for adding the taxes imposed by subchapters II and 59 30 III, or the average equivalents thereof, by providing 59 31 different methods applying uniformly to retailers 59 32 within the same general classification for the purpose 59 33 of enabling the retailers to add and collect, as far 59 34 as practicable, the amounts of those taxes. 59 35 Sec. . NEW SECTION. 423.26 VEHICLES SUBJECT 59 36 TO REGISTRATION OR ONLY TO THE ISSUANCE OF TITLE – 59 37 MANUFACTURED HOUSING. 59 38 The use tax imposed upon the use of vehicles 59 39 subject to registration or subject only to the 59 40 issuance of a certificate of title or imposed upon the 59 41 use of manufactured housing shall be paid by the owner 59 42 of the vehicle or of the manufactured housing to the 59 43 county treasurer or the state department of 59 44 transportation from whom the registration receipt or 59 45 certificate of title is obtained. A registration 59 46 receipt for a vehicle subject to registration or 59 47 certificate of title shall not be issued until the tax 59 48 has been paid. The county treasurer or the state 59 49 department of transportation shall require every 59 50 applicant for a registration receipt for a vehicle 60 1 subject to registration or certificate of title to 60 2 supply information as the county treasurer or the 60 3 director deems necessary as to the time of purchase, 60 4 the purchase price, installed purchase price, and 60 5 other information relative to the purchase of the 60 6 vehicle or manufactured housing. On or before the 60 7 tenth day of each month, the county treasurer or the 60 8 state department of transportation shall remit to the 60 9 department the amount of the taxes collected during 60 10 the preceding month. 60 11 A person who willfully makes a false statement in 60 12 regard to the purchase price of a vehicle subject to 60 13 taxation under this section is guilty of a fraudulent 60 14 practice. A person who willfully makes a false 60 15 statement in regard to the purchase price of such a 60 16 vehicle with the intent to evade the payment of tax 60 17 shall be assessed a penalty of seventy-five percent of 60 18 the amount of tax unpaid and required to be paid on 60 19 the actual purchase price less trade-in allowance. 60 20 Sec. . NEW SECTION. 423.27 MOTOR VEHICLE 60 21 LEASE TAX. 60 22 1. The use tax imposed upon the use of leased 60 23 vehicles subject to registration under chapter 321, 60 24 with gross vehicle weight ratings of less than sixteen 60 25 thousand pounds, excluding motorcycles and motorized 60 26 bicycles, which are leased by a lessor licensed 60 27 pursuant to chapter 321F for a period of twelve months 60 28 or more shall be paid by the owner of the vehicle to 60 29 the county treasurer or state department of 60 30 transportation from whom the registration receipt or 60 31 certificate of title is obtained. A registration 60 32 receipt for a vehicle subject to registration or 60 33 issuance of a certificate of title shall not be issued 60 34 until the tax is paid in the initial instance. Tax on 60 35 the lease transaction that does not require titling or 60 36 registration of the vehicle shall be remitted to the 60 37 department. Tax and the reporting of tax due to the 60 38 department shall be remitted on or before fifteen days 60 39 from the last day of the month that the vehicle lease 60 40 tax becomes due. Failure to timely report or remit 60 41 any of the tax when due shall result in a penalty and 60 42 interest being imposed on the tax due pursuant to 60 43 section 423.40, subsection 1, and section 423.42, 60 44 subsection 1. 60 45 2. The amount subject to tax shall be computed on 60 46 each separate lease transaction by taking the total of 60 47 the lease payments, plus the down payment, and 60 48 excluding all of the following: 60 49 a. Title fee. 60 50 b. Registration fees. 61 1 c. Vehicle lease tax pursuant to this section. 61 2 d. Federal excise taxes attributable to the sale 61 3 of the vehicle to the owner or to the lease of the 61 4 vehicle by the owner. 61 5 e. Optional service or warranty contracts subject 61 6 to tax pursuant to section 423.2, subsection 1. 61 7 f. Insurance. 61 8 g. Manufacturer's rebate. 61 9 h. Refundable deposit. 61 10 i. Finance charges, if any, on items listed in 61 11 paragraphs "a" through "h". 61 12 If any or all of the items in paragraphs "a" 61 13 through "i" are excluded from the taxable lease price, 61 14 the owner shall maintain adequate records of the 61 15 amounts of those items. If the parties to a lease 61 16 enter into an agreement providing that the tax imposed 61 17 under this statute is to be paid by the lessee or 61 18 included in the monthly lease payments to be paid by 61 19 the lessee, the total cost of the tax shall not be 61 20 included in the computation of lease price for the 61 21 purpose of taxation under this section. The county 61 22 treasurer, the state department of transportation, or 61 23 the department of revenue and finance shall require 61 24 every applicant for a registration receipt for a 61 25 vehicle subject to tax under this section to supply 61 26 information as the county treasurer or director deems 61 27 necessary as to the date of the lease transaction, the 61 28 lease price, and other information relative to the 61 29 lease of the vehicle. 61 30 3. On or before the tenth day of each month, the 61 31 county treasurer or the state department of 61 32 transportation shall remit to the department the 61 33 amount of the taxes collected during the preceding 61 34 month. 61 35 4. If the lease is terminated prior to the 61 36 termination date contained in the lease agreement, no 61 37 refund shall be allowed for tax previously paid under 61 38 this section, except as provided in section 322G.4. 61 39 Sec. . NEW SECTION. 423.28 SALES TAX REPORT 61 40 – DEDUCTION. 61 41 Motor vehicle or trailer dealers, in making their 61 42 reports and returns to the department for the purpose 61 43 of paying the sales tax, shall be permitted to deduct 61 44 all sales prices from retail sales of vehicles subject 61 45 to registration or subject only to the issuance of a 61 46 certificate of title. Sales prices from sales of 61 47 vehicles subject to registration or subject only to 61 48 the issuance of a certificate of title are exempted 61 49 from the sales tax, but, if required by the director, 61 50 the sales prices shall be included in the returns made 62 1 by motor vehicle or trailer dealers under subchapter 62 2 II, and proper deductions taken pursuant to this 62 3 section. 62 4 Sec. . NEW SECTION. 423.29 COLLECTIONS BY 62 5 SELLERS. 62 6 Every seller who is a retailer and who is making 62 7 taxable sales of tangible personal property in Iowa 62 8 shall, at the time of selling the property, collect 62 9 the sales tax. Every seller who is a retailer 62 10 maintaining a place of business in this state and 62 11 selling tangible personal property for use in Iowa 62 12 shall, at the time of making the sale, whether within 62 13 or without the state, collect the use tax. Sellers 62 14 required to collect sales or use tax shall give to any 62 15 purchaser a receipt for the tax collected in the 62 16 manner and form prescribed by the director. 62 17 Every seller who is a retailer furnishing taxable 62 18 services in Iowa and every seller who is a retailer 62 19 maintaining a place of business in this state and 62 20 furnishing taxable services in Iowa or services 62 21 outside Iowa if the product or result of the service 62 22 is used in Iowa shall be subject to the provisions of 62 23 the preceding paragraph. 62 24 Sec. . NEW SECTION. 423.30 FOREIGN SELLERS 62 25 NOT REGISTERED UNDER THE AGREEMENT. 62 26 The director may, upon application, authorize the 62 27 collection of the use tax by any seller who is a 62 28 retailer not maintaining a place of business within 62 29 this state and not registered under the agreement, 62 30 who, to the satisfaction of the director, furnishes 62 31 adequate security to ensure collection and payment of 62 32 the tax. Such sellers shall be issued, without 62 33 charge, permits to collect tax subject to any 62 34 regulations which the director shall prescribe. When 62 35 so authorized, it shall be the duty of foreign sellers 62 36 to collect the tax upon all tangible personal property 62 37 sold, to the retailer's knowledge, for use within this 62 38 state, in the same manner and subject to the same 62 39 requirements as a retailer maintaining a place of 62 40 business within this state. The authority and permit 62 41 may be canceled when, at any time, the director 62 42 considers the security inadequate, or that tax can 62 43 more effectively be collected from the person using 62 44 property in this state. 62 45 The discretionary power granted in this section is 62 46 extended to apply in the case of foreign retailers 62 47 furnishing services enumerated in section 423.2. 62 48 Sec. . NEW SECTION. 423.31 FILING OF SALES 62 49 TAX RETURNS AND PAYMENT OF SALES TAX. 62 50 1. Each person subject to this section and section 63 1 423.36 and in accordance with the provisions of this 63 2 section and section 423.36 shall, on or before the 63 3 last day of the month following the close of each 63 4 calendar quarter during which such person is or has 63 5 become or ceased being subject to the provisions of 63 6 this section and section 423.36, make, sign, and file 63 7 a return for the calendar quarter in the form as may 63 8 be required. Returns shall show information relating 63 9 to sales prices including goods, wares, and services 63 10 converted to the use of such person, the amounts of 63 11 sales prices excluded and exempt from the tax, the 63 12 amounts of sales prices subject to tax, a calculation 63 13 of tax due, and any other information for the period 63 14 covered by the return as may be required. Returns 63 15 shall be signed by the retailer or the retailer's 63 16 authorized agent and must be certified by the retailer 63 17 to be correct in accordance with forms and rules 63 18 prescribed by the director. 63 19 2. Persons required to file, or committed to file 63 20 by reason of voluntary action or by order of the 63 21 department, deposits of taxes due under this 63 22 subchapter shall be entitled to take credit against 63 23 the total quarterly amount of tax due such amount as 63 24 shall have been deposited by such persons during that 63 25 calendar quarter. The balance remaining due after 63 26 such credit for deposits shall be entered on the 63 27 return. However, such person may be granted an 63 28 extension of time not exceeding thirty days for filing 63 29 the quarterly return, upon a proper showing of 63 30 necessity. If an extension is granted, such person 63 31 shall have paid by the twentieth day of the month 63 32 following the close of such quarter ninety percent of 63 33 the estimated tax due. 63 34 3. The sales tax forms prescribed by the director 63 35 shall be referred to as "retailers tax deposit". 63 36 Deposit forms shall be signed by the retailer or the 63 37 retailer's duly authorized agent, and shall be duly 63 38 certified by the retailer or agent to be correct. The 63 39 director may authorize incorporated banks and trust 63 40 companies or other depositories authorized by law 63 41 which are depositories or financial agents of the 63 42 United States, or of this state, to receive any sales 63 43 tax imposed under this chapter, in the manner, at the 63 44 times, and under the conditions the director 63 45 prescribes. The director shall prescribe the manner, 63 46 times, and conditions under which the receipt of the 63 47 tax by those depositories is to be treated as payment 63 48 of the tax to the department. 63 49 4. Every retailer at the time of making any return 63 50 required by this section shall compute and pay to the 64 1 department the tax due for the preceding period. The 64 2 tax on sales prices from the sale or rental of 64 3 tangible personal property under a consumer rental 64 4 purchase agreement as defined in section 537.3604, 64 5 subsection 8, is payable in the tax period of receipt. 64 6 5. Upon making application and receiving approval 64 7 from the director, a parent corporation and its 64 8 affiliated corporations that make retail sales of 64 9 tangible personal property or taxable enumerated 64 10 services may make deposits and file a consolidated 64 11 sales tax return for the affiliated group, pursuant to 64 12 rules adopted by the director. A parent corporation 64 13 and each affiliate corporation that files a 64 14 consolidated return are jointly and severally liable 64 15 for all tax, penalty, and interest found due for the 64 16 tax period for which a consolidated return is filed or 64 17 required to be filed. 64 18 A business required to file a consolidated sales 64 19 tax return shall file a form entitled "schedule of 64 20 consolidated business locations" with its quarterly 64 21 sales tax return that shows the taxpayer's 64 22 consolidated permit number, the permit number for each 64 23 Iowa business location, the state sales tax amount by 64 24 business location, and the amount of state sales tax 64 25 due on goods consumed that are not assigned to a 64 26 specific business location. Consolidated quarterly 64 27 sales tax returns that are not accompanied by the 64 28 schedule of consolidated business locations form are 64 29 considered incomplete and are subject to penalty under 64 30 section 421.27. 64 31 6. If necessary or advisable in order to insure 64 32 the payment of the tax, the director may require 64 33 returns and payment of the tax to be made for other 64 34 than quarterly periods, the provisions of this 64 35 section, or other provision to the contrary 64 36 notwithstanding. 64 37 Sec. . NEW SECTION. 423.32 FILING OF USE TAX 64 38 RETURNS AND PAYMENT OF USE TAX. 64 39 1. A retailer maintaining a place of business in 64 40 this state who is required to collect or a user who is 64 41 required to pay the use tax or a foreign retailer 64 42 authorized, pursuant to section 423.30, to collect the 64 43 use tax, shall remit to the department the amount of 64 44 tax on or before the last day of the month following 64 45 each calendar quarterly period. However, a retailer 64 46 who collects or owes more than fifteen hundred dollars 64 47 in use taxes in a month shall deposit with the 64 48 department or in a depository authorized by law and 64 49 designated by the director, the amount collected or 64 50 owed, with a deposit form for the month as prescribed 65 1 by the director. 65 2 a. The deposit form is due on or before the 65 3 twentieth day of the month following the month of 65 4 collection, except a deposit is not required for the 65 5 third month of the calendar quarter, and the total 65 6 quarterly amount, less the amounts deposited for the 65 7 first two months of the quarter, is due with the 65 8 quarterly report on the last day of the month 65 9 following the month of collection. At that time, the 65 10 retailer shall file with the department a return for 65 11 the preceding quarterly period in the form prescribed 65 12 by the director showing the purchase price of the 65 13 tangible personal property sold by the retailer during 65 14 the preceding quarterly period, the use of which is 65 15 subject to the use tax imposed by this chapter, and 65 16 other information the director deems necessary for the 65 17 proper administration of the use tax. 65 18 b. The return shall be accompanied by a remittance 65 19 of the use tax for the period covered by the return. 65 20 If necessary in order to ensure payment to the state 65 21 of the tax, the director may in any or all cases 65 22 require returns and payments to be made for other than 65 23 quarterly periods. The director, upon request and a 65 24 proper showing of necessity, may grant an extension of 65 25 time not to exceed thirty days for making any return 65 26 and payment. Returns shall be signed, in accordance 65 27 with forms and rules prescribed by the director, by 65 28 the retailer or the retailer's authorized agent, and 65 29 shall be certified by the retailer or agent to be 65 30 correct. 65 31 2. If it is reasonably expected, as determined by 65 32 rules prescribed by the director, that a retailer's 65 33 annual sales or use tax liability will not exceed one 65 34 hundred twenty dollars for a calendar year, the 65 35 retailer may request and the director may grant 65 36 permission to the retailer, in lieu of the quarterly 65 37 filing and remitting requirements set out elsewhere in 65 38 this section, to file the return required by and remit 65 39 the sales or use tax due under this section on a 65 40 calendar-year basis. The return and tax are due and 65 41 payable no later than January 31 following each 65 42 calendar year in which the retailer carries on 65 43 business. 65 44 3. The director, in cooperation with the 65 45 department of management, may periodically change the 65 46 filing and remittance thresholds by administrative 65 47 rule if in the best interests of the state and 65 48 taxpayer to do so. 65 49 Sec. . NEW SECTION. 423.33 LIABILITY OF 65 50 PERSONS OTHER THAN RETAILERS FOR PAYMENT OF SALES OR 66 1 USE TAX. 66 2 1. LIABILITY OF PURCHASER FOR SALES TAX. If a 66 3 purchaser fails to pay sales tax to the retailer 66 4 required to collect the tax, then in addition to all 66 5 of the rights, obligations, and remedies provided, the 66 6 tax is payable by the purchaser directly to the 66 7 department, and sections 423.31, 423.32, 423.37, 66 8 423.38, 423.39, 423.40, 423.41, and 423.42 apply to 66 9 the purchaser. For failure to pay, the retailer and 66 10 purchaser are liable, unless the circumstances 66 11 described in section 421.60, subsection 2, paragraph 66 12 "m", or section 423.45, subsection 4, paragraph "b" or 66 13 "e", or subsection 5, paragraph "c" or "e", are 66 14 applicable. 66 15 2. IMMEDIATE SUCCESSOR LIABILITY FOR SALES OR USE 66 16 TAX. If a retailer sells the retailer's business or 66 17 stock of goods or quits the business, the retailer 66 18 shall prepare a final return and pay all sales or use 66 19 tax due within the time required by law. The 66 20 immediate successor to the retailer, if any, shall 66 21 withhold a sufficient portion of the purchase price, 66 22 in money or money's worth, to pay the amount of 66 23 delinquent tax, interest, or penalty due and unpaid. 66 24 If the immediate successor of the business or stock of 66 25 goods intentionally fails to withhold the amount due 66 26 from the purchase price as provided in this 66 27 subsection, the immediate successor is personally 66 28 liable for the payment of delinquent taxes, interest, 66 29 and penalty accrued and unpaid on account of the 66 30 operation of the business by the immediate former 66 31 retailer, except when the purchase is made in good 66 32 faith as provided in section 421.28. However, a 66 33 person foreclosing on a valid security interest or 66 34 retaking possession of premises under a valid lease is 66 35 not an "immediate successor" for purposes of this 66 36 section. The department may waive the liability of 66 37 the immediate successor under this subsection if the 66 38 immediate successor exercised good faith in 66 39 establishing the amount of the previous liability. 66 40 3. EVENT SPONSOR'S LIABILITY FOR SALES TAX. A 66 41 person sponsoring a flea market or a craft, antique, 66 42 coin, or stamp show or similar event shall obtain from 66 43 every retailer selling tangible personal property or 66 44 taxable services at the event proof that the retailer 66 45 possesses a valid sales tax permit or secure from the 66 46 retailer a statement, taken in good faith, that 66 47 property or services offered for sale are not subject 66 48 to sales tax. Failure to do so renders a sponsor of 66 49 the event liable for payment of any sales tax, 66 50 interest, and penalty due and owing from any retailer 67 1 selling property or services at the event. Sections 67 2 423.31, 423.32, 423.37, 423.38, 423.39, 423.40, 67 3 423.41, and 423.42 apply to the sponsors. For 67 4 purposes of this subsection, a person sponsoring a 67 5 flea market or a craft, antique, coin, or stamp show 67 6 or similar event does not include an organization 67 7 which sponsors an event less than three times a year 67 8 or a state, county, or district agricultural fair. 67 9 Sec. . NEW SECTION. 423.34 LIABILITY OF USER. 67 10 Any person who uses any property or services 67 11 enumerated in section 423.2 upon which the use tax has 67 12 not been paid, either to the county treasurer or to a 67 13 retailer or direct to the department as required by 67 14 this subchapter, shall be liable for the payment of 67 15 tax, and shall on or before the last day of the month 67 16 next succeeding each quarterly period pay the use tax 67 17 upon all property or services used by the person 67 18 during the preceding quarterly period in the manner 67 19 and accompanied by such returns as the director shall 67 20 prescribe. All of the provisions of sections 423.32 67 21 and 423.33 with reference to the returns and payments 67 22 shall be applicable to the returns and payments 67 23 required by this section. 67 24 Sec. . NEW SECTION. 423.35 POSTING OF BOND TO 67 25 SECURE PAYMENT. 67 26 The director may, when necessary and advisable in 67 27 order to secure the collection of the sales or use 67 28 tax, authorize any person subject to either tax, and 67 29 any retailer required or authorized to collect those 67 30 taxes pursuant to the provisions of section 423.14, to 67 31 file with the department a bond, issued by a surety 67 32 company authorized to transact business in this state 67 33 and approved by the insurance commissioner as to 67 34 solvency and responsibility, in an amount as the 67 35 director may fix, to secure the payment of any tax, 67 36 interest, or penalties due or which may become due 67 37 from such person. In lieu of a bond, securities 67 38 approved by the director, in an amount which the 67 39 director may prescribe, may be deposited with the 67 40 department, which securities shall be kept in the 67 41 custody of the department and may be sold by the 67 42 director at public or private sale, without notice to 67 43 the depositor, if it becomes necessary to do so in 67 44 order to recover any tax, interest, or penalties due. 67 45 Upon the sale, the surplus, if any, above the amounts 67 46 due under this chapter shall be returned to the person 67 47 who deposited the securities. 67 48 Sec. . NEW SECTION. 423.36 PERMITS REQUIRED 67 49 TO COLLECT SALES OR USE TAX – APPLICATIONS – 67 50 REVOCATION. 68 1 1. A person shall not engage in or transact 68 2 business as a retailer making taxable sales of 68 3 tangible personal property or furnishing services 68 4 within this state or as a retailer making taxable 68 5 sales of tangible personal property or furnishing 68 6 services for use within this state, unless a permit 68 7 has been issued to the retailer under this section, 68 8 except as provided in subsection 6. Every person 68 9 desiring to engage in or transact business as a 68 10 retailer shall file with the department an application 68 11 for a permit to collect sales or use tax. Every 68 12 application for a sales or use tax permit shall be 68 13 made upon a form prescribed by the director and shall 68 14 set forth any information the director may require. 68 15 The application shall be signed by an owner of the 68 16 business if a natural person; in the case of a 68 17 retailer which is an association or partnership, by a 68 18 member or partner; and in the case of a retailer which 68 19 is a corporation, by an executive officer or some 68 20 person specifically authorized by the corporation to 68 21 sign the application, to which shall be attached the 68 22 written evidence of the person's authority. 68 23 2. To collect sales or use tax, the applicant must 68 24 have a permit for each place of business in the state 68 25 of Iowa. The department may deny a permit to an 68 26 applicant who is substantially delinquent in paying a 68 27 tax due, or the interest or penalty on the tax, 68 28 administered by the department at the time of 68 29 application. If the applicant is a partnership, a 68 30 permit may be denied if a partner is substantially 68 31 delinquent in paying any delinquent tax, penalty, or 68 32 interest. If the applicant is a corporation, a permit 68 33 may be denied if any officer having a substantial 68 34 legal or equitable interest in the ownership of the 68 35 corporation owes any delinquent tax, penalty, or 68 36 interest. 68 37 3. The department shall grant and issue to each 68 38 applicant a permit for each place of business in this 68 39 state where sales or use tax is collected. A permit 68 40 is not assignable and is valid only for the person in 68 41 whose name it is issued and for the transaction of 68 42 business at the place designated or at a place of 68 43 relocation within the state if the ownership remains 68 44 the same. 68 45 If an applicant is making sales outside Iowa for 68 46 use in this state or furnishing services outside Iowa, 68 47 the product or result of which will be used in this 68 48 state, that applicant shall be issued one use tax 68 49 permit by the department applicable to these out-of- 68 50 state sales or services. 69 1 4. Permits issued under this section are valid and 69 2 effective until revoked by the department. 69 3 5. If the holder of a permit fails to comply with 69 4 any of the provisions of this subchapter or of 69 5 subchapter II or III or any order or rule of the 69 6 department adopted under those subchapters or is 69 7 substantially delinquent in the payment of a tax 69 8 administered by the department or the interest or 69 9 penalty on the tax, or if the person is a corporation 69 10 and if any officer having a substantial legal or 69 11 equitable interest in the ownership of the corporation 69 12 owes any delinquent tax of the permit-holding 69 13 corporation, or interest or penalty on the tax, 69 14 administered by the department, the director may 69 15 revoke the permit. The director shall send notice by 69 16 mail to a permit holder informing that person of the 69 17 director's intent to revoke the permit and of the 69 18 permit holder's right to a hearing on the matter. If 69 19 the permit holder petitions the director for a hearing 69 20 on the proposed revocation, after giving ten days' 69 21 notice of the time and place of the hearing in 69 22 accordance with section 17A.18, subsection 3, the 69 23 matter may be heard and a decision rendered. The 69 24 director may restore permits after revocation. The 69 25 director shall adopt rules setting forth the period of 69 26 time a retailer must wait before a permit may be 69 27 restored or a new permit may be issued. The waiting 69 28 period shall not exceed ninety days from the date of 69 29 the revocation of the permit. 69 30 6. Sellers who are not regularly engaged in 69 31 selling at retail and do not have a permanent place of 69 32 business, but who are temporarily engaged in selling 69 33 from trucks, portable roadside stands, concessionaires 69 34 at state, county, district, or local fairs, carnivals, 69 35 or the like, shall report and remit the sales tax on a 69 36 temporary basis, under rules the director shall 69 37 provide for the efficient collection of the sales tax. 69 38 This subsection applies to sellers who are temporarily 69 39 engaged in furnishing services. 69 40 Persons engaged in selling tangible personal 69 41 property or furnishing services shall not be required 69 42 to obtain or retain a sales tax permit for a place of 69 43 business at which taxable sales of tangible personal 69 44 property or taxable performance of services will not 69 45 occur. 69 46 7. The provisions of subsection 1, dealing with 69 47 the lawful right of a retailer to transact business, 69 48 as applicable, apply to persons having receipts from 69 49 furnishing services enumerated in section 423.2, 69 50 except that a person holding a permit pursuant to 70 1 subsection 1 shall not be required to obtain any 70 2 separate sales tax permit for the purpose of engaging 70 3 in business involving the services. 70 4 8. a. Except as provided in paragraph "b", 70 5 purchasers, users, and consumers of tangible personal 70 6 property or enumerated services taxed pursuant to 70 7 subchapter II or III of this chapter or chapters 423B 70 8 and 423E may be authorized, pursuant to rules adopted 70 9 by the director, to remit tax owed directly to the 70 10 department instead of the tax being collected and paid 70 11 by the seller. To qualify for a direct pay tax 70 12 permit, the purchaser, user, or consumer must accrue a 70 13 tax liability of more than four thousand dollars in 70 14 tax under subchapters II and III in a semimonthly 70 15 period and make deposits and file returns pursuant to 70 16 section 423.31. This authority shall not be granted 70 17 or exercised except upon application to the director 70 18 and then only after issuance by the director of a 70 19 direct pay tax permit. 70 20 b. The granting of a direct pay tax permit is not 70 21 authorized for any of the following: 70 22 (1) Taxes imposed on the sales, furnishing, or 70 23 service of gas, electricity, water, heat, pay 70 24 television service, and communication service. 70 25 (2) Taxes imposed under sections 423.26 and 423.27 70 26 and chapter 423C. 70 27 Sec. . NEW SECTION. 423.37 FAILURE TO FILE 70 28 SALES OR USE TAX RETURNS – INCORRECT RETURNS. 70 29 1. As soon as practicable after a return is filed 70 30 and in any event within three years after the return 70 31 is filed, the department shall examine it, assess and 70 32 determine the tax due if the return is found to be 70 33 incorrect, and give notice to the person liable for 70 34 the tax of the assessment and determination as 70 35 provided in subsection 2. The period for the 70 36 examination and determination of the correct amount of 70 37 tax is unlimited in the case of a false or fraudulent 70 38 return made with the intent to evade tax or in the 70 39 case of a failure to file a return. 70 40 2. If a return required by this subchapter is not 70 41 filed, or if a return when filed is incorrect or 70 42 insufficient and the maker fails to file a corrected 70 43 or sufficient return within twenty days after the same 70 44 is required by notice from the department, the 70 45 department shall determine the amount of tax due from 70 46 information as the department may be able to obtain 70 47 and, if necessary, may estimate the tax on the basis 70 48 of external indices, such as number of employees of 70 49 the person concerned, rentals paid by the person, 70 50 stock on hand, or other factors. The department shall 71 1 give notice of the determination to the person liable 71 2 for the tax. The determination shall fix the tax 71 3 unless the person against whom it is assessed shall, 71 4 within sixty days after the giving of notice of the 71 5 determination, apply to the director for a hearing or 71 6 unless the taxpayer contests the determination by 71 7 paying the tax, interest, and penalty and timely 71 8 filing a claim for refund. At the hearing evidence 71 9 may be offered to support the determination or to 71 10 prove that it is incorrect. After the hearing the 71 11 director shall give notice of the decision to the 71 12 person liable for the tax. 71 13 3. The three-year period of limitation provided in 71 14 subsection 1 may be extended by a taxpayer by signing 71 15 a waiver agreement form to be provided by the 71 16 department. The agreement shall stipulate the period 71 17 of extension and the tax period to which the extension 71 18 applies. The agreement shall also provide that a 71 19 claim for refund may be filed by the taxpayer at any 71 20 time during the period of extension. 71 21 Sec. . NEW SECTION. 423.38 JUDICIAL REVIEW. 71 22 1. Judicial review of actions of the director may 71 23 be sought in accordance with the terms of the Iowa 71 24 administrative procedure Act. 71 25 2. For cause and upon a showing by the director 71 26 that collection of the tax in dispute is in doubt, the 71 27 court may order the petitioner to file with the clerk 71 28 a bond for the use of the respondent, with sureties 71 29 approved by the clerk, in the amount of tax appealed 71 30 from, conditioned that the petitioner shall perform 71 31 the orders of the court. 71 32 3. An appeal may be taken by the taxpayer or the 71 33 director to the supreme court of this state 71 34 irrespective of the amount involved. 71 35 Sec. . NEW SECTION. 423.39 SERVICE OF 71 36 NOTICES. 71 37 1. A notice authorized or required under this 71 38 subchapter may be given by mailing the notice to the 71 39 person for whom it is intended, addressed to that 71 40 person at the address given in the last return filed 71 41 by the person pursuant to this subchapter, or if no 71 42 return has been filed, then to any address obtainable. 71 43 The mailing of the notice is presumptive evidence of 71 44 the receipt of the notice by the person to whom 71 45 addressed. Any period of time which is determined 71 46 according to this subchapter by the giving of notice 71 47 commences to run from the date of mailing of the 71 48 notice. 71 49 2. The provisions of the Code relative to the 71 50 limitation of time for the enforcement of a civil 72 1 remedy shall not apply to any proceeding or action 72 2 taken to levy, appraise, assess, determine, or enforce 72 3 the collection of any tax or penalty provided by this 72 4 chapter. 72 5 Sec. . NEW SECTION. 423.40 PENALTIES – 72 6 OFFENSES – LIMITATION. 72 7 1. In addition to the sales or use tax or 72 8 additional sales or use tax, the taxpayer shall pay a 72 9 penalty as provided in section 421.27. The taxpayer 72 10 shall also pay interest on the sales or use tax or 72 11 additional sales or use tax at the rate in effect 72 12 under section 421.7 for each month counting each 72 13 fraction of a month as an entire month, computed from 72 14 the date the semimonthly or monthly tax deposit form 72 15 or return was required to be filed. The penalty and 72 16 interest shall be paid to the department and disposed 72 17 of in the same manner as other receipts under this 72 18 subchapter. Unpaid penalties and interest may be 72 19 enforced in the same manner as the taxes imposed by 72 20 this chapter. 72 21 2. a. Any person who knowingly sells tangible 72 22 personal property, tickets or admissions to places of 72 23 amusement and athletic events, or gas, water, 72 24 electricity, or communication service at retail, or 72 25 engages in the furnishing of services enumerated in 72 26 section 423.2, in this state without procuring a 72 27 permit to collect tax, as provided in section 423.36, 72 28 or who violates section 423.24 and the officers of any 72 29 corporation who so act are guilty of a serious 72 30 misdemeanor. 72 31 b. A person who knowingly sells tangible personal 72 32 property, tickets or admissions to places of amusement 72 33 and athletic events, or gas, water, electricity, or 72 34 communication service at retail, or engages in the 72 35 furnishing of services enumerated in section 423.2, in 72 36 this state after the person's sales tax permit has 72 37 been revoked and before it has been restored as 72 38 provided in section 423.36, subsection 5, and the 72 39 officers of any corporation who so act are guilty of 72 40 an aggravated misdemeanor. 72 41 3. A person who willfully attempts in any manner 72 42 to evade any tax imposed by this chapter or the 72 43 payment of the tax or a person who makes or causes to 72 44 be made a false or fraudulent semimonthly or monthly 72 45 tax deposit form or return with intent to evade any 72 46 tax imposed by subchapter II or III or the payment of 72 47 the tax is guilty of a class "D" felony. 72 48 4. The certificate of the director to the effect 72 49 that a tax has not been paid, that a return has not 72 50 been filed, or that information has not been supplied 73 1 pursuant to the provisions of this subchapter shall be 73 2 prima facie evidence thereof. 73 3 5. A person required to pay sales or use tax, or 73 4 to make, sign, or file a tax deposit form or return or 73 5 supplemental return, who willfully makes a false or 73 6 fraudulent tax deposit form or return, or willfully 73 7 fails to pay at least ninety percent of the tax or 73 8 willfully fails to make, sign, or file the tax deposit 73 9 form or return, at the time required by law, is guilty 73 10 of a fraudulent practice. 73 11 6. A prosecution for an offense specified in this 73 12 section shall be commenced within six years after its 73 13 commission. 73 14 Sec. . NEW SECTION. 423.41 BOOKS – 73 15 EXAMINATION. 73 16 Every retailer required or authorized to collect 73 17 taxes imposed by this chapter and every person using 73 18 in this state tangible personal property, services, or 73 19 the product of services shall keep records, receipts, 73 20 invoices, and other pertinent papers as the director 73 21 shall require, in the form that the director shall 73 22 require, for as long as the director has the authority 73 23 to examine and determine tax due. The director or any 73 24 duly authorized agent of the department may examine 73 25 the books, papers, records, and equipment of any 73 26 person either selling tangible personal property or 73 27 services or liable for the tax imposed by this 73 28 chapter, and investigate the character of the business 73 29 of any person in order to verify the accuracy of any 73 30 return made, or if a return was not made by the 73 31 person, ascertain and determine the amount due under 73 32 this chapter. These books, papers, and records shall 73 33 be made available within this state for examination 73 34 upon reasonable notice when the director deems it 73 35 advisable and so orders. The preceding requirements 73 36 shall likewise apply to users and persons furnishing 73 37 services enumerated in section 423.2. 73 38 Sec. . NEW SECTION. 423.42 STATUTES 73 39 APPLICABLE. 73 40 1. The director shall administer the taxes imposed 73 41 by subchapters II and III in the same manner and 73 42 subject to all the provisions of, and all of the 73 43 powers, duties, authority, and restrictions contained 73 44 in, section 422.25, subsection 4, section 422.30, and 73 45 sections 422.67 through 422.75. 73 46 2. All the provisions of section 422.26 shall 73 47 apply in respect to the taxes and penalties imposed by 73 48 subchapters II and III and this subchapter, except 73 49 that, as applied to any tax imposed by subchapters II 73 50 and III, the lien provided in section 422.26 shall be 74 1 prior and paramount over all subsequent liens upon any 74 2 personal property within this state, or right to such 74 3 personal property, belonging to the taxpayer without 74 4 the necessity of recording as provided in section 74 5 422.26. The requirements for recording shall, as 74 6 applied to the taxes imposed by subchapters II and 74 7 III, apply only to the liens upon real property. When 74 8 requested to do so by any person from whom a taxpayer 74 9 is seeking credit, or with whom the taxpayer is 74 10 negotiating the sale of any personal property, or by 74 11 any other person having a legitimate interest in such 74 12 information, the director shall, upon being satisfied 74 13 that such a situation exists, inform that person as to 74 14 the amount of unpaid taxes due by such taxpayer under 74 15 the provisions of subchapters II and III. The giving 74 16 of this information under these circumstances shall 74 17 not be deemed a violation of section 422.72 as applied 74 18 to subchapters II and III. 74 19 Sec. . NEW SECTION. 423.43 DEPOSIT OF REVENUE 74 20 – APPROPRIATIONS. 74 21 Except as otherwise provided in section 312.2, 74 22 subsection 15, all revenues derived from the use tax 74 23 on motor vehicles, trailers, and motor vehicle 74 24 accessories and equipment as collected pursuant to 74 25 sections 423.26 and 423.27 shall be deposited and 74 26 credited to the road use tax fund and shall be used 74 27 exclusively for the construction, maintenance, and 74 28 supervision of public highways. 74 29 1. Notwithstanding any provision of this section 74 30 which provides that all revenues derived from the use 74 31 tax on motor vehicles, trailers, and motor vehicle 74 32 accessories and equipment as collected pursuant to 74 33 sections 423.26 and 423.27 shall be deposited and 74 34 credited to the road use tax fund, eighty percent of 74 35 the revenues shall be deposited and credited as 74 36 follows: 74 37 a. Twenty-five percent of all such revenue, up to 74 38 a maximum of four million two hundred fifty thousand 74 39 dollars per quarter, shall be deposited into and 74 40 credited to the Iowa comprehensive petroleum 74 41 underground storage tank fund created in section 74 42 455G.3, and the moneys so deposited are a continuing 74 43 appropriation for expenditure under chapter 455G, and 74 44 moneys so appropriated shall not be used for other 74 45 purposes. 74 46 b. Any such revenues remaining shall be credited 74 47 to the road use tax fund. 74 48 2. Notwithstanding any other provision of this 74 49 section that provides that all revenue derived from 74 50 the use tax on motor vehicles, trailers, and motor 75 1 vehicle accessories and equipment as collected 75 2 pursuant to section 423.26 shall be deposited and 75 3 credited to the road use tax fund, twenty percent of 75 4 the revenues shall be credited and deposited as 75 5 follows: one-half to the road use tax fund and one- 75 6 half to the primary road fund to be used for the 75 7 commercial and industrial highway network. 75 8 3. For the fiscal year beginning July 1, 2004, and 75 9 each subsequent fiscal year, revenues arising under 75 10 the operation of this chapter which are derived from 75 11 the tax imposed on remote sales shall be deposited 75 12 into the remote sales tax fund created in section 75 13 423.60 in an amount equal to the excess of the 75 14 revenues derived from the tax imposed on remote sales 75 15 during the fiscal year over the revenues derived from 75 16 the tax imposed on remote sales during the fiscal year 75 17 beginning July 1, 2003. 75 18 4. All other revenue arising under the operation 75 19 of this chapter shall be credited to the general fund 75 20 of the state. 75 21 Sec. . NEW SECTION. 423.44 REIMBURSEMENT FOR 75 22 PRIMARY ROAD FUND. 75 23 From moneys deposited into the road use tax fund, 75 24 the department may credit to the primary road fund any 75 25 amount of revenues derived from the use tax on motor 75 26 vehicles, trailers, and motor vehicle accessories and 75 27 equipment as collected pursuant to sections 423.26 and 75 28 423.27 to the extent necessary to reimburse that fund 75 29 for the expenditures not otherwise eligible to be made 75 30 from the primary road fund, which are made for 75 31 repairing, improving, and maintaining bridges over the 75 32 rivers bordering the state. Expenditures for those 75 33 portions of bridges within adjacent states may be 75 34 included when they are made pursuant to an agreement 75 35 entered into under section 313.63, 313A.34, or 314.10. 75 36 Sec. . NEW SECTION. 423.45 REFUNDS – 75 37 EXEMPTION CERTIFICATES. 75 38 1. If an amount of tax represented by a retailer 75 39 to a consumer or user as constituting tax due is 75 40 computed upon a sales price that is not taxable or the 75 41 amount represented is in excess of the actual taxable 75 42 amount and the amount represented is actually paid by 75 43 the consumer or user to the retailer, the excess 75 44 amount of tax paid shall be returned to the consumer 75 45 or user upon notification to the retailer by the 75 46 department that an excess payment exists. 75 47 2. If an amount of tax represented by a retailer 75 48 to a consumer or user as constituting tax due is 75 49 computed upon a sales price that is not taxable or the 75 50 amount represented is in excess of the actual taxable 76 1 amount and the amount represented is actually paid by 76 2 the consumer or user to the retailer, the excess 76 3 amount of tax paid shall be returned to the consumer 76 4 or user upon proper notification to the retailer by 76 5 the consumer or user that an excess payment exists. 76 6 "Proper" notification is written notification which 76 7 allows a retailer at least sixty days to respond and 76 8 which contains enough information to allow a retailer 76 9 to determine the validity of a consumer's or user's 76 10 claim that an excess amount of tax has been paid. No 76 11 cause of action shall accrue against a retailer for 76 12 excess tax paid until sixty days after proper notice 76 13 has been given the retailer by the consumer or user. 76 14 3. In the circumstances described in subsections 1 76 15 and 2, a retailer has the option to either return any 76 16 excess amount of tax paid to a consumer or user, or to 76 17 remit the amount which a consumer or user has paid to 76 18 the retailer to the department. 76 19 4. a. The department shall issue or the seller 76 20 may separately provide exemption certificates in the 76 21 form prescribed by the director, including 76 22 certificates not made of paper, which conform to the 76 23 requirements of paragraph "c", to assist retailers in 76 24 properly accounting for nontaxable sales of tangible 76 25 personal property or services to purchasers for a 76 26 nontaxable purpose. The department shall also allow 76 27 the use of exemption certificates for those 76 28 circumstances in which a sale is taxable but the 76 29 seller is not obligated to collect tax from the buyer. 76 30 b. The sales tax liability for all sales of 76 31 tangible personal property and all sales of services 76 32 is upon the seller and the purchaser unless the seller 76 33 takes in good faith from the purchaser a valid 76 34 exemption certificate stating under penalty of perjury 76 35 that the purchase is for a nontaxable purpose and is 76 36 not a retail sale as defined in section 423.1, or the 76 37 seller is not obligated to collect tax due, or unless 76 38 the seller takes a fuel exemption certificate pursuant 76 39 to subsection 5. If the tangible personal property or 76 40 services are purchased tax free pursuant to a valid 76 41 exemption certificate which is taken in good faith by 76 42 the seller, and the tangible personal property or 76 43 services are used or disposed of by the purchaser in a 76 44 nonexempt manner, the purchaser is solely liable for 76 45 the taxes and shall remit the taxes directly to the 76 46 department and sections 423.31, 423.32, 423.37, 76 47 423.38, 423.39, 423.40, 423.41, and 423.42 shall apply 76 48 to the purchaser. 76 49 c. A valid exemption certificate is an exemption 76 50 certificate which is complete and correct according to 77 1 the requirements of the director. 77 2 d. A valid exemption certificate is taken in good 77 3 faith by the seller when the seller has exercised that 77 4 caution and diligence which honest persons of ordinary 77 5 prudence would exercise in handling their own business 77 6 affairs, and includes an honesty of intention and 77 7 freedom from knowledge of circumstances which ought to 77 8 put one upon inquiry as to the facts. In order for a 77 9 seller to take a valid exemption certificate in good 77 10 faith, the seller must exercise reasonable prudence to 77 11 determine the facts supporting the valid exemption 77 12 certificate, and if any facts upon such certificate 77 13 would lead a reasonable person to further inquiry, 77 14 such inquiry must be made with an honest intent to 77 15 discover the facts. 77 16 e. If the circumstances change and as a result the 77 17 tangible personal property or services are used or 77 18 disposed of by the purchaser in a nonexempt manner or 77 19 the purchaser becomes obligated to pay the tax, the 77 20 purchaser is liable solely for the taxes and shall 77 21 remit the taxes directly to the department in 77 22 accordance with this subsection. 77 23 5. a. The department shall issue or the seller 77 24 may separately provide fuel exemption certificates in 77 25 the form prescribed by the director. 77 26 b. For purposes of this subsection: 77 27 (1) "Fuel" includes gas, electricity, water, heat, 77 28 steam, and any other tangible personal property 77 29 consumed in creating heat, power, or steam. 77 30 (2) "Fuel consumed in processing" means fuel used 77 31 or consumed for processing including grain drying, for 77 32 providing heat or cooling for livestock buildings or 77 33 for greenhouses or buildings or parts of buildings 77 34 dedicated to the production of flowering, ornamental, 77 35 or vegetable plants intended for sale in the ordinary 77 36 course of business, for use in aquaculture production, 77 37 or for generating electric current, or in implements 77 38 of husbandry engaged in agricultural production. 77 39 (3) "Fuel exemption certificate" means an 77 40 exemption certificate given by the purchaser under 77 41 penalty of perjury to assist retailers in properly 77 42 accounting for nontaxable sales of fuel consumed in 77 43 processing. 77 44 (4) "Substantial change" means a change in the use 77 45 or disposition of tangible personal property and 77 46 services by the purchaser such that the purchaser pays 77 47 less than ninety percent of the purchaser's actual 77 48 sales tax liability. A change includes a misstatement 77 49 of facts in an application made pursuant to paragraph 77 50 "d" or in a fuel exemption certificate. 78 1 c. The seller may accept a completed fuel 78 2 exemption certificate, as prepared by the purchaser, 78 3 for three years unless the purchaser files a new 78 4 completed exemption certificate. If the fuel is 78 5 purchased tax free pursuant to a fuel exemption 78 6 certificate which is taken by the seller, and the fuel 78 7 is used or disposed of by the purchaser in a nonexempt 78 8 manner, the purchaser is solely liable for the taxes, 78 9 and shall remit the taxes directly to the department 78 10 and sections 423.31, 423.32, 423.37, 423.38, 423.39, 78 11 423.40, 423.41, and 423.42 shall apply to the 78 12 purchaser. 78 13 d. The purchaser may apply to the department for 78 14 its review of the fuel exemption certificate. In this 78 15 event, the department shall review the fuel exemption 78 16 certificate within twelve months from the date of 78 17 application and determine the correct amount of the 78 18 exemption. If the amount determined by the department 78 19 is different than the amount that the purchaser claims 78 20 is exempt, the department shall promptly notify the 78 21 purchaser of the determination. Failure of the 78 22 department to make a determination within twelve 78 23 months from the date of application shall constitute a 78 24 determination that the fuel exemption certificate is 78 25 correct as submitted. A determination of exemption by 78 26 the department is final unless the purchaser appeals 78 27 to the director for a revision of the determination 78 28 within sixty days after the date of the notice of 78 29 determination. The director shall grant a hearing, 78 30 and upon the hearing, the director shall determine the 78 31 correct exemption and notify the purchaser of the 78 32 decision by mail. The decision of the director is 78 33 final unless the purchaser seeks judicial review of 78 34 the director's decision under section 423.38 within 78 35 sixty days after the date of the notice of the 78 36 director's decision. Unless there is a substantial 78 37 change, the department shall not impose penalties 78 38 pursuant to section 423.40 both retroactively to 78 39 purchases made after the date of application and 78 40 prospectively until the department gives notice to the 78 41 purchaser that a tax or additional tax is due, for 78 42 failure to remit any tax due which is in excess of a 78 43 determination made under this section. A 78 44 determination made by the department pursuant to this 78 45 subsection does not constitute an audit for purposes 78 46 of section 423.37. 78 47 e. If the circumstances change and the fuel is 78 48 used or disposed of by the purchaser in a nonexempt 78 49 manner, the purchaser is solely liable for the taxes 78 50 and shall remit the taxes directly to the department 79 1 in accordance with paragraph "c". 79 2 f. The purchaser shall attach documentation to the 79 3 fuel exemption certificate which is reasonably 79 4 necessary to support the exemption for fuel consumed 79 5 in processing. If the purchaser files a new exemption 79 6 certificate with the seller, documentation shall not 79 7 be required if the purchaser previously furnished the 79 8 seller with this documentation and substantial change 79 9 has not occurred since that documentation was 79 10 furnished or if fuel consumed in processing is 79 11 separately metered and billed by the seller. 79 12 6. Nothing in this section authorizes any cause of 79 13 action by any person to recover sales or use taxes 79 14 directly from the state or extends any person's time 79 15 to seek a refund of sales or use taxes which have been 79 16 collected and remitted to the state. 79 17 Sec. . NEW SECTION. 423.46 RATE AND BASE 79 18 CHANGES. 79 19 The department shall make a reasonable effort to 79 20 provide sellers with as much advance notice as 79 21 practicable of a rate change and to notify sellers of 79 22 legislative changes in the tax base and amendments to 79 23 sales and use tax rules. Failure of a seller to 79 24 receive notice or failure of this state to provide 79 25 notice or limit the effective date of a rate change 79 26 shall not relieve the seller of its obligation to 79 27 collect sales or use taxes for this state. 79 28 Sec. . NEW SECTION. 423.47 REFUNDS AND 79 29 CREDITS. 79 30 If it shall appear that, as a result of mistake, an 79 31 amount of tax, penalty, or interest has been paid 79 32 which was not due under the provisions of this 79 33 chapter, such amount shall be credited against any tax 79 34 due, or to become due, on the books of the department 79 35 from the person who made the erroneous payment, or 79 36 such amount shall be refunded to such person by the 79 37 department. A claim for refund or credit that has not 79 38 been filed with the department within three years 79 39 after the tax payment for which a refund or credit is 79 40 claimed became due, or one year after such tax payment 79 41 was made, whichever time is the later, shall not be 79 42 allowed by the director. 79 43 SUBCHAPTER VI 79 44 SALES AND USE TAX ACT – ADMINISTRATION OF 79 45 RETAILERS REGISTERED VOLUNTARILY UNDER THE 79 46 AGREEMENT 79 47 Sec. . NEW SECTION. 423.48 RESPONSIBILITIES 79 48 AND RIGHTS OF SELLERS REGISTERED UNDER THE AGREEMENT. 79 49 1. By registering under the agreement, the seller 79 50 agrees to collect and remit sales and use taxes for 80 1 all its taxable Iowa sales. Iowa's withdrawal from 80 2 the agreement or revocation of its membership in the 80 3 agreement shall not relieve a seller from its 80 4 responsibility to remit taxes previously collected on 80 5 behalf of this state. 80 6 2. The following provisions apply to any seller 80 7 who registers under the agreement: 80 8 a. The seller may register on-line. 80 9 b. Registration under the agreement and the 80 10 collection of Iowa sales and use taxes shall not be 80 11 used as factors in determining whether the seller has 80 12 nexus with Iowa for any tax. 80 13 c. If registered under the agreement with any 80 14 other member state, the seller is considered to be 80 15 registered in Iowa. 80 16 d. The seller is not required to pay registration 80 17 fees or other charges. 80 18 e. A written signature from the seller is not 80 19 required. 80 20 f. The seller may register by way of an agent. 80 21 The agent's appointment shall be in writing and 80 22 submitted to the department if requested by the 80 23 department. 80 24 g. The seller may cancel its registration at any 80 25 time under procedures adopted by the governing board 80 26 established pursuant to the agreement. Cancellation 80 27 does not relieve the seller of its liability for 80 28 remitting any Iowa taxes collected. 80 29 3. The following additional responsibilities and 80 30 rights apply to model sellers: 80 31 a. A model 1 seller's obligation to calculate, 80 32 collect, and remit sales and use taxes shall be 80 33 performed by its certified service provider, except 80 34 for the seller's obligation to remit tax on its own 80 35 purchases. As the seller's agent, the certified 80 36 service provider is liable for its model 1 seller's 80 37 sales and use tax due Iowa on all sales transactions 80 38 it processes for the seller except as set out in this 80 39 section. A seller that contracts with a certified 80 40 service provider is not liable to the state for sales 80 41 or use tax due on transactions processed by the 80 42 certified service provider unless the seller 80 43 misrepresents the types of items or services it sells 80 44 or commits fraud. In the absence of probable cause to 80 45 believe that the seller has committed fraud or made a 80 46 material misrepresentation, the seller is not subject 80 47 to audit on the transactions processed by the 80 48 certified service provider. A model 1 seller is 80 49 subject to audit for transactions not processed by the 80 50 certified service provider. The director is 81 1 authorized to perform a system check of the model 1 81 2 seller and review the seller's procedures to determine 81 3 if the certified service provider's system is 81 4 functioning properly and the extent to which the 81 5 seller's transactions are being processed by the 81 6 certified service provider. 81 7 b. A model 2 seller shall calculate the amount of 81 8 tax due on a transaction by the use of a certified 81 9 automated system, but shall collect and remit tax on 81 10 its own sales. A person that provides a certified 81 11 automated system is responsible for the proper 81 12 functioning of that system and is liable to this state 81 13 for underpayments of tax attributable to errors in the 81 14 functioning of the certified automated system. A 81 15 seller that uses a certified automated system remains 81 16 responsible and is liable to the state for reporting 81 17 and remitting tax. 81 18 c. A model 3 seller shall use its own proprietary 81 19 automated system to calculate tax due and collect and 81 20 remit tax on its own sales. A model 3 seller is 81 21 liable for the failure of its proprietary automated 81 22 system to meet the applicable performance standard. 81 23 Sec. . NEW SECTION. 423.49 RETURNS. 81 24 1. All model 1, 2, or 3 sellers are subject to all 81 25 of the following return requirements: 81 26 a. The seller is required to file only one return 81 27 per month for this state and for all taxing 81 28 jurisdictions within this state. 81 29 b. The date for filing returns shall be determined 81 30 under rules adopted by the director. However, in no 81 31 case shall the return be due earlier than the 81 32 twentieth day of the following month. 81 33 c. The director shall request additional 81 34 information returns. These returns shall not be 81 35 required more frequently than every six months. 81 36 2. Any registered seller which does not have a 81 37 legal obligation to register in this state and is not 81 38 a model 1, 2, or 3 seller is subject to all of the 81 39 following return requirements: 81 40 a. The seller is required to file a return within 81 41 one year of the month of initial registration and 81 42 shall file a return on an annual basis in succeeding 81 43 years. 81 44 b. In addition to the return required in paragraph 81 45 "a", if the seller accumulates more than one thousand 81 46 dollars in total state and local tax, the seller is 81 47 required to file a return in the following month. 81 48 c. The format of the return and the due date of 81 49 the initial return and the annual return shall be 81 50 determined under rules adopted by the department. 82 1 Sec. . NEW SECTION. 423.50 REMITTANCE OF 82 2 FUNDS. 82 3 1. Only one remittance of tax per return is 82 4 required except as provided in this subsection. 82 5 Sellers that collect more than thirty thousand dollars 82 6 in sales and use taxes for this state during the 82 7 preceding calendar year shall be required to make 82 8 additional remittances as required under rules adopted 82 9 by the director. The filing of a return is not 82 10 required with an additional remittance. 82 11 2. All remittances shall be remitted 82 12 electronically. 82 13 3. Electronic payments may be made either by 82 14 automated clearinghouse credit or automated 82 15 clearinghouse debit. Any data accompanying a 82 16 remittance must be formatted using uniform tax type 82 17 and payment codes approved by the governing board 82 18 established pursuant to the agreement. An alternative 82 19 method for making same-day payments shall be 82 20 determined under rules adopted by the director. 82 21 4. If a due date falls on a legal banking holiday 82 22 in this state, the taxes are due on the succeeding 82 23 business day. 82 24 Sec. . NEW SECTION. 423.51 ADMINISTRATION OF 82 25 EXEMPTIONS. 82 26 1. The following provisions shall apply when a 82 27 purchaser claims an exemption: 82 28 a. The seller shall obtain identifying information 82 29 of the purchaser and the reason for claiming a tax 82 30 exemption at the time of the purchase as determined by 82 31 the member states acting jointly. 82 32 b. A purchaser is not required to provide a 82 33 signature to claim an exemption from tax unless a 82 34 paper certificate is used. 82 35 c. The seller shall use the standard form for 82 36 claiming an exemption electronically as adopted 82 37 jointly by the member states. 82 38 d. The seller shall obtain the same information 82 39 for proof of a claimed exemption regardless of the 82 40 medium in which the transaction occurred. 82 41 e. The department may authorize a system wherein 82 42 the purchaser exempt from the payment of the tax is 82 43 issued an identification number which shall be 82 44 presented to the seller at the time of the sale. 82 45 f. The seller shall maintain proper records of 82 46 exempt transactions and provide them to the department 82 47 when requested. 82 48 g. The department shall administer entity-based 82 49 and use-based exemptions when practicable through a 82 50 direct pay tax permit, an exemption certificate, or 83 1 another means that does not burden sellers. For the 83 2 purposes of this paragraph: 83 3 (1) An "entity-based exemption" is an exemption 83 4 based on who purchases the product or who sells the 83 5 product. 83 6 (2) A "use-based exemption" is an exemption based 83 7 on the purchaser's use of the product. 83 8 2. Sellers that follow the requirements of this 83 9 section are relieved from any tax otherwise applicable 83 10 if it is determined that the purchaser improperly 83 11 claimed an exemption and that the purchaser is liable 83 12 for the nonpayment of tax. This relief from liability 83 13 does not apply to a seller who fraudulently fails to 83 14 collect the tax or solicits purchasers to participate 83 15 in the unlawful claim of an exemption. 83 16 Sec. . NEW SECTION. 423.52 RELIEF FROM 83 17 LIABILITY FOR SELLERS AND CERTIFIED SERVICE PROVIDERS. 83 18 Sellers and certified service providers are 83 19 relieved from liability to this state or its local 83 20 taxing jurisdictions for having charged and collected 83 21 the incorrect amount of sales or use tax resulting 83 22 from the seller or certified service provider relying 83 23 on erroneous data provided by this state on tax rates, 83 24 boundaries, or taxing jurisdiction assignments. If 83 25 this state provides an address-based system for 83 26 assigning taxing jurisdictions whether or not pursuant 83 27 to the federal Mobile Telecommunications Sourcing Act, 83 28 the director is not required to provide liability 83 29 relief for errors resulting from reliance on the 83 30 information provided by this state. 83 31 Sec. . NEW SECTION. 423.53 BAD DEBTS AND 83 32 MODEL 1 SELLERS. 83 33 A certified service provider may claim, on behalf 83 34 of a model 1 seller, any bad debt deduction as 83 35 provided in section 423.21. The certified service 83 36 provider must credit or refund the full amount of any 83 37 bad debt deduction or refund received to the seller. 83 38 Sec. . NEW SECTION. 423.54 AMNESTY FOR 83 39 REGISTERED SELLERS. 83 40 1. Subject to the limitations in subsections 2 83 41 through 6, the following provisions apply: 83 42 a. Amnesty is provided for uncollected or unpaid 83 43 sales or use tax to a seller who registers to pay or 83 44 to collect and remit applicable sales or use tax on 83 45 sales made to purchasers in this state in accordance 83 46 with the terms of the agreement, provided the seller 83 47 was not so registered in this state in the twelve- 83 48 month period preceding the commencement of Iowa's 83 49 participation in the agreement. 83 50 b. Amnesty precludes assessment of the seller for 84 1 uncollected or unpaid sales or use tax together with 84 2 penalty or interest for sales made during the period 84 3 the seller was not registered in this state, provided 84 4 registration occurs within twelve months of the 84 5 commencement of Iowa's participation in the agreement. 84 6 c. Amnesty shall be provided to any seller 84 7 lawfully registered under the agreement by any other 84 8 member state prior to the date of the commencement of 84 9 Iowa's participation in the agreement. 84 10 2. Amnesty is not available to a seller with 84 11 respect to any matter or matters for which the seller 84 12 received notice of the commencement of an audit and 84 13 which audit is not yet finally resolved, including any 84 14 related administrative and judicial processes. 84 15 3. Amnesty is not available for sales or use taxes 84 16 already paid or remitted or to taxes collected by the 84 17 seller. 84 18 4. Amnesty is fully effective absent the seller's 84 19 fraud or intentional misrepresentation of a material 84 20 fact as long as the seller continues registration and 84 21 continues payment or collection and remittance of 84 22 applicable sales or use taxes for a period of at least 84 23 thirty-six months. The statute of limitations 84 24 applicable to asserting a tax liability is tolled 84 25 during this thirty-six month period. 84 26 5. Amnesty is applicable only to sales or use 84 27 taxes due from a seller in its capacity as a seller 84 28 and not to sales or use taxes due from a seller in its 84 29 capacity as a buyer. 84 30 6. The director may allow amnesty on terms and 84 31 conditions more favorable to a seller than the terms 84 32 required by this section. 84 33 Sec. . NEW SECTION. 423.55 DATABASES. 84 34 The department shall provide and maintain databases 84 35 required by the agreement for the benefit of sellers 84 36 registered under the agreement. 84 37 Sec. . NEW SECTION. 423.56 CONFIDENTIALITY 84 38 AND PRIVACY PROTECTIONS UNDER MODEL 1. 84 39 1. As used in this section: 84 40 a. "Anonymous data" means information that does 84 41 not identify a person. 84 42 b. "Confidential taxpayer information" means all 84 43 information that is protected under this state's laws, 84 44 rules, and privileges. 84 45 c. "Personally identifiable information" means 84 46 information that identifies a person. 84 47 2. With very limited exceptions, a certified 84 48 service provider shall perform its tax calculation, 84 49 remittance, and reporting functions without retaining 84 50 the personally identifiable information of consumers. 85 1 3. A certified service provider may perform its 85 2 services in this state only if the certified service 85 3 provider certifies that: 85 4 a. Its system has been designed and tested to 85 5 ensure that the fundamental precept of anonymity is 85 6 respected. 85 7 b. Personally identifiable information is only 85 8 used and retained to the extent necessary for the 85 9 administration of model 1 sellers with respect to 85 10 exempt purchasers. 85 11 c. It provides consumers clear and conspicuous 85 12 notice of its information practices, including what 85 13 information it collects, how it collects the 85 14 information, how it uses the information, how long, if 85 15 at all, it retains the information, and whether it 85 16 discloses the information to member states. This 85 17 notice shall be satisfied by a written privacy policy 85 18 statement accessible by the public on the official web 85 19 site of the certified service provider. 85 20 d. Its collection, use, and retention of 85 21 personally identifiable information is limited to that 85 22 required by the member states to ensure the validity 85 23 of exemptions from taxation that are claimed by reason 85 24 of a consumer's status or the intended use of the 85 25 goods or services purchased. 85 26 e. It provides adequate technical, physical, and 85 27 administrative safeguards so as to protect personally 85 28 identifiable information from unauthorized access and 85 29 disclosure. 85 30 4. The department shall provide public 85 31 notification of its practices relating to the 85 32 collection, use, and retention of personally 85 33 identifiable information. 85 34 5. When any personally identifiable information 85 35 that has been collected and retained by the department 85 36 or certified service provider is no longer required 85 37 for the purposes set forth in subsection 3, paragraph 85 38 "d", that information shall no longer be retained by 85 39 the department or certified service provider. 85 40 6. When personally identifiable information 85 41 regarding an individual is retained by or on behalf of 85 42 this state, this state shall provide reasonable access 85 43 by such individual to his or her own information in 85 44 the state's possession and a right to correct any 85 45 inaccurately recorded information. 85 46 7. This privacy policy is subject to enforcement 85 47 by the department and the attorney general. 85 48 8. This state's laws and rules regarding the 85 49 collection, use, and maintenance of confidential 85 50 taxpayer information remain fully applicable and 86 1 binding. Without limitation, the agreement does not 86 2 enlarge or limit the state's or department's authority 86 3 to: 86 4 a. Conduct audits or other review as provided 86 5 under the agreement and state law. 86 6 b. Provide records pursuant to its examination of 86 7 public records law, disclosure laws of individual 86 8 governmental agencies, or other regulations. 86 9 c. Prevent, consistent with state law, disclosures 86 10 of confidential taxpayer information. 86 11 d. Prevent, consistent with federal law, 86 12 disclosures or misuse of federal return information 86 13 obtained under a disclosure agreement with the 86 14 internal revenue service. 86 15 e. Collect, disclose, disseminate, or otherwise 86 16 use anonymous data for governmental purposes. 86 17 9. This privacy policy does not preclude the 86 18 certification of a certified service provider whose 86 19 privacy policy is more protective of confidential 86 20 taxpayer information or personally identifiable 86 21 information than is required by the agreement. 86 22 Sec. . NEW SECTION. 423.57 STATUTES 86 23 APPLICABLE. 86 24 The director shall administer this subchapter as it 86 25 relates to the taxes imposed in this chapter in the 86 26 same manner and subject to all the provisions of, and 86 27 all of the powers, duties, authority, and restrictions 86 28 contained in sections 423.14, 423.15, 423.16, 423.17, 86 29 423.18, 423.19, 423.20, 423.21, 423.22, 423.23, 86 30 423.24, 423.25, 423.28, 423.29, 423.31, 423.32, 86 31 423.33, 423.34, 423.35, 423.37, 423.38, 423.39, 86 32 423.40, 423.41, and 423.42, section 423.43, subsection 86 33 3, and sections 423.45, 423.46, and 423.47. 86 34 Sec. . NEW SECTION. 423.60 REMOTE SALES TAX 86 35 FUND – APPROPRIATIONS. 86 36 1. A remote sales tax fund is created as a 86 37 separate fund in the state treasury under the control 86 38 of the department of revenue and finance consisting of 86 39 the state sales and use tax revenues collected from 86 40 remote sales and deposited as provided in section 86 41 423.43, subsection 3. 86 42 2. There is appropriated from the remote sales tax 86 43 fund for the fiscal year beginning July 1, 2005, and 86 44 each succeeding fiscal year to the general fund of the 86 45 state the following: 86 46 a. The first sixty million dollars deposited into 86 47 the fund during each fiscal year. 86 48 b. An amount to offset the projected loss during 86 49 the fiscal year to the general fund of the state 86 50 resulting from a state tax relief Act enacted during 87 1 the period beginning four and one-half years prior to 87 2 the start of the fiscal year. However, any state tax 87 3 relief Act enacted prior to July 1, 2004, shall not be 87 4 covered under this subsection. 87 5 3. For purposes of subsection 2, "state tax relief 87 6 Act" means an Act that was projected by the 87 7 legislative fiscal bureau to result in a loss in 87 8 revenue to the general fund of the state of at least 87 9 five million dollars in the first full fiscal year 87 10 during which the Act is effective and that contains 87 11 any of the following: 87 12 a. A state sales or use tax exemption. 87 13 b. A deduction for any state tax. 87 14 c. A reduction in any state tax rate. 87 15 Sec. . 87 16 1. Sections 422.42 through 422.59, Code 2003, are repealed. 87 17 2. Chapter 423, Code 2003, is repealed. 87 18 COORDINATING AMENDMENTS 87 19 Sec. . Section 15.331A, Code 2003, is amended 87 20 to read as follows: 87 21 15.331A SALES, SERVICES, AND USE TAX REFUND – 87 22 CONTRACTOR OR SUBCONTRACTOR. 87 23 The eligible business or a supporting business 87 24 shall be entitled to a refund of the sales and use 87 25 taxes paid underchapters 422 andchapter 423 for gas, 87 26 electricity, water, or sewer utility services, goods, 87 27 wares, or merchandise, or on services rendered, 87 28 furnished, or performed to or for a contractor or 87 29 subcontractor and used in the fulfillment of a written 87 30 contract relating to the construction or equipping of 87 31 a facility within the economic development area of the 87 32 eligible business or a supporting business. Taxes 87 33 attributable to intangible property and furniture and 87 34 furnishings shall not be refunded. 87 35 To receive the refund a claim shall be filed by the 87 36 eligible business or a supporting business with the 87 37 department of revenue and finance as follows: 87 38 1. The contractor or subcontractor shall state 87 39 under oath, on forms provided by the department, the 87 40 amount of the sales of goods, wares, or merchandise or 87 41 services rendered, furnished, or performed including 87 42 water, sewer, gas, and electric utility services for 87 43 use in the economic development area upon which sales 87 44 or use tax has been paid prior to the project 87 45 completion, and shall file the forms with the eligible 87 46 business or supporting business before final 87 47 settlement is made. 87 48 2. The eligible business or a supporting business 87 49 shall, not more than one year after project 87 50 completion, make application to the department for any 88 1 refund of the amount of the sales and use taxes paid 88 2 pursuant to chapter422 or423 upon any goods, wares, 88 3 or merchandise, or services rendered, furnished, or 88 4 performed, including water, sewer, gas, and electric 88 5 utility services. The application shall be made in 88 6 the manner and upon forms to be provided by the 88 7 department, and the department shall audit the claim 88 8 and, if approved, issue a warrant to the eligible 88 9 business or supporting business in the amount of the 88 10 sales or use tax which has been paid to the state of 88 11 Iowa under a contract. A claim filed by the eligible 88 12 business or a supporting business in accordance with 88 13 this section shall not be denied by reason of a 88 14 limitation provision set forth in chapter 421, 422,or 88 15 423. 88 16 3. A contractor or subcontractor who willfully 88 17 makes a false report of tax paid under the provisions 88 18 of this section is guilty of a simple misdemeanor and 88 19 in addition is liable for the payment of the tax and 88 20 any applicable penalty and interest. 88 21 Sec. . Section 15.334A, Code 2003, is amended 88 22 to read as follows: 88 23 15.334A SALES AND USE TAX EXEMPTION. 88 24 An eligible business may claim an exemption from 88 25 sales and use taxation under section422.45423.3, 88 26 subsection2746, for property which is exempt from 88 27 taxation under section 15.334, notwithstanding the 88 28 requirements of section422.45423.3, subsection2788 29 46, or any other provision of the Code to the 88 30 contrary. 88 31 Sec. . Section 15A.9, subsections 5, 6, and 7, 88 32 Code 2003, are amended to read as follows: 88 33 5. PROPERTY TAX EXEMPTION. 88 34 a. All property, as defined in section 427A.1, 88 35 subsection 1, paragraphs "e" and "j", Code 1993, used 88 36 by the primary business or a supporting business and 88 37 located within the zone, shall be exempt from property 88 38 taxation for a period of twenty years beginning with 88 39 the year it is first assessed for taxation. In order 88 40 to be eligible for this exemption, the property shall 88 41 be acquired or leased by the primary business or a 88 42 supporting business or relocated by the primary 88 43 business or a supporting business to the zone from 88 44 outside the state prior to project completion. 88 45 b. Property which is exempt for property tax 88 46 purposes under this subsection is eligible for the 88 47 sales and use tax exemption under section422.4588 48 423.3, subsection2746, notwithstanding that 88 49 subsection or any other provision of the Code to the 88 50 contrary. 89 1 6. SALES, SERVICES, AND USE TAX REFUND. Taxes 89 2 paid pursuant to chapter422 or423 on thegross89 3receiptssales price or rental price of property 89 4 purchased or rented by the primary business or a 89 5 supporting business for use by the primary business or 89 6 a supporting business within the zone or on gas, 89 7 electricity, water, and sewer utility services prior 89 8 to project completion shall be refunded to the primary 89 9 business or supporting business if the item was 89 10 purchased or the service was performed or received 89 11 prior to project completion. Claims under this 89 12 section shall be submitted on forms provided by the 89 13 department of revenue and finance not later than six 89 14 months after project completion. The refund in this 89 15 subsection shall not apply to furniture or 89 16 furnishings, or intangible property. 89 17 7. SALES, SERVICES, AND USE TAX REFUND – 89 18 CONTRACTOR OR SUBCONTRACTOR. The primary business or 89 19 a supporting business shall be entitled to a refund of 89 20 the sales and use taxes paid underchapters 422 and89 21 chapter 423 for gas, electricity, water, or sewer 89 22 utility services, goods, wares, or merchandise, or on 89 23 services rendered, furnished, or performed to or for a 89 24 contractor or subcontractor and used in the 89 25 fulfillment of a written contract relating to the 89 26 construction or equipping of a facility within the 89 27 zone of the primary business or a supporting business. 89 28 Taxes attributable to intangible property and 89 29 furniture and furnishings shall not be refunded. 89 30 To receive the refund a claim shall be filed by the 89 31 primary business or a supporting business with the 89 32 department of revenue and finance as follows: 89 33 a. The contractor or subcontractor shall state 89 34 under oath, on forms provided by the department, the 89 35 amount of the sales of goods, wares, or merchandise or 89 36 services rendered, furnished, or performed including 89 37 water, sewer, gas, and electric utility services for 89 38 use in the zone upon which sales or use tax has been 89 39 paid prior to the project completion, and shall file 89 40 the forms with the primary business or supporting 89 41 business before final settlement is made. 89 42 b. The primary business or a supporting business 89 43 shall, not more than six months after project 89 44 completion, make application to the department for any 89 45 refund of the amount of the sales and use taxes paid 89 46 pursuant to chapter422 or423 upon any goods, wares, 89 47 or merchandise, or services rendered, furnished, or 89 48 performed, including water, sewer, gas, and electric 89 49 utility services. The application shall be made in 89 50 the manner and upon forms to be provided by the 90 1 department, and the department shall audit the claim 90 2 and, if approved, issue a warrant to the primary 90 3 business or supporting business in the amount of the 90 4 sales or use tax which has been paid to the state of 90 5 Iowa under a contract. A claim filed by the primary 90 6 business or a supporting business in accordance with 90 7 this subsection shall not be denied by reason of a 90 8 limitation provision set forth in chapter 421, 422, or 90 9 423. 90 10 c. A contractor or subcontractor who willfully 90 11 makes a false report of tax paid under the provisions 90 12 of this subsection is guilty of a simple misdemeanor 90 13 and in addition is liable for the payment of the tax 90 14 and any applicable penalty and interest. 90 15 Sec. . Section 28A.17, unnumbered paragraph 1, 90 16 Code 2003, is amended to read as follows: 90 17 If an authority is established as provided in 90 18 section 28A.6 and after approval of a referendum by a 90 19 simple majority of votes cast in each metropolitan 90 20 area in favor of the sales and services tax, the 90 21 governing board of a county in this state within a 90 22 metropolitan area which is part of the authority shall 90 23 impose, at the request of the authority, a local sales 90 24 and services tax at the rate of one-fourth of one 90 25 percent ongross receiptsthe sales price taxed by 90 26 this state underchapter 422, division IVsection 90 27 423.2, within the metropolitan area located in this 90 28 state. The referendum shall be called by resolution 90 29 of the board and shall be held as provided in section 90 30 28A.6 to the extent applicable. The ballot 90 31 proposition shall contain a statement as to the 90 32 specific purpose or purposes for which the revenues 90 33 shall be expended and the date of expiration of the 90 34 tax. The local sales and services tax shall be 90 35 imposed on the same basis, with the same exceptions, 90 36 and following the same administrative procedures as 90 37 provided for a county under sections 422B.8 and 90 38 422B.9. The amount of the sale, for the purposes of 90 39 determining the amount of the local sales and services 90 40 tax under this section, does not include the amount of 90 41 any local sales and services tax imposed under 90 42 sections 422B.8 and 422B.9. 90 43 Sec. . Section 29C.15, Code 2003, is amended to 90 44 read as follows: 90 45 29C.15 TAX-EXEMPT PURCHASES. 90 46 All purchases under the provisions of this chapter 90 47 shall be exempt from the taxes imposed by sections 90 48422.43423.2 and423.2423.5. 90 49 Sec. . Section 99E.10, subsection 1, paragraph 90 50 b, Code 2003, is amended to read as follows: 91 1 b. An amount equal to the product of the state 91 2 sales tax rate under section422.43423.2 multiplied 91 3 by the gross sales price of each ticket or share sold 91 4 shall be deducted as the sales tax on the sale of that 91 5 ticket or share, remitted to the treasurer of state 91 6 and deposited into the state general fund. 91 7 Sec. . Section 123.187, subsection 2, Code 91 8 2003, is amended to read as follows: 91 9 2. A winery licensed or permitted pursuant to laws 91 10 regulating alcoholic beverages in a state which 91 11 affords this state an equal reciprocal shipping 91 12 privilege may ship into this state by private common 91 13 carrier, to a person twenty-one years of age or older, 91 14 not more than eighteen liters of wine per month, for 91 15 consumption or use by the person. Such wine shall not 91 16 be resold. Shipment of wine pursuant to this 91 17 subsection is not subject to sales tax under section 91 18422.43423.2, use tax under section423.2423.5, or 91 19 the wine gallonage tax under section 123.183, and does 91 20 not require a refund value for beverage container 91 21 control purposes under chapter 455C. 91 22 Sec. . Section 262.54, Code 2003, is amended to 91 23 read as follows: 91 24 262.54 COMPUTER SALES. 91 25 Sales, by an institution under the control of the 91 26 board of regents, of computer equipment, computer 91 27 software, and computer supplies to students and 91 28 faculty at the institution are retail sales under 91 29 chapter422, division IV423. 91 30 Sec. . Section 303.9, subsection 2, Code 2003, 91 31 is amended to read as follows: 91 32 2. The department may sell mementos and other 91 33 items relating to Iowa history and historic sites on 91 34 the premises of property under control of the 91 35 department and at the state capitol. Notwithstanding 91 36 sections 18.12 and 18.16, the department may directly 91 37 and independently enter into rental and lease 91 38 agreements with private vendors for the purpose of 91 39 selling mementos. All fees and income produced by the 91 40 sales and rental or lease agreements shall be credited 91 41 to the account of the department. The mementos and 91 42 other items sold by the department or vendors under 91 43 this subsection are exempt from section 18.6.The91 44department is not a retailer under chapter 422 and the91 45sale of such mementos and other items by the91 46department is not a retail sale under chapter 422 and91 47is exempt from the sales tax.91 48 Sec. . Section 312.1, subsection 4, Code 2003, 91 49 is amended to read as follows: 91 50 4. To the extent provided in section423.2492 1 423.43, subsection 1, paragraph "b", from revenue 92 2 derived from the use tax, under chapter 423 on motor 92 3 vehicles, trailers, and motor vehicle accessories and 92 4 equipment. 92 5 Sec. . Section 312.2, subsections 14 and 16, 92 6 Code 2003, are amended to read as follows: 92 7 14. The treasurer of state, before making the 92 8 allotments provided for in this section, shall credit 92 9 monthly from the road use tax fund to the general fund 92 10 of the state from revenue credited to the road use tax 92 11 fund under section423.24423.43, subsection 1, 92 12 paragraph "b", an amount equal to one-twentieth of 92 13 eighty percent of the revenue from the operation of 92 14 section423.7423.26. 92 15 There is appropriated from the general fund of the 92 16 state for each fiscal year to the state department of 92 17 transportation the amount of revenues credited to the 92 18 general fund of the state during the fiscal year under 92 19 this subsection to be used for purposes of public 92 20 transit assistance under chapter 324A. 92 21 16. The treasurer of state, before making the 92 22 allotments provided for in this section, shall credit 92 23 monthly from the road use tax fund to the motorcycle 92 24 rider education fund established in section 321.180B, 92 25 an amount equal to one dollar per year of license 92 26 validity for each issued or renewed driver's license 92 27 which is valid for the operation of a motorcycle. 92 28 Moneys credited to the motorcycle rider education fund 92 29 under this subsection shall be taken from moneys 92 30 credited to the road use tax fund under section423.2492 31 423.43. 92 32 Sec. . Section 321.20, subsection 5, Code 2003, 92 33 is amended to read as follows: 92 34 5. The amount of tax to be paid under section 92 35423.7423.26. 92 36 Sec. . Section 321.24, subsections 1 and 3, 92 37 Code 2003, are amended to read as follows: 92 38 1. Upon receipt of the application for title and 92 39 payment of the required fees for a motor vehicle, 92 40 trailer, or semitrailer, the county treasurer or the 92 41 department shall, when satisfied as to the 92 42 application's genuineness and regularity, and, in the 92 43 case of a mobile home or manufactured home, that taxes 92 44 are not owing under chapter 435, issue a certificate 92 45 of title and, except for a mobile home or manufactured 92 46 home, a registration receipt, and shall file the 92 47 application, the manufacturer's or importer's 92 48 certificate, the certificate of title, or other 92 49 evidence of ownership, as prescribed by the 92 50 department. The registration receipt shall be 93 1 delivered to the owner and shall contain upon its face 93 2 the date issued, the name and address of the owner, 93 3 the registration number assigned to the vehicle, the 93 4 amount of the fee paid, the amount of tax paid 93 5 pursuant to section423.7423.26, the type of fuel 93 6 used, and a description of the vehicle as determined 93 7 by the department, and upon the reverse side a form 93 8 for notice of transfer of the vehicle. The name and 93 9 address of any lessee of the vehicle shall not be 93 10 printed on the registration receipt or certificate of 93 11 title. Up to three owners may be listed on the 93 12 registration receipt and certificate of title. 93 13 3. The certificate of title shall contain upon its 93 14 face the identical information required upon the face 93 15 of the registration receipt. In addition, the 93 16 certificate of title shall contain a statement of the 93 17 owner's title, the title number assigned to the owner 93 18 or owners of the vehicle, the amount of tax paid 93 19 pursuant to section423.7423.26, the name and address 93 20 of the previous owner, and a statement of all security 93 21 interests and encumbrances as shown in the 93 22 application, upon the vehicle described, including the 93 23 nature of the security interest, date of notation, and 93 24 name and address of the secured party. 93 25 Sec. . Section 321.34, subsection 7, paragraph 93 26 c, Code 2003, is amended to read as follows: 93 27 c. The fees for a collegiate registration plate 93 28 are as follows: 93 29 (1) A registration fee of twenty-five dollars. 93 30 (2) A special collegiate registration fee of 93 31 twenty-five dollars. 93 32 These fees are in addition to the regular annual 93 33 registration fee. The fees collected by the director 93 34 under this subsection shall be paid monthly to the 93 35 treasurer of state and credited by the treasurer of 93 36 state to the road use tax fund. Notwithstanding 93 37 section423.24423.43 and prior to the revenues being 93 38 credited to the road use tax fund under section423.2493 39 423.43, subsection 1, paragraph "b", the treasurer of 93 40 state shall credit monthly from those revenues 93 41 respectively, to Iowa state university of science and 93 42 technology, the university of northern Iowa, and the 93 43 state university of Iowa, the amount of the special 93 44 collegiate registration fees collected in the previous 93 45 month for collegiate registration plates designed for 93 46 the university. The moneys credited are appropriated 93 47 to the respective universities to be used for 93 48 scholarships for students attending the universities. 93 49 Sec. . Section 321.34, subsection 11, paragraph 93 50 c, Code 2003, is amended to read as follows: 94 1 c. The special natural resources fee for letter 94 2 number designated natural resources plates is thirty- 94 3 five dollars. The fee for personalized natural 94 4 resources plates is forty-five dollars which shall be 94 5 paid in addition to the special natural resources fee 94 6 of thirty-five dollars. The fees collected by the 94 7 director under this subsection shall be paid monthly 94 8 to the treasurer of state and credited to the road use 94 9 tax fund. Notwithstanding section423.24423.43, and 94 10 prior to the crediting of revenues to the road use tax 94 11 fund under section423.24423.43, subsection 1, 94 12 paragraph "b", the treasurer of state shall credit 94 13 monthly from those revenues to the Iowa resources 94 14 enhancement and protection fund created pursuant to 94 15 section 455A.18, the amount of the special natural 94 16 resources fees collected in the previous month for the 94 17 natural resources plates. 94 18 Sec. . Section 321.34, subsection 11A, 94 19 paragraph c, Code 2003, is amended to read as follows: 94 20 c. The special fee for letter number designated 94 21 love our kids plates is thirty-five dollars. The fee 94 22 for personalized love our kids plates is twenty-five 94 23 dollars, which shall be paid in addition to the 94 24 special love our kids fee of thirty-five dollars. The 94 25 fees collected by the director under this subsection 94 26 shall be paid monthly to the treasurer of state and 94 27 credited to the road use tax fund. Notwithstanding 94 28 section423.24423.43, and prior to the crediting of 94 29 revenues to the road use tax fund under section423.2494 30 423.43, subsection 1, paragraph "b", the treasurer of 94 31 state shall transfer monthly from those revenues to 94 32 the Iowa department of public health the amount of the 94 33 special fees collected in the previous month for the 94 34 love our kids plates. Notwithstanding section 8.33, 94 35 moneys transferred under this subsection shall not 94 36 revert to the general fund of the state. 94 37 Sec. . Section 321.34, subsection 11B, 94 38 paragraph c, Code 2003, is amended to read as follows: 94 39 c. The special fee for letter number designated 94 40 motorcycle rider education plates is thirty-five 94 41 dollars. The fee for personalized motorcycle rider 94 42 education plates is twenty-five dollars, which shall 94 43 be paid in addition to the special motorcycle rider 94 44 education fee of thirty-five dollars. The fees 94 45 collected by the director under this subsection shall 94 46 be paid monthly to the treasurer of state and credited 94 47 to the road use tax fund. Notwithstanding section 94 48423.24423.43, and prior to the crediting of revenues 94 49 to the road use tax fund under section423.24423.43, 94 50 subsection 1, paragraph "b", the treasurer of state 95 1 shall transfer monthly from those revenues to the 95 2 department for use in accordance with section 95 3 321.180B, subsection 6, the amount of the special fees 95 4 collected in the previous month for the motorcycle 95 5 rider education plates. 95 6 Sec. . Section 321.34, subsection 13, paragraph 95 7 d, Code 2003, is amended to read as follows: 95 8 d. A state agency may submit a request to the 95 9 department recommending a special registration plate. 95 10 The alternate fee for letter number designated plates 95 11 is thirty-five dollars with a ten dollar annual 95 12 special renewal fee. The fee for personalized plates 95 13 is twenty-five dollars which is in addition to the 95 14 alternative fee of thirty-five dollars with an annual 95 15 personalized plate renewal fee of five dollars which 95 16 is in addition to the special renewal fee of ten 95 17 dollars. The alternate fees are in addition to the 95 18 regular annual registration fee. The alternate fees 95 19 collected under this paragraph shall be paid monthly 95 20 to the treasurer of state and credited to the road use 95 21 tax fund. Notwithstanding section423.24423.43, and 95 22 prior to the crediting of the revenues to the road use 95 23 tax fund under section423.24423.43, subsection 1, 95 24 paragraph "b", the treasurer of state shall credit 95 25 monthly the amount of the alternate fees collected in 95 26 the previous month to the state agency that 95 27 recommended the special registration plate. 95 28 Sec. . Section 321.34, subsection 21, paragraph 95 29 c, Code 2003, is amended to read as follows: 95 30 c. The special fees collected by the director 95 31 under this subsection shall be paid monthly to the 95 32 treasurer of state and credited to the road use tax 95 33 fund. Notwithstanding section423.24423.43, and 95 34 prior to the crediting of revenues to the road use tax 95 35 fund under section423.24423.43, subsection 1, 95 36 paragraph "b", the treasurer of state shall credit 95 37 monthly to the Iowa heritage fund created under 95 38 section 303.9A the amount of the special fees 95 39 collected in the previous month for the Iowa heritage 95 40 plates. 95 41 Sec. . Section 321.34, subsection 22, paragraph 95 42 b, Code 2003, is amended to read as follows: 95 43 b. The special school transportation fee for 95 44 letter number designated education plates is thirty- 95 45 five dollars. The fee for personalized education 95 46 plates is twenty-five dollars, which shall be paid in 95 47 addition to the special school transportation fee of 95 48 thirty-five dollars. The annual special school 95 49 transportation fee is ten dollars for letter number 95 50 designated registration plates and is fifteen dollars 96 1 for personalized registration plates which shall be 96 2 paid in addition to the regular annual registration 96 3 fee. The fees collected by the director under this 96 4 subsection shall be paid monthly to the treasurer of 96 5 state and credited to the road use tax fund. 96 6 Notwithstanding section423.24423.43, and prior to 96 7 the crediting of revenues to the road use tax fund 96 8 under section423.24423.43, subsection 1, paragraph 96 9 "b", the treasurer of state shall transfer monthly 96 10 from those revenues to the school budget review 96 11 committee in accordance with section 257.31, 96 12 subsection 17, the amount of the special school 96 13 transportation fees collected in the previous month 96 14 for the education plates. 96 15 Sec. . Section 321F.9, Code 2003, is amended to 96 16 read as follows: 96 17 321F.9 OPTION TO PURCHASE – DEALER'S LICENSE. 96 18 Any person engaged in business in this state shall 96 19 not enter into any agreement for the use of a motor 96 20 vehicle under the terms of whichsuchthat person 96 21 grants to another an option to purchasesuchthe motor 96 22 vehicle without first having obtained a motor vehicle 96 23 dealer's license under the provisions of chapter 322, 96 24 and all sales of motor vehicles under such options 96 25 shall be subject to sales or use taxes imposed under 96 26 the provisions ofchapters 422 andchapter 423. 96 27 Nothing contained in this section shall require such 96 28 person to have a place of business as provided by 96 29 section 322.6, subsection 8. 96 30 Sec. . Section 327I.26, Code 2003, is amended 96 31 to read as follows: 96 32 327I.26 APPROPRIATION TO AUTHORITY. 96 33 Notwithstanding section423.24423.43, and prior to 96 34 the application of section423.24423.43, subsection 96 35 1, paragraph "b", there shall be deposited into the 96 36 general fund of the state and is appropriated to the 96 37 authority from eighty percent of the revenues derived 96 38 from the operation of section423.7423.26, the 96 39 amounts certified by the authority under section 96 40 327I.25. However, the total amount deposited into the 96 41 general fund and appropriated to the Iowa railway 96 42 finance authority under this section shall not exceed 96 43 two million dollars annually. Moneys appropriated to 96 44 the Iowa railway finance authority under this section 96 45 are appropriated only for the payment of principal and 96 46 interest on obligations or the payment of leases 96 47 guaranteed by the authority as provided under section 96 48 327I.25. 96 49 Sec. . Section 328.26, unnumbered paragraph 2, 96 50 Code 2003, is amended to read as follows: 97 1 When an aircraft is registered to a person for the 97 2 first time the fee submitted to the department shall 97 3 include the tax imposed by section422.43423.2 or 97 4 section423.2423.5 or evidence of the exemption of 97 5 the aircraft from the tax imposed under section422.4397 6 423.2 or423.2423.5. 97 7 Sec. . Section 331.557, subsection 3, Code 97 8 2003, is amended to read as follows: 97 9 3. Collect the use tax on vehicles subject to 97 10 registration as provided in sections423.6, 423.7, and97 11423.7A423.14, 423.26, and 423.27. 97 12 Sec. . Section 357A.15, unnumbered paragraph 2, 97 13 Code 2003, is amended to read as follows: 97 14 A rural water district organized under chapter 504A 97 15 shall receive a refund of sales or use taxes upon 97 16 submitting an application to the department of revenue 97 17 and finance forsuchthe refund of taxes imposed upon 97 18 thegross receiptssales price of all sales of 97 19 building materials, supplies, or equipment sold to a 97 20 contractor or used in the fulfillment of a written 97 21 contract for the construction of facilities forsuch97 22 the rural water district to the same extent as a rural 97 23 water district organized under this chapter may obtain 97 24 a refund under section422.45423.4, subsection71. 97 25 Sec. . Section 421.10, Code 2003, is amended to 97 26 read as follows: 97 27 421.10 APPEAL PERIOD – APPLICABILITY. 97 28 The appeal period for revision of assessment of 97 29 tax, interest, and penalties set out under section 97 30 422.28,422.54423.37, 437A.9, 437A.22, 452A.64, 97 31 453A.29, or 453A.46 applies to appeals to notices from 97 32 the department denying changes in filing methods, 97 33 denying refund claims, and denying portions of refund 97 34 claims for the tax covered by that section, and 97 35 notices of any department action directed to a 97 36 specific taxpayer, other than licensing, which 97 37 involves a calculation. 97 38 Sec. . Section 421.17, subsection 22B, Code 97 39 2003, is amended to read as follows: 97 40 22B.EnterTo enter into agreements or compacts 97 41 with remote sellers, retailers, or third-party 97 42 providers for the voluntary collection of Iowa sales 97 43 or use taxes attributable to sales into Iowaand to97 44enter. The director has the authority to enter into 97 45 and perform all duties required of the office of 97 46 director by multistate agreements or compacts that 97 47 provide for thevoluntarycollection of sales and use 97 48 taxes, including joint audits with other states or 97 49 audits on behalf of other states. The agreements or 97 50 compacts shall generally conform to the provisions of 98 1 Iowa sales and use tax statutes. All fees for 98 2 services, reimbursements, remuneration, incentives, 98 3 and costs incurred by the department associated with 98 4 these agreements or compacts may be paid or reimbursed 98 5 from the additional revenue generated. An amount is 98 6 appropriated from amounts generated to pay or 98 7 reimburse all costs associated with this subsection. 98 8 Persons entering into an agreement or compact with the 98 9 department pursuant to this subsection are subject to 98 10 the requirements and penalties of the confidentiality 98 11 laws of this state regarding tax information. 98 12 Notwithstanding any other provisions of law, the 98 13 contract, agreement, or compact shall provide for the 98 14 registration, collection, report, and verification of 98 15 amounts subject to this subsection. 98 16 Sec. . Section 421.17, subsection 29, paragraph 98 17 j, Code 2003, is amended to read as follows: 98 18 j. The department's existing right to credit 98 19 against tax due or to become due under section 422.73 98 20 or 423.47 is not to be impaired by a right granted to 98 21 or a duty imposed upon the department or other state 98 22 agency by this subsection. This subsection is not 98 23 intended to impose upon the department any additional 98 24 requirement of notice, hearing, or appeal concerning 98 25 the right to credit against tax due under section 98 26 422.73 or 423.47. 98 27 Sec. . Section 421.17, subsection 34, paragraph 98 28 i, Code 2003, is amended to read as follows: 98 29 i. The director may distribute to credit reporting 98 30 entities and for publication the names, addresses, and 98 31 amounts of indebtedness owed to or being collected by 98 32 the state if the indebtedness is subject to the 98 33 centralized debt collection procedure established in 98 34 this subsection. The director shall adopt rules to 98 35 administer this paragraph, and the rules shall provide 98 36 guidelines by which the director shall determine which 98 37 names, addresses, and amounts of indebtedness may be 98 38 distributed for publication. The director may 98 39 distribute information for publication pursuant to 98 40 this paragraph, notwithstanding sections 422.20, 98 41 422.72, and423.23423.42, or any other provision of 98 42 state law to the contrary pertaining to 98 43 confidentiality of information. 98 44 Sec. . Section 421.26, Code 2003, is amended to 98 45 read as follows: 98 46 421.26 PERSONAL LIABILITY FOR TAX DUE. 98 47 If a licensee or other person under section 98 48 452A.65, a retailer or purchaser under chapter 422A or 98 49 422B, or section422.52423.31 or 423.33, or a 98 50 retailer or purchaser under section423.13423.32 or a 99 1 user under section423.14423.34 fails to pay a tax 99 2 under those sections when due, an officer of a 99 3 corporation or association, notwithstanding sections 99 4 490A.601 and 490A.602, a member or manager of a 99 5 limited liability company, or a partner of a 99 6 partnership, having control or supervision of or the 99 7 authority for remitting the tax payments and having a 99 8 substantial legal or equitable interest in the 99 9 ownership of the corporation, association, limited 99 10 liability company, or partnership, who has 99 11 intentionally failed to pay the tax is personally 99 12 liable for the payment of the tax, interest, and 99 13 penalty due and unpaid. However, this section shall 99 14 not apply to taxes on accounts receivable. The 99 15 dissolution of a corporation, association, limited 99 16 liability company, or partnership shall not discharge 99 17 a person's liability for failure to remit the tax due. 99 18 Sec. . Section 421.28, Code 2003, is amended to 99 19 read as follows: 99 20 421.28 EXCEPTIONS TO SUCCESSOR LIABILITY. 99 21 The immediate successor to a licensee's or 99 22 retailer's business or stock of goods under chapter 99 23 422A or 422B, or section422.52, 423.13, 423.14,99 24 423.33 or 452A.65, is not personally liable for the 99 25 amount of delinquent tax, interest, or penalty due and 99 26 unpaid if the immediate successor shows that the 99 27 purchase of the business or stock of goods was made in 99 28 good faith that no delinquent tax, interest, or 99 29 penalty was due and unpaid. For purposes of this 99 30 section the immediate successor shows good faith by 99 31 evidence that the department had provided the 99 32 immediate successor with a certified statement that no 99 33 delinquent tax, interest, or penalty is unpaid, or 99 34 that the immediate successor had taken in good faith a 99 35 certified statement from the licensee, retailer, or 99 36 seller that no delinquent tax, interest, or penalty is 99 37 unpaid. When requested to do so by a person with whom 99 38 the licensee or retailer is negotiating the sale of 99 39 the business or stock of goods, the director of 99 40 revenue and finance shall, upon being satisfied that 99 41 such a situation exists, inform that person as to the 99 42 amount of unpaid delinquent tax, interest, or penalty 99 43 due by the licensee or the retailer. The giving of 99 44 the information under this circumstance is not a 99 45 violation of section 422.20, 422.72, or 452A.63. 99 46 Sec. . Section 421B.11, unnumbered paragraph 3, 99 47 Code 2003, is amended to read as follows: 99 48 Judicial review of the actions of the director may 99 49 be sought in accordance with the terms of the Iowa 99 50 administrative procedure Act, and section422.55100 1 423.38. 100 2 Sec. . Section 422.7, subsection 21, paragraph 100 3 a, subparagraph (1), unnumbered paragraph 1, Code 100 4 2003, is amended to read as follows: 100 5 Net capital gain from the sale of real property 100 6 used in a business, in which the taxpayer materially 100 7 participated for ten years, as defined in section 100 8 469(h) of the Internal Revenue Code, and which has 100 9 been held for a minimum of ten years, or from the sale 100 10 of a business, as defined in section422.42423.1, in 100 11 which the taxpayer was employed or in which the 100 12 taxpayer materially participated for ten years, as 100 13 defined in section 469(h) of the Internal Revenue 100 14 Code, and which has been held for a minimum of ten 100 15 years. The sale of a business means the sale of all 100 16 or substantially all of the tangible personal property 100 17 or service of the business. 100 18 Sec. . Section 422.73, subsection 1, Code 2003, 100 19 is amended by striking the subsection. 100 20 Sec. . Section 422A.1, unnumbered paragraphs 1, 100 21 3, 7, and 8, Code 2003, are amended to read as 100 22 follows: 100 23 A city or county may impose by ordinance of the 100 24 city council or by resolution of the board of 100 25 supervisors a hotel and motel tax, at a rate not to 100 26 exceed seven percent, which shall be imposed in 100 27 increments of one or more full percentage points upon 100 28 thegross receiptssales price from the renting of 100 29 sleeping rooms, apartments, or sleeping quarters in a 100 30 hotel, motel, inn, public lodging house, rooming 100 31 house, manufactured or mobile home which is tangible 100 32 personal property, or tourist court, or in any place 100 33 where sleeping accommodations are furnished to 100 34 transient guests for rent, whether with or without 100 35 meals; except thegross receiptssales price from the 100 36 renting of sleeping rooms in dormitories and in 100 37 memorial unions at all universities and colleges 100 38 located in the state of Iowa and the guests of a 100 39 religious institution if the property is exempt under 100 40 section 427.1, subsection 8, and the purpose of 100 41 renting is to provide a place for a religious retreat 100 42 or function and not a place for transient guests 100 43 generally. The tax when imposed by a city shall apply 100 44 only within the corporate boundaries of that city and 100 45 when imposed by a county shall apply only outside 100 46 incorporated areas within that county. "Renting" and 100 47 "rent" include any kind of direct or indirect charge 100 48 for such sleeping rooms, apartments, or sleeping 100 49 quarters, or their use. However, the tax does not 100 50 apply to thegross receiptssales price from the 101 1 renting of a sleeping room, apartment, or sleeping 101 2 quarters while rented by the same person for a period 101 3 of more than thirty-one consecutive days. 101 4 A local hotel and motel tax shall be imposed on 101 5 January 1, April 1, July 1, or October 1, following 101 6 the notification of the director of revenue and 101 7 finance. Once imposed, the tax shall remain in effect 101 8 at the rate imposed for a minimum of one year. A 101 9 local hotel and motel tax shall terminate only on 101 10 March 31, June 30, September 30, or December 31. At 101 11 leastforty-fivesixty days prior to the tax being 101 12 effective or prior to a revision in the tax rate, or 101 13 prior to the repeal of the tax, a city or county shall 101 14 provide notice by mail of such action to the director 101 15 of revenue and finance. 101 16 No tax permit other than the state sales tax permit 101 17 required under section422.53423.36 may be required 101 18 by local authorities. 101 19 The tax levied shall be in addition to any state 101 20 sales tax imposed under section422.43423.2. Section 101 21 422.25, subsection 4, sections 422.30,422.48 to101 22422.52, 422.54 to 422.58,422.67, and 422.68, section 101 23 422.69, subsection 1,andsections 422.70 to 422.75, 101 24 section 423.14, subsection 1, and sections 423.23, 101 25 423.24, 423.25, 423.31, 423.33, 423.35, 423.37 to 101 26 423.42, and 423.47, consistent with the provisions of 101 27 this chapter, apply with respect to the taxes 101 28 authorized under this chapter, in the same manner and 101 29 with the same effect as if the hotel and motel taxes 101 30 were retail sales taxes within the meaning of those 101 31 statutes. Notwithstanding this paragraph, the 101 32 director shall provide for quarterly filing of returns 101 33as prescribed in section 422.51and for other than 101 34 quarterly filing of returns both as prescribed in 101 35 section422.51, subsection 2423.31. The director may 101 36 require all persons, as defined in section422.42101 37 423.1, who are engaged in the business of deriving 101 38gross receiptsany sales price subject to tax under 101 39 this chapter, to register with the department. 101 40 Sec. . Section 422B.8, Code 2003, is amended to 101 41 read as follows: 101 42 422B.8 LOCAL SALES AND SERVICES TAX. 101 43 A local sales and services tax at the rate of not 101 44 more than one percent may be imposed by a county on 101 45 thegross receiptssales price taxed by the state 101 46 under chapter422423,division IVsubchapter II. A 101 47 local sales and services tax shall be imposed on the 101 48 same basis as the state sales and services tax or in 101 49 the case of the use of natural gas, natural gas 101 50 service, electricity, or electric service on the same 102 1 basis as the state use tax and shall not be imposed on 102 2 the sale of any property or on any service not taxed 102 3 by the state, except the tax shall not be imposed on 102 4 thegross receiptssales price from the sale of motor 102 5 fuel or special fuel as defined in chapter 452A which 102 6 is consumed for highway use or in watercraft or 102 7 aircraft if the fuel tax is paid on the transaction 102 8 and a refund has not or will not be allowed, on the 102 9gross receiptssales price from the rental of rooms, 102 10 apartments, or sleeping quarters which are taxed under 102 11 chapter 422A during the period the hotel and motel tax 102 12 is imposed, on thegross receiptssales price from the 102 13 sale of equipment by the state department of 102 14 transportation, on thegross receiptssales price from 102 15 the sale of self-propelled building equipment, pile 102 16 drivers, motorized scaffolding, or attachments 102 17 customarily drawn or attached to self-propelled 102 18 building equipment, pile drivers, and motorized 102 19 scaffolding, including auxiliary attachments which 102 20 improve the performance, safety, operation, or 102 21 efficiency of the equipment and replacement parts and 102 22 are directly and primarily used by contractors, 102 23 subcontractors, and builders for new construction, 102 24 reconstruction, alterations, expansion, or remodeling 102 25 of real property or structures, and on thegross102 26receiptssales price from the sale of a lottery ticket 102 27 or share in a lottery game conducted pursuant to 102 28 chapter 99E and except the tax shall not be imposed on 102 29 thegross receiptssales price from the sale or use of 102 30 natural gas, natural gas service, electricity, or 102 31 electric service in a city or county where thegross102 32receiptssales price from the sale of natural gas or 102 33 electric energy are subject to a franchise fee or user 102 34 fee during the period the franchise or user fee is 102 35 imposed. A local sales and services tax is applicable 102 36 to transactions within those incorporated and 102 37 unincorporated areas of the county where it is imposed 102 38 and shall be collected by all persons required to 102 39 collect stategross receiptssales taxes. However, a 102 40 person required to collect state retail sales tax 102 41 under chapter422423,division IVsubchapter V or VI, 102 42 is not required to collect local sales and services 102 43 tax on transactions delivered within the area where 102 44 the local sales and services tax is imposed unless the 102 45 person has physical presence in that taxing area. All 102 46 cities contiguous to each other shall be treated as 102 47 part of one incorporated area and the tax would be 102 48 imposed in each of those contiguous cities only if the 102 49 majority of those voting in the total area covered by 102 50 the contiguous cities favor its imposition. 103 1 The amount of the sale, for purposes of determining 103 2 the amount of the local sales and services tax, does 103 3 not include the amount of any stategross receipts103 4taxessales tax. 103 5 A tax permit other than the state sales tax permit 103 6 required under section422.53 or 423.10423.36 shall 103 7 not be required by local authorities. 103 8 If a local sales and services tax is imposed by a 103 9 county pursuant to this chapter, a local excise tax at 103 10 the same rate shall be imposed by the county on the 103 11 purchase price of natural gas, natural gas service, 103 12 electricity, or electric service subject to tax under 103 13 chapter 423, subchapter III, and not exempted from tax 103 14 by any provision of chapter 423, subchapter III. The 103 15 local excise tax is applicable only to the use of 103 16 natural gas, natural gas service, electricity, or 103 17 electric service within those incorporated and 103 18 unincorporated areas of the county where it is imposed 103 19 and, except as otherwise provided in this chapter, 103 20 shall be collected and administered in the same manner 103 21 as the local sales and services tax. For purposes of 103 22 this chapter, "local sales and services tax" shall 103 23 also include the local excise tax. 103 24 Sec. . Section 422B.9, subsections 1 and 2, 103 25 Code 2003, are amended to read as follows: 103 26 1. a. A local sales and services tax shall be 103 27 imposed either January 1 or July 1 following the 103 28 notification of the director of revenue and finance 103 29 but not sooner than ninety days following the 103 30 favorable election and not sooner than sixty days 103 31 following notice to sellers, as defined in section 103 32 423.1. However, a jurisdiction which has voted to 103 33 continue imposition of the tax may impose that tax 103 34 without repeal of the prior tax. 103 35 b. A local sales and services tax shall be 103 36 repealed only on June 30 or December 31 but not sooner 103 37 than ninety days following the favorable election if 103 38 one is held. However, a local sales and services tax 103 39 shall not be repealed before the tax has been in 103 40 effect for one year. At least forty days before the 103 41 imposition or repeal of the tax, a county shall 103 42 provide notice of the action by certified mail to the 103 43 director of revenue and finance. 103 44 c. The imposition of or a rate change for a local 103 45 sales and service tax shall not be applied to 103 46 purchases from a printed catalog wherein a purchaser 103 47 computes the local tax based on rates published in the 103 48 catalog unless a minimum of one hundred twenty days' 103 49 notice of the imposition or rate change has been given 103 50 to the seller from the catalog and the first day of a 104 1 calendar quarter has occurred on or after the one 104 2 hundred twentieth day. 104 3c.d. If a local sales and services tax has been 104 4 imposed prior to April 1, 2000, and at the time of the 104 5 election a date for repeal was specified on the 104 6 ballot, the local sales and services tax may be 104 7 repealed on that date, notwithstanding paragraph "b". 104 8 2. a. The director of revenue and finance shall 104 9 administer a local sales and services tax as nearly as 104 10 possible in conjunction with the administration of 104 11 stategross receiptssales tax laws. The director 104 12 shall provide appropriate forms or provide on the 104 13 regular state tax forms for reporting local sales and 104 14 services tax liability. 104 15 b. The ordinance of a county board of supervisors 104 16 imposing a local sales and services tax shall adopt by 104 17 reference the applicable provisions of the appropriate 104 18 sections ofchapter 422, division IV, andchapter 423. 104 19 All powers and requirements of the director to 104 20 administer the stategross receiptssales tax law and 104 21 use tax law are applicable to the administration of a 104 22 local sales and services tax law and the local excise 104 23 tax, including but not limited to, the provisions of 104 24 section 422.25, subsection 4, sections 422.30,422.48104 25to 422.52, 422.54 to 422.58,422.67, and 422.68, 104 26 section 422.69, subsection 1, sections 422.70 to 104 27 422.75,423.6, subsections 2 to 4, and sections 423.11104 28to 423.18, and 423.21section 423.14, subsection 1 and 104 29 subsection 2, paragraphs "b" through "e", and sections 104 30 423.15, 423.23, 423.24, 423.25, 423.31 to 423.35, 104 31 423.37 to 423.42, 423.46, and 423.47. Local officials 104 32 shall confer with the director of revenue and finance 104 33 for assistance in drafting the ordinance imposing a 104 34 local sales and services tax. A certified copy of the 104 35 ordinance shall be filed with the director as soon as 104 36 possible after passage. 104 37 c. Frequency of deposits and quarterly reports of 104 38 a local sales and services tax with the department of 104 39 revenue and finance are governed by the tax provisions 104 40 in section422.52423.31. Local tax collections shall 104 41 not be included in computation of the total tax to 104 42 determine frequency of filing under section422.52104 43 423.31. 104 44 d. The director shall apply a boundary change of a 104 45 county or city imposing or collecting the local sales 104 46 and service tax to the imposition or collection of 104 47 that tax only on the first day of a calendar quarter 104 48 which occurs sixty days or more after the director has 104 49 given notice of the boundary change to sellers. 104 50 Sec. . Section 422C.2, subsections 4 and 6, 105 1 Code 2003, are amended to read as follows: 105 2 4. "Person" means person as defined in section 105 3422.42423.1. 105 4 6. "Rental price" means the consideration for 105 5 renting an automobile valued in money, and means the 105 6 same as"gross taxable services""sales price" as 105 7 defined in section422.42423.1. 105 8 Sec. . Section 422C.3, Code 2003, is amended to 105 9 read as follows: 105 10 422C.3 TAX ON RENTAL OF AUTOMOBILES. 105 11 1. A tax of five percent is imposed upon the 105 12 rental price of an automobile if the rental 105 13 transaction is subject to the sales and services tax 105 14 under chapter422423,division IVsubchapter II, or 105 15 the use tax under chapter 423, subchapter III. The 105 16 tax shall not be imposed on any rental transaction not 105 17 taxable under the state sales and services tax, as 105 18 provided in section422.45423.3, or the state use 105 19 tax, as provided in section423.4423.6, on automobile 105 20 rental receipts. 105 21 2. The lessor shall collect the tax by adding the 105 22 tax to the rental price of the automobile. 105 23 3. The tax, when collected, shall be stated as a 105 24 distinct item separate and apart from the rental price 105 25 of the automobile and the sales and services tax 105 26 imposed under chapter422423,division IVsubchapter 105 27 II, or the use tax imposed under chapter 423, 105 28 subchapter III. 105 29 Sec. . Section 422C.4, Code 2003, is amended to 105 30 read as follows: 105 31 422C.4 ADMINISTRATION AND ENFORCEMENT. 105 32 All powers and requirements of the director of 105 33 revenue and finance to administer the stategross105 34receiptssales tax law under chapter422, division IV,105 35 423 are applicable to the administration of the tax 105 36 imposed under section 422C.3, including but not 105 37 limited to section 422.25, subsection 4, sections 105 38 422.30,422.48 through 422.52, 422.54 through 422.58,105 39 422.67, and 422.68, section 422.69, subsection 1,and105 40 sections 422.70 through 422.75, section 423.14, 105 41 subsection 1, and sections 423.15, 423.23, 423.24, 105 42 423.25, 423.31, 423.33, 423.35 and 423.37 through 105 43 423.42, 423.45, 423.46, and 423.47. However, as an 105 44 exception to the powers specified in section422.52,105 45subsection 1423.31, the director shall only require 105 46 the filing of quarterly reports. 105 47 Sec. . Section 422E.1, subsection 1, is amended 105 48 to read as follows: 105 49 1. A local sales and services tax for school 105 50 infrastructure purposes may be imposed by a county on 106 1 behalf of school districts as provided in this 106 2 chapter. 106 3 If a local sales and services tax for school 106 4 infrastructure is imposed by a county pursuant to this 106 5 chapter, a local excise tax for school infrastructure 106 6 at the same rate shall be imposed by the county on the 106 7 purchase price of natural gas, natural gas service, 106 8 electricity, or electric service subject to tax under 106 9 chapter 423, subchapter III, and not exempted from tax 106 10 by any provision of chapter 423, subchapter III. The 106 11 local excise tax for school infrastructure is 106 12 applicable only to the use of natural gas, natural gas 106 13 service, electricity, or electric service within those 106 14 incorporated and unincorporated areas of the county 106 15 where it is imposed and, except as otherwise provided 106 16 in this chapter, shall be collected and administered 106 17 in the same manner as the local sales and services tax 106 18 for school infrastructure. For purposes of this 106 19 chapter, "local sales and services tax for school 106 20 infrastructure" shall also include the local excise 106 21 tax for school infrastructure. 106 22 Sec. . Section 422E.3, subsections 1, 2, and 3, 106 23 Code 2003, are amended to read as follows: 106 24 1. If a majority of those voting on the question 106 25 of imposition of a local sales and services tax for 106 26 school infrastructure purposes favors imposition of 106 27 the tax, the tax shall be imposed by the county board 106 28 of supervisors within the county pursuant to section 106 29 422E.2, at the rate specified for a ten-year duration 106 30 on thegross receiptssales price taxed by the state 106 31 under chapter422423,division IVsubchapter II. 106 32 2. The tax shall be imposed on the same basis as 106 33 the state sales and services tax or in the case of the 106 34 use of natural gas, natural gas service, electricity, 106 35 or electric service on the same basis as the state use 106 36 tax and shall not be imposed on the sale of any 106 37 property or on any service not taxed by the state, 106 38 except the tax shall not be imposed on thegross106 39receiptssales price from the sale of motor fuel or 106 40 special fuel as defined in chapter 452A which is 106 41 consumed for highway use or in watercraft or aircraft 106 42 if the fuel tax is paid on the transaction and a 106 43 refund has not or will not be allowed, on thegross106 44receiptssales price from the rental of rooms, 106 45 apartments, or sleeping quarters which are taxed under 106 46 chapter 422A during the period the hotel and motel tax 106 47 is imposed, on thegross receiptssales price from the 106 48 sale of equipment by the state department of 106 49 transportation, on thegross receiptssales price from 106 50 the sale of self-propelled building equipment, pile 107 1 drivers, motorized scaffolding, or attachments 107 2 customarily drawn or attached to self-propelled 107 3 building equipment, pile drivers, and motorized 107 4 scaffolding, including auxiliary attachments which 107 5 improve the performance, safety, operation, or 107 6 efficiency of the equipment, and replacement parts and 107 7 are directly and primarily used by contractors, 107 8 subcontractors, and builders for new construction, 107 9 reconstruction, alterations, expansion, or remodeling 107 10 of real property or structures, and on thegross107 11receiptssales price from the sale of a lottery ticket 107 12 or share in a lottery game conducted pursuant to 107 13 chapter 99E and except the tax shall not be imposed on 107 14 thegross receiptssales price from the sale or use of 107 15 natural gas, natural gas service, electricity, or 107 16 electric service in a city or county where thegross107 17receiptssales price from the sale of natural gas or 107 18 electric energy are subject to a franchise fee or user 107 19 fee during the period the franchise or user fee is 107 20 imposed. 107 21 3. The tax is applicable to transactions within 107 22 the county where it is imposed and shall be collected 107 23 by all persons required to collect stategross107 24receiptssales or local excise taxes. However, a 107 25 person required to collect stateretailsales tax 107 26 under chapter422, division IV,423 is not required to 107 27 collect local sales and services tax on transactions 107 28 delivered within the area where the local sales and 107 29 services tax is imposed unless the person has physical 107 30 presence in that taxing area. The amount of the sale, 107 31 for purposes of determining the amount of the tax, 107 32 does not include the amount of any stategross107 33receiptssales taxes or excise taxes or other local 107 34 option sales or excise taxes. A tax permit other than 107 35 the state tax permit required under section422.53 or107 36423.10423.36 shall not be required by local 107 37 authorities. 107 38 Sec. . Section 425.30, Code 2003, is amended to 107 39 read as follows: 107 40 425.30 NOTICES. 107 41 Section422.57423.39, subsection 1, shall apply to 107 42 all notices under this division. 107 43 Sec. . Section 425.31, Code 2003, is amended to 107 44 read as follows: 107 45 425.31 APPEALS. 107 46 Any person aggrieved by an act or decision of the 107 47 director of revenue and finance or the department of 107 48 revenue and finance under this division shall have the 107 49 same rights of appeal and review as provided in 107 50 sections 421.1 and422.55423.38 and the rules of the 108 1 department of revenue and finance. 108 2 Sec. . Section 452A.66, unnumbered paragraph 1, 108 3 Code 2003, is amended to read as follows: 108 4 The appropriate state agency shall administer the 108 5 taxes imposed by this chapter in the same manner as 108 6 and subject to section 422.25, subsection 4 and 108 7 section422.52, subsection 3423.35. 108 8 Sec. . Section 455B.455, Code 2003, is amended 108 9 to read as follows: 108 10 455B.455 SURCHARGE IMPOSED. 108 11 A land burial surcharge tax of two percent is 108 12 imposed on the fee for land burial of a hazardous 108 13 waste. The owner of the land burial facility shall 108 14 remit the tax collected to the director of revenue and 108 15 finance after consultation with the director according 108 16 to rules that the director shall adopt. The director 108 17 shall forward a copy of the site license to the 108 18 director of revenue and finance which shall be the 108 19 appropriate license for the collection of the land 108 20 burial surcharge tax and shall be subject to 108 21 suspension or revocation if the site license holder 108 22 fails to collect or remit the tax collected under this 108 23 section. The provisions ofsectionssection 422.25, 108 24 subsection 4, sections 422.30,422.48 to 422.52,108 25422.54 to 422.58,422.67, and 422.68, section 422.69, 108 26 subsection 1,andsections 422.70 to 422.75, section 108 27 423.14, subsection 1, and sections 423.23, 423.24, 108 28 423.25, 423.31, 423.33, 423.35, 423.37 to 423.42, and 108 29 423.47, consistent with the provisions of this part 6 108 30 of division IV, shall apply with respect to the taxes 108 31 authorized under this part, in the same manner and 108 32 with the same effect as if the land burial surcharge 108 33 tax wereretailsales taxes within the meaning of 108 34 those statutes. Notwithstanding the provisions of 108 35 thisparagraphsection, the director shall provide for 108 36 only quarterly filing of returns as prescribed in 108 37 section422.51423.31. Taxes collected by the 108 38 director of revenue and finance under this section 108 39 shall be deposited in the general fund of the state. 108 40 Sec. . Section 455G.3, subsection 1, Code 2003, 108 41 is amended to read as follows: 108 42 1. The Iowa comprehensive petroleum underground 108 43 storage tank fund is created as a separate fund in the 108 44 state treasury, and any funds remaining in the fund at 108 45 the end of each fiscal year shall not revert to the 108 46 general fund but shall remain in the Iowa 108 47 comprehensive petroleum underground storage tank fund. 108 48 Interest or other income earned by the fund shall be 108 49 deposited in the fund. The fund shall include moneys 108 50 credited to the fund under this section, section 109 1423.24423.43, subsection 1, paragraph "a", and 109 2 sections 455G.8, 455G.9, and 455G.11, and other funds 109 3 which by law may be credited to the fund. The moneys 109 4 in the fund are appropriated to and for the purposes 109 5 of the board as provided in this chapter. Amounts in 109 6 the fund shall not be subject to appropriation for any 109 7 other purpose by the general assembly, but shall be 109 8 used only for the purposes set forth in this chapter. 109 9 The treasurer of state shall act as custodian of the 109 10 fund and disburse amounts contained in it as directed 109 11 by the board including automatic disbursements of 109 12 funds as received pursuant to the terms of bond 109 13 indentures and documents and security provisions to 109 14 trustees and custodians. The treasurer of state is 109 15 authorized to invest the funds deposited in the fund 109 16 at the direction of the board and subject to any 109 17 limitations contained in any applicable bond 109 18 proceedings. The income from such investment shall be 109 19 credited to and deposited in the fund. The fund shall 109 20 be administered by the board which shall make 109 21 expenditures from the fund consistent with the 109 22 purposes of the programs set out in this chapter 109 23 without further appropriation. The fund may be 109 24 divided into different accounts with different 109 25 depositories as determined by the board and to fulfill 109 26 the purposes of this chapter. 109 27 Sec. . Section 455G.6, subsection 4, Code 2003, 109 28 is amended to read as follows: 109 29 4. Grant a mortgage, lien, pledge, assignment, or 109 30 other encumbrance on one or more improvements, 109 31 revenues, asset of right, accounts, or funds 109 32 established or received in connection with the fund, 109 33 including revenues derived from the use tax under 109 34 section423.24423.43, subsection 1, paragraph "a", 109 35 and deposited in the fund or an account of the fund. 109 36 Sec. . Section 455G.8, subsection 2, Code 2003, 109 37 is amended to read as follows: 109 38 2. USE TAX. The revenues derived from the use tax 109 39 imposed under chapter 423, subchapter III. The 109 40 proceeds of the use tax under section423.24423.43, 109 41 subsection 1, paragraph "a", shall be allocated, 109 42 consistent with this chapter, among the fund's 109 43 accounts, for debt service and other fund expenses, 109 44 according to the fund budget, resolution, trust 109 45 agreement, or other instrument prepared or entered 109 46 into by the board or authority under direction of the 109 47 board. 109 48 Sec. . Section 455G.9, subsection 2, Code 2003, 109 49 is amended to read as follows: 109 50 2. REMEDIAL ACCOUNT FUNDING. The remedial account 110 1 shall be funded by that portion of the proceeds of the 110 2 use tax imposed under chapter 423, subchapter III, and 110 3 other moneys and revenues budgeted to the remedial 110 4 account by the board. 110 5 Sec. . Section 2.67, Code 2003, is repealed. 110 6 Sec. . CODE EDITOR DIRECTIVE. The Code editor 110 7 is directed to transfer Code chapter 423A to Code 110 8 chapter 421A and to transfer Code chapters 422A, 422B, 110 9 422C, and 422E to Code chapters 423A, 423B, 423C, and 110 10 423E, respectively. The Code editor is directed to 110 11 correct Code references as required due to the changes 110 12 made in this Act. 110 13 SALES TAX ADVISORY COUNCIL 110 14 Sec. . IOWA STREAMLINED SALES TAX ADVISORY 110 15 COUNCIL. 110 16 1. An Iowa streamlined sales tax advisory council 110 17 is created. The advisory council shall review, study, 110 18 and submit recommendations to the Iowa streamlined 110 19 sales and use tax delegation regarding the proposed 110 20 streamlined sales and use tax agreement formalized by 110 21 the project's implementing sales on November 12, 2002, 110 22 the proposed language conforming Iowa's sales and use 110 23 tax to the national agreement, and the following 110 24 issues: 110 25 a. Uniform definitions proposed in the current 110 26 streamlined sales and use tax agreement and future 110 27 proposals. 110 28 b. Effects upon taxability of items newly defined 110 29 in Iowa. 110 30 c. Impacts upon business as a result of the 110 31 streamlined sales and use tax. 110 32 d. Technology implementation issues. 110 33 e. Any other issues that are brought before the 110 34 streamlined sales and use tax implementing state or 110 35 the streamlined sales and use tax governing board. 110 36 2. The department shall provide administrative 110 37 support to the Iowa streamlined sales tax advisory 110 38 council. The advisory council shall be representative 110 39 of Iowa's business community and economy when 110 40 reviewing and recommending solutions to streamlined 110 41 sales and use tax issues. The advisory council shall 110 42 provide the general assembly and the governor with 110 43 final recommendations made to the Iowa streamlined 110 44 sales and use tax delegation upon the conclusion of 110 45 each calendar year. 110 46 3. The director of revenue, in consultation with 110 47 the Iowa taxpayers association and the Iowa 110 48 association of business and industry, shall appoint 110 49 members to the Iowa streamlined sales tax advisory 110 50 council, which shall consist of the following members: 111 1 a. One member from the department of revenue and 111 2 finance. 111 3 b. Three members representing small Iowa 111 4 businesses, at least one of whom must be a retailer, 111 5 and at least one of whom shall be a supplier. 111 6 c. Three members representing medium Iowa 111 7 businesses, at least one of whom shall be a retailer, 111 8 and at least one of whom shall be a supplier. 111 9 d. Three members representing large Iowa 111 10 businesses, at least one of whom shall be a retailer, 111 11 and at least one of whom shall be a supplier. 111 12 e. One member representing taxpayers as a whole. 111 13 f. One member representing the retail community as 111 14 a whole. 111 15 g. Any other member the director of revenue and 111 16 finance deems appropriate. 111 17 Sec. . EFFECTIVE DATE. Except for the section 111 18 creating the Iowa streamlined sales tax advisory 111 19 council, this division of this Act takes effect July 111 20 1, 2004." 111 21 #2. Title page, line 11, by inserting after the 111 22 word "council," the following: "providing for a 111 23 streamlined sales and use tax law,". 111 24 111 25 111 26 111 27 JENKINS of Black Hawk 111 28 HF 683.304 80 111 29 mg/cf
Text: H01516 Text: H01518 Text: H01500 - H01599 Text: H Index Bills and Amendments: General Index Bill History: General Index
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