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PAG LIN 1 1 DIVISION I 1 2 DEFINITIONS 1 3 Section 1. NEW SECTION. 423.1 DEFINITIONS. 1 4 As used in this chapter the following words, terms, and 1 5 phrases have the meanings ascribed to them by this section, 1 6 except where the context clearly indicates that a different 1 7 meaning is intended: 1 8 1. "Agent" means a person appointed by a seller to 1 9 represent the seller before the member states. 1 10 2. "Agreement" means the streamlined sales and use tax 1 11 agreement authorized by division IV of this chapter to 1 12 provide a mechanism for establishing and maintaining a 1 13 cooperative, simplified system for the application and 1 14 administration of sales and use taxes. 1 15 3. "Agricultural production" includes the production of 1 16 flowering, ornamental, or vegetable plants in commercial 1 17 greenhouses or otherwise, and production from aquaculture. 1 18 "Agricultural products" includes flowering, ornamental, or 1 19 vegetable plants and those products of aquaculture. 1 20 4. "Business" includes any activity engaged in by any 1 21 person or caused to be engaged in by the person with the 1 22 object of gain, benefit, or advantage, either direct or 1 23 indirect. 1 24 5. "Certificate of title" means a certificate of title 1 25 issued for a vehicle or for manufactured housing under chapter 1 26 321. 1 27 6. "Certified automated system" means software certified 1 28 under the agreement to calculate the tax imposed by each 1 29 jurisdiction on a transaction, determine the amount of tax to 1 30 remit to the appropriate state, and maintain a record of the 1 31 transaction. 1 32 7. "Certified service provider" means an agent certified 1 33 under the agreement to perform all of a seller's sales or use 1 34 tax functions, other than the seller's obligation to remit tax 1 35 on its own purchases. 2 1 8. "Computer" means an electronic device that accepts 2 2 information in digital or similar form and manipulates the 2 3 information for a result based on a sequence of instructions. 2 4 9. "Computer software" means a set of coded instructions 2 5 designed to cause a computer or automatic data processing 2 6 equipment to perform a task. 2 7 10. "Delivered electronically" means delivered to the 2 8 purchaser by means other than tangible storage media. 2 9 11. "Delivery charges" means charges assessed by a seller 2 10 of personal property or services for preparation and delivery 2 11 to a location designated by the purchaser of personal property 2 12 or services including, but not limited to, transportation, 2 13 shipping, postage, handling, crating, and packing charges. 2 14 12. "Department" means the department of revenue and 2 15 finance. 2 16 13. "Direct mail" means printed material delivered or 2 17 distributed by United States mail or other delivery service to 2 18 a mass audience or to addressees on a mailing list provided by 2 19 the purchaser or at the direction of the purchaser when the 2 20 cost of the items is not billed directly to the recipients. 2 21 "Direct mail" includes tangible personal property supplied 2 22 directly or indirectly by the purchaser to the direct mail 2 23 seller for inclusion in the package containing the printed 2 24 material. "Direct mail" does not include multiple items of 2 25 printed material delivered to a single address. 2 26 14. "Director" means the director of revenue and finance. 2 27 15. "Electronic" means relating to technology having 2 28 electrical, digital, magnetic, wireless, optical, 2 29 electromagnetic, or similar capabilities. 2 30 16. "Farm deer" means the same as defined in section 2 31 189A.2. 2 32 17. "Farm machinery and equipment" means machinery and 2 33 equipment used in agricultural production. 2 34 18. "First use of a service". A "first use of a service" 2 35 occurs, for the purposes of this chapter, when a service is 3 1 rendered, furnished, or performed in Iowa or if rendered, 3 2 furnished, or performed outside of Iowa, when the product or 3 3 result of the service is used in Iowa. 3 4 19. "Goods, wares, or merchandise" means the same as 3 5 tangible personal property. 3 6 20. "Governing board" means the group comprised of 3 7 representatives of the member states of the agreement which is 3 8 created by the agreement to be responsible for the agreement's 3 9 administration and operation. 3 10 21. "Installed purchase price" is the amount charged, 3 11 valued in money whether paid in money or otherwise, by a 3 12 building contractor to convert manufactured housing from 3 13 tangible personal property into realty. "Installed purchase 3 14 price" includes, but is not limited to, amounts charged for 3 15 installing a foundation and electrical and plumbing hookups. 3 16 "Installed purchase price" excludes any amount charged for 3 17 landscaping in connection with the conversion. 3 18 22. "Lease or rental". 3 19 a. "Lease or rental" means any transfer of possession or 3 20 control of tangible personal property for a fixed or 3 21 indeterminate term for consideration. A "lease or rental" may 3 22 include future options to purchase or extend. 3 23 b. "Lease or rental" includes agreements covering motor 3 24 vehicles and trailers when the amount of consideration may be 3 25 increased or decreased by reference to the amount realized 3 26 upon sale or disposition of the property as defined in 26 3 27 U.S.C. } 7701(h)(1). 3 28 c. "Lease or rental" does not include any of the 3 29 following: 3 30 (1) A transfer of possession or control of property under 3 31 a security agreement or deferred payment plan that requires 3 32 the transfer of title upon completion of the required 3 33 payments. 3 34 (2) A transfer of possession or control of property under 3 35 an agreement that requires the transfer of title upon 4 1 completion of required payments, and payment of any option 4 2 price does not exceed the greater of one hundred dollars or 4 3 one percent of the total required payments. 4 4 (3) Providing tangible personal property along with an 4 5 operator for a fixed or indeterminate period of time. A 4 6 condition of this exclusion is that the operator is necessary 4 7 for the equipment to perform as designed. For the purpose of 4 8 this subparagraph, an operator must do more than maintain, 4 9 inspect, or set up the tangible personal property. 4 10 d. This definition shall be used for sales and use tax 4 11 purposes regardless of whether a transaction is characterized 4 12 as a lease or rental under generally accepted accounting 4 13 principles, the Internal Revenue Code, the Uniform Commercial 4 14 Code, or other provisions of federal, state, or local law. 4 15 23. "Livestock" includes but is not limited to an animal 4 16 classified as an ostrich, rhea, emu, bison, or farm deer. 4 17 24. "Manufactured housing" means "manufactured home" as 4 18 defined in section 321.1. 4 19 25. "Member state" is any state which has signed the 4 20 agreement. 4 21 26. "Mobile home" means "manufactured or mobile home" as 4 22 defined in section 321.1. 4 23 27. "Model 1 seller" is a seller that has selected a 4 24 certified service provider as its agent to perform all the 4 25 seller's sales and use tax functions, other than the seller's 4 26 obligation to remit tax on its own purchases. 4 27 28. "Model 2 seller" is a seller that has selected a 4 28 certified automated system to perform part of its sales and 4 29 use tax functions, but retains responsibility for remitting 4 30 the tax. 4 31 29. "Model 3 seller" is a seller that has sales in at 4 32 least five member states, has total annual sales revenue of at 4 33 least five hundred million dollars, has a proprietary system 4 34 that calculates the amount of tax due each jurisdiction, and 4 35 has entered into a performance agreement with the member 5 1 states that establishes a tax performance standard for the 5 2 seller. As used in this definition, a "seller" includes an 5 3 affiliated group of sellers using the same proprietary system. 5 4 30. "Nonresidential commercial operations" means 5 5 industrial, commercial, mining, or agricultural operations, 5 6 whether for profit or not, but does not include apartment 5 7 complexes or mobile home parks. 5 8 31. "Not registered under the agreement" means lack of 5 9 registration by a seller with the member states under the 5 10 central registration system provided by section 423.48. 5 11 32. "Person" means an individual, trust, estate, 5 12 fiduciary, partnership, limited liability company, limited 5 13 liability partnership, corporation, or any other legal entity. 5 14 33. "Place of business" means any warehouse, store, place, 5 15 office, building, or structure where goods, wares, or 5 16 merchandise are offered for sale at retail or where any 5 17 taxable amusement is conducted, or each office where gas, 5 18 water, heat, communication, or electric services are offered 5 19 for sale at retail. 5 20 When a retailer or amusement operator sells merchandise by 5 21 means of vending machines or operates music or amusement 5 22 devices by coin-operated machines at more than one location 5 23 within the state, the office, building, or place where the 5 24 books, papers, and records of the taxpayer are kept shall be 5 25 deemed to be the taxpayer's place of business. 5 26 34. "Prewritten computer software" includes software 5 27 designed and developed by the author or other creator to the 5 28 specifications of a specific purchaser when it is sold to a 5 29 person other than the purchaser. The combining of two or more 5 30 prewritten computer software programs or prewritten portions 5 31 of prewritten programs does not cause the combination to be 5 32 other than prewritten computer software. "Prewritten computer 5 33 software" also means computer software, including prewritten 5 34 upgrades, which is not designed and developed by the author or 5 35 other creator to the specifications of a specific purchaser. 6 1 When a person modifies or enhances computer software of 6 2 which the person is not the author or creator, the person 6 3 shall be deemed to be the author or creator only of such 6 4 person's modifications or enhancements. Prewritten computer 6 5 software or a prewritten portion of the prewritten software 6 6 that is modified or enhanced to any degree, when such 6 7 modification or enhancement is designed and developed to the 6 8 specifications of a specific purchaser, remains prewritten 6 9 computer software. However, when there is a reasonable, 6 10 separately stated charge or an invoice or other statement of 6 11 the price given to the purchaser for such modification or 6 12 enhancement, such modification or enhancement shall not 6 13 constitute prewritten computer software. 6 14 35. "Property purchased for resale in connection with the 6 15 performance of a service" means property which is purchased 6 16 for resale in connection with the rendition, furnishing, or 6 17 performance of a service by a person who renders, furnishes, 6 18 or performs the service if all of the following occur: 6 19 a. The provider and user of the service intend that a sale 6 20 of the property will occur. 6 21 b. The property is transferred to the user of the service 6 22 in connection with the performance of the service in a form or 6 23 quantity capable of a fixed or definite price value. 6 24 c. The sale is evidenced by a separate charge for the 6 25 identifiable piece of property. 6 26 36. "Purchase" means any transfer, exchange, or barter, 6 27 conditional or otherwise, in any manner or by any means 6 28 whatsoever, for a consideration. 6 29 37. "Purchase price" means the same as "sales price" as 6 30 defined in this section. 6 31 38. "Purchaser" is a person to whom a sale of personal 6 32 property is made or to whom a service is furnished. 6 33 39. "Receive" and "receipt" mean any of the following: 6 34 a. Taking possession of tangible personal property. 6 35 b. Making first use of a service. 7 1 c. Taking possession or making first use of digital goods, 7 2 whichever comes first. 7 3 "Receive" and "receipt" do not include possession by a 7 4 shipping company on behalf of a purchaser. 7 5 40. "Registered under the agreement" means registration by 7 6 a seller under the central registration system referenced in 7 7 section 423.11, subsection 4. 7 8 41. "Relief agency" means the state, any county, city and 7 9 county, city, or district thereof, or any agency engaged in 7 10 actual relief work. 7 11 42. "Retailer" means and includes every person engaged in 7 12 the business of selling tangible personal property or taxable 7 13 services at retail, or the furnishing of gas, electricity, 7 14 water, or communication service, and tickets or admissions to 7 15 places of amusement and athletic events or operating amusement 7 16 devices or other forms of commercial amusement from which 7 17 revenues are derived. However, when in the opinion of the 7 18 director it is necessary for the efficient administration of 7 19 this chapter to regard any salespersons, representatives, 7 20 truckers, peddlers, or canvassers as agents of the dealers, 7 21 distributors, supervisors, employers, or persons under whom 7 22 they operate or from whom they obtain tangible personal 7 23 property sold by them irrespective of whether or not they are 7 24 making sales on their own behalf or on behalf of such dealers, 7 25 distributors, supervisors, employers, or persons, the director 7 26 may so regard them, and may regard such dealers, distributors, 7 27 supervisors, employers, or persons as retailers for the 7 28 purposes of this chapter. "Retailer" includes a seller 7 29 obligated to collect sales or use tax. 7 30 43. "Retailer maintaining a place of business in this 7 31 state" or any like term includes any retailer having or 7 32 maintaining within this state, directly or by a subsidiary, an 7 33 office, distribution house, sales house, warehouse, or other 7 34 place of business, or any representative operating within this 7 35 state under the authority of the retailer or its subsidiary, 8 1 irrespective of whether that place of business or 8 2 representative is located here permanently or temporarily, or 8 3 whether the retailer or subsidiary is admitted to do business 8 4 within this state pursuant to chapter 490. 8 5 44. "Retailers who are not model sellers" means all 8 6 retailers other than model 1, model 2, or model 3 sellers. 8 7 45. "Retail sale" or "sale at retail" means any sale, 8 8 lease, or rental for any purpose other than resale, sublease, 8 9 or subrent. 8 10 46. "Sales" or "sale" means any transfer, exchange, or 8 11 barter, conditional or otherwise, in any manner or by any 8 12 means whatsoever, for consideration. 8 13 47. "Sales price" applies to the measure subject to sales 8 14 tax. 8 15 a. "Sales price" means the total amount of consideration, 8 16 including cash, credit, property, and services, for which 8 17 personal property or services are sold, leased, or rented, 8 18 valued in money, whether received in money or otherwise, 8 19 without any deduction for any of the following: 8 20 (1) The seller's cost of the property sold. 8 21 (2) The cost of materials used, labor or service cost, 8 22 interest, losses, all costs of transportation to the seller, 8 23 all taxes imposed on the seller, and any other expenses of the 8 24 seller. 8 25 (3) Charges by the seller for any services necessary to 8 26 complete the sale, other than delivery and installation 8 27 charges. 8 28 (4) Delivery charges. 8 29 (5) Installation charges. 8 30 (6) The value of exempt personal property given to the 8 31 purchaser where taxable and exempt personal property have been 8 32 bundled together and sold by the seller as a single product or 8 33 piece of merchandise. 8 34 (7) Credit for any trade-in authorized by section 423.3, 8 35 subsection 58. 9 1 b. "Sales price" does not include: 9 2 (1) Discounts, including cash, term, or coupons that are 9 3 not reimbursed by a third party that are allowed by a seller 9 4 and taken by a purchaser on a sale. 9 5 (2) Interest, financing, and carrying charges from credit 9 6 extended on the sale of personal property or services, if the 9 7 amount is separately stated on the invoice, bill of sale, or 9 8 similar document given to the purchaser. 9 9 (3) Any taxes legally imposed directly on the consumer 9 10 that are separately stated on the invoice, bill of sale, or 9 11 similar document given to the purchaser. 9 12 (4) The amounts received for charges included in paragraph 9 13 "a", subparagraphs (3) through (7), if they are separately 9 14 contracted for and separately stated on the invoice, billing, 9 15 or similar document given to the purchaser. 9 16 48. "Sales tax" means the tax levied under division II of 9 17 this chapter. 9 18 49. "Seller" means any person making sales, leases, or 9 19 rentals of personal property or services. 9 20 50. "Services" means all acts or services rendered, 9 21 furnished, or performed, other than services used in 9 22 processing of tangible personal property for use in retail 9 23 sales or services, for an employer, as defined in section 9 24 422.4, subsection 3, for a valuable consideration by any 9 25 person engaged in any business or occupation specifically 9 26 enumerated in section 423.2. The tax shall be due and 9 27 collectible when the service is rendered, furnished, or 9 28 performed for the ultimate user of the service. 9 29 51. "Services used in the processing of tangible personal 9 30 property" includes the reconditioning or repairing of tangible 9 31 personal property of the type normally sold in the regular 9 32 course of the retailer's business and which is held for sale. 9 33 52. "State" means any state of the United States and the 9 34 District of Columbia. 9 35 53. "System" means the central electronic registration 10 1 system maintained by Iowa and other states which are 10 2 signatories to the agreement. 10 3 54. "Tangible personal property" means personal property 10 4 that can be seen, weighed, measured, felt, or touched, or that 10 5 is in any other manner perceptible to the senses. "Tangible 10 6 personal property" includes electricity, water, gas, steam, 10 7 and prewritten computer software. 10 8 55. "Taxpayer" includes any person who is subject to a tax 10 9 imposed by this chapter, whether acting on the person's own 10 10 behalf or as a fiduciary. 10 11 56. "Trailer" shall mean every trailer, as is now or may 10 12 be hereafter so defined by chapter 321, which is required to 10 13 be registered or is subject only to the issuance of a 10 14 certificate of title under chapter 321. 10 15 57. "Use" means and includes the exercise by any person of 10 16 any right or power over tangible personal property incident to 10 17 the ownership of that property. A retailer's or building 10 18 contractor's sale of manufactured housing for use in this 10 19 state, whether in the form of tangible personal property or of 10 20 realty, is a use of that property for the purposes of this 10 21 chapter. 10 22 58. "Use tax" means the tax levied under division III of 10 23 this chapter for which the retailer collects and remits tax to 10 24 the department. 10 25 59. "User" means the immediate recipient of the services 10 26 who is entitled to exercise a right of power over the product 10 27 of such services. 10 28 60. "Value of services" means the price to the user 10 29 exclusive of any direct tax imposed by the federal government 10 30 or by this chapter. 10 31 61. "Vehicles subject to registration" means any vehicle 10 32 subject to registration pursuant to section 321.18. 10 33 DIVISION II 10 34 SALES TAX 10 35 Sec. 2. NEW SECTION. 423.2 TAX IMPOSED. 11 1 1. There is imposed a tax of five percent upon the sales 11 2 price of all sales of tangible personal property, consisting 11 3 of goods, wares, or merchandise, sold at retail in the state 11 4 to consumers or users except as otherwise provided in this 11 5 division. 11 6 a. For the purposes of this division, sales of the 11 7 following services are treated as if they were sales of 11 8 tangible personal property: 11 9 (1) Sales of engraving, photography, retouching, printing, 11 10 and binding services. 11 11 (2) Sales of vulcanizing, recapping, and retreading 11 12 services. 11 13 (3) Sales of prepaid telephone calling cards and prepaid 11 14 authorization numbers. 11 15 (4) Sales of optional service or warranty contracts, 11 16 except residential service contracts regulated under chapter 11 17 523C, which provide for the furnishing of labor and materials 11 18 and require the furnishing of any taxable service enumerated 11 19 under this section. The sales price is subject to tax even if 11 20 some of the services furnished are not enumerated under this 11 21 section. Additional sales, services, or use taxes shall not 11 22 be levied on services, parts, or labor provided under optional 11 23 service or warranty contracts which are subject to tax under 11 24 this subsection. 11 25 If the optional service or warranty contract is a computer 11 26 software maintenance or support service contract and there is 11 27 no separately stated fee for the taxable personal property or 11 28 for the nontaxable service, the tax imposed by this subsection 11 29 shall be imposed on fifty percent of the sales price from the 11 30 sale of such contract. If the contract provides for technical 11 31 support services only, no tax shall be imposed under this 11 32 subsection. The provisions of this subparagraph (4) also 11 33 apply to the use tax. 11 34 (5) Renting of rooms, apartments, or sleeping quarters in 11 35 a hotel, motel, inn, public lodging house, rooming house, 12 1 mobile home which is tangible personal property, or tourist 12 2 court, or in any place where sleeping accommodations are 12 3 furnished to transient guests for rent, whether with or 12 4 without meals. "Renting" and "rent" include any kind of 12 5 direct or indirect charge for such rooms, apartments, or 12 6 sleeping quarters, or their use. However, the tax does not 12 7 apply to the sales price from the renting of a room, 12 8 apartment, or sleeping quarters while rented by the same 12 9 person for a period of more than thirty-one consecutive days. 12 10 b. Sales of building materials, supplies, and equipment to 12 11 owners, contractors, subcontractors, or builders for the 12 12 erection of buildings or the alteration, repair, or 12 13 improvement of real property are retail sales of tangible 12 14 personal property in whatever quantity sold. Where the owner, 12 15 contractor, subcontractor, or builder is also a retailer 12 16 holding a retail sales tax permit and transacting retail sales 12 17 of building materials, supplies, and equipment, the person 12 18 shall purchase such items of tangible personal property 12 19 without liability for the tax if such property will be subject 12 20 to the tax at the time of resale or at the time it is 12 21 withdrawn from inventory for construction purposes. The sales 12 22 tax shall be due in the reporting period when the materials, 12 23 supplies, and equipment are withdrawn from inventory for 12 24 construction purposes or when sold at retail. The tax shall 12 25 not be due when materials are withdrawn from inventory for use 12 26 in construction outside of Iowa and the tax shall not apply to 12 27 tangible personal property purchased and consumed by the 12 28 manufacturer as building materials in the performance by the 12 29 manufacturer or its subcontractor of construction outside of 12 30 Iowa. The sale of carpeting is not a sale of building 12 31 materials. The sale of carpeting to owners, contractors, 12 32 subcontractors, or builders shall be treated as the sale of 12 33 ordinary tangible personal property and subject to the tax 12 34 imposed under this subsection and the use tax. 12 35 c. The use within this state of tangible personal property 13 1 by the manufacturer thereof, as building materials, supplies, 13 2 or equipment, in the performance of construction contracts in 13 3 Iowa, shall, for the purpose of this division, be construed as 13 4 a sale at retail of tangible personal property by the 13 5 manufacturer who shall be deemed to be the consumer of such 13 6 tangible personal property. The tax shall be computed upon 13 7 the cost to the manufacturer of the fabrication or production 13 8 of the tangible personal property. 13 9 2. A tax of five percent is imposed upon the sales price 13 10 of the sale or furnishing of gas, electricity, water, heat, 13 11 pay television service, and communication service, including 13 12 the sales price from such sales by any municipal corporation 13 13 or joint water utility furnishing gas, electricity, water, 13 14 heat, pay television service, and communication service to the 13 15 public in its proprietary capacity, except as otherwise 13 16 provided in this division, when sold at retail in the state to 13 17 consumers or users. 13 18 3. A tax of five percent is imposed upon the sales price 13 19 of all sales of tickets or admissions to places of amusement, 13 20 fairs, and athletic events except those of elementary and 13 21 secondary educational institutions. A tax of five percent is 13 22 imposed on the sales price of an entry fee or like charge 13 23 imposed solely for the privilege of participating in an 13 24 activity at a place of amusement, fair, or athletic event 13 25 unless the sales price of tickets or admissions charges for 13 26 observing the same activity are taxable under this division. 13 27 A tax of five percent is imposed upon that part of private 13 28 club membership fees or charges paid for the privilege of 13 29 participating in any athletic sports provided club members. 13 30 4. A tax of five percent is imposed upon the sales price 13 31 derived from the operation of all forms of amusement devices 13 32 and games of skill, games of chance, raffles, and bingo games 13 33 as defined in chapter 99B, operated or conducted within the 13 34 state, the tax to be collected from the operator in the same 13 35 manner as for the collection of taxes upon the sales price of 14 1 tickets or admission as provided in this section. The tax 14 2 shall also be imposed upon the sales price derived from the 14 3 sale of lottery tickets or shares pursuant to chapter 99E. 14 4 The tax on the lottery tickets or shares shall be included in 14 5 the sales price and distributed to the general fund of the 14 6 state as provided in section 99E.10. Nothing in this 14 7 subsection shall legalize any games of skill or chance or 14 8 slot-operated devices which are now prohibited by law. 14 9 The tax imposed under this subsection covers the total 14 10 amount from the operation of games of skill, games of chance, 14 11 raffles, and bingo games as defined in chapter 99B, and 14 12 musical devices, weighing machines, shooting galleries, 14 13 billiard and pool tables, bowling alleys, pinball machines, 14 14 slot-operated devices selling merchandise not subject to the 14 15 general sales taxes and on the total amount from devices or 14 16 systems where prizes are in any manner awarded to patrons and 14 17 upon the receipts from fees charged for participation in any 14 18 game or other form of amusement, and generally upon the sales 14 19 price from any source of amusement operated for profit, not 14 20 specified in this section, and upon the sales price from which 14 21 tax is not collected for tickets or admission, but tax shall 14 22 not be imposed upon any activity exempt from sales tax under 14 23 section 423.3, subsection 78. Every person receiving any 14 24 sales price from the sources described in this section is 14 25 subject to all provisions of this division relating to retail 14 26 sales tax and other provisions of this chapter as applicable. 14 27 5. There is imposed a tax of five percent upon the sales 14 28 price from the furnishing of services as defined in section 14 29 423.1. 14 30 6. The sales price of any of the following enumerated 14 31 services is subject to the tax imposed by subsection 5: 14 32 alteration and garment repair; armored car; vehicle repair; 14 33 battery, tire, and allied; investment counseling; service 14 34 charges of all financial institutions; barber and beauty; boat 14 35 repair; vehicle wash and wax; campgrounds; carpentry; roof, 15 1 shingle, and glass repair; dance schools and dance studios; 15 2 dating services; dry cleaning, pressing, dyeing, and 15 3 laundering; electrical and electronic repair and installation; 15 4 excavating and grading; farm implement repair of all kinds; 15 5 flying service; furniture, rug, carpet, and upholstery repair 15 6 and cleaning; fur storage and repair; golf and country clubs 15 7 and all commercial recreation; gun and camera repair; house 15 8 and building moving; household appliance, television, and 15 9 radio repair; janitorial and building maintenance or cleaning; 15 10 jewelry and watch repair; lawn care, landscaping, and tree 15 11 trimming and removal; limousine service, including driver; 15 12 machine operator; machine repair of all kinds; motor repair; 15 13 motorcycle, scooter, and bicycle repair; oilers and 15 14 lubricators; office and business machine repair; painting, 15 15 papering, and interior decorating; parking facilities; pay 15 16 television; pet grooming; pipe fitting and plumbing; wood 15 17 preparation; executive search agencies; private employment 15 18 agencies, excluding services for placing a person in 15 19 employment where the principal place of employment of that 15 20 person is to be located outside of the state; reflexology; 15 21 security and detective services; sewage services for 15 22 nonresidential commercial operations; sewing and stitching; 15 23 shoe repair and shoeshine; sign construction and installation; 15 24 storage of household goods, mini-storage, and warehousing of 15 25 raw agricultural products; swimming pool cleaning and 15 26 maintenance; tanning beds or salons; taxidermy services; 15 27 telephone answering service; test laboratories, including 15 28 mobile testing laboratories and field testing by testing 15 29 laboratories, and excluding tests on humans or animals; 15 30 termite, bug, roach, and pest eradicators; tin and sheet metal 15 31 repair; Turkish baths, massage, and reducing salons, excluding 15 32 services provided by massage therapists licensed under chapter 15 33 152C; water conditioning and softening; weighing; welding; 15 34 well drilling; wrapping, packing, and packaging of merchandise 15 35 other than processed meat, fish, fowl, and vegetables; 16 1 wrecking service; wrecker and towing. 16 2 For the purposes of this subsection, the sales price of a 16 3 lease or rental includes rents, royalties, and copyright and 16 4 license fees. For the purposes of this subsection, "financial 16 5 institutions" means all national banks, federally chartered 16 6 savings and loan associations, federally chartered savings 16 7 banks, federally chartered credit unions, banks organized 16 8 under chapter 524, savings and loan associations and savings 16 9 banks organized under chapter 534, and credit unions organized 16 10 under chapter 533. 16 11 7. a. A tax of five percent is imposed upon the sales 16 12 price from the sales, furnishing, or service of solid waste 16 13 collection and disposal service. 16 14 For purposes of this subsection, "solid waste" means 16 15 garbage, refuse, sludge from a water supply treatment plant or 16 16 air contaminant treatment facility, and other discarded waste 16 17 materials and sludges, in solid, semisolid, liquid, or 16 18 contained gaseous form, resulting from nonresidential 16 19 commercial operations, but does not include auto hulks; street 16 20 sweepings; ash; construction debris; mining waste; trees; 16 21 tires; lead acid batteries; used oil; hazardous waste; animal 16 22 waste used as fertilizer; earthen fill, boulders, or rock; 16 23 foundry sand used for daily cover at a sanitary landfill; 16 24 sewage sludge; solid or dissolved material in domestic sewage 16 25 or other common pollutants in water resources, such as silt, 16 26 dissolved or suspended solids in industrial waste water 16 27 effluents or discharges which are point sources subject to 16 28 permits under section 402 of the federal Water Pollution 16 29 Control Act, or dissolved materials in irrigation return 16 30 flows; or source, special nuclear, or by-product material 16 31 defined by the federal Atomic Energy Act of 1954. 16 32 A recycling facility that separates or processes recyclable 16 33 materials and that reduces the volume of the waste by at least 16 34 eighty-five percent is exempt from the tax imposed by this 16 35 subsection if the waste exempted is collected and disposed of 17 1 separately from other solid waste. 17 2 b. A person who transports solid waste generated by that 17 3 person or another person without compensation shall pay the 17 4 tax imposed by this subsection at the collection or disposal 17 5 facility based on the disposal charge or tipping fee. 17 6 However, the costs of a service or portion of a service to 17 7 collect and manage recyclable materials separated from solid 17 8 waste by the waste generator are exempt from the tax imposed 17 9 by this subsection. 17 10 8. a. A tax of five percent is imposed upon the sales 17 11 price from sales of bundled services contracts. For purposes 17 12 of this subsection, a "bundled services contract" means an 17 13 agreement providing for a retailer's performance of services, 17 14 one or more of which is a taxable service enumerated in this 17 15 section and one or more of which is not, in return for a 17 16 consumer's or user's single payment for the performance of the 17 17 services, with no separate statement to the consumer or user 17 18 of what portion of that payment is attributable to any one 17 19 service which is a part of the contract. 17 20 b. For purposes of the administration of the tax on 17 21 bundled services contracts, the director may enter into 17 22 agreements of limited duration with individual retailers, 17 23 groups of retailers, or organizations representing retailers 17 24 of bundled services contracts. Such an agreement shall impose 17 25 the tax rate only upon that portion of the sales price from a 17 26 bundled services contract which is attributable to taxable 17 27 services provided under the contract. 17 28 9. A tax of five percent is imposed upon the sales price 17 29 from any mobile telecommunications service which this state is 17 30 allowed to tax by the provisions of the federal Mobile 17 31 Telecommunications Sourcing Act, Pub. L. No. 106-252, 4 U.S.C. 17 32 } 116 et seq. For purposes of this subsection, taxes on 17 33 mobile telecommunications service, as defined under the 17 34 federal Mobile Telecommunications Sourcing Act that are deemed 17 35 to be provided by the customer's home service provider, shall 18 1 be paid to the taxing jurisdiction whose territorial limits 18 2 encompass the customer's place of primary use, regardless of 18 3 where the mobile telecommunications service originates, 18 4 terminates, or passes through and shall in all other respects 18 5 be taxed in conformity with the federal Mobile 18 6 Telecommunications Sourcing Act. All other provisions of the 18 7 federal Mobile Telecommunications Sourcing Act are adopted by 18 8 the state of Iowa and incorporated into this subsection by 18 9 reference. With respect to mobile telecommunications service 18 10 under the federal Mobile Telecommunications Sourcing Act, the 18 11 director shall, if requested, enter into agreements consistent 18 12 with the provisions of the federal Act. 18 13 10. All revenues arising under the operation of the 18 14 provisions of this section shall be deposited into the general 18 15 fund of the state. 18 16 Sec. 3. NEW SECTION. 423.3 EXEMPTIONS. 18 17 There is exempted from the provisions of this division and 18 18 from the computation of the amount of tax imposed by it the 18 19 following: 18 20 1. The sales price from sales of tangible personal 18 21 property and services furnished which this state is prohibited 18 22 from taxing under the Constitution or laws of the United 18 23 States or under the Constitution of this state. 18 24 2. The sales price of sales for resale of tangible 18 25 personal property or taxable services, or for resale of 18 26 tangible personal property in connection with the furnishing 18 27 of taxable services. 18 28 3. The sales price of agricultural breeding livestock and 18 29 domesticated fowl. 18 30 4. The sales price of commercial fertilizer. 18 31 5. The sales price of agricultural limestone, herbicide, 18 32 pesticide, insecticide, including adjuvants, surfactants, and 18 33 other products directly related to the application enhancement 18 34 of those products, food, medication, or agricultural drain 18 35 tile, including installation of agricultural drain tile, any 19 1 of which are to be used in disease control, weed control, 19 2 insect control, or health promotion of plants or livestock 19 3 produced as part of agricultural production for market. 19 4 6. The sales price of tangible personal property which 19 5 will be consumed as fuel in creating heat, power, or steam for 19 6 grain drying, or for providing heat or cooling for livestock 19 7 buildings or for greenhouses or buildings or parts of 19 8 buildings dedicated to the production of flowering, 19 9 ornamental, or vegetable plants intended for sale in the 19 10 ordinary course of business, or for use in cultivation of 19 11 agricultural products by aquaculture, or in implements of 19 12 husbandry engaged in agricultural production. 19 13 7. The sales price of services furnished by specialized 19 14 flying implements of husbandry used for agricultural aerial 19 15 spraying. 19 16 8. The sales price exclusive of services of farm machinery 19 17 and equipment, including auxiliary attachments which improve 19 18 the performance, safety, operation, or efficiency of the 19 19 machinery and equipment and replacement parts, if the 19 20 following conditions are met: 19 21 a. The farm machinery and equipment shall be directly and 19 22 primarily used in production of agricultural products. 19 23 b. The farm machinery and equipment shall constitute self- 19 24 propelled implements or implements customarily drawn or 19 25 attached to self-propelled implements or the farm machinery or 19 26 equipment is a grain dryer. 19 27 c. The replacement part is essential to any repair or 19 28 reconstruction necessary to the farm machinery's or 19 29 equipment's exempt use in the production of agricultural 19 30 products. 19 31 Vehicles subject to registration, as defined in section 19 32 423.1, or replacement parts for such vehicles, are not 19 33 eligible for this exemption. 19 34 9. The sales price of wood chips, sawdust, hay, straw, 19 35 paper, or other materials used for bedding in the production 20 1 of agricultural livestock or fowl. 20 2 10. The sales price of gas, electricity, water, or heat to 20 3 be used in implements of husbandry engaged in agricultural 20 4 production. 20 5 11. The sales price exclusive of services of farm 20 6 machinery and equipment, including auxiliary attachments which 20 7 improve the performance, safety, operation, or efficiency of 20 8 the machinery and equipment and replacement parts, if all of 20 9 the following conditions are met: 20 10 a. The implement, machinery, or equipment is directly and 20 11 primarily used in livestock or dairy production, aquaculture 20 12 production, or the production of flowering, ornamental, or 20 13 vegetable plants. 20 14 b. The implement is not a self-propelled implement or 20 15 implement customarily drawn or attached to self-propelled 20 16 implements. 20 17 c. The replacement part is essential to any repair or 20 18 reconstruction necessary to the farm machinery's or 20 19 equipment's exempt use in livestock or dairy production, 20 20 aquaculture production, or the production of flowering, 20 21 ornamental, or vegetable plants. 20 22 12. The sales price, exclusive of services, from sales of 20 23 irrigation equipment used in farming operations. 20 24 13. The sales price from the sale or rental of irrigation 20 25 equipment, whether installed above or below ground, to a 20 26 contractor or farmer if the equipment will be primarily used 20 27 in agricultural operations. 20 28 14. The sales price from the sales of horses, commonly 20 29 known as draft horses, when purchased for use and so used as 20 30 draft horses. 20 31 15. The sales price from the sale of property which is a 20 32 container, label, carton, pallet, packing case, wrapping, 20 33 baling wire, twine, bag, bottle, shipping case, or other 20 34 similar article or receptacle sold for use in agricultural, 20 35 livestock, or dairy production. 21 1 16. The sales price from the sale of feed and feed 21 2 supplements and additives when used for consumption by farm 21 3 deer or bison. 21 4 17. The sales price of all goods, wares, or merchandise, 21 5 or services, used for educational purposes sold to any private 21 6 nonprofit educational institution in this state. For the 21 7 purpose of this subsection, "educational institution" means an 21 8 institution which primarily functions as a school, college, or 21 9 university with students, faculty, and an established 21 10 curriculum. The faculty of an educational institution must be 21 11 associated with the institution and the curriculum must 21 12 include basic courses which are offered every year. 21 13 "Educational institution" includes an institution primarily 21 14 functioning as a library. 21 15 18. The sales price of tangible personal property sold, or 21 16 of services furnished, to the following nonprofit 21 17 corporations: 21 18 a. Residential care facilities and intermediate care 21 19 facilities for persons with mental retardation and residential 21 20 care facilities for persons with mental illness licensed by 21 21 the department of inspections and appeals under chapter 135C. 21 22 b. Residential facilities licensed by the department of 21 23 human services pursuant to chapter 237, other than those 21 24 maintained by individuals as defined in section 237.1, 21 25 subsection 7. 21 26 c. Rehabilitation facilities that provide accredited 21 27 rehabilitation services to persons with disabilities which are 21 28 accredited by the commission on accreditation of 21 29 rehabilitation facilities or the accreditation council for 21 30 services for persons with mental retardation and other persons 21 31 with developmental disabilities and adult day care services 21 32 approved for reimbursement by the state department of human 21 33 services. 21 34 d. Community mental health centers accredited by the 21 35 department of human services pursuant to chapter 225C. 22 1 e. Community health centers as defined in 42 U.S.C. } 22 2 254(c) and migrant health centers as defined in 42 U.S.C. } 22 3 254(b). 22 4 19. The sales price of tangible personal property sold to 22 5 a nonprofit organization which was organized for the purpose 22 6 of lending the tangible personal property to the general 22 7 public for use by them for nonprofit purposes. 22 8 20. The sales price of tangible personal property sold, or 22 9 of services furnished, to nonprofit legal aid organizations. 22 10 21. The sales price of goods, wares, or merchandise, or of 22 11 services, used for educational, scientific, historic 22 12 preservation, or aesthetic purpose sold to a nonprofit private 22 13 museum. 22 14 22. The sales price from sales of goods, wares, or 22 15 merchandise, or from services furnished, to a nonprofit 22 16 private art center to be used in the operation of the art 22 17 center. 22 18 23. The sales price of tangible personal property sold, or 22 19 of services furnished, by a fair society organized under 22 20 chapter 174. 22 21 24. The sales price from services furnished by the 22 22 notification center established pursuant to section 480.3, and 22 23 the vendor selected pursuant to section 480.3 to provide the 22 24 notification service. 22 25 25. The sales price of food and beverages sold for human 22 26 consumption by a nonprofit organization which principally 22 27 promotes a food or beverage product for human consumption 22 28 produced, grown, or raised in this state and whose income is 22 29 exempt from federal taxation under section 501(c) of the 22 30 Internal Revenue Code. 22 31 26. The sales price of tangible personal property sold, or 22 32 of services furnished, to a statewide nonprofit organ 22 33 procurement organization, as defined in section 142C.2. 22 34 27. The sales price of tangible personal property sold, or 22 35 of services furnished, to a nonprofit hospital licensed 23 1 pursuant to chapter 135B to be used in the operation of the 23 2 hospital. 23 3 28. The sales price of tangible personal property sold, or 23 4 of services furnished, to a freestanding nonprofit hospice 23 5 facility which operates a hospice program as defined in 42 23 6 C.F.R., ch. IV, } 418.3, which property or services are to be 23 7 used in the hospice program. 23 8 29. The sales price of all goods, wares, or merchandise 23 9 sold, or of services furnished, which are used in the 23 10 fulfillment of a written construction contract with a 23 11 nonprofit hospital licensed pursuant to chapter 135B if all of 23 12 the following apply: 23 13 a. The sales and delivery of the goods, wares, or 23 14 merchandise, or the services furnished occurred between July 23 15 1, 1998, and December 31, 2001. 23 16 b. The written construction contract was entered into 23 17 prior to December 31, 1999, or bonds to fund the construction 23 18 were issued prior to December 31, 1999. 23 19 c. The sales or services were purchased by a contractor as 23 20 the agent for the hospital or were purchased directly by the 23 21 hospital. 23 22 30. The sales price of livestock ear tags sold by a 23 23 nonprofit organization whose income is exempt from federal 23 24 taxation under section 501(c)(6) of the Internal Revenue Code 23 25 where the proceeds are used in bovine research programs 23 26 selected or approved by such organization. 23 27 31. The sales price of goods, wares, or merchandise sold 23 28 to and of services furnished, and used for public purposes 23 29 sold to a tax-certifying or tax-levying body of the state or a 23 30 governmental subdivision of the state, including regional 23 31 transit systems, as defined in section 324A.1, the state board 23 32 of regents, department of human services, state department of 23 33 transportation, any municipally owned solid waste facility 23 34 which sells all or part of its processed waste as fuel to a 23 35 municipally owned public utility, and all divisions, boards, 24 1 commissions, agencies, or instrumentalities of state, federal, 24 2 county, or municipal government which have no earnings going 24 3 to the benefit of an equity investor or stockholder, except 24 4 any of the following: 24 5 a. The sales price of goods, wares, or merchandise sold 24 6 to, or of services furnished, and used by or in connection 24 7 with the operation of any municipally owned public utility 24 8 engaged in selling gas, electricity, heat, or pay television 24 9 service to the general public. 24 10 b. The sales price of furnishing of sewage services to a 24 11 county or municipality on behalf of nonresidential commercial 24 12 operations. 24 13 c. The furnishing of solid waste collection and disposal 24 14 service to a county or municipality on behalf of 24 15 nonresidential commercial operations located within the county 24 16 or municipality. 24 17 The exemption provided by this subsection shall also apply 24 18 to all such sales of goods, wares, or merchandise or of 24 19 services furnished and subject to use tax. 24 20 32. The sales price of tangible personal property sold, or 24 21 of services furnished, by a county or city. This exemption 24 22 does not apply to any of the following: 24 23 a. The tax specifically imposed under section 423.2 on the 24 24 sales price from sales or furnishing of gas, electricity, 24 25 water, heat, pay television service, or communication service 24 26 to the public by a municipal corporation in its proprietary 24 27 capacity. 24 28 b. The sale or furnishing of solid waste collection and 24 29 disposal service to nonresidential commercial operations. 24 30 c. The sale or furnishing of sewage service for 24 31 nonresidential commercial operations. 24 32 d. Fees paid to cities and counties for the privilege of 24 33 participating in any athletic sports. 24 34 33. The sales price of mementos and other items relating 24 35 to Iowa history and historic sites, the general assembly, and 25 1 the state capitol, sold by the legislative service bureau and 25 2 its legislative information office on the premises of property 25 3 under the control of the legislative council, at the state 25 4 capitol, and on other state property. 25 5 34. The sales price from sales of mementos and other items 25 6 relating to Iowa history and historic sites by the department 25 7 of cultural affairs on the premises of property under its 25 8 control and at the state capitol. 25 9 35. The sales price from sales or services furnished by 25 10 the state fair organized under chapter 173. 25 11 36. The sales price from sales of tangible personal 25 12 property or of the sale or furnishing of electrical energy, 25 13 natural or artificial gas, or communication service to another 25 14 state or political subdivision of another state if the other 25 15 state provides a similar reciprocal exemption for this state 25 16 and political subdivisions of this state. 25 17 37. The sales price of services on or connected with new 25 18 construction, reconstruction, alteration, expansion, 25 19 remodeling, or the services of a general building contractor, 25 20 architect, or engineer. 25 21 38. The sales price from the sale of building materials, 25 22 supplies, or equipment sold to rural water districts organized 25 23 under chapter 504A as provided in chapter 357A and used for 25 24 the construction of facilities of a rural water district. 25 25 39. The sales price from "casual sales". 25 26 "Casual sales" means: 25 27 a. Sales of tangible personal property, or the furnishing 25 28 of services, of a nonrecurring nature, by the owner, if the 25 29 seller, at the time of the sale, is not engaged for profit in 25 30 the business of selling tangible personal property or services 25 31 taxed under section 423.2. 25 32 b. The sale of all or substantially all of the tangible 25 33 personal property or services held or used by a seller in the 25 34 course of the seller's trade or business for which the seller 25 35 is required to hold a sales tax permit when the seller sells 26 1 or otherwise transfers the trade or business to another person 26 2 who shall engage in a similar trade or business. 26 3 40. The sales price from the sale of automotive fluids to 26 4 a retailer to be used either in providing a service which 26 5 includes the installation or application of the fluids in or 26 6 on a motor vehicle, which service is subject to section 423.2, 26 7 subsection 6, or to be installed in or applied to a motor 26 8 vehicle which the retailer intends to sell, which sale is 26 9 subject to section 423.26. For purposes of this subsection, 26 10 automotive fluids are all those which are refined, 26 11 manufactured, or otherwise processed and packaged for sale 26 12 prior to their installation in or application to a motor 26 13 vehicle. They include but are not limited to motor oil and 26 14 other lubricants, hydraulic fluids, brake fluid, transmission 26 15 fluid, sealants, undercoatings, antifreeze, and gasoline 26 16 additives. 26 17 41. The sales price from the rental of motion picture 26 18 films, video and audio tapes, video and audio discs, records, 26 19 photos, copy, scripts, or other media used for the purpose of 26 20 transmitting that which can be seen, heard, or read, if either 26 21 of the following conditions are met: 26 22 a. The lessee imposes a charge for the viewing of such 26 23 media and the charge for the viewing is subject to taxation 26 24 under this division or is subject to use tax. 26 25 b. The lessee broadcasts the contents of such media for 26 26 public viewing or listening. 26 27 42. The sales price from the sale of tangible personal 26 28 property consisting of advertising material including paper to 26 29 a person in Iowa if that person or that person's agent will, 26 30 subsequent to the sale, send that advertising material outside 26 31 this state and the material is subsequently used solely 26 32 outside of Iowa. For the purpose of this subsection, 26 33 "advertising material" means any brochure, catalog, leaflet, 26 34 flyer, order form, return envelope, or similar item used to 26 35 promote sales of property or services. 27 1 43. The sales price from the sale of property or of 27 2 services performed on property which the retailer transfers to 27 3 a carrier for shipment to a point outside of Iowa, places in 27 4 the United States mail or parcel post directed to a point 27 5 outside of Iowa, or transports to a point outside of Iowa by 27 6 means of the retailer's own vehicles, and which is not 27 7 thereafter returned to a point within Iowa, except solely in 27 8 the course of interstate commerce or transportation. This 27 9 exemption shall not apply if the purchaser, consumer, or their 27 10 agent, other than a carrier, takes physical possession of the 27 11 property in Iowa. 27 12 44. The sales price from the sale of property which is a 27 13 container, label, carton, pallet, packing case, wrapping 27 14 paper, twine, bag, bottle, shipping case, or other similar 27 15 article or receptacle sold to retailers or manufacturers for 27 16 the purpose of packaging or facilitating the transportation of 27 17 tangible personal property sold at retail or transferred in 27 18 association with the maintenance or repair of fabric or 27 19 clothing. 27 20 45. The sales price from sales or rentals to a printer or 27 21 publisher of the following: acetate; anti-halation backing; 27 22 antistatic spray; back lining; base material used as a carrier 27 23 for light sensitive emulsions; blankets; blow-ups; bronze 27 24 powder; carbon tissue; codas; color filters; color 27 25 separations; contacts; continuous tone separations; creative 27 26 art; custom dies and die cutting materials; dampener sleeves; 27 27 dampening solution; design and styling; diazo coating; dot 27 28 etching; dot etching solutions; drawings; drawsheets; driers; 27 29 duplicate films or prints; electronically digitized images; 27 30 electrotypes; end product of image modulation; engravings; 27 31 etch solutions; film; finished art or final art; fix; fixative 27 32 spray; flats; flying pasters; foils; goldenrod paper; gum; 27 33 halftones; illustrations; ink; ink paste; keylines; lacquer; 27 34 lasering images; layouts; lettering; line negatives and 27 35 positives; linotypes; lithographic offset plates; magnesium 28 1 and zinc etchings; masking paper; masks; masters; mats; mat 28 2 service; metal toner; models and modeling; mylar; negatives; 28 3 nonoffset spray; opaque film process paper; opaquing; padding 28 4 compound; paper stock; photographic materials: acids, plastic 28 5 film, desensitizer emulsion, exposure chemicals, fix, 28 6 developers, and paper; photography, day rate; photopolymer 28 7 coating; photographs; photostats; photo-display tape; 28 8 phototypesetter materials; ph-indicator sticks; positives; 28 9 press pack; printing cylinders; printing plates, all types; 28 10 process lettering; proof paper; proofs and proof processes, 28 11 all types; pumice powder; purchased author alterations; 28 12 purchased composition; purchased phototypesetting; purchased 28 13 stripping and pasteups; red litho tape; reducers; roller 28 14 covering; screen tints; sketches; stepped plates; stereotypes; 28 15 strip types; substrate; tints; tissue overlays; toners; 28 16 transparencies; tympan; typesetting; typography; varnishes; 28 17 veloxes; wood mounts; and any other items used in a like 28 18 capacity to any of the above enumerated items by the printer 28 19 or publisher to complete a finished product for sale at 28 20 retail. Expendable tools and supplies which are not 28 21 enumerated in this subsection are excluded from the exemption. 28 22 "Printer" means that portion of a person's business engaged in 28 23 printing that completes a finished product for ultimate sale 28 24 at retail or means that portion of a person's business used to 28 25 complete a finished printed packaging material used to package 28 26 a product for ultimate sale at retail. "Printer" does not 28 27 mean an in-house printer who prints or copyrights its own 28 28 materials. 28 29 46. a. The sales price from the sale or rental of 28 30 computers, machinery, and equipment, including replacement 28 31 parts, and materials used to construct or self-construct 28 32 computers, machinery, and equipment if such items are any of 28 33 the following: 28 34 (1) Directly and primarily used in processing by a 28 35 manufacturer. 29 1 (2) Directly and primarily used to maintain the integrity 29 2 of the product or to maintain unique environmental conditions 29 3 required for either the product or the computers, machinery, 29 4 and equipment used in processing by a manufacturer, including 29 5 test equipment used to control quality and specifications of 29 6 the product. 29 7 (3) Directly and primarily used in research and 29 8 development of new products or processes of processing. 29 9 (4) Computers used in processing or storage of data or 29 10 information by an insurance company, financial institution, or 29 11 commercial enterprise. 29 12 (5) Directly and primarily used in recycling or 29 13 reprocessing of waste products. 29 14 (6) Pollution-control equipment used by a manufacturer, 29 15 including but not limited to that required or certified by an 29 16 agency of this state or of the United States government. 29 17 b. The sales price from the sale of fuel used in creating 29 18 heat, power, steam, or for generating electrical current, or 29 19 from the sale of electricity, consumed by computers, 29 20 machinery, or equipment used in an exempt manner described in 29 21 paragraph "a", subparagraph (1), (2), (3), (5), or (6). 29 22 c. The sales price from the sale or rental of the 29 23 following shall not be exempt from the tax imposed by this 29 24 division: 29 25 (1) Hand tools. 29 26 (2) Point-of-sale equipment and computers. 29 27 (3) Industrial machinery, equipment, and computers, 29 28 including pollution-control equipment within the scope of 29 29 section 427A.1, subsection 1, paragraphs "h" and "i". 29 30 (4) Vehicles subject to registration, except vehicles 29 31 subject to registration which are directly and primarily used 29 32 in recycling or reprocessing of waste products. 29 33 d. As used in this subsection: 29 34 (1) "Commercial enterprise" includes businesses and 29 35 manufacturers conducted for profit and centers for data 30 1 processing services to insurance companies, financial 30 2 institutions, businesses, and manufacturers, but excludes 30 3 professions and occupations and nonprofit organizations. 30 4 (2) "Financial institution" means as defined in section 30 5 527.2. 30 6 (3) "Insurance company" means an insurer organized or 30 7 operating under chapter 508, 514, 515, 518, 518A, 519, or 520, 30 8 or authorized to do business in Iowa as an insurer or an 30 9 insurance producer under chapter 522B. 30 10 (4) "Manufacturer" means as defined in section 428.20, but 30 11 also includes contract manufacturers. A contract manufacturer 30 12 is a manufacturer that otherwise falls within the definition 30 13 of manufacturer under section 428.20, except that a contract 30 14 manufacturer does not sell the tangible personal property the 30 15 contract manufacturer processes on behalf of other 30 16 manufacturers. A business engaged in activities subsequent to 30 17 the extractive process of quarrying or mining, such as 30 18 crushing, washing, sizing, or blending of aggregate materials, 30 19 is a manufacturer with respect to these activities. 30 20 (5) "Processing" means a series of operations in which 30 21 materials are manufactured, refined, purified, created, 30 22 combined, or transformed by a manufacturer, ultimately into 30 23 tangible personal property. Processing encompasses all 30 24 activities commencing with the receipt or producing of raw 30 25 materials by the manufacturer and ending at the point products 30 26 are delivered for shipment or transferred from the 30 27 manufacturer. Processing includes but is not limited to 30 28 refinement or purification of materials; treatment of 30 29 materials to change their form, context, or condition; 30 30 maintenance of the quality or integrity of materials, 30 31 components, or products; maintenance of environmental 30 32 conditions necessary for materials, components, or products; 30 33 quality control activities; and construction of packaging and 30 34 shipping devices, placement into shipping containers or any 30 35 type of shipping devices or medium, and the movement of 31 1 materials, components, or products until shipment from the 31 2 processor. 31 3 (6) "Receipt or producing of raw materials" means 31 4 activities performed upon tangible personal property only. 31 5 With respect to raw materials produced from or upon real 31 6 estate, the receipt or producing of raw materials is deemed to 31 7 occur immediately following the severance of the raw materials 31 8 from the real estate. 31 9 47. The sales price from the furnishing of the design and 31 10 installation of new industrial machinery or equipment, 31 11 including electrical and electronic installation. 31 12 48. The sales price from the sale of carbon dioxide in a 31 13 liquid, solid, or gaseous form, electricity, steam, and other 31 14 taxable services when used by a manufacturer of food products 31 15 to produce marketable food products for human consumption, 31 16 including but not limited to treatment of material to change 31 17 its form, context, or condition, in order to produce the food 31 18 product, maintenance of quality or integrity of the food 31 19 product, changing or maintenance of temperature levels 31 20 necessary to avoid spoilage or to hold the food product in 31 21 marketable condition, maintenance of environmental conditions 31 22 necessary for the safe or efficient use of machinery and 31 23 material used to produce the food product, sanitation and 31 24 quality control activities, formation of packaging, placement 31 25 into shipping containers, and movement of the material or food 31 26 product until shipment from the building of manufacture. 31 27 49. The sales price of sales of electricity, steam, or any 31 28 taxable service when purchased and used in the processing of 31 29 tangible personal property intended to be sold ultimately at 31 30 retail. 31 31 50. The sales price of tangible personal property sold for 31 32 processing. Tangible personal property is sold for processing 31 33 within the meaning of this subsection only when it is intended 31 34 that the property will, by means of fabrication, compounding, 31 35 manufacturing, or germination, become an integral part of 32 1 other tangible personal property intended to be sold 32 2 ultimately at retail; or for generating electric current; or 32 3 the property is a chemical, solvent, sorbent, or reagent, 32 4 which is directly used and is consumed, dissipated, or 32 5 depleted, in processing tangible personal property which is 32 6 intended to be sold ultimately at retail or consumed in the 32 7 maintenance or repair of fabric or clothing, and which may not 32 8 become a component or integral part of the finished product. 32 9 The distribution to the public of free newspapers or shoppers 32 10 guides is a retail sale for purposes of the processing 32 11 exemption set out in this subsection and in subsection 49. 32 12 51. The sales price from the sale of argon and other 32 13 similar gases to be used in the manufacturing process. 32 14 52. The sales price from the sale of electricity to water 32 15 companies assessed for property tax pursuant to sections 32 16 428.24, 428.26, and 428.28 which is used solely for the 32 17 purpose of pumping water from a river or well. 32 18 53. The sales price from the sale of wind energy 32 19 conversion property to be used as an electric power source and 32 20 the sale of the materials used to manufacture, install, or 32 21 construct wind energy conversion property used or to be used 32 22 as an electric power source. 32 23 For purposes of this subsection, "wind energy conversion 32 24 property" means any device, including, but not limited to, a 32 25 wind charger, windmill, wind turbine, tower and electrical 32 26 equipment, pad mount transformers, power lines, and 32 27 substation, which converts wind energy to a form of usable 32 28 energy. 32 29 54. The sales price from the sales of newspapers, free 32 30 newspapers, or shoppers guides and the printing and publishing 32 31 of such newspapers and shoppers guides, and envelopes for 32 32 advertising. 32 33 55. The sales price from the sale of motor fuel and 32 34 special fuel consumed for highway use or in watercraft or 32 35 aircraft where the fuel tax has been imposed and paid and no 33 1 refund has been or will be allowed and the sales price from 33 2 the sales of ethanol blended gasoline, as defined in section 33 3 452A.2. 33 4 56. The sales price from all sales of food and food 33 5 ingredients. However, as used in this subsection, "food" does 33 6 not include alcoholic beverages, candy, dietary supplements, 33 7 food sold through vending machines, prepared food, soft 33 8 drinks, and tobacco. 33 9 For the purposes of this subsection: 33 10 a. "Alcoholic beverages" means beverages that are suitable 33 11 for human consumption and contain one-half of one percent or 33 12 more of alcohol by volume. 33 13 b. "Candy" means a preparation of sugar, honey, or other 33 14 natural or artificial sweeteners in combination with 33 15 chocolate, fruits, nuts, or other ingredients or flavorings in 33 16 the form of bars, drops, or pieces. Candy shall not include 33 17 any preparation containing flour and shall require no 33 18 refrigeration. 33 19 c. "Dietary supplement" means any product, other than 33 20 tobacco, intended to supplement the diet that contains one or 33 21 more of the following dietary ingredients: 33 22 (1) A vitamin. 33 23 (2) A mineral. 33 24 (3) An herb or other botanical. 33 25 (4) An amino acid. 33 26 (5) A dietary substance for use by humans to supplement 33 27 the diet by increasing the total dietary intake. 33 28 (6) A concentrate, metabolite, constituent, extract, or 33 29 combination of any of the ingredients in subparagraphs (1) 33 30 through (5) that is intended for ingestion in tablet, capsule, 33 31 powder, softgel, gelcap, or liquid form, or if not intended 33 32 for ingestion in such a form, is not represented as 33 33 conventional food and is not represented for use as a sole 33 34 item of a meal or of the diet; and is required to be labeled 33 35 as a dietary supplement, identifiable by the "supplement 34 1 facts" box found on the label and as required pursuant to 21 34 2 C.F.R. } 101.36. 34 3 d. "Food and food ingredients" means substances, whether 34 4 in liquid, concentrated, solid, frozen, dried, or dehydrated 34 5 form, that are sold for ingestion or chewing by humans and are 34 6 consumed for their taste or nutritional value. 34 7 e. "Food sold through vending machines" means food 34 8 dispensed from a machine or other mechanical device that 34 9 accepts payment. 34 10 f. "Prepared food" means any of following: 34 11 (1) Food sold in a heated state or heated by the seller. 34 12 (2) Two or more food ingredients mixed or combined by the 34 13 seller for sale as a single item. "Prepared food", for the 34 14 purposes of this subparagraph, does not include food that is 34 15 only cut, repackaged, or pasteurized by the seller, and eggs, 34 16 fish, meat, poultry, and foods containing these raw animal 34 17 foods requiring cooking by the consumer as recommended by the 34 18 United States food and drug administration in chapter 3, part 34 19 401.11 of its food code so as to prevent food borne illnesses. 34 20 (3) Food sold with eating utensils provided by the seller, 34 21 including plates, knives, forks, spoons, glasses, cups, 34 22 napkins, or straws. A plate does not include a container or 34 23 packaging used to transport food. 34 24 g. "Soft drinks" means nonalcoholic beverages that contain 34 25 natural or artificial sweeteners. "Soft drinks" does not 34 26 include beverages that contain milk or milk products; soy, 34 27 rice, or similar milk substitutes; or greater than fifty 34 28 percent of vegetable or fruit juice by volume. 34 29 f. "Tobacco" means cigarettes, cigars, chewing or pipe 34 30 tobacco, or any other item that contains tobacco. 34 31 57. The sales price from the sale of items purchased with 34 32 coupons issued under the federal Food Stamp Act of 1977, 7 34 33 U.S.C. } 2011 et seq. 34 34 58. In transactions in which tangible personal property is 34 35 traded toward the sales price of other tangible personal 35 1 property, that portion of the sales price which is not payable 35 2 in money to the retailer is exempted from the taxable amount 35 3 if the following conditions are met: 35 4 a. The tangible personal property traded to the retailer 35 5 is the type of property normally sold in the regular course of 35 6 the retailer's business. 35 7 b. The tangible personal property traded to the retailer 35 8 is intended by the retailer to be ultimately sold at retail or 35 9 is intended to be used by the retailer or another in the 35 10 remanufacturing of a like item. 35 11 59. The sales price from the sale or rental of 35 12 prescription drugs or medical devices intended for human use 35 13 or consumption. 35 14 For the purposes of this subsection: 35 15 a. "Drug" means a compound, substance, or preparation, and 35 16 any component of a compound, substance, or preparation, other 35 17 than food and food ingredients, dietary supplements, or 35 18 alcoholic beverages which is any of the following: 35 19 (1) Recognized in the official United States 35 20 pharmacopoeia, official homeopathic pharmacopoeia of the 35 21 United States, or official national formulary, and supplement 35 22 to any of them. 35 23 (2) Intended for use in the diagnosis, cure, mitigation, 35 24 treatment, or prevention of disease. 35 25 (3) Intended to affect the structure or any function of 35 26 the body. 35 27 b. "Medical device" means equipment or a supply, intended 35 28 to be prescribed by a practitioner, including orthopedic or 35 29 orthotic devices. However, "medical device" also includes 35 30 prosthetic devices, ostomy, urological, and tracheostomy 35 31 equipment and supplies, and diabetic testing materials, 35 32 hypodermic syringes and needles, anesthesia trays, biopsy 35 33 trays and biopsy needles, cannula systems, catheter trays and 35 34 invasive catheters, dialyzers, drug infusion devices, fistula 35 35 sets, hemodialysis devices, insulin infusion devices, 36 1 intraocular lenses, irrigation solutions, intravenous 36 2 administering sets, solutions and stopcocks, myelogram trays, 36 3 nebulizers, small vein infusion kits, spinal puncture trays, 36 4 transfusion sets, venous blood sets, and oxygen equipment, 36 5 intended to be dispensed for human use with or without a 36 6 prescription to an ultimate user. 36 7 c. "Practitioner" means a practitioner as defined in 36 8 section 155A.3, or a person licensed to prescribe drugs. 36 9 d. "Prescription drug" means a drug intended to be 36 10 dispensed to an ultimate user pursuant to a prescription drug 36 11 order, formula, or recipe issued in any form of oral, written, 36 12 electronic, or other means of transmission by a duly licensed 36 13 practitioner, or oxygen or insulin dispensed for human 36 14 consumption with or without a prescription drug order or 36 15 medication order. 36 16 e. "Prosthetic device" means a replacement, corrective, or 36 17 supportive device including repair and replacement parts for 36 18 the same worn on or in the body to do any of the following: 36 19 (1) Artificially replace a missing portion of the body. 36 20 (2) Prevent or correct physical deformity or malfunction. 36 21 (3) Support a weak or deformed portion of the body. 36 22 f. "Ultimate user" means an individual who has lawfully 36 23 obtained and possesses a prescription drug or medical device 36 24 for the individual's own use or for the use of a member of the 36 25 individual's household, or an individual to whom a 36 26 prescription drug or medical device has been lawfully 36 27 supplied, administered, dispensed, or prescribed. 36 28 60. The sales price from services furnished by aerial 36 29 commercial and charter transportation services. 36 30 61. The sales price from the sale of raffle tickets for a 36 31 raffle licensed pursuant to section 99B.5. 36 32 62. The sales price from the sale of tangible personal 36 33 property which will be given as prizes to players in games of 36 34 skill, games of chance, raffles, and bingo games as defined in 36 35 chapter 99B. 37 1 63. The sales price from the sale of a modular home, as 37 2 defined in section 435.1, to the extent of the portion of the 37 3 purchase price of the modular home which is not attributable 37 4 to the cost of the tangible personal property used in the 37 5 processing of the modular home. For purposes of this 37 6 exemption, the portion of the purchase price which is not 37 7 attributable to the cost of the tangible personal property 37 8 used in the processing of the modular home is forty percent. 37 9 64. The sales price from charges paid to a provider for 37 10 access to on-line computer services. For purposes of this 37 11 subsection, "on-line computer service" means a service that 37 12 provides or enables computer access by multiple users to the 37 13 internet or to other information made available through a 37 14 computer server. 37 15 65. The sales price from the sale or rental of information 37 16 services. "Information services" means every business 37 17 activity, process, or function by which a seller or its agent 37 18 accumulates, prepares, organizes, or conveys data, facts, 37 19 knowledge, procedures, and like services to a buyer or its 37 20 agent of such information through any tangible or intangible 37 21 medium. Information accumulated, prepared, or organized for a 37 22 buyer or its agent is an information service even though it 37 23 may incorporate preexisting components of data or other 37 24 information. "Information services" includes, but is not 37 25 limited to, database files, mailing lists, subscription files, 37 26 market research, credit reports, surveys, real estate 37 27 listings, bond rating reports, abstracts of title, bad check 37 28 lists, broadcasting rating services, wire services, and 37 29 scouting reports, or other similar items. 37 30 66. The sales price of a sale at retail if the substance 37 31 of the transaction is delivered to the purchaser digitally, 37 32 electronically, or utilizing cable, or by radio waves, 37 33 microwaves, satellites, or fiber optics. 37 34 67. a. The sales price from the sale of an article of 37 35 clothing designed to be worn on or about the human body if all 38 1 of the following apply: 38 2 (1) The sales price of the article is less than one 38 3 hundred dollars. 38 4 (2) The sale takes place during a period beginning at 38 5 12:01 a.m. on the first Friday in August and ending at 38 6 midnight on the following Saturday. 38 7 b. This subsection does not apply to any of the following: 38 8 (1) Sport or recreational equipment and protective 38 9 equipment. 38 10 (2) Clothing accessories or equipment. 38 11 (3) The rental of clothing. 38 12 c. For purposes of this subsection: 38 13 (1) "Clothing" means all human wearing apparel suitable 38 14 for general use. "Clothing" includes, but is not limited to 38 15 the following: aprons, household and shop; athletic 38 16 supporters; baby receiving blankets; bathing suits and caps; 38 17 beach capes and coats; belts and suspenders; boots; coats and 38 18 jackets; costumes; diapers (children and adults, including 38 19 disposable diapers); earmuffs; footlets; formal wear; garters 38 20 and garter belts; girdles; gloves and mittens for general use; 38 21 hats and caps; hosiery; insoles for shoes; lab coats; 38 22 neckties; overshoes; pantyhose; rainwear; rubber pants; 38 23 sandals; scarves; shoes and shoelaces; slippers; sneakers; 38 24 socks and stockings; steel-toed shoes; underwear; uniforms, 38 25 athletic and nonathletic; and wedding apparel. 38 26 "Clothing" does not include the following: belt buckles 38 27 sold separately; costume masks sold separately; patches and 38 28 emblems sold separately; sewing equipment and supplies 38 29 (including, but not limited to, knitting needles, patterns, 38 30 pins, scissors, sewing machines, sewing needles, tape 38 31 measures, and thimbles); and sewing materials that become part 38 32 of clothing (including, but not limited to, buttons, fabric, 38 33 lace, thread, yarn, and zippers). 38 34 (2) "Clothing accessories or equipment" means incidental 38 35 items worn on the person or in conjunction with clothing. 39 1 "Clothing accessories or equipment" includes, but is not 39 2 limited to, the following: briefcases; cosmetics; hair 39 3 notions (including, but not limited to, barrettes, hair bows, 39 4 and hair nets); handbags; handkerchiefs; jewelry; sunglasses, 39 5 nonprescription; umbrellas; wallets; watches; and wigs and 39 6 hairpieces. 39 7 (3) "Protective equipment" means items for human wear and 39 8 designed as protection for the wearer against injury or 39 9 disease or as protection against damage or injury of other 39 10 persons or property but not suitable for general use. 39 11 "Protective equipment" includes, but is not limited to, the 39 12 following: breathing masks; clean room apparel and equipment; 39 13 ear and hearing protectors; face shields; hard hats; helmets; 39 14 paint or dust respirators; protective gloves; safety glasses 39 15 and goggles; safety belts; tool belts; and welders gloves and 39 16 masks. 39 17 (4) "Sport or recreational equipment" means items designed 39 18 for human use and worn in conjunction with an athletic or 39 19 recreational activity that are not suitable for general use. 39 20 "Sport or recreational equipment" includes, but is not limited 39 21 to, the following: ballet and tap shoes; cleated or spiked 39 22 athletic shoes; gloves (including, but not limited to, 39 23 baseball, bowling, boxing, hockey, and golf); goggles; hand 39 24 and elbow guards; life preservers and vests; mouth guards; 39 25 roller and ice skates; shin guards; shoulder pads; ski boots; 39 26 waders; and wetsuits and fins. 39 27 68. a. Subject to paragraph "b", the sales price from the 39 28 sale or furnishing of metered gas, electricity, and fuel, 39 29 including propane and heating oil, to residential customers 39 30 which is used to provide energy for residential dwellings and 39 31 units of apartment and condominium complexes used for human 39 32 occupancy. 39 33 b. The exemption in this subsection shall be phased in by 39 34 means of a reduction in the tax rate as follows: 39 35 (1) If the date of the utility billing or meter reading 40 1 cycle of the residential customer for the sale or furnishing 40 2 of metered gas and electricity is on or after January 1, 2002, 40 3 through December 31, 2002, or if the sale or furnishing of 40 4 fuel for purposes of residential energy and the delivery of 40 5 the fuel occurs on or after January 1, 2002, through December 40 6 31, 2002, the rate of tax is four percent of the sales price. 40 7 (2) If the date of the utility billing or meter reading 40 8 cycle of the residential customer for the sale or furnishing 40 9 of metered gas and electricity is on or after January 1, 2003, 40 10 through December 31, 2003, or if the sale or furnishing of 40 11 fuel for purposes of residential energy and the delivery of 40 12 the fuel occurs on or after January 1, 2003, through December 40 13 31, 2003, the rate of tax is three percent of the sales price. 40 14 (3) If the date of the utility billing or meter reading 40 15 cycle of the residential customer for the sale or furnishing 40 16 of metered gas and electricity is on or after January 1, 2004, 40 17 through December 31, 2004, or if the sale or furnishing of 40 18 fuel for purposes of residential energy and the delivery of 40 19 the fuel occurs on or after January 1, 2004, through December 40 20 31, 2004, the rate of tax is two percent of the sales price. 40 21 (4) If the date of the utility billing or meter reading 40 22 cycle of the residential customer for the sale or furnishing 40 23 of metered gas and electricity is on or after January 1, 2005, 40 24 through December 31, 2005, or if the sale or furnishing of 40 25 fuel for purposes of residential energy and the delivery of 40 26 the fuel occurs on or after January 1, 2005, through December 40 27 31, 2005, the rate of tax is one percent of the sales price. 40 28 (5) If the date of the utility billing or meter reading 40 29 cycle of the residential customer for the sale or furnishing 40 30 of metered gas and electricity is on or after January 1, 2006, 40 31 or if the sale, furnishing, or service of fuel for purposes of 40 32 residential energy and the delivery of the fuel occurs on or 40 33 after January 1, 2006, the rate of tax is zero percent of the 40 34 sales price. 40 35 c. The exemption in this subsection does not apply to 41 1 local option sales and services tax imposed pursuant to 41 2 chapters 423B and 423E. 41 3 69. The sales price from charges paid for the delivery of 41 4 electricity or natural gas if the sale or furnishing of the 41 5 electricity or natural gas or its use is exempt from the tax 41 6 on sales prices imposed under this division or from the use 41 7 tax imposed under division III. 41 8 70. The sales price from the sales, furnishing, or service 41 9 of transportation service except the rental of recreational 41 10 vehicles or recreational boats, except the rental of motor 41 11 vehicles subject to registration which are registered for a 41 12 gross weight of thirteen tons or less for a period of sixty 41 13 days or less, and except the rental of aircraft for a period 41 14 of sixty days or less. This exemption does not apply to the 41 15 transportation of electric energy or natural gas. 41 16 71. The sales price from sales of tangible personal 41 17 property used or to be used as railroad rolling stock for 41 18 transporting persons or property, or as materials or parts 41 19 therefor. 41 20 72. The sales price from the sales of special fuel for 41 21 diesel engines consumed or used in the operation of ships, 41 22 barges, or waterborne vessels which are used primarily in or 41 23 for the transportation of property or cargo, or the conveyance 41 24 of persons for hire on rivers bordering on the state if the 41 25 fuel is delivered by the seller to the purchaser's barge, 41 26 ship, or waterborne vessel while it is afloat upon such a 41 27 river. 41 28 73. The sales price from sales of vehicles subject to 41 29 registration or subject only to the issuance of a certificate 41 30 of title and sales of aircraft subject to registration under 41 31 section 328.20. 41 32 74. The sales price from the sale of aircraft for use in a 41 33 scheduled interstate federal aviation administration 41 34 certificated air carrier operation. 41 35 75. The sales price from the sale or rental of aircraft; 42 1 the sale or rental of tangible personal property permanently 42 2 affixed or attached as a component part of the aircraft, 42 3 including but not limited to repair or replacement materials 42 4 or parts; and the sales price of all services used for 42 5 aircraft repair, remodeling, and maintenance services when 42 6 such services are performed on aircraft, aircraft engines, or 42 7 aircraft component materials or parts. For the purposes of 42 8 this exemption, "aircraft" means aircraft used in a scheduled 42 9 interstate federal aviation administration certificated air 42 10 carrier operation. 42 11 76. The sales price from the sale or rental of tangible 42 12 personal property permanently affixed or attached as a 42 13 component part of the aircraft, including but not limited to 42 14 repair or replacement materials or parts; and the sales price 42 15 of all services used for aircraft repair, remodeling, and 42 16 maintenance services when such services are performed on 42 17 aircraft, aircraft engines, or aircraft component materials or 42 18 parts. For the purposes of this exemption, "aircraft" means 42 19 aircraft used in nonscheduled interstate federal aviation 42 20 administration certificated air carrier operation operating 42 21 under 14 C.F.R. ch. 1, pt. 135. 42 22 77. The sales price from the sale of aircraft to an 42 23 aircraft dealer who in turn rents or leases the aircraft if 42 24 all of the following apply: 42 25 a. The aircraft is kept in the inventory of the dealer for 42 26 sale at all times. 42 27 b. The dealer reserves the right to immediately take the 42 28 aircraft from the renter or lessee when a buyer is found. 42 29 c. The renter or lessee is aware that the dealer will 42 30 immediately take the aircraft when a buyer is found. 42 31 If an aircraft exempt under this subsection is used for any 42 32 purpose other than leasing or renting, or the conditions in 42 33 paragraphs "a", "b", and "c" are not continuously met, the 42 34 dealer claiming the exemption under this subsection is liable 42 35 for the tax that would have been due except for this 43 1 subsection. The tax shall be computed upon the original 43 2 purchase price. 43 3 78. The sales price from sales or rental of tangible 43 4 personal property, or services rendered by any entity where 43 5 the profits from the sales or rental of the tangible personal 43 6 property, or services rendered are used by or donated to a 43 7 nonprofit entity which is exempt from federal income taxation 43 8 pursuant to section 501(c)(3) of the Internal Revenue Code, a 43 9 government entity, or a nonprofit private educational 43 10 institution, and where the entire proceeds from the sales, 43 11 rental, or services are expended for any of the following 43 12 purposes: 43 13 a. Educational. 43 14 b. Religious. 43 15 c. Charitable. A charitable act is an act done out of 43 16 goodwill, benevolence, and a desire to add or improve the good 43 17 of humankind in general or any class or portion of humankind, 43 18 with no pecuniary profit inuring to the person performing the 43 19 service or giving the gift. 43 20 This exemption does not apply to the sales price from games 43 21 of skill, games of chance, raffles, and bingo games as defined 43 22 in chapter 99B. This exemption is disallowed on the amount of 43 23 the sales price only to the extent the profits from the sales, 43 24 rental, or services are not used by or donated to the 43 25 appropriate entity and expended for educational, religious, or 43 26 charitable purposes. 43 27 79. The sales price from the sale or rental of tangible 43 28 personal property or from services furnished to a recognized 43 29 community action agency as provided in section 216A.93 to be 43 30 used for the purposes of the agency. 43 31 80. a. For purposes of this subsection, "designated 43 32 exempt entity" means an entity which is designated in section 43 33 423.4, subsection 1. 43 34 b. If a contractor, subcontractor, or builder is to use 43 35 building materials, supplies, and equipment in the performance 44 1 of a construction contract with a designated exempt entity, 44 2 the person shall purchase such items of tangible personal 44 3 property without liability for the tax if such property will 44 4 be used in the performance of the construction contract and a 44 5 purchasing agent authorization letter and an exemption 44 6 certificate, issued by the designated exempt entity, are 44 7 presented to the retailer. 44 8 c. Where the owner, contractor, subcontractor, or builder 44 9 is also a retailer holding a retail sales tax permit and 44 10 transacting retail sales of building materials, supplies, and 44 11 equipment, the tax shall not be due when materials are 44 12 withdrawn from inventory for use in construction performed for 44 13 a designated exempt entity if an exemption certificate is 44 14 received from such entity. 44 15 d. Tax shall not apply to tangible personal property 44 16 purchased and consumed by a manufacturer as building 44 17 materials, supplies, or equipment in the performance of a 44 18 construction contract for a designated exempt entity, if a 44 19 purchasing agent authorization letter and an exemption 44 20 certificate are received from such entity and presented to a 44 21 retailer. 44 22 Sec. 4. NEW SECTION. 423.4 REFUNDS. 44 23 1. A private nonprofit educational institution in this 44 24 state, nonprofit private museum in this state, tax-certifying 44 25 or tax-levying body or governmental subdivision of the state, 44 26 including the state board of regents, state department of 44 27 human services, state department of transportation, a 44 28 municipally owned solid waste facility which sells all or part 44 29 of its processed waste as fuel to a municipally owned public 44 30 utility, and all divisions, boards, commissions, agencies, or 44 31 instrumentalities of state, federal, county, or municipal 44 32 government which do not have earnings going to the benefit of 44 33 an equity investor or stockholder, may make application to the 44 34 department for the refund of the sales or use tax upon the 44 35 sales price of all sales of goods, wares, or merchandise, or 45 1 from services furnished to a contractor, used in the 45 2 fulfillment of a written contract with the state of Iowa, any 45 3 political subdivision of the state, or a division, board, 45 4 commission, agency, or instrumentality of the state or a 45 5 political subdivision, a private nonprofit educational 45 6 institution in this state, or a nonprofit private museum in 45 7 this state if the property becomes an integral part of the 45 8 project under contract and at the completion of the project 45 9 becomes public property, is devoted to educational uses, or 45 10 becomes a nonprofit private museum; except goods, wares, or 45 11 merchandise, or services furnished which are used in the 45 12 performance of any contract in connection with the operation 45 13 of any municipal utility engaged in selling gas, electricity, 45 14 or heat to the general public or in connection with the 45 15 operation of a municipal pay television system; and except 45 16 goods, wares, and merchandise used in the performance of a 45 17 contract for a "project" under chapter 419 as defined in that 45 18 chapter other than goods, wares, or merchandise used in the 45 19 performance of a contract for a "project" under chapter 419 45 20 for which a bond issue was approved by a municipality prior to 45 21 July 1, 1968, or for which the goods, wares, or merchandise 45 22 becomes an integral part of the project under contract and at 45 23 the completion of the project becomes public property or is 45 24 devoted to educational uses. 45 25 a. Such contractor shall state under oath, on forms 45 26 provided by the department, the amount of such sales of goods, 45 27 wares, or merchandise, or services furnished and used in the 45 28 performance of such contract, and upon which sales or use tax 45 29 has been paid, and shall file such forms with the governmental 45 30 unit, private nonprofit educational institution, or nonprofit 45 31 private museum which has made any written contract for 45 32 performance by the contractor. The forms shall be filed by 45 33 the contractor with the governmental unit, educational 45 34 institution, or nonprofit private museum before final 45 35 settlement is made. 46 1 b. Such governmental unit, educational institution, or 46 2 nonprofit private museum shall, not more than one year after 46 3 the final settlement has been made, make application to the 46 4 department for any refund of the amount of the sales or use 46 5 tax which shall have been paid upon any goods, wares, or 46 6 merchandise, or services furnished, the application to be made 46 7 in the manner and upon forms to be provided by the department, 46 8 and the department shall forthwith audit the claim and, if 46 9 approved, issue a warrant to the governmental unit, 46 10 educational institution, or nonprofit private museum in the 46 11 amount of the sales or use tax which has been paid to the 46 12 state of Iowa under the contract. 46 13 Refunds authorized under this subsection shall accrue 46 14 interest at the rate in effect under section 421.7 from the 46 15 first day of the second calendar month following the date the 46 16 refund claim is received by the department. 46 17 c. Any contractor who willfully makes a false report of 46 18 tax paid under the provisions of this subsection is guilty of 46 19 a simple misdemeanor and in addition shall be liable for the 46 20 payment of the tax and any applicable penalty and interest. 46 21 2. The refund of sales and use tax paid on transportation 46 22 construction projects let by the state department of 46 23 transportation is subject to the special provisions of this 46 24 subsection. 46 25 a. A contractor awarded a contract for a transportation 46 26 construction project is considered the consumer of all 46 27 building materials, building supplies, and equipment and shall 46 28 pay sales tax to the supplier or remit consumer use tax 46 29 directly to the department. 46 30 b. The contractor is not required to file information with 46 31 the state department of transportation stating the amount of 46 32 goods, wares, or merchandise, or services rendered, furnished, 46 33 or performed and used in the performance of the contract or 46 34 the amount of sales or use tax paid. 46 35 c. The state department of transportation shall file a 47 1 refund claim based on a formula that considers the following: 47 2 (1) The quantity of material to complete the contract, and 47 3 quantities of items of work. 47 4 (2) The estimated cost of these materials included in the 47 5 items of work, and the state sales or use tax to be paid on 47 6 the tax rate in effect in section 423.2. The quantity of 47 7 materials shall be determined after each letting based on the 47 8 contract quantities of all items of work let to contract. The 47 9 quantity of individual component materials required for each 47 10 item shall be determined and maintained in a database. The 47 11 total quantities of materials shall be determined by 47 12 multiplying the quantities of component materials for each 47 13 contract item of work by the total quantities of each contract 47 14 item for each letting. Where variances exist in the cost of 47 15 materials, the lowest cost shall be used as the base cost. 47 16 d. Only the state sales or use tax is refundable. Local 47 17 option taxes paid by the contractor are not refundable. 47 18 3. A relief agency may apply to the director for refund of 47 19 the amount of sales or use tax imposed and paid upon sales to 47 20 it of any goods, wares, merchandise, or services furnished, 47 21 used for free distribution to the poor and needy. 47 22 a. The refunds may be obtained only in the following 47 23 amounts and manner and only under the following conditions: 47 24 (1) On forms furnished by the department, and filed within 47 25 the time as the director shall provide by rule, the relief 47 26 agency shall report to the department the total amount or 47 27 amounts, valued in money, expended directly or indirectly for 47 28 goods, wares, merchandise, or services furnished, used for 47 29 free distribution to the poor and needy. 47 30 (2) On these forms the relief agency shall separately list 47 31 the persons making the sales to it or to its order, together 47 32 with the dates of the sales, and the total amount so expended 47 33 by the relief agency. 47 34 (3) The relief agency must prove to the satisfaction of 47 35 the director that the person making the sales has included the 48 1 amount thereof in the computation of the sales price of such 48 2 person and that such person has paid the tax levied by this 48 3 division or division III, based upon such computation of sales 48 4 price. 48 5 b. If satisfied that the foregoing conditions and 48 6 requirements have been complied with, the director shall 48 7 refund the amount claimed by the relief agency. 48 8 DIVISION III 48 9 USE TAX 48 10 Sec. 5. NEW SECTION. 423.5 IMPOSITION OF TAX. 48 11 An excise tax at the rate of five percent of the purchase 48 12 price or installed purchase price is imposed on the following: 48 13 1. The use in this state of tangible personal property as 48 14 defined in section 423.1, including aircraft subject to 48 15 registration under section 328.20, purchased for use in this 48 16 state. For the purposes of this division, the furnishing or 48 17 use of the following services is also treated as the use of 48 18 tangible personal property: optional service or warranty 48 19 contracts, except residential service contracts regulated 48 20 under chapter 523C, vulcanizing, recapping, or retreading 48 21 services, engraving, photography, retouching, printing, or 48 22 binding services, and communication service when furnished or 48 23 delivered to consumers or users within this state. 48 24 2. The use of manufactured housing in this state, on the 48 25 purchase price if the manufactured housing is sold in the form 48 26 of tangible personal property or on the installed purchase 48 27 price if the manufactured housing is sold in the form of 48 28 realty. 48 29 3. The use of leased vehicles, on the amount subject to 48 30 tax as calculated pursuant to section 423.27. 48 31 4. Purchases of tangible personal property made from the 48 32 government of the United States or any of its agencies by 48 33 ultimate consumers shall be subject to the tax imposed by this 48 34 section. Services purchased from the same source or sources 48 35 shall be subject to the service tax imposed by this division 49 1 and apply to the user of the services. 49 2 5. The use in this state of services enumerated in section 49 3 423.2. This tax is applicable where services are furnished in 49 4 this state or where the product or result of the service is 49 5 used in this state. 49 6 6. The excise tax is imposed upon every person using the 49 7 property within this state until the tax has been paid 49 8 directly to the county treasurer, the state department of 49 9 transportation, a retailer, or the department. This tax is 49 10 imposed on every person using the services or the product of 49 11 the services in this state until the user has paid the tax 49 12 either to an Iowa use tax permit holder or to the department. 49 13 7. For the purpose of the proper administration of the use 49 14 tax and to prevent its evasion, evidence that tangible 49 15 personal property was sold by any person for delivery in this 49 16 state shall be prima facie evidence that such tangible 49 17 personal property was sold for use in this state. 49 18 Sec. 6. NEW SECTION. 423.6 EXEMPTIONS. 49 19 The use in this state of the following tangible personal 49 20 property and services is exempted from the tax imposed by this 49 21 division: 49 22 1. Tangible personal property and enumerated services, the 49 23 sales price from the sale of which are required to be included 49 24 in the measure of the sales tax, if that tax has been paid to 49 25 the department or the retailer. This exemption does not 49 26 include vehicles subject to registration or subject only to 49 27 the issuance of a certificate of title. 49 28 2. The sale of tangible personal property or the 49 29 furnishing of services in the regular course of business. 49 30 3. Property used in processing. The use of property in 49 31 processing within the meaning of this subsection shall mean 49 32 and include any of the following: 49 33 a. Any tangible personal property including containers 49 34 which it is intended shall, by means of fabrication, 49 35 compounding, manufacturing, or germination, become an integral 50 1 part of other tangible personal property intended to be sold 50 2 ultimately at retail, and containers used in the collection, 50 3 recovery, or return of empty beverage containers subject to 50 4 chapter 455C. 50 5 b. Fuel which is consumed in creating power, heat, or 50 6 steam for processing or for generating electric current. 50 7 c. Chemicals, solvents, sorbents, or reagents, which are 50 8 directly used and are consumed, dissipated, or depleted in 50 9 processing tangible personal property which is intended to be 50 10 sold ultimately at retail, and which may not become a 50 11 component or integral part of the finished product. 50 12 d. The distribution to the public of free newspapers or 50 13 shoppers guides shall be deemed a retail sale for purposes of 50 14 the processing exemption in this subsection. 50 15 4. All articles of tangible personal property brought into 50 16 the state of Iowa by a nonresident individual for the 50 17 individual's use or enjoyment while within the state. 50 18 5. Services exempt from taxation by the provisions of 50 19 section 423.3. 50 20 6. Tangible personal property or services the sales price 50 21 of which is exempt from the sales tax under section 423.3, 50 22 except subsections 39 and 73, as it relates to the sale, but 50 23 not the lease or rental, of vehicles subject to registration 50 24 or subject only to the issuance of a certificate of title and 50 25 as it relates to aircraft subject to registration under 50 26 section 328.20. 50 27 7. Advertisement and promotional material and matter, seed 50 28 catalogs, envelopes for same, and other similar material 50 29 temporarily stored in this state which are acquired outside of 50 30 Iowa and which, subsequent to being brought into this state, 50 31 are sent outside of Iowa, either singly or physically attached 50 32 to other tangible personal property sent outside of Iowa. 50 33 8. Vehicles, as defined in section 321.1, subsections 41, 50 34 64A, 71, 85, and 88, except such vehicles subject to 50 35 registration which are designed primarily for carrying 51 1 persons, when purchased for lease and actually leased to a 51 2 lessee for use outside the state of Iowa and the subsequent 51 3 sole use in Iowa is in interstate commerce or interstate 51 4 transportation. 51 5 9. Tangible personal property which, by means of 51 6 fabrication, compounding, or manufacturing, becomes an 51 7 integral part of vehicles, as defined in section 321.1, 51 8 subsections 41, 64A, 71, 85, and 88, manufactured for lease 51 9 and actually leased to a lessee for use outside the state of 51 10 Iowa and the subsequent sole use in Iowa is in interstate 51 11 commerce or interstate transportation. Vehicles subject to 51 12 registration which are designed primarily for carrying persons 51 13 are excluded from this subsection. 51 14 10. Vehicles subject to registration which are transferred 51 15 from a business or individual conducting a business within 51 16 this state as a sole proprietorship, partnership, or limited 51 17 liability company to a corporation formed by the sole 51 18 proprietorship, partnership, or limited liability company for 51 19 the purpose of continuing the business when all of the stock 51 20 of the corporation so formed is owned by the sole proprietor 51 21 and the sole proprietor's spouse, by all the partners in the 51 22 case of a partnership, or by all the members in the case of a 51 23 limited liability company. This exemption is equally 51 24 available where the vehicles subject to registration are 51 25 transferred from a corporation to a sole proprietorship, 51 26 partnership, or limited liability company formed by that 51 27 corporation for the purpose of continuing the business when 51 28 all of the incidents of ownership are owned by the same person 51 29 or persons who were stockholders of the corporation. 51 30 This exemption also applies where the vehicles subject to 51 31 registration are transferred from a corporation as part of the 51 32 liquidation of the corporation to its stockholders if within 51 33 three months of such transfer the stockholders retransfer 51 34 those vehicles subject to registration to a sole 51 35 proprietorship, partnership, or limited liability company for 52 1 the purpose of continuing the business of the corporation when 52 2 all of the incidents of ownership are owned by the same person 52 3 or persons who were stockholders of the corporation. 52 4 11. Vehicles registered or operated under chapter 326 and 52 5 used substantially in interstate commerce, section 423.5, 52 6 subsection 7, notwithstanding. For purposes of this 52 7 subsection, "substantially in interstate commerce" means that 52 8 a minimum of twenty-five percent of the miles operated by the 52 9 vehicle accrues in states other than Iowa. This subsection 52 10 applies only to vehicles which are registered for a gross 52 11 weight of thirteen tons or more. 52 12 For purposes of this subsection, trailers and semitrailers 52 13 registered or operated under chapter 326 are deemed to be used 52 14 substantially in interstate commerce and to be registered for 52 15 a gross weight of thirteen tons or more. 52 16 For the purposes of this subsection, if a vehicle meets the 52 17 requirement that twenty-five percent of the miles operated 52 18 accrues in states other than Iowa in each year of the first 52 19 four-year period of operation, the exemption from use tax 52 20 shall continue until the vehicle is sold or transferred. If 52 21 the vehicle is found to have not met the exemption 52 22 requirements or the exemption was revoked, the value of the 52 23 vehicle upon which the use tax shall be imposed is the book or 52 24 market value, whichever is less, at the time the exemption 52 25 requirements were not met or the exemption was revoked. 52 26 12. Mobile homes and manufactured housing the use of which 52 27 has previously been subject to the tax imposed under this 52 28 division and for which that tax has been paid. 52 29 13. Mobile homes to the extent of the portion of the 52 30 purchase price of the mobile home which is not attributable to 52 31 the cost of the tangible personal property used in the 52 32 processing of the mobile home, and manufactured housing to the 52 33 extent of the purchase price or the installed purchase price 52 34 of the manufactured housing which is not attributable to the 52 35 cost of the tangible personal property used in the processing 53 1 of the manufactured housing. For purposes of this exemption, 53 2 the portion of the purchase price which is not attributable to 53 3 the cost of the tangible personal property used in the 53 4 processing of the mobile home is forty percent and the portion 53 5 of the purchase price or installed purchase price which is not 53 6 attributable to the cost of the tangible personal property 53 7 used in the processing of the manufactured housing is forty 53 8 percent. 53 9 14. Tangible personal property used or to be used as a 53 10 ship, barge, or waterborne vessel which is used or to be used 53 11 primarily in or for the transportation of property or cargo 53 12 for hire on the rivers bordering the state or as materials or 53 13 parts of such ship, barge, or waterborne vessel. 53 14 15. Vehicles subject to registration in any state when 53 15 purchased for rental or registered and titled by a motor 53 16 vehicle dealer licensed pursuant to chapter 322 for rental 53 17 use, and held for rental for a period of one hundred twenty 53 18 days or more and actually rented for periods of sixty days or 53 19 less by a person regularly engaged in the business of renting 53 20 vehicles including, but not limited to, motor vehicle dealers 53 21 licensed pursuant to chapter 322 who rent automobiles to 53 22 users, if the rental of the vehicles is subject to taxation 53 23 under chapter 423C. 53 24 16. Motor vehicles subject to registration which were 53 25 registered and titled between July 1, 1982, and July 1, 1992, 53 26 to a motor vehicle dealer licensed under chapter 322 and which 53 27 were rented to a user as defined in section 423C.2 if the 53 28 following occurred: 53 29 a. The dealer kept the vehicle on the inventory of 53 30 vehicles for sale at all times. 53 31 b. The vehicle was to be immediately taken from the user 53 32 of the vehicle when a buyer was found. 53 33 c. The user was aware of this situation. 53 34 17. Vehicles subject to registration under chapter 321, 53 35 with a gross vehicle weight rating of less than sixteen 54 1 thousand pounds, excluding motorcycles and motorized bicycles, 54 2 when purchased for lease and titled by the lessor licensed 54 3 pursuant to chapter 321F and actually leased for a period of 54 4 twelve months or more if the lease of the vehicle is subject 54 5 to taxation under section 423.27. 54 6 A lessor may maintain the exemption from use tax under this 54 7 subsection for a qualifying lease that terminates at the 54 8 conclusion or prior to the contracted expiration date, if the 54 9 lessor does not use the vehicle for any purpose other than for 54 10 lease. Once the vehicle is used by the lessor for a purpose 54 11 other than for lease, the exemption from use tax under this 54 12 subsection no longer applies and, unless there is an exemption 54 13 from the use tax, use tax is due on the fair market value of 54 14 the vehicle determined at the time the lessor uses the vehicle 54 15 for a purpose other than for lease, payable to the department. 54 16 If the lessor holds the vehicle exclusively for sale, use tax 54 17 is due and payable on the purchase price of the vehicle at the 54 18 time of purchase pursuant to this division. 54 19 18. Aircraft for use in a scheduled interstate federal 54 20 aviation administration certificated air carrier operation. 54 21 19. Aircraft; tangible personal property permanently 54 22 affixed or attached as a component part of the aircraft, 54 23 including but not limited to repair or replacement materials 54 24 or parts; and all services used for aircraft repair, 54 25 remodeling, and maintenance services when such services are 54 26 performed on aircraft, aircraft engines, or aircraft component 54 27 materials or parts. For the purposes of this exemption, 54 28 "aircraft" means aircraft used in a scheduled interstate 54 29 federal aviation administration certificated air carrier 54 30 operation. 54 31 20. Tangible personal property permanently affixed or 54 32 attached as a component part of the aircraft, including but 54 33 not limited to repair or replacement materials or parts; and 54 34 all services used for aircraft repair, remodeling, and 54 35 maintenance services when such services are performed on 55 1 aircraft, aircraft engines, or aircraft component materials or 55 2 parts. For the purposes of this exemption, "aircraft" means 55 3 aircraft used in a nonscheduled interstate federal aviation 55 4 administration certificated air carrier operation operating 55 5 under 14 C.F.R., ch. 1, pt. 135. 55 6 21. Aircraft sold to an aircraft dealer who in turn rents 55 7 or leases the aircraft if all of the following apply: 55 8 a. The aircraft is kept in the inventory of the dealer for 55 9 sale at all times. 55 10 b. The dealer reserves the right to immediately take the 55 11 aircraft from the renter or lessee when a buyer is found. 55 12 c. The renter or lessee is aware that the dealer will 55 13 immediately take the aircraft when a buyer is found. 55 14 If an aircraft exempt under this subsection is used for any 55 15 purpose other than leasing or renting, or the conditions in 55 16 paragraphs "a", "b", and "c" are not continuously met, the 55 17 dealer claiming the exemption under this subsection is liable 55 18 for the tax that would have been due except for this 55 19 subsection. The tax shall be computed upon the original 55 20 purchase price. 55 21 22. The use in this state of building materials, supplies, 55 22 or equipment, the sale or use of which is not treated as a 55 23 retail sale or a sale at retail under section 423.2, 55 24 subsection 1. 55 25 23. Exempted from the purchase price of any vehicle 55 26 subject to registration is: 55 27 a. The amount of any cash rebate which is provided by a 55 28 motor vehicle manufacturer to the purchaser of the vehicle 55 29 subject to registration so long as the rebate is applied to 55 30 the purchase price of the vehicle. 55 31 b. In a transaction between persons, neither of which is a 55 32 retailer of vehicles subject to registration, in which a 55 33 vehicle subject to registration is traded toward the purchase 55 34 price of another vehicle subject to registration, the amount 55 35 of the trade-in value allowed on the vehicle subject to 56 1 registration traded. 56 2 DIVISION IV 56 3 UNIFORM SALES AND USE TAX ADMINISTRATION ACT 56 4 Sec. 7. NEW SECTION. 423.7 TITLE. 56 5 This division shall be known and may be cited as the 56 6 "Uniform Sales and Use Tax Administration Act". 56 7 Sec. 8. NEW SECTION. 423.8 LEGISLATIVE FINDING AND 56 8 INTENT. 56 9 The general assembly finds that Iowa should enter into an 56 10 agreement with one or more states to simplify and modernize 56 11 sales and use tax administration in order to substantially 56 12 reduce the burden of tax compliance for all sellers and for 56 13 all types of commerce. It is the intent of the general 56 14 assembly that entering into this agreement will lead to 56 15 simplification and modernization of the sales and use tax law 56 16 and not to the imposition of new taxes or an increase or 56 17 decrease in the existing number of exemptions, unless such a 56 18 result is unavoidable under the terms of the agreement. 56 19 Sec. 9. NEW SECTION. 423.9 AUTHORITY TO ENTER AGREEMENT 56 20 AND TO REPRESENT THE STATE. 56 21 The director is authorized and directed to enter into the 56 22 streamlined sales and use tax agreement with one or more 56 23 states to simplify and modernize sales and use tax 56 24 administration in order to substantially reduce the burden of 56 25 tax compliance for all sellers and for all types of commerce. 56 26 The director is further authorized to take other actions 56 27 reasonably required to implement the provisions set forth in 56 28 this chapter. Other actions authorized by this section 56 29 include, but are not limited to, the adoption of rules and the 56 30 joint procurement, with other member states, of goods and 56 31 services in furtherance of the cooperative agreement. 56 32 The director or the director's designee is authorized to be 56 33 a member of the governing board established pursuant to the 56 34 agreement and to represent Iowa before that body. 56 35 Sec. 10. NEW SECTION. 423.10 RELATIONSHIP TO STATE LAW. 57 1 Entry into the agreement by the director does not amend or 57 2 modify any law of this state. Implementation of any condition 57 3 of the agreement in this state, whether adopted before, at, or 57 4 after membership of this state in the agreement, shall be by 57 5 action of the general assembly. 57 6 Sec. 11. NEW SECTION. 423.11 AGREEMENT REQUIREMENTS. 57 7 The director shall not enter into the agreement unless the 57 8 agreement requires each state to abide by the following 57 9 requirements: 57 10 1. UNIFORM STATE RATE. The agreement must set 57 11 restrictions to achieve more uniform state rates through the 57 12 following: 57 13 a. Limiting the number of state rates. 57 14 b. Limiting the application of maximums on the amount of 57 15 state tax that is due on a transaction. 57 16 c. Limiting the application of thresholds on the 57 17 application of state tax. 57 18 2. UNIFORM STANDARDS. The agreement must establish 57 19 uniform standards for the following: 57 20 a. The sourcing of transactions to taxing jurisdictions. 57 21 b. The administration of exempt sales. 57 22 c. The allowances a seller can take for bad debts. 57 23 d. Sales and use tax returns and remittances. 57 24 3. UNIFORM DEFINITIONS. The agreement must require states 57 25 to develop and adopt uniform definitions of sales and use tax 57 26 terms. The definitions must enable a state to preserve its 57 27 ability to make policy choices not inconsistent with the 57 28 uniform definitions. 57 29 4. CENTRAL REGISTRATION. The agreement must provide a 57 30 central, electronic registration system that allows a seller 57 31 to register to collect and remit sales and use taxes for all 57 32 member states. 57 33 5. NO NEXUS ATTRIBUTION. The agreement must provide that 57 34 registration with the central registration system and the 57 35 collection of sales and use taxes in the member states must 58 1 not be used as a factor in determining whether the seller has 58 2 nexus with a state for any tax. 58 3 6. LOCAL SALES AND USE TAXES. The agreement must provide 58 4 for reduction of the burdens of complying with local sales and 58 5 use taxes through the following: 58 6 a. Restricting variances between the state and local tax 58 7 bases. 58 8 b. Requiring states to administer any sales and use taxes 58 9 levied by local jurisdictions within the state so that sellers 58 10 collecting and remitting these taxes must not have to register 58 11 or file returns with, remit funds to, or be subject to 58 12 independent audits from local taxing jurisdictions. 58 13 c. Restricting the frequency of changes in the local sales 58 14 and use tax rates and setting effective dates for the 58 15 application of local jurisdictional boundary changes to local 58 16 sales and use taxes. 58 17 d. Providing notice of changes in local sales and use tax 58 18 rates and of changes in the boundaries of local taxing 58 19 jurisdictions. 58 20 7. MONETARY ALLOWANCES. The agreement must outline any 58 21 monetary allowances that are to be provided by the states to 58 22 sellers or certified service providers. 58 23 8. STATE COMPLIANCE. The agreement must require each 58 24 state to certify compliance with the terms of the agreement 58 25 prior to joining and to maintain compliance, under the laws of 58 26 the member state, with all provisions of the agreement while a 58 27 member. 58 28 9. CONSUMER PRIVACY. The agreement must require each 58 29 state to adopt a uniform policy for certified service 58 30 providers that protects the privacy of consumers and maintains 58 31 the confidentiality of tax information. 58 32 10. ADVISORY COUNCILS. The agreement must provide for the 58 33 appointment of an advisory council of private sector 58 34 representatives and an advisory council of nonmember state 58 35 representatives to consult with in the administration of the 59 1 agreement. 59 2 Sec. 12. NEW SECTION. 423.12 LIMITED BINDING AND 59 3 BENEFICIAL EFFECT. 59 4 1. The agreement binds and inures only to the benefit of 59 5 Iowa and the other member states. A person, other than a 59 6 member state, is not an intended beneficiary of the agreement. 59 7 Any benefit to a person other than a member state is 59 8 established by the law of Iowa and not by the terms of the 59 9 agreement. 59 10 2. A person shall not have any cause of action or defense 59 11 under the agreement or by virtue of this state's entry into 59 12 the agreement. A person may not challenge, in any action 59 13 brought under any provision of law, any action or inaction by 59 14 any department, agency, or other instrumentality of this 59 15 state, or any political subdivision of this state on the 59 16 ground that the action or inaction is inconsistent with the 59 17 agreement. 59 18 3. A law of this state, or the application of it, shall 59 19 not be declared invalid as to any such person or circumstance 59 20 on the ground that the provision or application is 59 21 inconsistent with the agreement. 59 22 DIVISION V 59 23 SALES AND USE TAX ACT – ADMINISTRATION OF 59 24 RETAILERS NOT REGISTERED UNDER THE AGREEMENT AND OF 59 25 CONSUMERS OBLIGATED TO PAY USE TAX DIRECTLY 59 26 Sec. 13. NEW SECTION. 423.13 PURPOSE OF THIS DIVISION. 59 27 The purpose of this division is to provide for the 59 28 administration and collection of sales or use tax on the part 59 29 of retailers who are not registered under the agreement and 59 30 for the collection of use tax on the part of consumers who are 59 31 obligated to pay that tax directly. Any application of the 59 32 sections of this division to retailers registered under the 59 33 agreement is only by way of incorporation by reference into 59 34 division VI of this chapter. 59 35 Sec. 14. NEW SECTION. 423.14 SALES AND USE TAX 60 1 COLLECTION. 60 2 1. a. Sales tax, other than that described in paragraph 60 3 "c", shall be collected by sellers who are retailers or by 60 4 their agents. Sellers or their agents shall, as far as 60 5 practicable, add the sales tax, or the average equivalent 60 6 thereof, to the sales price or charge, less trade-ins allowed 60 7 and taken and when added such tax shall constitute a part of 60 8 the sales price or charge, shall be a debt from consumer or 60 9 user to seller or agent until paid, and shall be recoverable 60 10 at law in the same manner as other debts. 60 11 b. In computing the tax to be collected as the result of 60 12 any transaction, the tax computation must be carried to the 60 13 third decimal place. Whenever the third decimal place is 60 14 greater than four, the tax must be rounded up to the next 60 15 whole cent; whenever the third decimal place is less than 60 16 four, the tax must be rounded downward to a whole cent. 60 17 Sellers may elect to compute the tax due on transactions on an 60 18 item or invoice basis. Sellers are not required to use a 60 19 bracket system. 60 20 c. The tax imposed upon those sales of motor vehicle fuel 60 21 which are subject to tax and refund under chapter 452A shall 60 22 be collected by the state treasurer by way of deduction from 60 23 refunds otherwise allowable under that chapter. The treasurer 60 24 shall transfer the amount of such deductions from the motor 60 25 vehicle fuel tax fund to the special tax fund. 60 26 2. Use tax shall be collected in the following manner: 60 27 a. The tax upon the use of all vehicles subject to 60 28 registration or subject only to the issuance of a certificate 60 29 of title or the tax upon the use of manufactured housing shall 60 30 be collected by the county treasurer or the state department 60 31 of transportation pursuant to sections 423.26 and 423.27. The 60 32 county treasurer shall retain one dollar from each tax payment 60 33 collected, to be credited to the county general fund. 60 34 b. The tax upon the use of all tangible personal property 60 35 other than that enumerated in paragraph "a", which is sold by 61 1 a seller who is a retailer maintaining a place of business in 61 2 this state, or by such other retailer or agent as the director 61 3 shall authorize pursuant to section 423.30, shall be collected 61 4 by the retailer or agent and remitted to the department, 61 5 pursuant to the provisions of paragraph "e", and sections 61 6 423.24, 423.29, 423.30, 423.32, and 423.33. 61 7 c. The tax upon the use of all tangible personal property 61 8 not paid pursuant to paragraphs "a" and "b" shall be paid to 61 9 the department directly by any person using the property 61 10 within this state, pursuant to the provisions of section 61 11 423.34. 61 12 d. The tax imposed on the use of services enumerated in 61 13 section 423.5 shall be collected, remitted, and paid to the 61 14 department of revenue and finance in the same manner as use 61 15 tax on tangible personal property is collected, remitted, and 61 16 paid under this division. 61 17 e. All persons obligated by paragraph "a", "b", or "d", to 61 18 collect use tax shall, as far as practicable, add that tax, or 61 19 the average equivalent thereof, to the purchase price, less 61 20 trade-ins allowed and taken, and when added the tax shall 61 21 constitute a part of the purchase price. Use tax which this 61 22 section requires to be collected by a retailer and any tax 61 23 collected pursuant to this section by a retailer shall 61 24 constitute a debt owed by the retailer to this state. Tax 61 25 which must be paid directly to the department, pursuant to 61 26 paragraph "c" or "d", is to be computed and added by the 61 27 consumer or user to the purchase price in the same manner as 61 28 this paragraph requires a seller to compute and add the tax. 61 29 The tax shall be a debt from the consumer or user to the 61 30 department until paid, and shall be recoverable at law in the 61 31 same manner as other debts. 61 32 Sec. 15. NEW SECTION. 423.15 GENERAL SOURCING RULES. 61 33 All sellers obligated to collect Iowa sales or use tax 61 34 shall use the standards set out in this section to determine 61 35 where sales of products occur, excluding sales enumerated in 62 1 section 423.16. These provisions apply regardless of the 62 2 characterization of a product as tangible personal property, a 62 3 digital good, or a service, excluding telecommunications 62 4 services. This section only applies to determine a seller's 62 5 obligation to pay or collect and remit a sales or use tax with 62 6 respect to the seller's sale of a product. This section does 62 7 not affect the obligation of a purchaser or lessee to remit 62 8 tax on the use of the product to the taxing jurisdictions in 62 9 which the use occurs. A seller's obligation to collect Iowa 62 10 sales tax or Iowa use tax only occurs if the sale is sourced 62 11 to this state. The application of whether Iowa sales tax 62 12 applies to sales sourced to Iowa depends upon where the sale 62 13 is consummated by delivery. 62 14 1. Sales, excluding leases or rentals other than leases or 62 15 rentals set out in subsection 2, of products shall be sourced 62 16 as follows. 62 17 a. When the product is received by the purchaser at a 62 18 business location of the seller, the sale is sourced to that 62 19 business location. 62 20 b. When the product is not received by the purchaser at a 62 21 business location of the seller, the sale is sourced to the 62 22 location where receipt by the purchaser or the purchaser's 62 23 donee, designated as such by the purchaser, occurs, including 62 24 the location indicated by instructions for delivery to the 62 25 purchaser or donee, known to the seller. 62 26 c. When paragraphs "a" and "b" do not apply, the sale is 62 27 sourced to the location indicated by an address for the 62 28 purchaser that is available from the business records of the 62 29 seller that are maintained in the ordinary course of the 62 30 seller's business when use of this address does not constitute 62 31 bad faith. 62 32 d. When paragraphs "a", "b", and "c" do not apply, the 62 33 sale is sourced to the location indicated by an address for 62 34 the purchaser obtained during the consummation of the sale, 62 35 including the address of a purchaser's payment instrument, if 63 1 no other address is available, when use of this address does 63 2 not constitute bad faith. 63 3 e. When paragraphs "a", "b", "c", and "d" do not apply, 63 4 including the circumstance where the seller is without 63 5 sufficient information to apply the previous rules, then the 63 6 location will be determined by the address from which tangible 63 7 personal property was shipped, from which the digital good or 63 8 the computer software delivered electronically was first 63 9 available for transmission by the seller, or from which the 63 10 service was provided disregarding for these purposes any 63 11 location that merely provided the digital transfer of the 63 12 product sold. 63 13 2. The lease or rental of tangible personal property, 63 14 other than property identified in subsection 3 or section 63 15 423.16, shall be sourced as follows: 63 16 a. For a lease or rental that requires recurring periodic 63 17 payments, the first periodic payment is sourced the same as a 63 18 retail sale in accordance with the provisions of subsection 1. 63 19 Periodic payments made subsequent to the first payment are 63 20 sourced to the primary property location for each period 63 21 covered by the payment. The primary property location shall 63 22 be as indicated by an address for the property provided by the 63 23 lessee that is available to the lessor from its records 63 24 maintained in the ordinary course of business, when use of 63 25 this address does not constitute bad faith. The property 63 26 location shall not be altered by intermittent use at different 63 27 locations, such as use of business property that accompanies 63 28 employees on business trips and service calls. 63 29 b. For a lease or rental that does not require recurring 63 30 periodic payments, the payment is sourced the same as a retail 63 31 sale in accordance with the provisions of subsection 1. 63 32 c. This subsection does not affect the imposition or 63 33 computation of sales or use tax on leases or rentals based on 63 34 a lump sum or accelerated basis, or on the acquisition of 63 35 property for lease. 64 1 3. The retail sale, including lease or rental, of 64 2 transportation equipment shall be sourced the same as a retail 64 3 sale in accordance with the provisions of subsection 1, 64 4 notwithstanding the exclusion of lease or rental in that 64 5 subsection. "Transportation equipment" means any of the 64 6 following: 64 7 a. Locomotives or railcars that are utilized for the 64 8 carriage of persons or property in interstate commerce. 64 9 b. Trucks and truck-tractors with a gross vehicle weight 64 10 rating of ten thousand one pounds or greater, trailers, 64 11 semitrailers, or passenger buses that meet both of the 64 12 following requirements: 64 13 (1) Are registered through the international registration 64 14 plan. 64 15 (2) Are operated under authority of a carrier authorized 64 16 and certificated by the United States department of 64 17 transportation or another federal authority to engage in the 64 18 carriage of persons or property in interstate commerce. 64 19 c. Aircraft that are operated by air carriers authorized 64 20 and certificated by the United States department of 64 21 transportation or another federal or a foreign authority to 64 22 engage in the carriage of persons or property in interstate or 64 23 foreign commerce. 64 24 d. Containers designed for use on and component parts 64 25 attached or secured on the items set forth in paragraphs "a" 64 26 through "c". 64 27 Sec. 16. NEW SECTION. 423.16 TRANSACTIONS TO WHICH THE 64 28 GENERAL SOURCING RULES DO NOT APPLY. 64 29 Section 423.15 does not apply to sales or use taxes levied 64 30 on the following: 64 31 1. The retail sale or transfer of watercraft, modular 64 32 homes, manufactured housing, or mobile homes, and the retail 64 33 sale, excluding lease or rental, of motor vehicles, trailers, 64 34 semitrailers, or aircraft that do not qualify as 64 35 transportation equipment, as defined in section 423.15, 65 1 subsection 3. 65 2 2. The lease or rental of motor vehicles, trailers, 65 3 semitrailers, or aircraft that do not qualify as 65 4 transportation equipment, as defined in section 423.15, 65 5 subsection 3, which shall be sourced in accordance with 65 6 section 423.17. 65 7 3. Transactions to which the multiple points use exemption 65 8 is applicable, which shall be sourced in accordance with 65 9 section 423.18. 65 10 4. Transactions to which direct mail sourcing is 65 11 applicable, which shall be sourced in accordance with section 65 12 423.19. 65 13 5. Telecommunications services, as set out in section 65 14 423.20, which shall be sourced in accordance with section 65 15 423.20, subsection 2. 65 16 Sec. 17. NEW SECTION. 423.17 SOURCING RULES FOR VARIOUS 65 17 TYPES OF LEASED OR RENTED EQUIPMENT WHICH IS NOT 65 18 TRANSPORTATION EQUIPMENT. 65 19 The lease or rental of motor vehicles, trailers, 65 20 semitrailers, or aircraft that do not qualify as 65 21 transportation equipment, as defined in section 423.15, 65 22 subsection 3, shall be sourced as follows: 65 23 1. For a lease or rental that requires recurring periodic 65 24 payments, each periodic payment is sourced to the primary 65 25 property location. The primary property location shall be as 65 26 indicated by an address for the property provided by the 65 27 lessee that is available to the lessor from its records 65 28 maintained in the ordinary course of business, when use of 65 29 this address does not constitute bad faith. This location 65 30 shall not be altered by intermittent use at different 65 31 locations. 65 32 2. For a lease or rental that does not require recurring 65 33 periodic payments, the payment is sourced the same as a retail 65 34 sale in accordance with the provisions of section 423.15, 65 35 subsection 1. 66 1 3. This section does not affect the imposition or 66 2 computation of sales or use tax on leases or rentals based on 66 3 a lump sum or accelerated basis, or on the acquisition of 66 4 property for lease. 66 5 Sec. 18. NEW SECTION. 423.18 MULTIPLE POINTS OF USE 66 6 EXEMPTION FORMS. 66 7 A business purchaser that is not a holder of a direct pay 66 8 tax permit pursuant to section 423.36 that knows at the time 66 9 of its purchase of a digital good, computer software delivered 66 10 electronically, or a service that the digital good, computer 66 11 software delivered electronically, or service will be 66 12 concurrently available for use in more than one jurisdiction 66 13 shall deliver to the seller in conjunction with its purchase a 66 14 "multiple points of use" or "MPU" exemption form disclosing 66 15 this fact. 66 16 1. Upon receipt of the MPU exemption form, the seller is 66 17 relieved of all obligation to collect, pay, or remit the 66 18 applicable tax and the purchaser shall be obligated to 66 19 collect, pay, or remit the applicable tax on a direct pay 66 20 basis. 66 21 2. A purchaser delivering the MPU exemption form may use 66 22 any reasonable, but consistent and uniform, method of 66 23 apportionment that is supported by the purchaser's business 66 24 records as they exist at the time of the consummation of the 66 25 sale. 66 26 3. The MPU exemption form will remain in effect for all 66 27 future sales by the seller to the purchaser except as to the 66 28 subsequent sale's specific apportionment that is governed by 66 29 the principle of subsection 2 and the facts existing at the 66 30 time of the sale until it is revoked in writing. 66 31 4. A holder of a direct pay tax permit under section 66 32 423.36 shall not be required to deliver an MPU exemption form 66 33 to the seller. A direct pay tax permit holder shall follow 66 34 the provisions of subsection 2 in apportioning the tax due on 66 35 a digital good, computer software delivered electronically, or 67 1 service that will be concurrently available for use in more 67 2 than one jurisdiction. 67 3 Sec. 19. NEW SECTION. 423.19 DIRECT MAIL SOURCING. 67 4 1. Notwithstanding section 423.15, a purchaser of direct 67 5 mail that is not a holder of a direct pay tax permit pursuant 67 6 to section 423.36 shall provide to the seller in conjunction 67 7 with the purchase either a direct mail form or information to 67 8 show the jurisdictions to which the direct mail is delivered 67 9 to recipients. 67 10 a. Upon receipt of the direct mail form, the seller is 67 11 relieved of all obligations to collect, pay, or remit the 67 12 applicable tax and the purchaser is obligated to pay or remit 67 13 the applicable tax on a direct pay basis. A direct mail form 67 14 shall remain in effect for all future sales of direct mail by 67 15 the seller to the purchaser until it is revoked in writing. 67 16 b. Upon receipt of information from the purchaser showing 67 17 the jurisdictions to which the direct mail is delivered to 67 18 recipients, the seller shall collect the tax according to the 67 19 delivery information provided by the purchaser. In the 67 20 absence of bad faith, the seller is relieved of any further 67 21 obligation to collect tax on any transaction where the seller 67 22 has collected tax pursuant to the delivery information 67 23 provided by the purchaser. 67 24 2. If the purchaser of direct mail does not have a direct 67 25 pay tax permit and does not provide the seller with either a 67 26 direct mail form or delivery information, as required by 67 27 subsection 1, the seller shall collect the tax according to 67 28 section 423.15, subsection 1, paragraph "e". Nothing in this 67 29 subsection shall limit a purchaser's obligation for sales or 67 30 use tax to any state to which the direct mail is delivered. 67 31 3. If a purchaser of direct mail provides the seller with 67 32 documentation of direct pay authority, the purchaser shall not 67 33 be required to provide a direct mail form or delivery 67 34 information to the seller. 67 35 Sec. 20. NEW SECTION. 423.20 TELECOMMUNICATIONS SERVICE 68 1 SOURCING. 68 2 1. As used in this section: 68 3 a. "Air-to-ground radiotelephone service" means a radio 68 4 service, as that term is used in 47 C.F.R. } 22.99, in which 68 5 common carriers are authorized to offer and provide radio 68 6 telecommunications service for hire to subscribers in 68 7 aircraft. 68 8 b. "Call-by-call basis" means any method of charging for 68 9 the telecommunications service where the price is measured by 68 10 individual calls. 68 11 c. "Communications channel" means a physical or virtual 68 12 path of communications over which signals are transmitted 68 13 between or among customer channel termination points. 68 14 d. "Customer" means the person or entity that contracts 68 15 with the seller of the telecommunications service. If the end 68 16 user of the telecommunications service is not the contracting 68 17 party, the end user of the telecommunications service is the 68 18 customer of the telecommunications service, but this sentence 68 19 only applies for the purpose of sourcing sales of the 68 20 telecommunications service under this section. "Customer" 68 21 does not include a reseller of a telecommunications service or 68 22 for mobile telecommunications service of a serving carrier 68 23 under an agreement to serve the customer outside the home 68 24 service provider's licensed service area. 68 25 e. "Customer channel termination point" means the location 68 26 where the customer either inputs or receives the 68 27 communications. 68 28 f. "End user" means the person who utilizes the 68 29 telecommunications service. In the case of an entity, "end 68 30 user" means the individual who utilizes the service on behalf 68 31 of the entity. 68 32 g. "Home service provider" means the same as that term is 68 33 defined in the federal Mobile Telecommunications Sourcing Act, 68 34 Pub. L. No. 106-252, 4 U.S.C. } 124(5). 68 35 h. "Mobile telecommunications service" means the same as 69 1 that term is defined in federal Mobile Telecommunications 69 2 Sourcing Act, Pub. L. No. 106-252, 4 U.S.C. } 124(7). 69 3 i. "Place of primary use" means the street address 69 4 representative of where the customer's use of the 69 5 telecommunications service primarily occurs, which must be the 69 6 residential street address or the primary business street 69 7 address of the customer. In the case of mobile 69 8 telecommunications service, "place of primary use" must be 69 9 within the licensed service area of the home service provider. 69 10 j. "Postpaid calling service" means the telecommunications 69 11 service obtained by making a payment on a call-by-call basis 69 12 either through the use of a credit card or payment mechanism 69 13 such as a bank card, travel card, credit card, or debit card, 69 14 or by charge made to which a telephone number which is not 69 15 associated with the origination or termination of the 69 16 telecommunications service. A "postpaid calling service" 69 17 includes a telecommunications service that would be a prepaid 69 18 calling service except it is not exclusively a 69 19 telecommunications service. 69 20 k. "Prepaid calling service" means the right to access 69 21 exclusively telecommunications services, which must be paid 69 22 for in advance and which enables the origination of calls 69 23 using an access number or authorization code, whether manually 69 24 or electronically dialed, and that is sold in predetermined 69 25 units or dollars of which the amount declines with use in a 69 26 known amount. 69 27 l. "Private communication service" means a 69 28 telecommunications service that entitles the customer to 69 29 exclusive or priority use of a communications channel or group 69 30 of channels between or among termination points, regardless of 69 31 the manner in which such channel or channels are connected, 69 32 and includes switching capacity, extension lines, stations, 69 33 and any other associated services that are provided in 69 34 connection with the use of such channel or channels. 69 35 m. "Service address" means one of the following: 70 1 (1) The location of the telecommunications equipment to 70 2 which a customer's call is charged and from which the call 70 3 originates or terminates, regardless of where the call is 70 4 billed or paid. 70 5 (2) If the location in subparagraph (1) is not known, 70 6 "service address" means the origination point of the signal of 70 7 the telecommunications service first identified by either the 70 8 seller's telecommunications system or in information received 70 9 by the seller from its service provider, where the system used 70 10 to transport such signals is not that of the seller. 70 11 (3) If the locations in subparagraphs (1) and (2) are not 70 12 known, the "service address" means the location of the 70 13 customer's place of primary use. 70 14 2. Sales of telecommunications services shall be sourced 70 15 in the following manner: 70 16 a. Except for the defined telecommunications services in 70 17 paragraph "c", the sale of telecommunications services sold on 70 18 a call-by-call basis shall be sourced to one of the following: 70 19 (1) Each level of taxing jurisdiction where the call 70 20 originates and terminates in that jurisdiction. 70 21 (2) Each level of taxing jurisdiction where the call 70 22 either originates or terminates and in which the service 70 23 address is also located. 70 24 b. Except for the defined telecommunications services in 70 25 paragraph "c", a sale of telecommunications services sold on a 70 26 basis other than a call-by-call basis is sourced to the 70 27 customer's place of primary use. 70 28 c. Sale of the following telecommunications services shall 70 29 be sourced to each level of taxing jurisdiction as follows: 70 30 (1) A sale of mobile telecommunications services other 70 31 than air-to-ground radiotelephone service or prepaid calling 70 32 service is sourced to the customer's place of primary use as 70 33 required by the federal Mobile Telecommunications Sourcing 70 34 Act. 70 35 (2) A sale of postpaid calling service is sourced to the 71 1 origination point of the telecommunications signal as first 71 2 identified by either of the following: 71 3 (a) The seller's telecommunications system. 71 4 (b) Information received by the seller from its service 71 5 provider, where the system used to transport such signals is 71 6 not that of the seller. 71 7 (3) A sale of prepaid calling service is sourced in 71 8 accordance with section 423.15. However, in the case of a 71 9 sale of mobile telecommunications services that is a prepaid 71 10 telecommunications service, the rule provided in section 71 11 423.15, subsection 1, paragraph "e", shall include as an 71 12 option the location associated with the mobile telephone 71 13 number. 71 14 (4) A sale of a private telecommunications service is 71 15 sourced as follows: 71 16 (a) Service for a separate charge related to a customer 71 17 channel termination point is sourced to each level of 71 18 jurisdiction in which such customer channel termination point 71 19 is located. 71 20 (b) Service where all customer termination points are 71 21 located entirely within one jurisdiction or level of 71 22 jurisdiction is sourced in such jurisdiction in which the 71 23 customer channel termination points are located. 71 24 (c) Service for segments of a channel between two customer 71 25 channel termination points located in different jurisdictions 71 26 and which segments of a channel are separately charged is 71 27 sourced fifty percent in each level of jurisdiction in which 71 28 the customer channel termination points are located. 71 29 (d) Service for segments of a channel located in more than 71 30 one jurisdiction or levels of jurisdiction and which segments 71 31 are not separately billed is sourced in each jurisdiction 71 32 based on the percentage determined by dividing the number of 71 33 customer channel termination points in such jurisdiction by 71 34 the total number of customer channel termination points. 71 35 Sec. 21. NEW SECTION. 423.21 BAD DEBT DEDUCTIONS. 72 1 1. For the purposes of this section, "bad debt" means an 72 2 amount properly calculated pursuant to section 166 of the 72 3 Internal Revenue Code then adjusted to exclude financing 72 4 charges or interest, sales or use taxes charged on the 72 5 purchase price, uncollectible amounts on property that remain 72 6 in the possession of the seller until the full purchase price 72 7 is paid, expenses incurred in attempting to collect any debt, 72 8 and repossessed property. 72 9 2. In computing the amount of tax due, a seller may deduct 72 10 bad debts from the total amount upon which the tax is 72 11 calculated for any return. Any deduction taken or refund paid 72 12 which is attributed to bad debts shall not include interest. 72 13 3. A seller may deduct bad debts on the return for the 72 14 period during which the bad debt is written off as 72 15 uncollectible in the seller's books and records and is 72 16 eligible to be deducted for federal income tax purposes. For 72 17 purposes of this subsection, a seller who is not required to 72 18 file federal income tax returns may deduct a bad debt on a 72 19 return filed for the period in which the bad debt is written 72 20 off as uncollectible in the seller's books and records and 72 21 would be eligible for a bad debt deduction for federal income 72 22 tax purposes if the seller were required to file a federal 72 23 income tax return. 72 24 4. If a deduction is taken for a bad debt and the seller 72 25 subsequently collects the debt in whole or in part, the tax on 72 26 the amount so collected must be paid and reported on the 72 27 return filed for the period in which the collection is made. 72 28 5. A seller may obtain a refund of tax on any amount of 72 29 bad debt that exceeds the amount of taxable sales within the 72 30 period allowed for refund claims by section 423.47. However, 72 31 the period allowed for refund claims shall be measured from 72 32 the due date of the return on which the bad debt could first 72 33 be claimed. 72 34 6. For the purposes of computing a bad debt deduction or 72 35 reporting a payment received on a previously claimed bad debt, 73 1 any payments made on a debt or account shall be applied first 73 2 to the price of the property or service and tax thereon, 73 3 proportionally, and secondly to interest, service charges, and 73 4 any other charges. 73 5 Sec. 22. NEW SECTION. 423.22 TAXATION IN ANOTHER STATE. 73 6 If any person who causes tangible personal property to be 73 7 brought into this state or who uses in this state services 73 8 enumerated in section 423.2 has already paid a tax in another 73 9 state in respect to the sale or use of the property or the 73 10 performance of the service, or an occupation tax in respect to 73 11 the property or service, in an amount less than the tax 73 12 imposed by division II or III, the provisions of those 73 13 divisions shall apply, but at a rate measured by the 73 14 difference only between the rate fixed by division II or III 73 15 and the rate by which the previous tax on the sale or use, or 73 16 the occupation tax, was computed. If the tax imposed and paid 73 17 in the other state is equal to or more than the tax imposed by 73 18 those divisions, then a tax is not due in this state on the 73 19 personal property or service. 73 20 Sec. 23. NEW SECTION. 423.23 SELLERS' AGREEMENTS. 73 21 Agreements between competing sellers, or the adoption of 73 22 appropriate rules and regulations by organizations or 73 23 associations of sellers to provide uniform methods for adding 73 24 sales or use tax or the average equivalent thereof, and which 73 25 do not involve price-fixing agreements otherwise unlawful, are 73 26 expressly authorized and shall be held not in violation of 73 27 chapter 553 or other antitrust laws of this state. The 73 28 director shall cooperate with sellers, organizations, or 73 29 associations in formulating agreements and rules. 73 30 Sec. 24. NEW SECTION. 423.24 ABSORBING TAX PROHIBITED. 73 31 A seller shall not advertise or hold out or state to the 73 32 public or to any purchaser, consumer, or user, directly or 73 33 indirectly, that the taxes or any parts thereof imposed by 73 34 division II or III will be assumed or absorbed by the seller 73 35 or the taxes will not be added to the sales price of the 74 1 property sold, or if added that the taxes or any part thereof 74 2 will be refunded. Any person violating any of the provisions 74 3 of this section within this state is guilty of a simple 74 4 misdemeanor. 74 5 Sec. 25. NEW SECTION. 423.25 DIRECTOR'S POWER TO ADOPT 74 6 RULES. 74 7 The director shall have the power to adopt rules for adding 74 8 the taxes imposed by divisions II and III, or the average 74 9 equivalents thereof, by providing different methods applying 74 10 uniformly to retailers within the same general classification 74 11 for the purpose of enabling the retailers to add and collect, 74 12 as far as practicable, the amounts of those taxes. 74 13 Sec. 26. NEW SECTION. 423.26 VEHICLES SUBJECT TO 74 14 REGISTRATION OR ONLY TO THE ISSUANCE OF TITLE – MANUFACTURED 74 15 HOUSING. 74 16 The use tax imposed upon the use of vehicles subject to 74 17 registration or subject only to the issuance of a certificate 74 18 of title or imposed upon the use of manufactured housing shall 74 19 be paid by the owner of the vehicle or of the manufactured 74 20 housing to the county treasurer or the state department of 74 21 transportation from whom the registration receipt or 74 22 certificate of title is obtained. A registration receipt for 74 23 a vehicle subject to registration or certificate of title 74 24 shall not be issued until the tax has been paid. The county 74 25 treasurer or the state department of transportation shall 74 26 require every applicant for a registration receipt for a 74 27 vehicle subject to registration or certificate of title to 74 28 supply information as the county treasurer or the director 74 29 deems necessary as to the time of purchase, the purchase 74 30 price, installed purchase price, and other information 74 31 relative to the purchase of the vehicle or manufactured 74 32 housing. On or before the tenth day of each month, the county 74 33 treasurer or the state department of transportation shall 74 34 remit to the department the amount of the taxes collected 74 35 during the preceding month. 75 1 A person who willfully makes a false statement in regard to 75 2 the purchase price of a vehicle subject to taxation under this 75 3 section is guilty of a fraudulent practice. A person who 75 4 willfully makes a false statement in regard to the purchase 75 5 price of such a vehicle with the intent to evade the payment 75 6 of tax shall be assessed a penalty of seventy-five percent of 75 7 the amount of tax unpaid and required to be paid on the actual 75 8 purchase price less trade-in allowance. 75 9 Sec. 27. NEW SECTION. 423.27 MOTOR VEHICLE LEASE TAX. 75 10 1. The use tax imposed upon the use of leased vehicles 75 11 subject to registration under chapter 321, with gross vehicle 75 12 weight ratings of less than sixteen thousand pounds, excluding 75 13 motorcycles and motorized bicycles, which are leased by a 75 14 lessor licensed pursuant to chapter 321F for a period of 75 15 twelve months or more shall be paid by the owner of the 75 16 vehicle to the county treasurer or state department of 75 17 transportation from whom the registration receipt or 75 18 certificate of title is obtained. A registration receipt for 75 19 a vehicle subject to registration or issuance of a certificate 75 20 of title shall not be issued until the tax is paid in the 75 21 initial instance. Tax on the lease transaction that does not 75 22 require titling or registration of the vehicle shall be 75 23 remitted to the department. Tax and the reporting of tax due 75 24 to the department shall be remitted on or before fifteen days 75 25 from the last day of the month that the vehicle lease tax 75 26 becomes due. Failure to timely report or remit any of the tax 75 27 when due shall result in a penalty and interest being imposed 75 28 on the tax due pursuant to section 423.40, subsection 1, and 75 29 section 423.42, subsection 1. 75 30 2. The amount subject to tax shall be computed on each 75 31 separate lease transaction by taking the total of the lease 75 32 payments, plus the down payment, and excluding all of the 75 33 following: 75 34 a. Title fee. 75 35 b. Registration fees. 76 1 c. Vehicle lease tax pursuant to this section. 76 2 d. Federal excise taxes attributable to the sale of the 76 3 vehicle to the owner or to the lease of the vehicle by the 76 4 owner. 76 5 e. Optional service or warranty contracts subject to tax 76 6 pursuant to section 423.2, subsection 1. 76 7 f. Insurance. 76 8 g. Manufacturer's rebate. 76 9 h. Refundable deposit. 76 10 i. Finance charges, if any, on items listed in paragraphs 76 11 "a" through "h". 76 12 If any or all of the items in paragraphs "a" through "i" 76 13 are excluded from the taxable lease price, the owner shall 76 14 maintain adequate records of the amounts of those items. If 76 15 the parties to a lease enter into an agreement providing that 76 16 the tax imposed under this statute is to be paid by the lessee 76 17 or included in the monthly lease payments to be paid by the 76 18 lessee, the total cost of the tax shall not be included in the 76 19 computation of lease price for the purpose of taxation under 76 20 this section. The county treasurer, the state department of 76 21 transportation, or the department of revenue and finance shall 76 22 require every applicant for a registration receipt for a 76 23 vehicle subject to tax under this section to supply 76 24 information as the county treasurer or director deems 76 25 necessary as to the date of the lease transaction, the lease 76 26 price, and other information relative to the lease of the 76 27 vehicle. 76 28 3. On or before the tenth day of each month, the county 76 29 treasurer or the state department of transportation shall 76 30 remit to the department the amount of the taxes collected 76 31 during the preceding month. 76 32 4. If the lease is terminated prior to the termination 76 33 date contained in the lease agreement, no refund shall be 76 34 allowed for tax previously paid under this section, except as 76 35 provided in section 322G.4. 77 1 Sec. 28. NEW SECTION. 423.28 SALES TAX REPORT – 77 2 DEDUCTION. 77 3 Motor vehicle or trailer dealers, in making their reports 77 4 and returns to the department for the purpose of paying the 77 5 sales tax, shall be permitted to deduct all sales prices from 77 6 retail sales of vehicles subject to registration or subject 77 7 only to the issuance of a certificate of title. Sales prices 77 8 from sales of vehicles subject to registration or subject only 77 9 to the issuance of a certificate of title are exempted from 77 10 the sales tax, but, if required by the director, the sales 77 11 prices shall be included in the returns made by motor vehicle 77 12 or trailer dealers under division II, and proper deductions 77 13 taken pursuant to this section. 77 14 Sec. 29. NEW SECTION. 423.29 COLLECTIONS BY SELLERS. 77 15 Every seller who is a retailer and who is making taxable 77 16 sales of tangible personal property in Iowa shall, at the time 77 17 of selling the property, collect the sales tax. Every seller 77 18 who is a retailer maintaining a place of business in this 77 19 state and selling tangible personal property for use in Iowa 77 20 shall, at the time of making the sale, whether within or 77 21 without the state, collect the use tax. Sellers required to 77 22 collect sales or use tax shall give to any purchaser a receipt 77 23 for the tax collected in the manner and form prescribed by the 77 24 director. 77 25 Every seller who is a retailer furnishing taxable services 77 26 in Iowa and every seller who is a retailer maintaining a place 77 27 of business in this state and furnishing taxable services in 77 28 Iowa or services outside Iowa if the product or result of the 77 29 service is used in Iowa shall be subject to the provisions of 77 30 the preceding paragraph. 77 31 Sec. 30. NEW SECTION. 423.30 FOREIGN SELLERS NOT 77 32 REGISTERED UNDER THE AGREEMENT. 77 33 The director may, upon application, authorize the 77 34 collection of the use tax by any seller who is a retailer not 77 35 maintaining a place of business within this state and not 78 1 registered under the agreement, who, to the satisfaction of 78 2 the director, furnishes adequate security to ensure collection 78 3 and payment of the tax. Such sellers shall be issued, without 78 4 charge, permits to collect tax subject to any regulations 78 5 which the director shall prescribe. When so authorized, it 78 6 shall be the duty of foreign sellers to collect the tax upon 78 7 all tangible personal property sold, to the retailer's 78 8 knowledge, for use within this state, in the same manner and 78 9 subject to the same requirements as a retailer maintaining a 78 10 place of business within this state. The authority and permit 78 11 may be canceled when, at any time, the director considers the 78 12 security inadequate, or that tax can more effectively be 78 13 collected from the person using property in this state. 78 14 The discretionary power granted in this section is extended 78 15 to apply in the case of foreign retailers furnishing services 78 16 enumerated in section 423.2. 78 17 Sec. 31. NEW SECTION. 423.31 FILING OF SALES TAX RETURNS 78 18 AND PAYMENT OF SALES TAX. 78 19 1. Each person subject to this section and section 423.36 78 20 and in accordance with the provisions of this section and 78 21 section 423.36 shall, on or before the last day of the month 78 22 following the close of each calendar quarter during which such 78 23 person is or has become or ceased being subject to the 78 24 provisions of this section and section 423.36, make, sign, and 78 25 file a return for the calendar quarter in the form as may be 78 26 required. Returns shall show information relating to sales 78 27 prices including goods, wares, and services converted to the 78 28 use of such person, the amounts of sales prices excluded and 78 29 exempt from the tax, the amounts of sales prices subject to 78 30 tax, a calculation of tax due, and any other information for 78 31 the period covered by the return as may be required. Returns 78 32 shall be signed by the retailer or the retailer's authorized 78 33 agent and must be certified by the retailer to be correct in 78 34 accordance with forms and rules prescribed by the director. 78 35 2. Persons required to file, or committed to file by 79 1 reason of voluntary action or by order of the department, 79 2 deposits of taxes due under this division shall be entitled to 79 3 take credit against the total quarterly amount of tax due such 79 4 amount as shall have been deposited by such persons during 79 5 that calendar quarter. The balance remaining due after such 79 6 credit for deposits shall be entered on the return. However, 79 7 such person may be granted an extension of time not exceeding 79 8 thirty days for filing the quarterly return, upon a proper 79 9 showing of necessity. If an extension is granted, such person 79 10 shall have paid by the twentieth day of the month following 79 11 the close of such quarter ninety percent of the estimated tax 79 12 due. 79 13 3. The sales tax forms prescribed by the director shall be 79 14 referred to as "retailers tax deposit". Deposit forms shall 79 15 be signed by the retailer or the retailer's duly authorized 79 16 agent, and shall be duly certified by the retailer or agent to 79 17 be correct. The director may authorize incorporated banks and 79 18 trust companies or other depositories authorized by law which 79 19 are depositories or financial agents of the United States, or 79 20 of this state, to receive any sales tax imposed under this 79 21 chapter, in the manner, at the times, and under the conditions 79 22 the director prescribes. The director shall prescribe the 79 23 manner, times, and conditions under which the receipt of the 79 24 tax by those depositories is to be treated as payment of the 79 25 tax to the department. 79 26 4. Every retailer at the time of making any return 79 27 required by this section shall compute and pay to the 79 28 department the tax due for the preceding period. The tax on 79 29 sales prices from the sale or rental of tangible personal 79 30 property under a consumer rental purchase agreement as defined 79 31 in section 537.3604, subsection 8, is payable in the tax 79 32 period of receipt. 79 33 5. Upon making application and receiving approval from the 79 34 director, a parent corporation and its affiliated corporations 79 35 that make retail sales of tangible personal property or 80 1 taxable enumerated services may make deposits and file a 80 2 consolidated sales tax return for the affiliated group, 80 3 pursuant to rules adopted by the director. A parent 80 4 corporation and each affiliate corporation that files a 80 5 consolidated return are jointly and severally liable for all 80 6 tax, penalty, and interest found due for the tax period for 80 7 which a consolidated return is filed or required to be filed. 80 8 A business required to file a consolidated sales tax return 80 9 shall file a form entitled "schedule of consolidated business 80 10 locations" with its quarterly sales tax return that shows the 80 11 taxpayer's consolidated permit number, the permit number for 80 12 each Iowa business location, the state sales tax amount by 80 13 business location, and the amount of state sales tax due on 80 14 goods consumed that are not assigned to a specific business 80 15 location. Consolidated quarterly sales tax returns that are 80 16 not accompanied by the schedule of consolidated business 80 17 locations form are considered incomplete and are subject to 80 18 penalty under section 421.27. 80 19 6. If necessary or advisable in order to insure the 80 20 payment of the tax, the director may require returns and 80 21 payment of the tax to be made for other than quarterly 80 22 periods, the provisions of this section, or other provision to 80 23 the contrary notwithstanding. 80 24 Sec. 32. NEW SECTION. 423.32 FILING OF USE TAX RETURNS 80 25 AND PAYMENT OF USE TAX. 80 26 1. A retailer maintaining a place of business in this 80 27 state who is required to collect or a user who is required to 80 28 pay the use tax or a foreign retailer authorized, pursuant to 80 29 section 423.30, to collect the use tax, shall remit to the 80 30 department the amount of tax on or before the last day of the 80 31 month following each calendar quarterly period. However, a 80 32 retailer who collects or owes more than fifteen hundred 80 33 dollars in use taxes in a month shall deposit with the 80 34 department or in a depository authorized by law and designated 80 35 by the director, the amount collected or owed, with a deposit 81 1 form for the month as prescribed by the director. 81 2 a. The deposit form is due on or before the twentieth day 81 3 of the month following the month of collection, except a 81 4 deposit is not required for the third month of the calendar 81 5 quarter, and the total quarterly amount, less the amounts 81 6 deposited for the first two months of the quarter, is due with 81 7 the quarterly report on the last day of the month following 81 8 the month of collection. At that time, the retailer shall 81 9 file with the department a return for the preceding quarterly 81 10 period in the form prescribed by the director showing the 81 11 purchase price of the tangible personal property sold by the 81 12 retailer during the preceding quarterly period, the use of 81 13 which is subject to the use tax imposed by this chapter, and 81 14 other information the director deems necessary for the proper 81 15 administration of the use tax. 81 16 b. The return shall be accompanied by a remittance of the 81 17 use tax for the period covered by the return. If necessary in 81 18 order to ensure payment to the state of the tax, the director 81 19 may in any or all cases require returns and payments to be 81 20 made for other than quarterly periods. The director, upon 81 21 request and a proper showing of necessity, may grant an 81 22 extension of time not to exceed thirty days for making any 81 23 return and payment. Returns shall be signed, in accordance 81 24 with forms and rules prescribed by the director, by the 81 25 retailer or the retailer's authorized agent, and shall be 81 26 certified by the retailer or agent to be correct. 81 27 2. If it is reasonably expected, as determined by rules 81 28 prescribed by the director, that a retailer's annual sales or 81 29 use tax liability will not exceed one hundred twenty dollars 81 30 for a calendar year, the retailer may request and the director 81 31 may grant permission to the retailer, in lieu of the quarterly 81 32 filing and remitting requirements set out elsewhere in this 81 33 section, to file the return required by and remit the sales or 81 34 use tax due under this section on a calendar-year basis. The 81 35 return and tax are due and payable no later than January 31 82 1 following each calendar year in which the retailer carries on 82 2 business. 82 3 3. The director, in cooperation with the department of 82 4 management, may periodically change the filing and remittance 82 5 thresholds by administrative rule if in the best interests of 82 6 the state and taxpayer to do so. 82 7 Sec. 33. NEW SECTION. 423.33 LIABILITY OF PERSONS OTHER 82 8 THAN RETAILERS FOR PAYMENT OF SALES OR USE TAX. 82 9 1. LIABILITY OF PURCHASER FOR SALES TAX. If a purchaser 82 10 fails to pay sales tax to the retailer required to collect the 82 11 tax, then in addition to all of the rights, obligations, and 82 12 remedies provided, the tax is payable by the purchaser 82 13 directly to the department, and sections 423.31, 423.32, 82 14 423.37, 423.38, 423.39, 423.40, 423.41, and 423.42 apply to 82 15 the purchaser. For failure to pay, the retailer and purchaser 82 16 are liable, unless the circumstances described in section 82 17 421.60, subsection 2, paragraph "m", or section 423.45, 82 18 subsection 4, paragraph "b" or "e", or subsection 5, paragraph 82 19 "c" or "e", are applicable. 82 20 2. IMMEDIATE SUCCESSOR LIABILITY FOR SALES OR USE TAX. If 82 21 a retailer sells the retailer's business or stock of goods or 82 22 quits the business, the retailer shall prepare a final return 82 23 and pay all sales or use tax due within the time required by 82 24 law. The immediate successor to the retailer, if any, shall 82 25 withhold a sufficient portion of the purchase price, in money 82 26 or money's worth, to pay the amount of delinquent tax, 82 27 interest, or penalty due and unpaid. If the immediate 82 28 successor of the business or stock of goods intentionally 82 29 fails to withhold the amount due from the purchase price as 82 30 provided in this subsection, the immediate successor is 82 31 personally liable for the payment of delinquent taxes, 82 32 interest, and penalty accrued and unpaid on account of the 82 33 operation of the business by the immediate former retailer, 82 34 except when the purchase is made in good faith as provided in 82 35 section 421.28. However, a person foreclosing on a valid 83 1 security interest or retaking possession of premises under a 83 2 valid lease is not an "immediate successor" for purposes of 83 3 this section. The department may waive the liability of the 83 4 immediate successor under this subsection if the immediate 83 5 successor exercised good faith in establishing the amount of 83 6 the previous liability. 83 7 3. EVENT SPONSOR'S LIABILITY FOR SALES TAX. A person 83 8 sponsoring a flea market or a craft, antique, coin, or stamp 83 9 show or similar event shall obtain from every retailer selling 83 10 tangible personal property or taxable services at the event 83 11 proof that the retailer possesses a valid sales tax permit or 83 12 secure from the retailer a statement, taken in good faith, 83 13 that property or services offered for sale are not subject to 83 14 sales tax. Failure to do so renders a sponsor of the event 83 15 liable for payment of any sales tax, interest, and penalty due 83 16 and owing from any retailer selling property or services at 83 17 the event. Sections 423.31, 423.32, 423.37, 423.38, 423.39, 83 18 423.40, 423.41, and 423.42 apply to the sponsors. For 83 19 purposes of this subsection, a person sponsoring a flea market 83 20 or a craft, antique, coin, or stamp show or similar event does 83 21 not include an organization which sponsors an event less than 83 22 three times a year or a state, county, or district 83 23 agricultural fair. 83 24 Sec. 34. NEW SECTION. 423.34 LIABILITY OF USER. 83 25 Any person who uses any property or services enumerated in 83 26 section 423.2 upon which the use tax has not been paid, either 83 27 to the county treasurer or to a retailer or direct to the 83 28 department as required by this division, shall be liable for 83 29 the payment of tax, and shall on or before the last day of the 83 30 month next succeeding each quarterly period pay the use tax 83 31 upon all property or services used by the person during the 83 32 preceding quarterly period in the manner and accompanied by 83 33 such returns as the director shall prescribe. All of the 83 34 provisions of sections 423.32 and 423.33 with reference to the 83 35 returns and payments shall be applicable to the returns and 84 1 payments required by this section. 84 2 Sec. 35. NEW SECTION. 423.35 POSTING OF BOND TO SECURE 84 3 PAYMENT. 84 4 The director may, when necessary and advisable in order to 84 5 secure the collection of the sales or use tax, authorize any 84 6 person subject to either tax, and any retailer required or 84 7 authorized to collect those taxes pursuant to the provisions 84 8 of section 423.14, to file with the department a bond, issued 84 9 by a surety company authorized to transact business in this 84 10 state and approved by the insurance commissioner as to 84 11 solvency and responsibility, in an amount as the director may 84 12 fix, to secure the payment of any tax, interest, or penalties 84 13 due or which may become due from such person. In lieu of a 84 14 bond, securities approved by the director, in an amount which 84 15 the director may prescribe, may be deposited with the 84 16 department, which securities shall be kept in the custody of 84 17 the department and may be sold by the director at public or 84 18 private sale, without notice to the depositor, if it becomes 84 19 necessary to do so in order to recover any tax, interest, or 84 20 penalties due. Upon the sale, the surplus, if any, above the 84 21 amounts due under this chapter shall be returned to the person 84 22 who deposited the securities. 84 23 Sec. 36. NEW SECTION. 423.36 PERMITS REQUIRED TO COLLECT 84 24 SALES OR USE TAX – APPLICATIONS – REVOCATION. 84 25 1. A person shall not engage in or transact business as a 84 26 retailer making taxable sales of tangible personal property or 84 27 furnishing services within this state or as a retailer making 84 28 taxable sales of tangible personal property or furnishing 84 29 services for use within this state, unless a permit has been 84 30 issued to the retailer under this section, except as provided 84 31 in subsection 6. Every person desiring to engage in or 84 32 transact business as a retailer shall file with the department 84 33 an application for a permit to collect sales or use tax. 84 34 Every application for a sales or use tax permit shall be made 84 35 upon a form prescribed by the director and shall set forth any 85 1 information the director may require. The application shall 85 2 be signed by an owner of the business if a natural person; in 85 3 the case of a retailer which is an association or partnership, 85 4 by a member or partner; and in the case of a retailer which is 85 5 a corporation, by an executive officer or some person 85 6 specifically authorized by the corporation to sign the 85 7 application, to which shall be attached the written evidence 85 8 of the person's authority. 85 9 2. To collect sales or use tax, the applicant must have a 85 10 permit for each place of business in the state of Iowa. The 85 11 department may deny a permit to an applicant who is 85 12 substantially delinquent in paying a tax due, or the interest 85 13 or penalty on the tax, administered by the department at the 85 14 time of application. If the applicant is a partnership, a 85 15 permit may be denied if a partner is substantially delinquent 85 16 in paying any delinquent tax, penalty, or interest. If the 85 17 applicant is a corporation, a permit may be denied if any 85 18 officer having a substantial legal or equitable interest in 85 19 the ownership of the corporation owes any delinquent tax, 85 20 penalty, or interest. 85 21 3. The department shall grant and issue to each applicant 85 22 a permit for each place of business in this state where sales 85 23 or use tax is collected. A permit is not assignable and is 85 24 valid only for the person in whose name it is issued and for 85 25 the transaction of business at the place designated or at a 85 26 place of relocation within the state if the ownership remains 85 27 the same. 85 28 If an applicant is making sales outside Iowa for use in 85 29 this state or furnishing services outside Iowa, the product or 85 30 result of which will be used in this state, that applicant 85 31 shall be issued one use tax permit by the department 85 32 applicable to these out-of-state sales or services. 85 33 4. Permits issued under this section are valid and 85 34 effective until revoked by the department. 85 35 5. If the holder of a permit fails to comply with any of 86 1 the provisions of this division or of division II or III or 86 2 any order or rule of the department adopted under those 86 3 divisions or is substantially delinquent in the payment of a 86 4 tax administered by the department or the interest or penalty 86 5 on the tax, or if the person is a corporation and if any 86 6 officer having a substantial legal or equitable interest in 86 7 the ownership of the corporation owes any delinquent tax of 86 8 the permit-holding corporation, or interest or penalty on the 86 9 tax, administered by the department, the director may revoke 86 10 the permit. The director shall send notice by mail to a 86 11 permit holder informing that person of the director's intent 86 12 to revoke the permit and of the permit holder's right to a 86 13 hearing on the matter. If the permit holder petitions the 86 14 director for a hearing on the proposed revocation, after 86 15 giving ten days' notice of the time and place of the hearing 86 16 in accordance with section 17A.18, subsection 3, the matter 86 17 may be heard and a decision rendered. The director may 86 18 restore permits after revocation. The director shall adopt 86 19 rules setting forth the period of time a retailer must wait 86 20 before a permit may be restored or a new permit may be issued. 86 21 The waiting period shall not exceed ninety days from the date 86 22 of the revocation of the permit. 86 23 6. Sellers who are not regularly engaged in selling at 86 24 retail and do not have a permanent place of business, but who 86 25 are temporarily engaged in selling from trucks, portable 86 26 roadside stands, concessionaires at state, county, district, 86 27 or local fairs, carnivals, or the like, shall report and remit 86 28 the sales tax on a temporary basis, under rules the director 86 29 shall provide for the efficient collection of the sales tax. 86 30 This subsection applies to sellers who are temporarily engaged 86 31 in furnishing services. 86 32 Persons engaged in selling tangible personal property or 86 33 furnishing services shall not be required to obtain or retain 86 34 a sales tax permit for a place of business at which taxable 86 35 sales of tangible personal property or taxable performance of 87 1 services will not occur. 87 2 7. The provisions of subsection 1, dealing with the lawful 87 3 right of a retailer to transact business, as applicable, apply 87 4 to persons having receipts from furnishing services enumerated 87 5 in section 423.2, except that a person holding a permit 87 6 pursuant to subsection 1 shall not be required to obtain any 87 7 separate sales tax permit for the purpose of engaging in 87 8 business involving the services. 87 9 8. a. Except as provided in paragraph "b", purchasers, 87 10 users, and consumers of tangible personal property or 87 11 enumerated services taxed pursuant to division II or III of 87 12 this chapter or chapters 423B and 423E may be authorized, 87 13 pursuant to rules adopted by the director, to remit tax owed 87 14 directly to the department instead of the tax being collected 87 15 and paid by the seller. To qualify for a direct pay tax 87 16 permit, the purchaser, user, or consumer must accrue a tax 87 17 liability of more than four thousand dollars in tax under 87 18 divisions II and III in a semimonthly period and make deposits 87 19 and file returns pursuant to section 423.31. This authority 87 20 shall not be granted or exercised except upon application to 87 21 the director and then only after issuance by the director of a 87 22 direct pay tax permit. 87 23 b. The granting of a direct pay tax permit is not 87 24 authorized for any of the following: 87 25 (1) Taxes imposed on the sales, furnishing, or service of 87 26 gas, electricity, water, heat, pay television service, and 87 27 communication service. 87 28 (2) Taxes imposed under sections 423.26 and 423.27 and 87 29 chapter 423C. 87 30 Sec. 37. NEW SECTION. 423.37 FAILURE TO FILE SALES OR 87 31 USE TAX RETURNS – INCORRECT RETURNS. 87 32 1. As soon as practicable after a return is filed and in 87 33 any event within three years after the return is filed, the 87 34 department shall examine it, assess and determine the tax due 87 35 if the return is found to be incorrect, and give notice to the 88 1 person liable for the tax of the assessment and determination 88 2 as provided in subsection 2. The period for the examination 88 3 and determination of the correct amount of tax is unlimited in 88 4 the case of a false or fraudulent return made with the intent 88 5 to evade tax or in the case of a failure to file a return. 88 6 2. If a return required by this division is not filed, or 88 7 if a return when filed is incorrect or insufficient and the 88 8 maker fails to file a corrected or sufficient return within 88 9 twenty days after the same is required by notice from the 88 10 department, the department shall determine the amount of tax 88 11 due from information as the department may be able to obtain 88 12 and, if necessary, may estimate the tax on the basis of 88 13 external indices, such as number of employees of the person 88 14 concerned, rentals paid by the person, stock on hand, or other 88 15 factors. The department shall give notice of the 88 16 determination to the person liable for the tax. The 88 17 determination shall fix the tax unless the person against whom 88 18 it is assessed shall, within sixty days after the giving of 88 19 notice of the determination, apply to the director for a 88 20 hearing or unless the taxpayer contests the determination by 88 21 paying the tax, interest, and penalty and timely filing a 88 22 claim for refund. At the hearing evidence may be offered to 88 23 support the determination or to prove that it is incorrect. 88 24 After the hearing the director shall give notice of the 88 25 decision to the person liable for the tax. 88 26 3. The three-year period of limitation provided in 88 27 subsection 1 may be extended by a taxpayer by signing a waiver 88 28 agreement form to be provided by the department. The 88 29 agreement shall stipulate the period of extension and the tax 88 30 period to which the extension applies. The agreement shall 88 31 also provide that a claim for refund may be filed by the 88 32 taxpayer at any time during the period of extension. 88 33 Sec. 38. NEW SECTION. 423.38 JUDICIAL REVIEW. 88 34 1. Judicial review of actions of the director may be 88 35 sought in accordance with the terms of the Iowa administrative 89 1 procedure Act. 89 2 2. For cause and upon a showing by the director that 89 3 collection of the tax in dispute is in doubt, the court may 89 4 order the petitioner to file with the clerk a bond for the use 89 5 of the respondent, with sureties approved by the clerk, in the 89 6 amount of tax appealed from, conditioned that the petitioner 89 7 shall perform the orders of the court. 89 8 3. An appeal may be taken by the taxpayer or the director 89 9 to the supreme court of this state irrespective of the amount 89 10 involved. 89 11 Sec. 39. NEW SECTION. 423.39 SERVICE OF NOTICES. 89 12 1. A notice authorized or required under this division may 89 13 be given by mailing the notice to the person for whom it is 89 14 intended, addressed to that person at the address given in the 89 15 last return filed by the person pursuant to this division, or 89 16 if no return has been filed, then to any address obtainable. 89 17 The mailing of the notice is presumptive evidence of the 89 18 receipt of the notice by the person to whom addressed. Any 89 19 period of time which is determined according to this division 89 20 by the giving of notice commences to run from the date of 89 21 mailing of the notice. 89 22 2. The provisions of the Code relative to the limitation 89 23 of time for the enforcement of a civil remedy shall not apply 89 24 to any proceeding or action taken to levy, appraise, assess, 89 25 determine, or enforce the collection of any tax or penalty 89 26 provided by this chapter. 89 27 Sec. 40. NEW SECTION. 423.40 PENALTIES – OFFENSES – 89 28 LIMITATION. 89 29 1. In addition to the sales or use tax or additional sales 89 30 or use tax, the taxpayer shall pay a penalty as provided in 89 31 section 421.27. The taxpayer shall also pay interest on the 89 32 sales or use tax or additional sales or use tax at the rate in 89 33 effect under section 421.7 for each month counting each 89 34 fraction of a month as an entire month, computed from the date 89 35 the semimonthly or monthly tax deposit form or return was 90 1 required to be filed. The penalty and interest shall be paid 90 2 to the department and disposed of in the same manner as other 90 3 receipts under this division. Unpaid penalties and interest 90 4 may be enforced in the same manner as the taxes imposed by 90 5 this chapter. 90 6 2. a. Any person who knowingly sells tangible personal 90 7 property, tickets or admissions to places of amusement and 90 8 athletic events, or gas, water, electricity, or communication 90 9 service at retail, or engages in the furnishing of services 90 10 enumerated in section 423.2, in this state without procuring a 90 11 permit to collect tax, as provided in section 423.36, or who 90 12 violates section 423.24 and the officers of any corporation 90 13 who so act are guilty of a serious misdemeanor. 90 14 b. A person who knowingly sells tangible personal 90 15 property, tickets or admissions to places of amusement and 90 16 athletic events, or gas, water, electricity, or communication 90 17 service at retail, or engages in the furnishing of services 90 18 enumerated in section 423.2, in this state after the person's 90 19 sales tax permit has been revoked and before it has been 90 20 restored as provided in section 423.36, subsection 5, and the 90 21 officers of any corporation who so act are guilty of an 90 22 aggravated misdemeanor. 90 23 3. A person who willfully attempts in any manner to evade 90 24 any tax imposed by this chapter or the payment of the tax or a 90 25 person who makes or causes to be made a false or fraudulent 90 26 semimonthly or monthly tax deposit form or return with intent 90 27 to evade any tax imposed by division II or III or the payment 90 28 of the tax is guilty of a class "D" felony. 90 29 4. The certificate of the director to the effect that a 90 30 tax has not been paid, that a return has not been filed, or 90 31 that information has not been supplied pursuant to the 90 32 provisions of this division shall be prima facie evidence 90 33 thereof. 90 34 5. A person required to pay sales or use tax, or to make, 90 35 sign, or file a tax deposit form or return or supplemental 91 1 return, who willfully makes a false or fraudulent tax deposit 91 2 form or return, or willfully fails to pay at least ninety 91 3 percent of the tax or willfully fails to make, sign, or file 91 4 the tax deposit form or return, at the time required by law, 91 5 is guilty of a fraudulent practice. 91 6 6. A prosecution for an offense specified in this section 91 7 shall be commenced within six years after its commission. 91 8 Sec. 41. NEW SECTION. 423.41 BOOKS – EXAMINATION. 91 9 Every retailer required or authorized to collect taxes 91 10 imposed by this chapter and every person using in this state 91 11 tangible personal property, services, or the product of 91 12 services shall keep records, receipts, invoices, and other 91 13 pertinent papers as the director shall require, in the form 91 14 that the director shall require, for as long as the director 91 15 has the authority to examine and determine tax due. The 91 16 director or any duly authorized agent of the department may 91 17 examine the books, papers, records, and equipment of any 91 18 person either selling tangible personal property or services 91 19 or liable for the tax imposed by this chapter, and investigate 91 20 the character of the business of any person in order to verify 91 21 the accuracy of any return made, or if a return was not made 91 22 by the person, ascertain and determine the amount due under 91 23 this chapter. These books, papers, and records shall be made 91 24 available within this state for examination upon reasonable 91 25 notice when the director deems it advisable and so orders. 91 26 The preceding requirements shall likewise apply to users and 91 27 persons furnishing services enumerated in section 423.2. 91 28 Sec. 42. NEW SECTION. 423.42 STATUTES APPLICABLE. 91 29 1. The director shall administer the taxes imposed by 91 30 divisions II and III in the same manner and subject to all the 91 31 provisions of, and all of the powers, duties, authority, and 91 32 restrictions contained in, section 422.25, subsection 4, 91 33 section 422.30, and sections 422.67 through 422.75. 91 34 2. All the provisions of section 422.26 shall apply in 91 35 respect to the taxes and penalties imposed by divisions II and 92 1 III and this division, except that, as applied to any tax 92 2 imposed by divisions II and III, the lien provided in section 92 3 422.26 shall be prior and paramount over all subsequent liens 92 4 upon any personal property within this state, or right to such 92 5 personal property, belonging to the taxpayer without the 92 6 necessity of recording as provided in section 422.26. The 92 7 requirements for recording shall, as applied to the taxes 92 8 imposed by divisions II and III, apply only to the liens upon 92 9 real property. When requested to do so by any person from 92 10 whom a taxpayer is seeking credit, or with whom the taxpayer 92 11 is negotiating the sale of any personal property, or by any 92 12 other person having a legitimate interest in such information, 92 13 the director shall, upon being satisfied that such a situation 92 14 exists, inform that person as to the amount of unpaid taxes 92 15 due by such taxpayer under the provisions of divisions II and 92 16 III. The giving of this information under these circumstances 92 17 shall not be deemed a violation of section 422.72 as applied 92 18 to divisions II and III. 92 19 Sec. 43. NEW SECTION. 423.43 DEPOSIT OF REVENUE – 92 20 APPROPRIATIONS. 92 21 Except as otherwise provided in section 312.2, subsection 92 22 15, all revenues derived from the use tax on motor vehicles, 92 23 trailers, and motor vehicle accessories and equipment as 92 24 collected pursuant to sections 423.26 and 423.27 shall be 92 25 deposited and credited to the road use tax fund and shall be 92 26 used exclusively for the construction, maintenance, and 92 27 supervision of public highways. 92 28 1. Notwithstanding any provision of this section which 92 29 provides that all revenues derived from the use tax on motor 92 30 vehicles, trailers, and motor vehicle accessories and 92 31 equipment as collected pursuant to sections 423.26 and 423.27 92 32 shall be deposited and credited to the road use tax fund, 92 33 eighty percent of the revenues shall be deposited and credited 92 34 as follows: 92 35 a. Twenty-five percent of all such revenue, up to a 93 1 maximum of four million two hundred fifty thousand dollars per 93 2 quarter, shall be deposited into and credited to the Iowa 93 3 comprehensive petroleum underground storage tank fund created 93 4 in section 455G.3, and the moneys so deposited are a 93 5 continuing appropriation for expenditure under chapter 455G, 93 6 and moneys so appropriated shall not be used for other 93 7 purposes. 93 8 b. Any such revenues remaining shall be credited to the 93 9 road use tax fund. 93 10 2. Notwithstanding any other provision of this section 93 11 that provides that all revenue derived from the use tax on 93 12 motor vehicles, trailers, and motor vehicle accessories and 93 13 equipment as collected pursuant to section 423.26 shall be 93 14 deposited and credited to the road use tax fund, twenty 93 15 percent of the revenues shall be credited and deposited as 93 16 follows: one-half to the road use tax fund and one-half to 93 17 the primary road fund to be used for the commercial and 93 18 industrial highway network. 93 19 3. All other revenue arising under the operation of this 93 20 chapter shall be credited to the general fund of the state. 93 21 Sec. 44. NEW SECTION. 423.44 REIMBURSEMENT FOR PRIMARY 93 22 ROAD FUND. 93 23 From moneys deposited into the road use tax fund, the 93 24 department may credit to the primary road fund any amount of 93 25 revenues derived from the use tax on motor vehicles, trailers, 93 26 and motor vehicle accessories and equipment as collected 93 27 pursuant to sections 423.26 and 423.27 to the extent necessary 93 28 to reimburse that fund for the expenditures not otherwise 93 29 eligible to be made from the primary road fund, which are made 93 30 for repairing, improving, and maintaining bridges over the 93 31 rivers bordering the state. Expenditures for those portions 93 32 of bridges within adjacent states may be included when they 93 33 are made pursuant to an agreement entered into under section 93 34 313.63, 313A.34, or 314.10. 93 35 Sec. 45. NEW SECTION. 423.45 REFUNDS – EXEMPTION 94 1 CERTIFICATES. 94 2 1. If an amount of tax represented by a retailer to a 94 3 consumer or user as constituting tax due is computed upon a 94 4 sales price that is not taxable or the amount represented is 94 5 in excess of the actual taxable amount and the amount 94 6 represented is actually paid by the consumer or user to the 94 7 retailer, the excess amount of tax paid shall be returned to 94 8 the consumer or user upon notification to the retailer by the 94 9 department that an excess payment exists. 94 10 2. If an amount of tax represented by a retailer to a 94 11 consumer or user as constituting tax due is computed upon a 94 12 sales price that is not taxable or the amount represented is 94 13 in excess of the actual taxable amount and the amount 94 14 represented is actually paid by the consumer or user to the 94 15 retailer, the excess amount of tax paid shall be returned to 94 16 the consumer or user upon proper notification to the retailer 94 17 by the consumer or user that an excess payment exists. 94 18 "Proper" notification is written notification which allows a 94 19 retailer at least sixty days to respond and which contains 94 20 enough information to allow a retailer to determine the 94 21 validity of a consumer's or user's claim that an excess amount 94 22 of tax has been paid. No cause of action shall accrue against 94 23 a retailer for excess tax paid until sixty days after proper 94 24 notice has been given the retailer by the consumer or user. 94 25 3. In the circumstances described in subsections 1 and 2, 94 26 a retailer has the option to either return any excess amount 94 27 of tax paid to a consumer or user, or to remit the amount 94 28 which a consumer or user has paid to the retailer to the 94 29 department. 94 30 4. a. The department shall issue or the seller may 94 31 separately provide exemption certificates in the form 94 32 prescribed by the director, including certificates not made of 94 33 paper, which conform to the requirements of paragraph "c", to 94 34 assist retailers in properly accounting for nontaxable sales 94 35 of tangible personal property or services to purchasers for a 95 1 nontaxable purpose. The department shall also allow the use 95 2 of exemption certificates for those circumstances in which a 95 3 sale is taxable but the seller is not obligated to collect tax 95 4 from the buyer. 95 5 b. The sales tax liability for all sales of tangible 95 6 personal property and all sales of services is upon the seller 95 7 and the purchaser unless the seller takes in good faith from 95 8 the purchaser a valid exemption certificate stating under 95 9 penalty of perjury that the purchase is for a nontaxable 95 10 purpose and is not a retail sale as defined in section 423.1, 95 11 or the seller is not obligated to collect tax due, or unless 95 12 the seller takes a fuel exemption certificate pursuant to 95 13 subsection 5. If the tangible personal property or services 95 14 are purchased tax free pursuant to a valid exemption 95 15 certificate which is taken in good faith by the seller, and 95 16 the tangible personal property or services are used or 95 17 disposed of by the purchaser in a nonexempt manner, the 95 18 purchaser is solely liable for the taxes and shall remit the 95 19 taxes directly to the department and sections 423.31, 423.32, 95 20 423.37, 423.38, 423.39, 423.40, 423.41, and 423.42 shall apply 95 21 to the purchaser. 95 22 c. A valid exemption certificate is an exemption 95 23 certificate which is complete and correct according to the 95 24 requirements of the director. 95 25 d. A valid exemption certificate is taken in good faith by 95 26 the seller when the seller has exercised that caution and 95 27 diligence which honest persons of ordinary prudence would 95 28 exercise in handling their own business affairs, and includes 95 29 an honesty of intention and freedom from knowledge of 95 30 circumstances which ought to put one upon inquiry as to the 95 31 facts. In order for a seller to take a valid exemption 95 32 certificate in good faith, the seller must exercise reasonable 95 33 prudence to determine the facts supporting the valid exemption 95 34 certificate, and if any facts upon such certificate would lead 95 35 a reasonable person to further inquiry, such inquiry must be 96 1 made with an honest intent to discover the facts. 96 2 e. If the circumstances change and as a result the 96 3 tangible personal property or services are used or disposed of 96 4 by the purchaser in a nonexempt manner or the purchaser 96 5 becomes obligated to pay the tax, the purchaser is liable 96 6 solely for the taxes and shall remit the taxes directly to the 96 7 department in accordance with this subsection. 96 8 5. a. The department shall issue or the seller may 96 9 separately provide fuel exemption certificates in the form 96 10 prescribed by the director. 96 11 b. For purposes of this subsection: 96 12 (1) "Fuel" includes gas, electricity, water, heat, steam, 96 13 and any other tangible personal property consumed in creating 96 14 heat, power, or steam. 96 15 (2) "Fuel consumed in processing" means fuel used or 96 16 consumed for processing including grain drying, for providing 96 17 heat or cooling for livestock buildings or for greenhouses or 96 18 buildings or parts of buildings dedicated to the production of 96 19 flowering, ornamental, or vegetable plants intended for sale 96 20 in the ordinary course of business, for use in aquaculture 96 21 production, or for generating electric current, or in 96 22 implements of husbandry engaged in agricultural production. 96 23 (3) "Fuel exemption certificate" means an exemption 96 24 certificate given by the purchaser under penalty of perjury to 96 25 assist retailers in properly accounting for nontaxable sales 96 26 of fuel consumed in processing. 96 27 (4) "Substantial change" means a change in the use or 96 28 disposition of tangible personal property and services by the 96 29 purchaser such that the purchaser pays less than ninety 96 30 percent of the purchaser's actual sales tax liability. A 96 31 change includes a misstatement of facts in an application made 96 32 pursuant to paragraph "d" or in a fuel exemption certificate. 96 33 c. The seller may accept a completed fuel exemption 96 34 certificate, as prepared by the purchaser, for three years 96 35 unless the purchaser files a new completed exemption 97 1 certificate. If the fuel is purchased tax free pursuant to a 97 2 fuel exemption certificate which is taken by the seller, and 97 3 the fuel is used or disposed of by the purchaser in a 97 4 nonexempt manner, the purchaser is solely liable for the 97 5 taxes, and shall remit the taxes directly to the department 97 6 and sections 423.31, 423.32, 423.37, 423.38, 423.39, 423.40, 97 7 423.41, and 423.42 shall apply to the purchaser. 97 8 d. The purchaser may apply to the department for its 97 9 review of the fuel exemption certificate. In this event, the 97 10 department shall review the fuel exemption certificate within 97 11 twelve months from the date of application and determine the 97 12 correct amount of the exemption. If the amount determined by 97 13 the department is different than the amount that the purchaser 97 14 claims is exempt, the department shall promptly notify the 97 15 purchaser of the determination. Failure of the department to 97 16 make a determination within twelve months from the date of 97 17 application shall constitute a determination that the fuel 97 18 exemption certificate is correct as submitted. A 97 19 determination of exemption by the department is final unless 97 20 the purchaser appeals to the director for a revision of the 97 21 determination within sixty days after the date of the notice 97 22 of determination. The director shall grant a hearing, and 97 23 upon the hearing, the director shall determine the correct 97 24 exemption and notify the purchaser of the decision by mail. 97 25 The decision of the director is final unless the purchaser 97 26 seeks judicial review of the director's decision under section 97 27 423.38 within sixty days after the date of the notice of the 97 28 director's decision. Unless there is a substantial change, 97 29 the department shall not impose penalties pursuant to section 97 30 423.40 both retroactively to purchases made after the date of 97 31 application and prospectively until the department gives 97 32 notice to the purchaser that a tax or additional tax is due, 97 33 for failure to remit any tax due which is in excess of a 97 34 determination made under this section. A determination made 97 35 by the department pursuant to this subsection does not 98 1 constitute an audit for purposes of section 423.37. 98 2 e. If the circumstances change and the fuel is used or 98 3 disposed of by the purchaser in a nonexempt manner, the 98 4 purchaser is solely liable for the taxes and shall remit the 98 5 taxes directly to the department in accordance with paragraph 98 6 "c". 98 7 f. The purchaser shall attach documentation to the fuel 98 8 exemption certificate which is reasonably necessary to support 98 9 the exemption for fuel consumed in processing. If the 98 10 purchaser files a new exemption certificate with the seller, 98 11 documentation shall not be required if the purchaser 98 12 previously furnished the seller with this documentation and 98 13 substantial change has not occurred since that documentation 98 14 was furnished or if fuel consumed in processing is separately 98 15 metered and billed by the seller. 98 16 6. Nothing in this section authorizes any cause of action 98 17 by any person to recover sales or use taxes directly from the 98 18 state or extends any person's time to seek a refund of sales 98 19 or use taxes which have been collected and remitted to the 98 20 state. 98 21 Sec. 46. NEW SECTION. 423.46 RATE AND BASE CHANGES. 98 22 The department shall make a reasonable effort to provide 98 23 sellers with as much advance notice as practicable of a rate 98 24 change and to notify sellers of legislative changes in the tax 98 25 base and amendments to sales and use tax rules. Failure of a 98 26 seller to receive notice or failure of this state to provide 98 27 notice or limit the effective date of a rate change shall not 98 28 relieve the seller of its obligation to collect sales or use 98 29 taxes for this state. 98 30 Sec. 47. NEW SECTION. 423.47 REFUNDS AND CREDITS. 98 31 If it shall appear that, as a result of mistake, an amount 98 32 of tax, penalty, or interest has been paid which was not due 98 33 under the provisions of this chapter, such amount shall be 98 34 credited against any tax due, or to become due, on the books 98 35 of the department from the person who made the erroneous 99 1 payment, or such amount shall be refunded to such person by 99 2 the department. A claim for refund or credit that has not 99 3 been filed with the department within three years after the 99 4 tax payment for which a refund or credit is claimed became 99 5 due, or one year after such tax payment was made, whichever 99 6 time is the later, shall not be allowed by the director. 99 7 DIVISION VI 99 8 SALES AND USE TAX ACT – ADMINISTRATION OF 99 9 RETAILERS REGISTERED VOLUNTARILY UNDER THE 99 10 AGREEMENT 99 11 Sec. 48. NEW SECTION. 423.48 RESPONSIBILITIES AND RIGHTS 99 12 OF SELLERS REGISTERED UNDER THE AGREEMENT. 99 13 1. By registering under the agreement, the seller agrees 99 14 to collect and remit sales and use taxes for all its taxable 99 15 Iowa sales. Iowa's withdrawal from the agreement or 99 16 revocation of its membership in the agreement shall not 99 17 relieve a seller from its responsibility to remit taxes 99 18 previously collected on behalf of this state. 99 19 2. The following provisions apply to any seller who 99 20 registers under the agreement: 99 21 a. The seller may register on-line. 99 22 b. Registration under the agreement and the collection of 99 23 Iowa sales and use taxes shall not be used as factors in 99 24 determining whether the seller has nexus with Iowa for any 99 25 tax. 99 26 c. If registered under the agreement with any other member 99 27 state, the seller is considered to be registered in Iowa. 99 28 d. The seller is not required to pay registration fees or 99 29 other charges. 99 30 e. A written signature from the seller is not required. 99 31 f. The seller may register by way of an agent. The 99 32 agent's appointment shall be in writing and submitted to the 99 33 department if requested by the department. 99 34 g. The seller may cancel its registration at any time 99 35 under procedures adopted by the governing board established 100 1 pursuant to the agreement. Cancellation does not relieve the 100 2 seller of its liability for remitting any Iowa taxes 100 3 collected. 100 4 3. The following additional responsibilities and rights 100 5 apply to model sellers: 100 6 a. A model 1 seller's obligation to calculate, collect, 100 7 and remit sales and use taxes shall be performed by its 100 8 certified service provider, except for the seller's obligation 100 9 to remit tax on its own purchases. As the seller's agent, the 100 10 certified service provider is liable for its model 1 seller's 100 11 sales and use tax due Iowa on all sales transactions it 100 12 processes for the seller except as set out in this section. A 100 13 seller that contracts with a certified service provider is not 100 14 liable to the state for sales or use tax due on transactions 100 15 processed by the certified service provider unless the seller 100 16 misrepresents the types of items or services it sells or 100 17 commits fraud. In the absence of probable cause to believe 100 18 that the seller has committed fraud or made a material 100 19 misrepresentation, the seller is not subject to audit on the 100 20 transactions processed by the certified service provider. A 100 21 model 1 seller is subject to audit for transactions not 100 22 processed by the certified service provider. The director is 100 23 authorized to perform a system check of the model 1 seller and 100 24 review the seller's procedures to determine if the certified 100 25 service provider's system is functioning properly and the 100 26 extent to which the seller's transactions are being processed 100 27 by the certified service provider. 100 28 b. A model 2 seller shall calculate the amount of tax due 100 29 on a transaction by the use of a certified automated system, 100 30 but shall collect and remit tax on its own sales. A person 100 31 that provides a certified automated system is responsible for 100 32 the proper functioning of that system and is liable to this 100 33 state for underpayments of tax attributable to errors in the 100 34 functioning of the certified automated system. A seller that 100 35 uses a certified automated system remains responsible and is 101 1 liable to the state for reporting and remitting tax. 101 2 c. A model 3 seller shall use its own proprietary 101 3 automated system to calculate tax due and collect and remit 101 4 tax on its own sales. A model 3 seller is liable for the 101 5 failure of its proprietary automated system to meet the 101 6 applicable performance standard. 101 7 Sec. 49. NEW SECTION. 423.49 RETURNS. 101 8 1. All model 1, 2, or 3 sellers are subject to all of the 101 9 following return requirements: 101 10 a. The seller is required to file only one return per 101 11 month for this state and for all taxing jurisdictions within 101 12 this state. 101 13 b. The date for filing returns shall be determined under 101 14 rules adopted by the director. However, in no case shall the 101 15 return be due earlier than the twentieth day of the following 101 16 month. 101 17 c. The director shall request additional information 101 18 returns. These returns shall not be required more frequently 101 19 than every six months. 101 20 2. Any registered seller which does not have a legal 101 21 obligation to register in this state and is not a model 1, 2, 101 22 or 3 seller is subject to all of the following return 101 23 requirements: 101 24 a. The seller is required to file a return within one year 101 25 of the month of initial registration and shall file a return 101 26 on an annual basis in succeeding years. 101 27 b. In addition to the return required in paragraph "a", if 101 28 the seller accumulates more than one thousand dollars in total 101 29 state and local tax, the seller is required to file a return 101 30 in the following month. 101 31 c. The format of the return and the due date of the 101 32 initial return and the annual return shall be determined under 101 33 rules adopted by the department. 101 34 Sec. 50. NEW SECTION. 423.50 REMITTANCE OF FUNDS. 101 35 1. Only one remittance of tax per return is required 102 1 except as provided in this subsection. Sellers that collect 102 2 more than thirty thousand dollars in sales and use taxes for 102 3 this state during the preceding calendar year shall be 102 4 required to make additional remittances as required under 102 5 rules adopted by the director. The filing of a return is not 102 6 required with an additional remittance. 102 7 2. All remittances shall be remitted electronically. 102 8 3. Electronic payments may be made either by automated 102 9 clearinghouse credit or automated clearinghouse debit. Any 102 10 data accompanying a remittance must be formatted using uniform 102 11 tax type and payment codes approved by the governing board 102 12 established pursuant to the agreement. An alternative method 102 13 for making same-day payments shall be determined under rules 102 14 adopted by the director. 102 15 4. If a due date falls on a legal banking holiday in this 102 16 state, the taxes are due on the succeeding business day. 102 17 Sec. 51. NEW SECTION. 423.51 ADMINISTRATION OF 102 18 EXEMPTIONS. 102 19 1. The following provisions shall apply when a purchaser 102 20 claims an exemption: 102 21 a. The seller shall obtain identifying information of the 102 22 purchaser and the reason for claiming a tax exemption at the 102 23 time of the purchase as determined by the member states acting 102 24 jointly. 102 25 b. A purchaser is not required to provide a signature to 102 26 claim an exemption from tax unless a paper certificate is 102 27 used. 102 28 c. The seller shall use the standard form for claiming an 102 29 exemption electronically as adopted jointly by the member 102 30 states. 102 31 d. The seller shall obtain the same information for proof 102 32 of a claimed exemption regardless of the medium in which the 102 33 transaction occurred. 102 34 e. The department may authorize a system wherein the 102 35 purchaser exempt from the payment of the tax is issued an 103 1 identification number which shall be presented to the seller 103 2 at the time of the sale. 103 3 f. The seller shall maintain proper records of exempt 103 4 transactions and provide them to the department when 103 5 requested. 103 6 g. The department shall administer entity-based and use- 103 7 based exemptions when practicable through a direct pay tax 103 8 permit, an exemption certificate, or another means that does 103 9 not burden sellers. For the purposes of this paragraph: 103 10 (1) An "entity-based exemption" is an exemption based on 103 11 who purchases the product or who sells the product. 103 12 (2) A "use-based exemption" is an exemption based on the 103 13 purchaser's use of the product. 103 14 2. Sellers that follow the requirements of this section 103 15 are relieved from any tax otherwise applicable if it is 103 16 determined that the purchaser improperly claimed an exemption 103 17 and that the purchaser is liable for the nonpayment of tax. 103 18 This relief from liability does not apply to a seller who 103 19 fraudulently fails to collect the tax or solicits purchasers 103 20 to participate in the unlawful claim of an exemption. 103 21 Sec. 52. NEW SECTION. 423.52 RELIEF FROM LIABILITY FOR 103 22 SELLERS AND CERTIFIED SERVICE PROVIDERS. 103 23 Sellers and certified service providers are relieved from 103 24 liability to this state or its local taxing jurisdictions for 103 25 having charged and collected the incorrect amount of sales or 103 26 use tax resulting from the seller or certified service 103 27 provider relying on erroneous data provided by this state on 103 28 tax rates, boundaries, or taxing jurisdiction assignments. If 103 29 this state provides an address-based system for assigning 103 30 taxing jurisdictions whether or not pursuant to the federal 103 31 Mobile Telecommunications Sourcing Act, the director is not 103 32 required to provide liability relief for errors resulting from 103 33 reliance on the information provided by this state. 103 34 Sec. 53. NEW SECTION. 423.53 BAD DEBTS AND MODEL 1 103 35 SELLERS. 104 1 A certified service provider may claim, on behalf of a 104 2 model 1 seller, any bad debt deduction as provided in section 104 3 423.21. The certified service provider must credit or refund 104 4 the full amount of any bad debt deduction or refund received 104 5 to the seller. 104 6 Sec. 54. NEW SECTION. 423.54 AMNESTY FOR REGISTERED 104 7 SELLERS. 104 8 1. Subject to the limitations in subsections 2 through 6, 104 9 the following provisions apply: 104 10 a. Amnesty is provided for uncollected or unpaid sales or 104 11 use tax to a seller who registers to pay or to collect and 104 12 remit applicable sales or use tax on sales made to purchasers 104 13 in this state in accordance with the terms of the agreement, 104 14 provided the seller was not so registered in this state in the 104 15 twelve-month period preceding the commencement of Iowa's 104 16 participation in the agreement. 104 17 b. Amnesty precludes assessment of the seller for 104 18 uncollected or unpaid sales or use tax together with penalty 104 19 or interest for sales made during the period the seller was 104 20 not registered in this state, provided registration occurs 104 21 within twelve months of the commencement of Iowa's 104 22 participation in the agreement. 104 23 c. Amnesty shall be provided to any seller lawfully 104 24 registered under the agreement by any other member state prior 104 25 to the date of the commencement of Iowa's participation in the 104 26 agreement. 104 27 2. Amnesty is not available to a seller with respect to 104 28 any matter or matters for which the seller received notice of 104 29 the commencement of an audit and which audit is not yet 104 30 finally resolved, including any related administrative and 104 31 judicial processes. 104 32 3. Amnesty is not available for sales or use taxes already 104 33 paid or remitted or to taxes collected by the seller. 104 34 4. Amnesty is fully effective absent the seller's fraud or 104 35 intentional misrepresentation of a material fact as long as 105 1 the seller continues registration and continues payment or 105 2 collection and remittance of applicable sales or use taxes for 105 3 a period of at least thirty-six months. The statute of 105 4 limitations applicable to asserting a tax liability is tolled 105 5 during this thirty-six month period. 105 6 5. Amnesty is applicable only to sales or use taxes due 105 7 from a seller in its capacity as a seller and not to sales or 105 8 use taxes due from a seller in its capacity as a buyer. 105 9 6. The director may allow amnesty on terms and conditions 105 10 more favorable to a seller than the terms required by this 105 11 section. 105 12 Sec. 55. NEW SECTION. 423.55 DATABASES. 105 13 The department shall provide and maintain databases 105 14 required by the agreement for the benefit of sellers 105 15 registered under the agreement. 105 16 Sec. 56. NEW SECTION. 423.56 CONFIDENTIALITY AND PRIVACY 105 17 PROTECTIONS UNDER MODEL 1. 105 18 1. As used in this section: 105 19 a. "Anonymous data" means information that does not 105 20 identify a person. 105 21 b. "Confidential taxpayer information" means all 105 22 information that is protected under this state's laws, rules, 105 23 and privileges. 105 24 c. "Personally identifiable information" means information 105 25 that identifies a person. 105 26 2. With very limited exceptions, a certified service 105 27 provider shall perform its tax calculation, remittance, and 105 28 reporting functions without retaining the personally 105 29 identifiable information of consumers. 105 30 3. A certified service provider may perform its services 105 31 in this state only if the certified service provider certifies 105 32 that: 105 33 a. Its system has been designed and tested to ensure that 105 34 the fundamental precept of anonymity is respected. 105 35 b. Personally identifiable information is only used and 106 1 retained to the extent necessary for the administration of 106 2 model 1 sellers with respect to exempt purchasers. 106 3 c. It provides consumers clear and conspicuous notice of 106 4 its information practices, including what information it 106 5 collects, how it collects the information, how it uses the 106 6 information, how long, if at all, it retains the information, 106 7 and whether it discloses the information to member states. 106 8 This notice shall be satisfied by a written privacy policy 106 9 statement accessible by the public on the official web site of 106 10 the certified service provider. 106 11 d. Its collection, use, and retention of personally 106 12 identifiable information is limited to that required by the 106 13 member states to ensure the validity of exemptions from 106 14 taxation that are claimed by reason of a consumer's status or 106 15 the intended use of the goods or services purchased. 106 16 e. It provides adequate technical, physical, and 106 17 administrative safeguards so as to protect personally 106 18 identifiable information from unauthorized access and 106 19 disclosure. 106 20 4. The department shall provide public notification of its 106 21 practices relating to the collection, use, and retention of 106 22 personally identifiable information. 106 23 5. When any personally identifiable information that has 106 24 been collected and retained by the department or certified 106 25 service provider is no longer required for the purposes set 106 26 forth in subsection 3, paragraph "d", that information shall 106 27 no longer be retained by the department or certified service 106 28 provider. 106 29 6. When personally identifiable information regarding an 106 30 individual is retained by or on behalf of this state, this 106 31 state shall provide reasonable access by such individual to 106 32 his or her own information in the state's possession and a 106 33 right to correct any inaccurately recorded information. 106 34 7. This privacy policy is subject to enforcement by the 106 35 department and the attorney general. 107 1 8. This state's laws and rules regarding the collection, 107 2 use, and maintenance of confidential taxpayer information 107 3 remain fully applicable and binding. Without limitation, the 107 4 agreement does not enlarge or limit the state's or 107 5 department's authority to: 107 6 a. Conduct audits or other review as provided under the 107 7 agreement and state law. 107 8 b. Provide records pursuant to its examination of public 107 9 records law, disclosure laws of individual governmental 107 10 agencies, or other regulations. 107 11 c. Prevent, consistent with state law, disclosures of 107 12 confidential taxpayer information. 107 13 d. Prevent, consistent with federal law, disclosures or 107 14 misuse of federal return information obtained under a 107 15 disclosure agreement with the internal revenue service. 107 16 e. Collect, disclose, disseminate, or otherwise use 107 17 anonymous data for governmental purposes. 107 18 9. This privacy policy does not preclude the certification 107 19 of a certified service provider whose privacy policy is more 107 20 protective of confidential taxpayer information or personally 107 21 identifiable information than is required by the agreement. 107 22 Sec. 57. NEW SECTION. 423.57 STATUTES APPLICABLE. 107 23 The director shall administer this division as it relates 107 24 to the taxes imposed in this chapter in the same manner and 107 25 subject to all the provisions of, and all of the powers, 107 26 duties, authority, and restrictions contained in sections 107 27 423.14, 423.15, 423.16, 423.17, 423.18, 423.19, 423.20, 107 28 423.21, 423.22, 423.23, 423.24, 423.25, 423.28, 423.29, 107 29 423.31, 423.32, 423.33, 423.34, 423.35, 423.37, 423.38, 107 30 423.39, 423.40, 423.41, and 423.42, section 423.43, subsection 107 31 3, and sections 423.45, 423.46, and 423.47. 107 32 Sec. 58. 107 33 1. Sections 422.42 through 422.59, Code 2003, are repealed. 107 34 2. Chapter 423, Code 2003, is repealed. 107 35 COORDINATING AMENDMENTS 108 1 Sec. 59. Section 15.331A, Code 2003, is amended to read as 108 2 follows: 108 3 15.331A SALES, SERVICES, AND USE TAX REFUND – CONTRACTOR 108 4 OR SUBCONTRACTOR. 108 5 The eligible business or a supporting business shall be 108 6 entitled to a refund of the sales and use taxes paid under 108 7chapters 422 andchapter 423 for gas, electricity, water, or 108 8 sewer utility services, goods, wares, or merchandise, or on 108 9 services rendered, furnished, or performed to or for a 108 10 contractor or subcontractor and used in the fulfillment of a 108 11 written contract relating to the construction or equipping of 108 12 a facility within the economic development area of the 108 13 eligible business or a supporting business. Taxes 108 14 attributable to intangible property and furniture and 108 15 furnishings shall not be refunded. 108 16 To receive the refund a claim shall be filed by the 108 17 eligible business or a supporting business with the department 108 18 of revenue and finance as follows: 108 19 1. The contractor or subcontractor shall state under oath, 108 20 on forms provided by the department, the amount of the sales 108 21 of goods, wares, or merchandise or services rendered, 108 22 furnished, or performed including water, sewer, gas, and 108 23 electric utility services for use in the economic development 108 24 area upon which sales or use tax has been paid prior to the 108 25 project completion, and shall file the forms with the eligible 108 26 business or supporting business before final settlement is 108 27 made. 108 28 2. The eligible business or a supporting business shall, 108 29 not more than one year after project completion, make 108 30 application to the department for any refund of the amount of 108 31 the sales and use taxes paid pursuant to chapter422 or423 108 32 upon any goods, wares, or merchandise, or services rendered, 108 33 furnished, or performed, including water, sewer, gas, and 108 34 electric utility services. The application shall be made in 108 35 the manner and upon forms to be provided by the department, 109 1 and the department shall audit the claim and, if approved, 109 2 issue a warrant to the eligible business or supporting 109 3 business in the amount of the sales or use tax which has been 109 4 paid to the state of Iowa under a contract. A claim filed by 109 5 the eligible business or a supporting business in accordance 109 6 with this section shall not be denied by reason of a 109 7 limitation provision set forth in chapter 421, 422,or 423. 109 8 3. A contractor or subcontractor who willfully makes a 109 9 false report of tax paid under the provisions of this section 109 10 is guilty of a simple misdemeanor and in addition is liable 109 11 for the payment of the tax and any applicable penalty and 109 12 interest. 109 13 Sec. 60. Section 15.334A, Code 2003, is amended to read as 109 14 follows: 109 15 15.334A SALES AND USE TAX EXEMPTION. 109 16 An eligible business may claim an exemption from sales and 109 17 use taxation under section422.45423.3, subsection2746, for 109 18 property which is exempt from taxation under section 15.334, 109 19 notwithstanding the requirements of section422.45423.3, 109 20 subsection2746, or any other provision of the Code to the 109 21 contrary. 109 22 Sec. 61. Section 15A.9, subsections 5, 6, and 7, Code 109 23 2003, are amended to read as follows: 109 24 5. PROPERTY TAX EXEMPTION. 109 25 a. All property, as defined in section 427A.1, subsection 109 26 1, paragraphs "e" and "j", Code 1993, used by the primary 109 27 business or a supporting business and located within the zone, 109 28 shall be exempt from property taxation for a period of twenty 109 29 years beginning with the year it is first assessed for 109 30 taxation. In order to be eligible for this exemption, the 109 31 property shall be acquired or leased by the primary business 109 32 or a supporting business or relocated by the primary business 109 33 or a supporting business to the zone from outside the state 109 34 prior to project completion. 109 35 b. Property which is exempt for property tax purposes 110 1 under this subsection is eligible for the sales and use tax 110 2 exemption under section422.45423.3, subsection2746, 110 3 notwithstanding that subsection or any other provision of the 110 4 Code to the contrary. 110 5 6. SALES, SERVICES, AND USE TAX REFUND. Taxes paid 110 6 pursuant to chapter422 or423 on thegross receiptssales 110 7 price or rental price of property purchased or rented by the 110 8 primary business or a supporting business for use by the 110 9 primary business or a supporting business within the zone or 110 10 on gas, electricity, water, and sewer utility services prior 110 11 to project completion shall be refunded to the primary 110 12 business or supporting business if the item was purchased or 110 13 the service was performed or received prior to project 110 14 completion. Claims under this section shall be submitted on 110 15 forms provided by the department of revenue and finance not 110 16 later than six months after project completion. The refund in 110 17 this subsection shall not apply to furniture or furnishings, 110 18 or intangible property. 110 19 7. SALES, SERVICES, AND USE TAX REFUND – CONTRACTOR OR 110 20 SUBCONTRACTOR. The primary business or a supporting business 110 21 shall be entitled to a refund of the sales and use taxes paid 110 22 underchapters 422 andchapter 423 for gas, electricity, 110 23 water, or sewer utility services, goods, wares, or 110 24 merchandise, or on services rendered, furnished, or performed 110 25 to or for a contractor or subcontractor and used in the 110 26 fulfillment of a written contract relating to the construction 110 27 or equipping of a facility within the zone of the primary 110 28 business or a supporting business. Taxes attributable to 110 29 intangible property and furniture and furnishings shall not be 110 30 refunded. 110 31 To receive the refund a claim shall be filed by the primary 110 32 business or a supporting business with the department of 110 33 revenue and finance as follows: 110 34 a. The contractor or subcontractor shall state under oath, 110 35 on forms provided by the department, the amount of the sales 111 1 of goods, wares, or merchandise or services rendered, 111 2 furnished, or performed including water, sewer, gas, and 111 3 electric utility services for use in the zone upon which sales 111 4 or use tax has been paid prior to the project completion, and 111 5 shall file the forms with the primary business or supporting 111 6 business before final settlement is made. 111 7 b. The primary business or a supporting business shall, 111 8 not more than six months after project completion, make 111 9 application to the department for any refund of the amount of 111 10 the sales and use taxes paid pursuant to chapter422 or423 111 11 upon any goods, wares, or merchandise, or services rendered, 111 12 furnished, or performed, including water, sewer, gas, and 111 13 electric utility services. The application shall be made in 111 14 the manner and upon forms to be provided by the department, 111 15 and the department shall audit the claim and, if approved, 111 16 issue a warrant to the primary business or supporting business 111 17 in the amount of the sales or use tax which has been paid to 111 18 the state of Iowa under a contract. A claim filed by the 111 19 primary business or a supporting business in accordance with 111 20 this subsection shall not be denied by reason of a limitation 111 21 provision set forth in chapter 421, 422, or 423. 111 22 c. A contractor or subcontractor who willfully makes a 111 23 false report of tax paid under the provisions of this 111 24 subsection is guilty of a simple misdemeanor and in addition 111 25 is liable for the payment of the tax and any applicable 111 26 penalty and interest. 111 27 Sec. 62. Section 28A.17, unnumbered paragraph 1, Code 111 28 2003, is amended to read as follows: 111 29 If an authority is established as provided in section 28A.6 111 30 and after approval of a referendum by a simple majority of 111 31 votes cast in each metropolitan area in favor of the sales and 111 32 services tax, the governing board of a county in this state 111 33 within a metropolitan area which is part of the authority 111 34 shall impose, at the request of the authority, a local sales 111 35 and services tax at the rate of one-fourth of one percent on 112 1gross receiptsthe sales price taxed by this state under 112 2chapter 422, division IVsection 423.2, within the 112 3 metropolitan area located in this state. The referendum shall 112 4 be called by resolution of the board and shall be held as 112 5 provided in section 28A.6 to the extent applicable. The 112 6 ballot proposition shall contain a statement as to the 112 7 specific purpose or purposes for which the revenues shall be 112 8 expended and the date of expiration of the tax. The local 112 9 sales and services tax shall be imposed on the same basis, 112 10 with the same exceptions, and following the same 112 11 administrative procedures as provided for a county under 112 12 sections 422B.8 and 422B.9. The amount of the sale, for the 112 13 purposes of determining the amount of the local sales and 112 14 services tax under this section, does not include the amount 112 15 of any local sales and services tax imposed under sections 112 16 422B.8 and 422B.9. 112 17 Sec. 63. Section 29C.15, Code 2003, is amended to read as 112 18 follows: 112 19 29C.15 TAX-EXEMPT PURCHASES. 112 20 All purchases under the provisions of this chapter shall be 112 21 exempt from the taxes imposed by sections422.43423.2 and 112 22423.2423.5. 112 23 Sec. 64. Section 99E.10, subsection 1, paragraph b, Code 112 24 2003, is amended to read as follows: 112 25 b. An amount equal to the product of the state sales tax 112 26 rate under section422.43423.2 multiplied by the gross sales 112 27 price of each ticket or share sold shall be deducted as the 112 28 sales tax on the sale of that ticket or share, remitted to the 112 29 treasurer of state and deposited into the state general fund. 112 30 Sec. 65. Section 123.187, subsection 2, Code 2003, is 112 31 amended to read as follows: 112 32 2. A winery licensed or permitted pursuant to laws 112 33 regulating alcoholic beverages in a state which affords this 112 34 state an equal reciprocal shipping privilege may ship into 112 35 this state by private common carrier, to a person twenty-one 113 1 years of age or older, not more than eighteen liters of wine 113 2 per month, for consumption or use by the person. Such wine 113 3 shall not be resold. Shipment of wine pursuant to this 113 4 subsection is not subject to sales tax under section422.43113 5 423.2, use tax under section423.2423.5, or the wine 113 6 gallonage tax under section 123.183, and does not require a 113 7 refund value for beverage container control purposes under 113 8 chapter 455C. 113 9 Sec. 66. Section 262.54, Code 2003, is amended to read as 113 10 follows: 113 11 262.54 COMPUTER SALES. 113 12 Sales, by an institution under the control of the board of 113 13 regents, of computer equipment, computer software, and 113 14 computer supplies to students and faculty at the institution 113 15 are retail sales under chapter422, division IV423. 113 16 Sec. 67. Section 303.9, subsection 2, Code 2003, is 113 17 amended to read as follows: 113 18 2. The department may sell mementos and other items 113 19 relating to Iowa history and historic sites on the premises of 113 20 property under control of the department and at the state 113 21 capitol. Notwithstanding sections 18.12 and 18.16, the 113 22 department may directly and independently enter into rental 113 23 and lease agreements with private vendors for the purpose of 113 24 selling mementos. All fees and income produced by the sales 113 25 and rental or lease agreements shall be credited to the 113 26 account of the department. The mementos and other items sold 113 27 by the department or vendors under this subsection are exempt 113 28 from section 18.6.The department is not a retailer under113 29chapter 422 and the sale of such mementos and other items by113 30the department is not a retail sale under chapter 422 and is113 31exempt from the sales tax.113 32 Sec. 68. Section 312.1, subsection 4, Code 2003, is 113 33 amended to read as follows: 113 34 4. To the extent provided in section423.24423.43, 113 35 subsection 1, paragraph "b", from revenue derived from the use 114 1 tax, under chapter 423 on motor vehicles, trailers, and motor 114 2 vehicle accessories and equipment. 114 3 Sec. 69. Section 312.2, subsections 14 and 16, Code 2003, 114 4 are amended to read as follows: 114 5 14. The treasurer of state, before making the allotments 114 6 provided for in this section, shall credit monthly from the 114 7 road use tax fund to the general fund of the state from 114 8 revenue credited to the road use tax fund under section423.24114 9 423.43, subsection 1, paragraph "b", an amount equal to one- 114 10 twentieth of eighty percent of the revenue from the operation 114 11 of section423.7423.26. 114 12 There is appropriated from the general fund of the state 114 13 for each fiscal year to the state department of transportation 114 14 the amount of revenues credited to the general fund of the 114 15 state during the fiscal year under this subsection to be used 114 16 for purposes of public transit assistance under chapter 324A. 114 17 16. The treasurer of state, before making the allotments 114 18 provided for in this section, shall credit monthly from the 114 19 road use tax fund to the motorcycle rider education fund 114 20 established in section 321.180B, an amount equal to one dollar 114 21 per year of license validity for each issued or renewed 114 22 driver's license which is valid for the operation of a 114 23 motorcycle. Moneys credited to the motorcycle rider education 114 24 fund under this subsection shall be taken from moneys credited 114 25 to the road use tax fund under section423.24423.43. 114 26 Sec. 70. Section 321.20, subsection 5, Code 2003, is 114 27 amended to read as follows: 114 28 5. The amount of tax to be paid under section423.7114 29 423.26. 114 30 Sec. 71. Section 321.24, subsections 1 and 3, Code 2003, 114 31 are amended to read as follows: 114 32 1. Upon receipt of the application for title and payment 114 33 of the required fees for a motor vehicle, trailer, or 114 34 semitrailer, the county treasurer or the department shall, 114 35 when satisfied as to the application's genuineness and 115 1 regularity, and, in the case of a mobile home or manufactured 115 2 home, that taxes are not owing under chapter 435, issue a 115 3 certificate of title and, except for a mobile home or 115 4 manufactured home, a registration receipt, and shall file the 115 5 application, the manufacturer's or importer's certificate, the 115 6 certificate of title, or other evidence of ownership, as 115 7 prescribed by the department. The registration receipt shall 115 8 be delivered to the owner and shall contain upon its face the 115 9 date issued, the name and address of the owner, the 115 10 registration number assigned to the vehicle, the amount of the 115 11 fee paid, the amount of tax paid pursuant to section423.7115 12 423.26, the type of fuel used, and a description of the 115 13 vehicle as determined by the department, and upon the reverse 115 14 side a form for notice of transfer of the vehicle. The name 115 15 and address of any lessee of the vehicle shall not be printed 115 16 on the registration receipt or certificate of title. Up to 115 17 three owners may be listed on the registration receipt and 115 18 certificate of title. 115 19 3. The certificate of title shall contain upon its face 115 20 the identical information required upon the face of the 115 21 registration receipt. In addition, the certificate of title 115 22 shall contain a statement of the owner's title, the title 115 23 number assigned to the owner or owners of the vehicle, the 115 24 amount of tax paid pursuant to section423.7423.26, the name 115 25 and address of the previous owner, and a statement of all 115 26 security interests and encumbrances as shown in the 115 27 application, upon the vehicle described, including the nature 115 28 of the security interest, date of notation, and name and 115 29 address of the secured party. 115 30 Sec. 72. Section 321.34, subsection 7, paragraph c, Code 115 31 2003, is amended to read as follows: 115 32 c. The fees for a collegiate registration plate are as 115 33 follows: 115 34 (1) A registration fee of twenty-five dollars. 115 35 (2) A special collegiate registration fee of twenty-five 116 1 dollars. 116 2 These fees are in addition to the regular annual 116 3 registration fee. The fees collected by the director under 116 4 this subsection shall be paid monthly to the treasurer of 116 5 state and credited by the treasurer of state to the road use 116 6 tax fund. Notwithstanding section423.24423.43 and prior to 116 7 the revenues being credited to the road use tax fund under 116 8 section423.24423.43, subsection 1, paragraph "b", the 116 9 treasurer of state shall credit monthly from those revenues 116 10 respectively, to Iowa state university of science and 116 11 technology, the university of northern Iowa, and the state 116 12 university of Iowa, the amount of the special collegiate 116 13 registration fees collected in the previous month for 116 14 collegiate registration plates designed for the university. 116 15 The moneys credited are appropriated to the respective 116 16 universities to be used for scholarships for students 116 17 attending the universities. 116 18 Sec. 73. Section 321.34, subsection 11, paragraph c, Code 116 19 2003, is amended to read as follows: 116 20 c. The special natural resources fee for letter number 116 21 designated natural resources plates is thirty-five dollars. 116 22 The fee for personalized natural resources plates is forty- 116 23 five dollars which shall be paid in addition to the special 116 24 natural resources fee of thirty-five dollars. The fees 116 25 collected by the director under this subsection shall be paid 116 26 monthly to the treasurer of state and credited to the road use 116 27 tax fund. Notwithstanding section423.24423.43, and prior to 116 28 the crediting of revenues to the road use tax fund under 116 29 section423.24423.43, subsection 1, paragraph "b", the 116 30 treasurer of state shall credit monthly from those revenues to 116 31 the Iowa resources enhancement and protection fund created 116 32 pursuant to section 455A.18, the amount of the special natural 116 33 resources fees collected in the previous month for the natural 116 34 resources plates. 116 35 Sec. 74. Section 321.34, subsection 11A, paragraph c, Code 117 1 2003, is amended to read as follows: 117 2 c. The special fee for letter number designated love our 117 3 kids plates is thirty-five dollars. The fee for personalized 117 4 love our kids plates is twenty-five dollars, which shall be 117 5 paid in addition to the special love our kids fee of thirty- 117 6 five dollars. The fees collected by the director under this 117 7 subsection shall be paid monthly to the treasurer of state and 117 8 credited to the road use tax fund. Notwithstanding section 117 9423.24423.43, and prior to the crediting of revenues to the 117 10 road use tax fund under section423.24423.43, subsection 1, 117 11 paragraph "b", the treasurer of state shall transfer monthly 117 12 from those revenues to the Iowa department of public health 117 13 the amount of the special fees collected in the previous month 117 14 for the love our kids plates. Notwithstanding section 8.33, 117 15 moneys transferred under this subsection shall not revert to 117 16 the general fund of the state. 117 17 Sec. 75. Section 321.34, subsection 11B, paragraph c, Code 117 18 2003, is amended to read as follows: 117 19 c. The special fee for letter number designated motorcycle 117 20 rider education plates is thirty-five dollars. The fee for 117 21 personalized motorcycle rider education plates is twenty-five 117 22 dollars, which shall be paid in addition to the special 117 23 motorcycle rider education fee of thirty-five dollars. The 117 24 fees collected by the director under this subsection shall be 117 25 paid monthly to the treasurer of state and credited to the 117 26 road use tax fund. Notwithstanding section423.24423.43, and 117 27 prior to the crediting of revenues to the road use tax fund 117 28 under section423.24423.43, subsection 1, paragraph "b", the 117 29 treasurer of state shall transfer monthly from those revenues 117 30 to the department for use in accordance with section 321.180B, 117 31 subsection 6, the amount of the special fees collected in the 117 32 previous month for the motorcycle rider education plates. 117 33 Sec. 76. Section 321.34, subsection 13, paragraph d, Code 117 34 2003, is amended to read as follows: 117 35 d. A state agency may submit a request to the department 118 1 recommending a special registration plate. The alternate fee 118 2 for letter number designated plates is thirty-five dollars 118 3 with a ten dollar annual special renewal fee. The fee for 118 4 personalized plates is twenty-five dollars which is in 118 5 addition to the alternative fee of thirty-five dollars with an 118 6 annual personalized plate renewal fee of five dollars which is 118 7 in addition to the special renewal fee of ten dollars. The 118 8 alternate fees are in addition to the regular annual 118 9 registration fee. The alternate fees collected under this 118 10 paragraph shall be paid monthly to the treasurer of state and 118 11 credited to the road use tax fund. Notwithstanding section 118 12423.24423.43, and prior to the crediting of the revenues to 118 13 the road use tax fund under section423.24423.43, subsection 118 14 1, paragraph "b", the treasurer of state shall credit monthly 118 15 the amount of the alternate fees collected in the previous 118 16 month to the state agency that recommended the special 118 17 registration plate. 118 18 Sec. 77. Section 321.34, subsection 21, paragraph c, Code 118 19 2003, is amended to read as follows: 118 20 c. The special fees collected by the director under this 118 21 subsection shall be paid monthly to the treasurer of state and 118 22 credited to the road use tax fund. Notwithstanding section 118 23423.24423.43, and prior to the crediting of revenues to the 118 24 road use tax fund under section423.24423.43, subsection 1, 118 25 paragraph "b", the treasurer of state shall credit monthly to 118 26 the Iowa heritage fund created under section 303.9A the amount 118 27 of the special fees collected in the previous month for the 118 28 Iowa heritage plates. 118 29 Sec. 78. Section 321.34, subsection 22, paragraph b, Code 118 30 2003, is amended to read as follows: 118 31 b. The special school transportation fee for letter number 118 32 designated education plates is thirty-five dollars. The fee 118 33 for personalized education plates is twenty-five dollars, 118 34 which shall be paid in addition to the special school 118 35 transportation fee of thirty-five dollars. The annual special 119 1 school transportation fee is ten dollars for letter number 119 2 designated registration plates and is fifteen dollars for 119 3 personalized registration plates which shall be paid in 119 4 addition to the regular annual registration fee. The fees 119 5 collected by the director under this subsection shall be paid 119 6 monthly to the treasurer of state and credited to the road use 119 7 tax fund. Notwithstanding section423.24423.43, and prior to 119 8 the crediting of revenues to the road use tax fund under 119 9 section423.24423.43, subsection 1, paragraph "b", the 119 10 treasurer of state shall transfer monthly from those revenues 119 11 to the school budget review committee in accordance with 119 12 section 257.31, subsection 17, the amount of the special 119 13 school transportation fees collected in the previous month for 119 14 the education plates. 119 15 Sec. 79. Section 321F.9, Code 2003, is amended to read as 119 16 follows: 119 17 321F.9 OPTION TO PURCHASE – DEALER'S LICENSE. 119 18 Any person engaged in business in this state shall not 119 19 enter into any agreement for the use of a motor vehicle under 119 20 the terms of whichsuchthat person grants to another an 119 21 option to purchasesuchthe motor vehicle without first having 119 22 obtained a motor vehicle dealer's license under the provisions 119 23 of chapter 322, and all sales of motor vehicles under such 119 24 options shall be subject to sales or use taxes imposed under 119 25 the provisions ofchapters 422 andchapter 423. Nothing 119 26 contained in this section shall require such person to have a 119 27 place of business as provided by section 322.6, subsection 8. 119 28 Sec. 80. Section 327I.26, Code 2003, is amended to read as 119 29 follows: 119 30 327I.26 APPROPRIATION TO AUTHORITY. 119 31 Notwithstanding section423.24423.43, and prior to the 119 32 application of section423.24423.43, subsection 1, paragraph 119 33 "b", there shall be deposited into the general fund of the 119 34 state and is appropriated to the authority from eighty percent 119 35 of the revenues derived from the operation of section423.7120 1 423.26, the amounts certified by the authority under section 120 2 327I.25. However, the total amount deposited into the general 120 3 fund and appropriated to the Iowa railway finance authority 120 4 under this section shall not exceed two million dollars 120 5 annually. Moneys appropriated to the Iowa railway finance 120 6 authority under this section are appropriated only for the 120 7 payment of principal and interest on obligations or the 120 8 payment of leases guaranteed by the authority as provided 120 9 under section 327I.25. 120 10 Sec. 81. Section 328.26, unnumbered paragraph 2, Code 120 11 2003, is amended to read as follows: 120 12 When an aircraft is registered to a person for the first 120 13 time the fee submitted to the department shall include the tax 120 14 imposed by section422.43423.2 or section423.2423.5 or 120 15 evidence of the exemption of the aircraft from the tax imposed 120 16 under section422.43423.2 or423.2423.5. 120 17 Sec. 82. Section 331.557, subsection 3, Code 2003, is 120 18 amended to read as follows: 120 19 3. Collect the use tax on vehicles subject to registration 120 20 as provided in sections423.6, 423.7, and 423.7A423.14, 120 21 423.26, and 423.27. 120 22 Sec. 83. Section 357A.15, unnumbered paragraph 2, Code 120 23 2003, is amended to read as follows: 120 24 A rural water district organized under chapter 504A shall 120 25 receive a refund of sales or use taxes upon submitting an 120 26 application to the department of revenue and finance forsuch120 27 the refund of taxes imposed upon thegross receiptssales 120 28 price of all sales of building materials, supplies, or 120 29 equipment sold to a contractor or used in the fulfillment of a 120 30 written contract for the construction of facilities forsuch120 31 the rural water district to the same extent as a rural water 120 32 district organized under this chapter may obtain a refund 120 33 under section422.45423.4, subsection71. 120 34 Sec. 84. Section 421.10, Code 2003, is amended to read as 120 35 follows: 121 1 421.10 APPEAL PERIOD – APPLICABILITY. 121 2 The appeal period for revision of assessment of tax, 121 3 interest, and penalties set out under section 422.28,422.54121 4 423.37, 437A.9, 437A.22, 452A.64, 453A.29, or 453A.46 applies 121 5 to appeals to notices from the department denying changes in 121 6 filing methods, denying refund claims, and denying portions of 121 7 refund claims for the tax covered by that section, and notices 121 8 of any department action directed to a specific taxpayer, 121 9 other than licensing, which involves a calculation. 121 10 Sec. 85. Section 421.17, subsection 22B, Code 2003, is 121 11 amended to read as follows: 121 12 22B.EnterTo enter into agreements or compacts with 121 13 remote sellers, retailers, or third-party providers for the 121 14 voluntary collection of Iowa sales or use taxes attributable 121 15 to sales into Iowaand to enter. The director has the 121 16 authority to enter into and perform all duties required of the 121 17 office of director by multistate agreements or compacts that 121 18 provide for thevoluntarycollection of sales and use taxes, 121 19 including joint audits with other states or audits on behalf 121 20 of other states. The agreements or compacts shall generally 121 21 conform to the provisions of Iowa sales and use tax statutes. 121 22 All fees for services, reimbursements, remuneration, 121 23 incentives, and costs incurred by the department associated 121 24 with these agreements or compacts may be paid or reimbursed 121 25 from the additional revenue generated. An amount is 121 26 appropriated from amounts generated to pay or reimburse all 121 27 costs associated with this subsection. Persons entering into 121 28 an agreement or compact with the department pursuant to this 121 29 subsection are subject to the requirements and penalties of 121 30 the confidentiality laws of this state regarding tax 121 31 information. Notwithstanding any other provisions of law, the 121 32 contract, agreement, or compact shall provide for the 121 33 registration, collection, report, and verification of amounts 121 34 subject to this subsection. 121 35 Sec. 86. Section 421.17, subsection 29, paragraph j, Code 122 1 2003, is amended to read as follows: 122 2 j. The department's existing right to credit against tax 122 3 due or to become due under section 422.73 or 423.47 is not to 122 4 be impaired by a right granted to or a duty imposed upon the 122 5 department or other state agency by this subsection. This 122 6 subsection is not intended to impose upon the department any 122 7 additional requirement of notice, hearing, or appeal 122 8 concerning the right to credit against tax due under section 122 9 422.73 or 423.47. 122 10 Sec. 87. Section 421.17, subsection 34, paragraph i, Code 122 11 2003, is amended to read as follows: 122 12 i. The director may distribute to credit reporting 122 13 entities and for publication the names, addresses, and amounts 122 14 of indebtedness owed to or being collected by the state if the 122 15 indebtedness is subject to the centralized debt collection 122 16 procedure established in this subsection. The director shall 122 17 adopt rules to administer this paragraph, and the rules shall 122 18 provide guidelines by which the director shall determine which 122 19 names, addresses, and amounts of indebtedness may be 122 20 distributed for publication. The director may distribute 122 21 information for publication pursuant to this paragraph, 122 22 notwithstanding sections 422.20, 422.72, and423.23423.42, or 122 23 any other provision of state law to the contrary pertaining to 122 24 confidentiality of information. 122 25 Sec. 88. Section 421.26, Code 2003, is amended to read as 122 26 follows: 122 27 421.26 PERSONAL LIABILITY FOR TAX DUE. 122 28 If a licensee or other person under section 452A.65, a 122 29 retailer or purchaser under chapter 422A or 422B, or section 122 30422.52423.31 or 423.33, or a retailer or purchaser under 122 31 section423.13423.32 or a user under section423.14423.34 122 32 fails to pay a tax under those sections when due, an officer 122 33 of a corporation or association, notwithstanding sections 122 34 490A.601 and 490A.602, a member or manager of a limited 122 35 liability company, or a partner of a partnership, having 123 1 control or supervision of or the authority for remitting the 123 2 tax payments and having a substantial legal or equitable 123 3 interest in the ownership of the corporation, association, 123 4 limited liability company, or partnership, who has 123 5 intentionally failed to pay the tax is personally liable for 123 6 the payment of the tax, interest, and penalty due and unpaid. 123 7 However, this section shall not apply to taxes on accounts 123 8 receivable. The dissolution of a corporation, association, 123 9 limited liability company, or partnership shall not discharge 123 10 a person's liability for failure to remit the tax due. 123 11 Sec. 89. Section 421.28, Code 2003, is amended to read as 123 12 follows: 123 13 421.28 EXCEPTIONS TO SUCCESSOR LIABILITY. 123 14 The immediate successor to a licensee's or retailer's 123 15 business or stock of goods under chapter 422A or 422B, or 123 16 section422.52, 423.13, 423.14,423.33 or 452A.65, is not 123 17 personally liable for the amount of delinquent tax, interest, 123 18 or penalty due and unpaid if the immediate successor shows 123 19 that the purchase of the business or stock of goods was made 123 20 in good faith that no delinquent tax, interest, or penalty was 123 21 due and unpaid. For purposes of this section the immediate 123 22 successor shows good faith by evidence that the department had 123 23 provided the immediate successor with a certified statement 123 24 that no delinquent tax, interest, or penalty is unpaid, or 123 25 that the immediate successor had taken in good faith a 123 26 certified statement from the licensee, retailer, or seller 123 27 that no delinquent tax, interest, or penalty is unpaid. When 123 28 requested to do so by a person with whom the licensee or 123 29 retailer is negotiating the sale of the business or stock of 123 30 goods, the director of revenue and finance shall, upon being 123 31 satisfied that such a situation exists, inform that person as 123 32 to the amount of unpaid delinquent tax, interest, or penalty 123 33 due by the licensee or the retailer. The giving of the 123 34 information under this circumstance is not a violation of 123 35 section 422.20, 422.72, or 452A.63. 124 1 Sec. 90. Section 421B.11, unnumbered paragraph 3, Code 124 2 2003, is amended to read as follows: 124 3 Judicial review of the actions of the director may be 124 4 sought in accordance with the terms of the Iowa administrative 124 5 procedure Act, and section422.55423.38. 124 6 Sec. 91. Section 422.7, subsection 21, paragraph a, 124 7 subparagraph (1), unnumbered paragraph 1, Code 2003, is 124 8 amended to read as follows: 124 9 Net capital gain from the sale of real property used in a 124 10 business, in which the taxpayer materially participated for 124 11 ten years, as defined in section 469(h) of the Internal 124 12 Revenue Code, and which has been held for a minimum of ten 124 13 years, or from the sale of a business, as defined in section 124 14422.42423.1, in which the taxpayer was employed or in which 124 15 the taxpayer materially participated for ten years, as defined 124 16 in section 469(h) of the Internal Revenue Code, and which has 124 17 been held for a minimum of ten years. The sale of a business 124 18 means the sale of all or substantially all of the tangible 124 19 personal property or service of the business. 124 20 Sec. 92. Section 422.73, subsection 1, Code 2003, is 124 21 amended by striking the subsection. 124 22 Sec. 93. Section 422A.1, unnumbered paragraphs 1, 3, 7, 124 23 and 8, Code 2003, are amended to read as follows: 124 24 A city or county may impose by ordinance of the city 124 25 council or by resolution of the board of supervisors a hotel 124 26 and motel tax, at a rate not to exceed seven percent, which 124 27 shall be imposed in increments of one or more full percentage 124 28 points upon thegross receiptssales price from the renting of 124 29 sleeping rooms, apartments, or sleeping quarters in a hotel, 124 30 motel, inn, public lodging house, rooming house, manufactured 124 31 or mobile home which is tangible personal property, or tourist 124 32 court, or in any place where sleeping accommodations are 124 33 furnished to transient guests for rent, whether with or 124 34 without meals; except thegross receiptssales price from the 124 35 renting of sleeping rooms in dormitories and in memorial 125 1 unions at all universities and colleges located in the state 125 2 of Iowa and the guests of a religious institution if the 125 3 property is exempt under section 427.1, subsection 8, and the 125 4 purpose of renting is to provide a place for a religious 125 5 retreat or function and not a place for transient guests 125 6 generally. The tax when imposed by a city shall apply only 125 7 within the corporate boundaries of that city and when imposed 125 8 by a county shall apply only outside incorporated areas within 125 9 that county. "Renting" and "rent" include any kind of direct 125 10 or indirect charge for such sleeping rooms, apartments, or 125 11 sleeping quarters, or their use. However, the tax does not 125 12 apply to thegross receiptssales price from the renting of a 125 13 sleeping room, apartment, or sleeping quarters while rented by 125 14 the same person for a period of more than thirty-one 125 15 consecutive days. 125 16 A local hotel and motel tax shall be imposed on January 1, 125 17 April 1, July 1, or October 1, following the notification of 125 18 the director of revenue and finance. Once imposed, the tax 125 19 shall remain in effect at the rate imposed for a minimum of 125 20 one year. A local hotel and motel tax shall terminate only on 125 21 March 31, June 30, September 30, or December 31. At least 125 22forty-fivesixty days prior to the tax being effective or 125 23 prior to a revision in the tax rate, or prior to the repeal of 125 24 the tax, a city or county shall provide notice by mail of such 125 25 action to the director of revenue and finance. 125 26 No tax permit other than the state sales tax permit 125 27 required under section422.53423.36 may be required by local 125 28 authorities. 125 29 The tax levied shall be in addition to any state sales tax 125 30 imposed under section422.43423.2. Section 422.25, 125 31 subsection 4, sections 422.30,422.48 to 422.52, 422.54 to125 32422.58,422.67, and 422.68, section 422.69, subsection 1,and125 33 sections 422.70 to 422.75, section 423.14, subsection 1, and 125 34 sections 423.23, 423.24, 423.25, 423.31, 423.33, 423.35, 125 35 423.37 to 423.42, and 423.47, consistent with the provisions 126 1 of this chapter, apply with respect to the taxes authorized 126 2 under this chapter, in the same manner and with the same 126 3 effect as if the hotel and motel taxes were retail sales taxes 126 4 within the meaning of those statutes. Notwithstanding this 126 5 paragraph, the director shall provide for quarterly filing of 126 6 returnsas prescribed in section 422.51and for other than 126 7 quarterly filing of returns both as prescribed in section 126 8422.51, subsection 2423.31. The director may require all 126 9 persons, as defined in section422.42423.1, who are engaged 126 10 in the business of derivinggross receiptsany sales price 126 11 subject to tax under this chapter, to register with the 126 12 department. 126 13 Sec. 94. Section 422B.8, Code 2003, is amended to read as 126 14 follows: 126 15 422B.8 LOCAL SALES AND SERVICES TAX. 126 16 A local sales and services tax at the rate of not more than 126 17 one percent may be imposed by a county on thegross receipts126 18 sales price taxed by the state under chapter422423, division 126 19IVII. A local sales and services tax shall be imposed on the 126 20 same basis as the state sales and services tax or in the case 126 21 of the use of natural gas, natural gas service, electricity, 126 22 or electric service on the same basis as the state use tax and 126 23 shall not be imposed on the sale of any property or on any 126 24 service not taxed by the state, except the tax shall not be 126 25 imposed on thegross receiptssales price from the sale of 126 26 motor fuel or special fuel as defined in chapter 452A which is 126 27 consumed for highway use or in watercraft or aircraft if the 126 28 fuel tax is paid on the transaction and a refund has not or 126 29 will not be allowed, on thegross receiptssales price from 126 30 the rental of rooms, apartments, or sleeping quarters which 126 31 are taxed under chapter 422A during the period the hotel and 126 32 motel tax is imposed, on thegross receiptssales price from 126 33 the sale of equipment by the state department of 126 34 transportation, on thegross receiptssales price from the 126 35 sale of self-propelled building equipment, pile drivers, 127 1 motorized scaffolding, or attachments customarily drawn or 127 2 attached to self-propelled building equipment, pile drivers, 127 3 and motorized scaffolding, including auxiliary attachments 127 4 which improve the performance, safety, operation, or 127 5 efficiency of the equipment and replacement parts and are 127 6 directly and primarily used by contractors, subcontractors, 127 7 and builders for new construction, reconstruction, 127 8 alterations, expansion, or remodeling of real property or 127 9 structures, and on thegross receiptssales price from the 127 10 sale of a lottery ticket or share in a lottery game conducted 127 11 pursuant to chapter 99E and except the tax shall not be 127 12 imposed on thegross receiptssales price from the sale or use 127 13 of natural gas, natural gas service, electricity, or electric 127 14 service in a city or county where thegross receiptssales 127 15 price from the sale of natural gas or electric energy are 127 16 subject to a franchise fee or user fee during the period the 127 17 franchise or user fee is imposed. A local sales and services 127 18 tax is applicable to transactions within those incorporated 127 19 and unincorporated areas of the county where it is imposed and 127 20 shall be collected by all persons required to collect state 127 21gross receiptssales taxes. However, a person required to 127 22 collect state retail sales tax under chapter422423, division 127 23IVV or VI, is not required to collect local sales and 127 24 services tax on transactions delivered within the area where 127 25 the local sales and services tax is imposed unless the person 127 26 has physical presence in that taxing area. All cities 127 27 contiguous to each other shall be treated as part of one 127 28 incorporated area and the tax would be imposed in each of 127 29 those contiguous cities only if the majority of those voting 127 30 in the total area covered by the contiguous cities favor its 127 31 imposition. 127 32 The amount of the sale, for purposes of determining the 127 33 amount of the local sales and services tax, does not include 127 34 the amount of any stategross receipts taxessales tax. 127 35 A tax permit other than the state sales tax permit required 128 1 under section422.53 or 423.10423.36 shall not be required by 128 2 local authorities. 128 3 If a local sales and services tax is imposed by a county 128 4 pursuant to this chapter, a local excise tax at the same rate 128 5 shall be imposed by the county on the purchase price of 128 6 natural gas, natural gas service, electricity, or electric 128 7 service subject to tax under chapter 423, division III, and 128 8 not exempted from tax by any provision of chapter 423, 128 9 division III. The local excise tax is applicable only to the 128 10 use of natural gas, natural gas service, electricity, or 128 11 electric service within those incorporated and unincorporated 128 12 areas of the county where it is imposed and, except as 128 13 otherwise provided in this chapter, shall be collected and 128 14 administered in the same manner as the local sales and 128 15 services tax. For purposes of this chapter, "local sales and 128 16 services tax" shall also include the local excise tax. 128 17 Sec. 95. Section 422B.9, subsections 1 and 2, Code 2003, 128 18 are amended to read as follows: 128 19 1. a. A local sales and services tax shall be imposed 128 20 either January 1 or July 1 following the notification of the 128 21 director of revenue and finance but not sooner than ninety 128 22 days following the favorable election and not sooner than 128 23 sixty days following notice to sellers, as defined in section 128 24 423.1. However, a jurisdiction which has voted to continue 128 25 imposition of the tax may impose that tax without repeal of 128 26 the prior tax. 128 27 b. A local sales and services tax shall be repealed only 128 28 on June 30 or December 31 but not sooner than ninety days 128 29 following the favorable election if one is held. However, a 128 30 local sales and services tax shall not be repealed before the 128 31 tax has been in effect for one year. At least forty days 128 32 before the imposition or repeal of the tax, a county shall 128 33 provide notice of the action by certified mail to the director 128 34 of revenue and finance. 128 35 c. The imposition of or a rate change for a local sales 129 1 and service tax shall not be applied to purchases from a 129 2 printed catalog wherein a purchaser computes the local tax 129 3 based on rates published in the catalog unless a minimum of 129 4 one hundred twenty days' notice of the imposition or rate 129 5 change has been given to the seller from the catalog and the 129 6 first day of a calendar quarter has occurred on or after the 129 7 one hundred twentieth day. 129 8c.d. If a local sales and services tax has been imposed 129 9 prior to April 1, 2000, and at the time of the election a date 129 10 for repeal was specified on the ballot, the local sales and 129 11 services tax may be repealed on that date, notwithstanding 129 12 paragraph "b". 129 13 2. a. The director of revenue and finance shall 129 14 administer a local sales and services tax as nearly as 129 15 possible in conjunction with the administration of stategross129 16receiptssales tax laws. The director shall provide 129 17 appropriate forms or provide on the regular state tax forms 129 18 for reporting local sales and services tax liability. 129 19 b. The ordinance of a county board of supervisors imposing 129 20 a local sales and services tax shall adopt by reference the 129 21 applicable provisions of the appropriate sections ofchapter129 22422, division IV, andchapter 423. All powers and 129 23 requirements of the director to administer the stategross129 24receiptssales tax law and use tax law are applicable to the 129 25 administration of a local sales and services tax law and the 129 26 local excise tax, including but not limited to, the provisions 129 27 of section 422.25, subsection 4, sections 422.30,422.48 to129 28422.52, 422.54 to 422.58,422.67, and 422.68, section 422.69, 129 29 subsection 1, sections 422.70 to 422.75,423.6, subsections 2129 30to 4, and sections 423.11 to 423.18, and 423.21section 129 31 423.14, subsection 1 and subsection 2, paragraphs "b" through 129 32 "e", and sections 423.15, 423.23, 423.24, 423.25, 423.31 to 129 33 423.35, 423.37 to 423.42, 423.46, and 423.47. Local officials 129 34 shall confer with the director of revenue and finance for 129 35 assistance in drafting the ordinance imposing a local sales 130 1 and services tax. A certified copy of the ordinance shall be 130 2 filed with the director as soon as possible after passage. 130 3 c. Frequency of deposits and quarterly reports of a local 130 4 sales and services tax with the department of revenue and 130 5 finance are governed by the tax provisions in section422.52130 6 423.31. Local tax collections shall not be included in 130 7 computation of the total tax to determine frequency of filing 130 8 under section422.52423.31. 130 9 d. The director shall apply a boundary change of a county 130 10 or city imposing or collecting the local sales and service tax 130 11 to the imposition or collection of that tax only on the first 130 12 day of a calendar quarter which occurs sixty days or more 130 13 after the director has given notice of the boundary change to 130 14 sellers. 130 15 Sec. 96. Section 422C.2, subsections 4 and 6, Code 2003, 130 16 are amended to read as follows: 130 17 4. "Person" means person as defined in section422.42130 18 423.1. 130 19 6. "Rental price" means the consideration for renting an 130 20 automobile valued in money, and means the same as"gross130 21taxable services""sales price" as defined in section422.42130 22 423.1. 130 23 Sec. 97. Section 422C.3, Code 2003, is amended to read as 130 24 follows: 130 25 422C.3 TAX ON RENTAL OF AUTOMOBILES. 130 26 1. A tax of five percent is imposed upon the rental price 130 27 of an automobile if the rental transaction is subject to the 130 28 sales and services tax under chapter422423, divisionIVII, 130 29 or the use tax under chapter 423, division III. The tax shall 130 30 not be imposed on any rental transaction not taxable under the 130 31 state sales and services tax, as provided in section422.45130 32 423.3, or the state use tax, as provided in section423.4130 33 423.6, on automobile rental receipts. 130 34 2. The lessor shall collect the tax by adding the tax to 130 35 the rental price of the automobile. 131 1 3. The tax, when collected, shall be stated as a distinct 131 2 item separate and apart from the rental price of the 131 3 automobile and the sales and services tax imposed under 131 4 chapter422423, divisionIVII, or the use tax imposed under 131 5 chapter 423, division III. 131 6 Sec. 98. Section 422C.4, Code 2003, is amended to read as 131 7 follows: 131 8 422C.4 ADMINISTRATION AND ENFORCEMENT. 131 9 All powers and requirements of the director of revenue and 131 10 finance to administer the stategross receiptssales tax law 131 11 under chapter422, division IV,423 are applicable to the 131 12 administration of the tax imposed under section 422C.3, 131 13 including but not limited to section 422.25, subsection 4, 131 14 sections 422.30,422.48 through 422.52, 422.54 through 422.58,131 15 422.67, and 422.68, section 422.69, subsection 1,andsections 131 16 422.70 through 422.75, section 423.14, subsection 1, and 131 17 sections 423.15, 423.23, 423.24, 423.25, 423.31, 423.33, 131 18 423.35 and 423.37 through 423.42, 423.45, 423.46, and 423.47. 131 19 However, as an exception to the powers specified in section 131 20422.52, subsection 1423.31, the director shall only require 131 21 the filing of quarterly reports. 131 22 Sec. 99. Section 422E.1, subsection 1, is amended to read 131 23 as follows: 131 24 1. A local sales and services tax for school 131 25 infrastructure purposes may be imposed by a county on behalf 131 26 of school districts as provided in this chapter. 131 27 If a local sales and services tax for school infrastructure 131 28 is imposed by a county pursuant to this chapter, a local 131 29 excise tax for school infrastructure at the same rate shall be 131 30 imposed by the county on the purchase price of natural gas, 131 31 natural gas service, electricity, or electric service subject 131 32 to tax under chapter 423, division III, and not exempted from 131 33 tax by any provision of chapter 423, division III. The local 131 34 excise tax for school infrastructure is applicable only to the 131 35 use of natural gas, natural gas service, electricity, or 132 1 electric service within those incorporated and unincorporated 132 2 areas of the county where it is imposed and, except as 132 3 otherwise provided in this chapter, shall be collected and 132 4 administered in the same manner as the local sales and 132 5 services tax for school infrastructure. For purposes of this 132 6 chapter, "local sales and services tax for school 132 7 infrastructure" shall also include the local excise tax for 132 8 school infrastructure. 132 9 Sec. 100. Section 422E.3, subsections 1, 2, and 3, Code 132 10 2003, are amended to read as follows: 132 11 1. If a majority of those voting on the question of 132 12 imposition of a local sales and services tax for school 132 13 infrastructure purposes favors imposition of the tax, the tax 132 14 shall be imposed by the county board of supervisors within the 132 15 county pursuant to section 422E.2, at the rate specified for a 132 16 ten-year duration on thegross receiptssales price taxed by 132 17 the state under chapter422423, divisionIVII. 132 18 2. The tax shall be imposed on the same basis as the state 132 19 sales and services tax or in the case of the use of natural 132 20 gas, natural gas service, electricity, or electric service on 132 21 the same basis as the state use tax and shall not be imposed 132 22 on the sale of any property or on any service not taxed by the 132 23 state, except the tax shall not be imposed on thegross132 24receiptssales price from the sale of motor fuel or special 132 25 fuel as defined in chapter 452A which is consumed for highway 132 26 use or in watercraft or aircraft if the fuel tax is paid on 132 27 the transaction and a refund has not or will not be allowed, 132 28 on thegross receiptssales price from the rental of rooms, 132 29 apartments, or sleeping quarters which are taxed under chapter 132 30 422A during the period the hotel and motel tax is imposed, on 132 31 thegross receiptssales price from the sale of equipment by 132 32 the state department of transportation, on thegross receipts132 33 sales price from the sale of self-propelled building 132 34 equipment, pile drivers, motorized scaffolding, or attachments 132 35 customarily drawn or attached to self-propelled building 133 1 equipment, pile drivers, and motorized scaffolding, including 133 2 auxiliary attachments which improve the performance, safety, 133 3 operation, or efficiency of the equipment, and replacement 133 4 parts and are directly and primarily used by contractors, 133 5 subcontractors, and builders for new construction, 133 6 reconstruction, alterations, expansion, or remodeling of real 133 7 property or structures, and on thegross receiptssales price 133 8 from the sale of a lottery ticket or share in a lottery game 133 9 conducted pursuant to chapter 99E and except the tax shall not 133 10 be imposed on thegross receiptssales price from the sale or 133 11 use of natural gas, natural gas service, electricity, or 133 12 electric service in a city or county where thegross receipts133 13 sales price from the sale of natural gas or electric energy 133 14 are subject to a franchise fee or user fee during the period 133 15 the franchise or user fee is imposed. 133 16 3. The tax is applicable to transactions within the county 133 17 where it is imposed and shall be collected by all persons 133 18 required to collect stategross receiptssales or local excise 133 19 taxes. However, a person required to collect stateretail133 20 sales tax under chapter422, division IV,423 is not required 133 21 to collect local sales and services tax on transactions 133 22 delivered within the area where the local sales and services 133 23 tax is imposed unless the person has physical presence in that 133 24 taxing area. The amount of the sale, for purposes of 133 25 determining the amount of the tax, does not include the amount 133 26 of any stategross receiptssales taxes or excise taxes or 133 27 other local option sales or excise taxes. A tax permit other 133 28 than the state tax permit required under section422.53 or133 29423.10423.36 shall not be required by local authorities. 133 30 Sec. 101. Section 425.30, Code 2003, is amended to read as 133 31 follows: 133 32 425.30 NOTICES. 133 33 Section422.57423.39, subsection 1, shall apply to all 133 34 notices under this division. 133 35 Sec. 102. Section 425.31, Code 2003, is amended to read as 134 1 follows: 134 2 425.31 APPEALS. 134 3 Any person aggrieved by an act or decision of the director 134 4 of revenue and finance or the department of revenue and 134 5 finance under this division shall have the same rights of 134 6 appeal and review as provided in sections 421.1 and422.55134 7 423.38 and the rules of the department of revenue and finance. 134 8 Sec. 103. Section 452A.66, unnumbered paragraph 1, Code 134 9 2003, is amended to read as follows: 134 10 The appropriate state agency shall administer the taxes 134 11 imposed by this chapter in the same manner as and subject to 134 12 section 422.25, subsection 4 and section422.52, subsection 3134 13 423.35. 134 14 Sec. 104. Section 455B.455, Code 2003, is amended to read 134 15 as follows: 134 16 455B.455 SURCHARGE IMPOSED. 134 17 A land burial surcharge tax of two percent is imposed on 134 18 the fee for land burial of a hazardous waste. The owner of 134 19 the land burial facility shall remit the tax collected to the 134 20 director of revenue and finance after consultation with the 134 21 director according to rules that the director shall adopt. 134 22 The director shall forward a copy of the site license to the 134 23 director of revenue and finance which shall be the appropriate 134 24 license for the collection of the land burial surcharge tax 134 25 and shall be subject to suspension or revocation if the site 134 26 license holder fails to collect or remit the tax collected 134 27 under this section. The provisions ofsectionssection 134 28 422.25, subsection 4, sections 422.30,422.48 to 422.52,134 29422.54 to 422.58,422.67, and 422.68, section 422.69, 134 30 subsection 1,andsections 422.70 to 422.75, section 423.14, 134 31 subsection 1, and sections 423.23, 423.24, 423.25, 423.31, 134 32 423.33, 423.35, 423.37 to 423.42, and 423.47, consistent with 134 33 the provisions of this part 6 of division IV, shall apply with 134 34 respect to the taxes authorized under this part, in the same 134 35 manner and with the same effect as if the land burial 135 1 surcharge tax wereretailsales taxes within the meaning of 135 2 those statutes. Notwithstanding the provisions of this 135 3paragraphsection, the director shall provide for only 135 4 quarterly filing of returns as prescribed in section422.51135 5 423.31. Taxes collected by the director of revenue and 135 6 finance under this section shall be deposited in the general 135 7 fund of the state. 135 8 Sec. 105. Section 455G.3, subsection 1, Code 2003, is 135 9 amended to read as follows: 135 10 1. The Iowa comprehensive petroleum underground storage 135 11 tank fund is created as a separate fund in the state treasury, 135 12 and any funds remaining in the fund at the end of each fiscal 135 13 year shall not revert to the general fund but shall remain in 135 14 the Iowa comprehensive petroleum underground storage tank 135 15 fund. Interest or other income earned by the fund shall be 135 16 deposited in the fund. The fund shall include moneys credited 135 17 to the fund under this section, section423.24423.43, 135 18 subsection 1, paragraph "a", and sections 455G.8, 455G.9, and 135 19 455G.11, and other funds which by law may be credited to the 135 20 fund. The moneys in the fund are appropriated to and for the 135 21 purposes of the board as provided in this chapter. Amounts in 135 22 the fund shall not be subject to appropriation for any other 135 23 purpose by the general assembly, but shall be used only for 135 24 the purposes set forth in this chapter. The treasurer of 135 25 state shall act as custodian of the fund and disburse amounts 135 26 contained in it as directed by the board including automatic 135 27 disbursements of funds as received pursuant to the terms of 135 28 bond indentures and documents and security provisions to 135 29 trustees and custodians. The treasurer of state is authorized 135 30 to invest the funds deposited in the fund at the direction of 135 31 the board and subject to any limitations contained in any 135 32 applicable bond proceedings. The income from such investment 135 33 shall be credited to and deposited in the fund. The fund 135 34 shall be administered by the board which shall make 135 35 expenditures from the fund consistent with the purposes of the 136 1 programs set out in this chapter without further 136 2 appropriation. The fund may be divided into different 136 3 accounts with different depositories as determined by the 136 4 board and to fulfill the purposes of this chapter. 136 5 Sec. 106. Section 455G.6, subsection 4, Code 2003, is 136 6 amended to read as follows: 136 7 4. Grant a mortgage, lien, pledge, assignment, or other 136 8 encumbrance on one or more improvements, revenues, asset of 136 9 right, accounts, or funds established or received in 136 10 connection with the fund, including revenues derived from the 136 11 use tax under section423.24423.43, subsection 1, paragraph 136 12 "a", and deposited in the fund or an account of the fund. 136 13 Sec. 107. Section 455G.8, subsection 2, Code 2003, is 136 14 amended to read as follows: 136 15 2. USE TAX. The revenues derived from the use tax imposed 136 16 under chapter 423, division III. The proceeds of the use tax 136 17 under section423.24423.43, subsection 1, paragraph "a", 136 18 shall be allocated, consistent with this chapter, among the 136 19 fund's accounts, for debt service and other fund expenses, 136 20 according to the fund budget, resolution, trust agreement, or 136 21 other instrument prepared or entered into by the board or 136 22 authority under direction of the board. 136 23 Sec. 108. Section 455G.9, subsection 2, Code 2003, is 136 24 amended to read as follows: 136 25 2. REMEDIAL ACCOUNT FUNDING. The remedial account shall 136 26 be funded by that portion of the proceeds of the use tax 136 27 imposed under chapter 423, division III, and other moneys and 136 28 revenues budgeted to the remedial account by the board. 136 29 Sec. 109. Section 2.67, Code 2003, is repealed. 136 30 Sec. 110. CODE EDITOR DIRECTIVE. The Code editor is 136 31 directed to transfer Code chapter 423A to Code chapter 421A 136 32 and to transfer Code chapters 422A, 422B, 422C, and 422E to 136 33 Code chapters 423A, 423B, 423C, and 423E, respectively. The 136 34 Code editor is directed to correct Code references as required 136 35 due to the changes made in this Act. 137 1 Sec. 111. EFFECTIVE DATE. This Act takes effect January 137 2 1, 2004. 137 3 EXPLANATION 137 4 This bill rewrites the state sales and use taxes by 137 5 combining Code chapter 422, division IV (sales tax), Code 137 6 chapter 423 (use tax), and provisions of the multistate 137 7 streamlined sales and use tax agreement (agreement) into a new 137 8 Code chapter 423. 137 9 Division I of the new Code chapter sets out the definitions 137 10 applicable to the new Code chapter. These definitions are 137 11 from the definitions used in the present sales and use taxes 137 12 and others needed for provisions under the agreement. 137 13 Division II of the new Code chapter imposes the sales tax, 137 14 provides sales tax exemptions, and provides for sales tax 137 15 refunds. These provisions are presently part of the current 137 16 sales tax. However, this division puts all exemptions in the 137 17 same Code section while current Code had them located in 137 18 numerous places, e.g., many agriculture-related exemptions 137 19 were listed under the definition of "retail sale". 137 20 Division III of the new Code chapter imposes the use tax 137 21 and provides use tax exemptions. These provisions are 137 22 presently part of the current use tax. 137 23 Division IV of the new Code chapter establishes the uniform 137 24 sales and use tax administration Act which is part of the 137 25 agreement and authorizes the director of revenue and finance 137 26 to enter into the agreement on behalf of the state; provides 137 27 that entry into the agreement does not amend or modify Iowa 137 28 law; establishes certain agreement requirements including 137 29 striving to achieve uniform tax rates, uniform standards, 137 30 central registration, no change in nexus status as a result of 137 31 registration, monetary allowances for retailers, and consumer 137 32 privacy; and provides that the agreement only binds and 137 33 provides benefits to those states that are members of it. 137 34 Division V of the new Code chapter provides for the 137 35 administration of the sales and use tax as it relates to 138 1 retailers not registered under the agreement. This division 138 2 incorporates the current sales and use tax provisions related 138 3 to the liability and collection of tax, penalties, filing of 138 4 returns, and refunds. The division also incorporates the 138 5 sourcing rules contained in the agreement. These rules 138 6 establish the manner of determining in which state the 138 7 transaction upon which the sales tax is imposed occurs, or if, 138 8 as in telecommunications services, the transaction occurs in 138 9 more than one state, how the tax is to be divided up. 138 10 Division VI of the new chapter provides for the 138 11 administration of the sales and use tax as it relates to 138 12 retailers registered under the agreement. The provisions of 138 13 division VI apply to these retailers. In addition, the 138 14 division specifies the benefits and obligations of retailers 138 15 that register under the agreement, including the filing of 138 16 returns and paying of the taxes by a certified service 138 17 provider who is the retailer's agent with authority to perform 138 18 all use tax functions, by a certified automated system which 138 19 is software that calculates the taxes owed the various 138 20 jurisdictions, and by a proprietary automated system which is 138 21 software-owned by the retailer that calculates the taxes owed 138 22 the various jurisdictions. 138 23 The bill also contains coordinating amendments. 138 24 The bill takes effect January 1, 2004. 138 25 LSB 1665XL 80 138 26 mg/cf/24.1
Text: SSB01199 Text: SSB01201 Text: SSB01200 - SSB01299 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
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