Senate File 2367 H-8382 Amend Senate File 2367, as passed by the Senate, as follows: 1 1. By striking everything after the enacting clause and 2 inserting: 3 < DIVISION I 4 SALES, USE, AND EXCISE TAX —— RETURNS DUE 5 Section 1. Section 9C.3, subsection 3, Code 2022, is amended 6 to read as follows: 7 3. The application shall state whether or not the applicant 8 has an Iowa retailers sales or use tax permit and if the 9 applicant has such permit, shall state the number of such 10 permit. 11 Sec. 2. Section 9C.5, Code 2022, is amended to read as 12 follows: 13 9C.5 Issuance of license. 14 Upon receiving an application for a transient merchant’s 15 license, the secretary of state shall investigate or cause to 16 be investigated, the reputation and character of the applicant. 17 If, upon making such investigation, the secretary of state is 18 satisfied that the statements and representations contained in 19 the application are true, and that the applicant is of good 20 reputation and character, and the holder of an Iowa retailer’s 21 sales or use tax permit, and if a foreign corporation, has 22 authority to do business in the state of Iowa, the secretary 23 shall issue to the applicant a license as a transient merchant 24 upon payment of the fee as herein prescribed for the period of 25 time requested in said application and for use at the location 26 and place where it is stated in said application the sale will 27 be held or the business conducted, both of which shall be set 28 out in said license. Such license shall be valid only for the 29 period of time and at the location and place described therein. 30 Sec. 3. Section 99G.30A, subsection 2, paragraph c, Code 31 2022, is amended to read as follows: 32 c. Frequency of deposits and quarterly monthly reports of 33 the monitor vending machine excise tax with the department of 34 revenue are governed by the tax provisions in section 423.31 . 35 -1- SF 2367.4592 (2) 89 jm/jh 1/ 30 #1.

Monitor vending machine excise tax collections shall not be 1 included in computation of the total tax to determine frequency 2 of filing under section 423.31 . 3 Sec. 4. Section 321.105A, subsection 4, paragraph b, Code 4 2022, is amended to read as follows: 5 b. Section 422.25, subsection 4 , sections 422.30 , 422.67 , 6 and 422.68 , section 422.69, subsection 1 , sections 422.70 , 7 422.71 , 422.72 , 422.74 , and 422.75 , section 423.14, subsection 8 2 , and sections 423.23 , 423.24 , 423.25 , 423.32 , 423.33 , 423.35 , 9 423.37 through 423.42 , 423.45 , and 423.47 , consistent with the 10 provisions of this section , apply with respect to the fees 11 for new registration authorized under this section in the 12 same manner and with the same effect as if the fees for new 13 registration were retail use taxes within the meaning of those 14 statutes. 15 Sec. 5. Section 421.26, Code 2022, is amended to read as 16 follows: 17 421.26 Personal liability for tax due. 18 If a licensee or other person under section 452A.65 , a 19 retailer or purchaser under chapter 423A , 423B , 423C , 423D , 20 or 423E , or section 423.14 , 423.14A , 423.29 , 423.31 , 423.32 , 21 or 423.33 , or a user under section 423.34 , or a permit holder 22 or licensee under section 453A.13 , 453A.16 , or 453A.44 fails 23 to pay a tax under those sections when due, an officer of a 24 corporation or association, notwithstanding section 489.304 , 25 a member or manager of a limited liability company, or a 26 partner of a partnership, having control or supervision of 27 or the authority for remitting the tax payments and having 28 a substantial legal or equitable interest in the ownership 29 of the corporation, association, limited liability company, 30 or partnership, who has intentionally failed to pay the tax 31 is personally liable for the payment of the tax, interest, 32 and penalty due and unpaid. However, this section shall 33 not apply to taxes on accounts receivable. The dissolution 34 of a corporation, association, limited liability company, 35 -2- SF 2367.4592 (2) 89 jm/jh 2/ 30

or partnership shall not discharge a person’s liability for 1 failure to remit the tax due. 2 Sec. 6. Section 423.2, subsection 1, paragraph b, Code 2022, 3 is amended to read as follows: 4 b. Sales of building materials, supplies, and equipment 5 to owners, contractors, subcontractors, or builders for the 6 erection of buildings or the alteration, repair, or improvement 7 of real property are retail sales of tangible personal property 8 in whatever quantity sold. Where the owner, contractor, 9 subcontractor, or builder is also a retailer holding a retail 10 sales or use tax permit and transacting retail sales of 11 building materials, supplies, and equipment, the person shall 12 purchase such items of tangible personal property without 13 liability for the tax if such property will be subject to the 14 tax at the time of resale or at the time it is withdrawn from 15 inventory for construction purposes. The sales tax shall be 16 due in the reporting period when the materials, supplies, 17 and equipment are withdrawn from inventory for construction 18 purposes or when sold at retail. The tax shall not be due when 19 materials are withdrawn from inventory for use in construction 20 outside of Iowa and the tax shall not apply to tangible 21 personal property purchased and consumed by the manufacturer as 22 building materials in the performance by the manufacturer or 23 its subcontractor of construction outside of Iowa. The sale 24 of carpeting is not a sale of building materials. The sale of 25 carpeting to owners, contractors, subcontractors, or builders 26 shall be treated as the sale of ordinary tangible personal 27 property and subject to the tax imposed under this subsection 28 and the use tax. 29 Sec. 7. Section 423.3, subsection 39, paragraph a, 30 subparagraph (2), Code 2022, is amended to read as follows: 31 (2) The sale of all or substantially all of the tangible 32 personal property, or specified digital products, or services 33 held or used by a seller in the course of the seller’s trade 34 or business for which the seller is required to hold a sales 35 -3- SF 2367.4592 (2) 89 jm/jh 3/ 30

or use tax permit when the seller sells or otherwise transfers 1 the trade or business to another person who shall engage in a 2 similar trade or business. 3 Sec. 8. Section 423.3, subsection 80, paragraph d, Code 4 2022, is amended to read as follows: 5 d. Subject to the limitations in paragraph “c” , where the 6 owner, contractor, subcontractor, or builder is also a retailer 7 holding a retail sales or use tax permit and transacting 8 retail sales of building materials, supplies, and equipment, 9 the tax shall not be due when materials are withdrawn from 10 inventory for use in construction performed for a designated 11 exempt entity if an exemption certificate is received from such 12 entity. 13 Sec. 9. Section 423.3, subsection 104, paragraph b, 14 subparagraph (1), Code 2022, is amended to read as follows: 15 (1) “Commercial enterprise” means the same as defined in 16 section 423.3, subsection 47 , paragraph “d” , subparagraph (1), 17 but also includes professions and occupations , and includes 18 public utilities as defined in section 476.1, subsection 3 . 19 Sec. 10. Section 423.5, subsection 2, Code 2022, is amended 20 to read as follows: 21 2. The excise tax is imposed upon every person using 22 the property within this state until the tax has been paid 23 directly to the county treasurer, the state department of 24 transportation, a retailer, or the department. This tax is 25 imposed on every person using the services or the product of 26 the services in this state until the user has paid the tax 27 either to an Iowa sales or use tax permit holder or to the 28 department. 29 Sec. 11. Section 423.14, subsection 2, paragraph b, Code 30 2022, is amended to read as follows: 31 b. The tax upon the use of all tangible personal property 32 and specified digital products other than that enumerated in 33 paragraph “a” , which is sold by a seller who is a retailer or 34 its agent that is not otherwise required to collect sales tax 35 -4- SF 2367.4592 (2) 89 jm/jh 4/ 30

under the provisions of this chapter , may be collected by the 1 retailer or agent and remitted to the department, pursuant to 2 the provisions of paragraph “e” , and sections 423.24 , 423.29 , 3 423.30 , 423.32 423.31 , and 423.33 . 4 Sec. 12. Section 423.14A, subsection 3, paragraph c, 5 subparagraph (2), Code 2022, is amended to read as follows: 6 (2) A marketplace facilitator shall collect sales and 7 use tax on the entire sales price or purchase price paid by 8 a purchaser on each Iowa sale subject to sales and use tax 9 that is made or facilitated by the marketplace facilitator, 10 regardless of whether the marketplace seller for whom an Iowa 11 sale is made or facilitated has or is required to have a retail 12 sales or use tax permit or would have been required to collect 13 sales and use tax had the sale not been facilitated by the 14 marketplace facilitator, and regardless of the amount of the 15 sales price or purchase price that will ultimately accrue 16 to or benefit the marketplace facilitator, the marketplace 17 seller, or any other person. This sales and use tax collection 18 responsibility of a marketplace facilitator applies but shall 19 not be limited to sales facilitated through a computer software 20 application, commonly referred to as in-app purchases, or 21 through another specified digital product. 22 Sec. 13. Section 423.31, subsections 1, 3, 5, and 6, Code 23 2022, are amended to read as follows: 24 1. a. Each Except as provided in paragraph “b” , each person 25 subject to this section and section 423.36 and in accordance 26 with the provisions of this section and section 423.36 shall, 27 on or before the last day of the month following the close of 28 each calendar quarter month during which such person is or 29 has become or ceased being subject to the provisions of this 30 section and section 423.36 , make, sign, and file electronically 31 a return for the calendar quarter month in the form as may be 32 required. Returns shall show information relating to sales 33 prices including tangible personal property, specified digital 34 products, and services converted to the use of such person, 35 -5- SF 2367.4592 (2) 89 jm/jh 5/ 30

the amounts of sales prices excluded and exempt from the tax, 1 the amounts of sales prices subject to tax, a calculation of 2 tax due, and any other information for the period covered by 3 the return as may be required. Returns shall be signed by 4 the retailer or the retailer’s authorized agent and must be 5 certified by the retailer to be correct in accordance with 6 forms and rules prescribed by the director. A person required 7 to file a sales or use tax return who is unable to do so may 8 request permission from the director to file a return by 9 another method. 10 b. Notwithstanding paragraph “a” , each person subject to 11 this section who collects and remits less than one thousand 12 two hundred dollars in sales or use tax to the department per 13 calendar year may file a return on or before the last day of the 14 month following the close of the calendar year. 15 3. The sales tax forms prescribed by the director shall be 16 referred to as “retailers tax deposit”. Deposit forms shall 17 be signed by the retailer or the retailer’s duly authorized 18 agent, and shall be duly certified by the retailer or agent to 19 be correct. The director may authorize incorporated banks and 20 trust companies or other depositories authorized by law which 21 are depositories or financial agents of the United States, 22 or of this state, to receive any sales or use tax imposed 23 under this chapter , in the manner, at the times, and under 24 the conditions the director prescribes. The director shall 25 prescribe the manner, times, and conditions under which the 26 receipt of the tax by those depositories is to be treated as 27 payment of the tax to the department. 28 5. a. Upon making application and receiving approval 29 from the director, a person and its affiliates that make 30 retail sales of tangible personal property, specified digital 31 products, or taxable enumerated services may make deposits and 32 file a consolidated sales or use tax return for the affiliated 33 group, pursuant to rules adopted by the director. A person and 34 each affiliate that files a consolidated return are jointly and 35 -6- SF 2367.4592 (2) 89 jm/jh 6/ 30

severally liable for all tax, penalty, and interest found due 1 for the tax period for which a consolidated return is filed or 2 required to be filed. 3 b. A business required to file a consolidated sales or use 4 tax return shall file a form entitled “schedule of consolidated 5 business locations” with its quarterly sales or use tax 6 return that shows the taxpayer’s consolidated permit number, 7 the permit number for each Iowa business location, the state 8 sales tax amount by business location, and the amount of state 9 sales tax due on goods consumed that are not assigned to a 10 specific business location. Consolidated quarterly sales or 11 use tax returns that are not accompanied by the schedule of 12 consolidated business locations form are considered incomplete 13 and are subject to penalty under section 421.27 . 14 6. If necessary or advisable in order to insure ensure 15 the payment of the tax, the director may require returns and 16 payment of the tax to be made for other than quarterly monthly 17 periods, the provisions of this section or other provision to 18 the contrary notwithstanding. 19 Sec. 14. Section 423.31, subsection 2, Code 2022, is amended 20 by striking the subsection. 21 Sec. 15. Section 423.33, subsection 1, paragraph a, Code 22 2022, is amended to read as follows: 23 a. If a purchaser fails to pay sales tax to the retailer 24 required to collect the tax, then in addition to all of the 25 rights, obligations, and remedies provided, a use tax is 26 payable by the purchaser directly to the department, and 27 sections 423.31 , 423.32 , 423.37 , 423.38 , 423.39 , 423.40 , 28 423.41 , and 423.42 apply to the purchaser. 29 Sec. 16. Section 423.33, subsection 3, Code 2022, is amended 30 to read as follows: 31 3. Event sponsor’s liability for sales tax. A person 32 sponsoring a flea market or a craft, antique, coin, or stamp 33 show or similar event shall obtain from every retailer selling 34 tangible personal property, specified digital products, or 35 -7- SF 2367.4592 (2) 89 jm/jh 7/ 30

taxable services at the event proof that the retailer possesses 1 a valid sales or use tax permit or secure from the retailer 2 a statement, taken in good faith, that tangible personal 3 property, specified digital products, or services offered for 4 sale are not subject to sales tax. Failure to do so renders 5 a sponsor of the event liable for payment of any sales tax, 6 interest, and penalty due and owing from any retailer selling 7 property or services at the event. Sections 423.31 , 423.32 , 8 423.37 , 423.38 , 423.39 , 423.40 , 423.41 , and 423.42 apply to the 9 sponsors. For purposes of this subsection , a “person sponsoring 10 a flea market or a craft, antique, coin, or stamp show or similar 11 event” does not include a marketplace facilitator as defined in 12 section 423.14A, subsection 1, an organization which sponsors 13 an event determined to qualify as an event involving casual 14 sales pursuant to section 423.3, subsection 39 , or the state 15 fair or a fair as defined in section 174.1 . 16 Sec. 17. Section 423.34, Code 2022, is amended to read as 17 follows: 18 423.34 Liability of user. 19 Any person who uses any tangible personal property, 20 specified digital products, or services enumerated in section 21 423.2 upon which the use tax has not been paid, either to the 22 county treasurer or to a retailer or direct to the department 23 as required by this subchapter , shall be liable for the payment 24 of tax, and shall on or before the last day of the month next 25 succeeding each quarterly monthly period pay the use tax upon 26 all tangible personal property, specified digital products, 27 or services used by the person during the preceding quarterly 28 monthly period in the manner and accompanied by such returns 29 as the director shall prescribe. All of the provisions of 30 sections 423.32 423.31 and 423.33 with reference to the returns 31 and payments shall be applicable to the returns and payments 32 required by this section . 33 Sec. 18. Section 423.36, subsection 4, paragraph b, Code 34 2022, is amended to read as follows: 35 -8- SF 2367.4592 (2) 89 jm/jh 8/ 30

b. If an applicant is making sales outside Iowa for use in 1 this state or furnishing services outside Iowa, the product 2 or result of which will be used in this state, that applicant 3 shall be issued one sales or use tax permit by the department 4 applicable to these out-of-state sales or services. 5 Sec. 19. Section 423.36, subsection 4, Code 2022, is amended 6 by adding the following new paragraph: 7 NEW PARAGRAPH . c. If an applicant is required to collect 8 sales or use tax and is not included in the definition of a 9 retailer maintaining a place of business in this state in 10 section 423.1, subsection 48, paragraph “a” , subparagraph (1), 11 the applicant shall be issued one sales or use tax permit by 12 the department regardless of the number of locations from which 13 sales are made. 14 Sec. 20. Section 423.36, subsections 7 and 8, Code 2022, are 15 amended to read as follows: 16 7. a. Sellers who are not regularly engaged in selling 17 at retail and do not have a permanent place of business, but 18 who are temporarily engaged in selling from trucks, portable 19 roadside stands, concessionaires at state, county, district, 20 or local fairs, carnivals, or the like, shall report and remit 21 the sales tax on a temporary seasonal basis, under rules 22 the director shall provide for the efficient collection of 23 the sales tax. This subsection applies to sellers who are 24 temporarily engaged in furnishing services. 25 b. Persons engaged in selling tangible personal property, 26 specified digital products, or furnishing services shall not 27 be required to obtain or retain a sales or use tax permit for a 28 place of business at which taxable sales of tangible personal 29 property, specified digital products, or taxable performance of 30 services will not occur. 31 8. The provisions of subsection 1 , dealing with the lawful 32 right of a retailer to transact business, as applicable, apply 33 to persons having receipts from furnishing services enumerated 34 in section 423.2 , except that a person holding a permit 35 -9- SF 2367.4592 (2) 89 jm/jh 9/ 30

pursuant to subsection 1 shall not be required to obtain any 1 separate sales or use tax permit for the purpose of engaging in 2 business involving the services. 3 Sec. 21. Section 423.40, subsections 1, 2, 3, and 5, Code 4 2022, are amended to read as follows: 5 1. In addition to the sales or use tax or additional sales 6 or use tax, the taxpayer shall pay a penalty as provided in 7 section 421.27 . The taxpayer shall also pay interest on the 8 sales or use tax or additional sales or use tax at the rate 9 in effect under section 421.7 for each month counting each 10 fraction of a month as an entire month, computed from the date 11 the semimonthly or monthly tax deposit form or return was 12 required to be filed. The penalty and interest shall be paid 13 to the department and disposed of in the same manner as other 14 receipts under this subchapter . Unpaid penalties and interest 15 may be enforced in the same manner as the taxes imposed by this 16 chapter . 17 2. a. Any person who knowingly sells tangible personal 18 property, specified digital products, tickets or admissions 19 to places of amusement and athletic events, or gas, water, 20 electricity, or communication service at retail, or engages in 21 the furnishing of services enumerated in section 423.2 , in this 22 state without procuring a permit to collect tax, as provided 23 in section 423.36 , or who violates section 423.24 and the 24 officers of any corporation who so act are guilty of a serious 25 misdemeanor. 26 b. A person who knowingly sells tangible personal property, 27 specified digital products, tickets or admissions to places of 28 amusement and athletic events, or gas, water, electricity, or 29 communication service at retail, or engages in the furnishing 30 of services enumerated in section 423.2 , in this state after 31 the person’s sales or use tax permit has been revoked and 32 before it has been restored as provided in section 423.36, 33 subsection 6 , and the officers of any corporation who so act 34 are guilty of an aggravated misdemeanor. 35 -10- SF 2367.4592 (2) 89 jm/jh 10/ 30

3. A person who willfully attempts in any manner to evade 1 any tax imposed by this chapter or the payment of the tax or 2 a person who makes or causes to be made a false or fraudulent 3 semimonthly or monthly tax deposit form or return with intent 4 to evade any tax imposed by subchapter II or III or the payment 5 of the tax is guilty of a class “D” felony. 6 5. A person required to pay sales or use tax, or to make, 7 sign, or file a tax deposit form or return or supplemental 8 return, who willfully makes a false or fraudulent tax deposit 9 form or return, or willfully fails to pay at least ninety 10 percent of the tax or willfully fails to make, sign, or file 11 the tax deposit form or return, at the time required by law, is 12 guilty of a fraudulent practice. 13 Sec. 22. Section 423.45, subsection 4, paragraph b, Code 14 2022, is amended to read as follows: 15 b. The sales tax liability for all sales of tangible 16 personal property and specified digital products and all sales 17 of services is upon the seller and the purchaser unless the 18 seller takes from the purchaser a valid exemption certificate 19 stating under penalty of perjury that the purchase is for a 20 nontaxable purpose and is not a retail sale as defined in 21 section 423.1 , or the seller is not obligated to collect tax 22 due, or unless the seller takes a fuel exemption certificate 23 pursuant to subsection 5 . If the tangible personal property, 24 specified digital products, or services are purchased tax free 25 pursuant to a valid exemption certificate and the tangible 26 personal property, specified digital products, or services are 27 used or disposed of by the purchaser in a nonexempt manner, the 28 purchaser is solely liable for the taxes and shall remit the 29 taxes directly to the department and sections 423.31 , 423.32 , 30 423.37 , 423.38 , 423.39 , 423.40 , 423.41 , and 423.42 shall apply 31 to the purchaser. 32 Sec. 23. Section 423.45, subsection 5, paragraph c, Code 33 2022, is amended to read as follows: 34 c. The seller may accept a completed fuel exemption 35 -11- SF 2367.4592 (2) 89 jm/jh 11/ 30

certificate, as prepared by the purchaser, for three 1 years unless the purchaser files a new completed exemption 2 certificate. If the fuel is purchased tax free pursuant to a 3 fuel exemption certificate which is taken by the seller, and 4 the fuel is used or disposed of by the purchaser in a nonexempt 5 manner, the purchaser is solely liable for the taxes, and shall 6 remit the taxes directly to the department and sections 423.31 , 7 423.32 , 423.37 , 423.38 , 423.39 , 423.40 , 423.41 , and 423.42 8 shall apply to the purchaser. 9 Sec. 24. Section 423.50, subsection 1, Code 2022, is amended 10 to read as follows: 11 1. Only one remittance of tax per return is required except 12 as provided in this subsection . Sellers that collect more 13 than thirty thousand dollars in sales and use taxes for this 14 state during the preceding calendar year shall be required to 15 make additional remittances as required under rules adopted by 16 the director. The filing of a return is not required with an 17 additional remittance. 18 Sec. 25. Section 423.57, Code 2022, is amended to read as 19 follows: 20 423.57 Statutes applicable. 21 The director shall administer this subchapter as it relates 22 to the taxes imposed in this chapter in the same manner and 23 subject to all the provisions of, and all of the powers, 24 duties, authority, and restrictions contained in sections 25 423.14 , 423.14A , 423.14B , 423.15 , 423.16 , 423.17 , 423.19 , 26 423.20 , 423.21 , 423.22 , 423.23 , 423.24 , 423.25 , 423.29 , 423.31 , 27 423.32 , 423.33 , 423.34 , 423.34A , 423.35 , 423.37 , 423.38 , 28 423.39 , 423.40 , 423.41 , and 423.42 , section 423.43, subsection 29 1 , and sections 423.45 , 423.46 , and 423.47 . 30 Sec. 26. Section 423.58, Code 2022, is amended to read as 31 follows: 32 423.58 Collection, permit, and tax return exemption for 33 certain out-of-state businesses. 34 Notwithstanding sections 423.14 , 423.14A , 423.14B , 423.29 , 35 -12- SF 2367.4592 (2) 89 jm/jh 12/ 30

423.31 , 423.32 , and 423.36 , a person meeting the requirements 1 of section 29C.24 is not required to obtain a sales or use tax 2 permit, collect and remit sales and use tax, or make and file 3 applicable sales or use tax returns, as provided in section 4 29C.24, subsection 3 , paragraph “a” , subparagraph (2). 5 Sec. 27. Section 423A.6, subsection 4, Code 2022, is amended 6 to read as follows: 7 4. Section 422.25, subsection 4 , sections 422.30 , 422.67 , 8 and 422.68 , section 422.69, subsection 1 , sections 422.70 , 9 422.71 , 422.72 , 422.74 , and 422.75 , section 423.14, subsection 10 1 , and sections 423.23 , 423.24 , 423.25 , 423.31 , 423.33 , 11 423.35 , 423.37 through 423.42 , and 423.47 , consistent with the 12 provisions of this chapter , apply with respect to the taxes 13 authorized under this chapter , in the same manner and with the 14 same effect as if the state and local hotel and motel taxes 15 were retail sales taxes within the meaning of those statutes. 16 Notwithstanding this subsection , the director shall provide 17 for quarterly monthly filing of returns and for other than 18 quarterly monthly filing of returns both as prescribed in 19 section 423.31 . The director may require all persons who are 20 engaged in the business of deriving any sales price subject 21 to tax under this chapter to register with the department. 22 All taxes collected under this chapter by a retailer, lodging 23 provider, lodging facilitator, lodging platform, or any other 24 person are deemed to be held in trust for the state of Iowa and 25 the local jurisdictions imposing the taxes. 26 Sec. 28. Section 423B.5, subsection 3, Code 2022, is amended 27 to read as follows: 28 3. A tax permit other than the state sales or use tax permit 29 required under section 423.36 shall not be required by local 30 authorities. 31 Sec. 29. Section 423B.6, subsection 2, paragraph c, Code 32 2022, is amended to read as follows: 33 c. Frequency of deposits and quarterly monthly reports of a 34 local sales and services tax with the department of revenue are 35 -13- SF 2367.4592 (2) 89 jm/jh 13/ 30

governed by the tax provisions in section 423.31 . Local tax 1 collections shall not be included in computation of the total 2 tax to determine frequency of filing under section 423.31 . 3 Sec. 30. Section 423C.4, Code 2022, is amended to read as 4 follows: 5 423C.4 Administration and enforcement. 6 All powers and requirements of the director of revenue 7 to administer the state sales tax law under chapter 423 are 8 applicable to the administration of the tax imposed under 9 section 423C.3 , including but not limited to section 422.25, 10 subsection 4 , sections 422.30 , 422.67 , and 422.68 , section 11 422.69, subsection 1 , sections 422.70 through 422.75 , section 12 423.14, subsection 1 , and sections 423.15 , 423.23 , 423.24 , 13 423.25 , 423.31 , 423.33 , 423.35 and 423.37 through 423.42 , 14 423.45 , 423.46 , and 423.47 . However, as an exception to the 15 powers specified in section 423.31 , the director shall only 16 require the filing of quarterly monthly reports. 17 Sec. 31. Section 423D.4, subsection 3, Code 2022, is amended 18 to read as follows: 19 3. Section 422.25, subsection 4 , sections 422.30 , 422.67 , 20 and 422.68 , section 422.69, subsection 1 , sections 422.70 , 21 422.71 , 422.72 , 422.74 , and 422.75 , section 423.14, subsection 22 1 , and sections 423.23 , 423.24 , 423.25 , 423.31 through 23 423.35 , 423.37 through 423.42 , and 423.47 , consistent with 24 the provisions of this chapter , apply with respect to the tax 25 authorized under this chapter , in the same manner and with the 26 same effect as if the excise taxes on equipment sales or use 27 were retail sales taxes within the meaning of those statutes. 28 Notwithstanding this subsection , the director shall provide 29 for quarterly monthly filing of returns and for other than 30 quarterly monthly filing of returns both as prescribed in 31 section 423.31 . All taxes collected under this chapter by a 32 retailer or any user are deemed to be held in trust for the 33 state of Iowa. 34 Sec. 32. Section 423G.5, subsection 3, Code 2022, is amended 35 -14- SF 2367.4592 (2) 89 jm/jh 14/ 30

to read as follows: 1 3. Section 422.25, subsection 4 , sections 422.30 , 422.67 , 2 and 422.68 , section 422.69, subsection 1 , sections 422.70 , 3 422.71 , 422.72 , 422.74 , and 422.75 , section 423.14, subsection 4 1 , and sections 423.23 , 423.24 , 423.25 , 423.31 through 5 423.35 , 423.37 through 423.42 , and 423.47 , consistent with the 6 provisions of this chapter , shall apply with respect to the tax 7 authorized under this chapter , in the same manner and with the 8 same effect as if the excise taxes on the sale or furnishing of 9 a water service were retail sales taxes within the meaning of 10 those statutes. Notwithstanding this subsection , the director 11 shall provide for quarterly monthly filing of returns and 12 for other than quarterly monthly filing of returns both as 13 prescribed in section 423.31 . All taxes collected under this 14 chapter by a retailer or any user are deemed to be held in trust 15 for the state of Iowa. 16 Sec. 33. Section 728.1, subsection 6, Code 2022, is amended 17 to read as follows: 18 6. “Place of business” means the premises of a business 19 required to obtain a sales or use tax permit pursuant to 20 chapter 423 , the premises of a nonprofit or not-for-profit 21 organization, and the premises of an establishment which is 22 open to the public at large or where entrance is limited by a 23 cover charge or membership requirement. 24 Sec. 34. Section 728.5, subsection 1, unnumbered paragraph 25 1, Code 2022, is amended to read as follows: 26 An owner, manager, or person who exercises direct control 27 over a place of business required to obtain a sales or use tax 28 permit shall be guilty of a serious misdemeanor under any of 29 the following circumstances: 30 Sec. 35. REPEAL. Section 423.32, Code 2022, is repealed. 31 Sec. 36. TEMPORARY PENALTY AND INTEREST GRACE PERIOD. A 32 taxpayer shall file a return and pay tax pursuant to section 33 423.31, subsection 1, as amended by this division of this Act. 34 However, if a taxpayer is unable to file a return or pay tax in 35 -15- SF 2367.4592 (2) 89 jm/jh 15/ 30

accordance with the changes to section 423.31, subsection 1, 1 as amended by this division of this Act, by July 1, 2022, the 2 taxpayer shall file returns and pay tax for tax periods ending 3 on or before September 30, 2022, according to the taxpayer’s 4 registration as of June 30, 2022, and such a taxpayer shall 5 not incur a penalty for doing so. Interest on unpaid payments 6 for such taxpayers unable to file a return or pay a tax in 7 accordance with the changes to section 423.31, subsection 1, as 8 amended by this division of this Act, shall be suspended until 9 October 1, 2022. 10 Sec. 37. AUTHORITY TO MODIFY PERMITS. Notwithstanding any 11 provision of law to the contrary, the department of revenue 12 shall have authority to convert, renumber, or combine existing 13 sales tax, retailer’s use tax, and consumer’s use tax permits 14 for taxpayers holding multiple tax permits in accordance with 15 section 423.31, subsection 1, as amended by this division of 16 this Act. 17 Sec. 38. IMPLEMENTATION —— EMERGENCY RULES. The department 18 of revenue may adopt emergency rules under section 17A.4, 19 subsection 3, and section 17A.5, subsection 2, paragraph “b”, 20 to implement the provisions of this division of this Act and 21 the rules shall be effective immediately upon filing unless 22 a later date is specified in the rules. Any rules adopted 23 in accordance with this section shall also be published as a 24 notice of intended action as provided in section 17A.4. 25 Sec. 39. EFFECTIVE DATE. The following, being deemed of 26 immediate importance, takes effect upon enactment: 27 The section of this division of this Act enacting emergency 28 rules relating to the implementation of this division of this 29 Act. 30 Sec. 40. EFFECTIVE DATE. The following takes effect January 31 1, 2023: 32 The section of this division of this Act amending section 33 423.3, subsection 104, paragraph “b”, subparagraph (1). 34 DIVISION II 35 -16- SF 2367.4592 (2) 89 jm/jh 16/ 30

SALES AND USE TAX EXEMPTIONS 1 Sec. 41. Section 423.3, subsection 47, paragraph a, 2 subparagraph (4), Code 2022, is amended by striking the 3 subparagraph. 4 Sec. 42. Section 423.3, subsection 68, paragraph c, 5 subparagraph (1), subparagraph division (a), Code 2022, is 6 amended to read as follows: 7 (a) “Clothing” includes but is not limited to the 8 following: aprons, household and shop; athletic supporters; 9 baby receiving blankets; bathing suits and caps; beach capes 10 and coats; belts and suspenders; boots; coats and jackets; 11 costumes; diapers (children and adults, including disposable 12 diapers); earmuffs; footlets; formal wear; garters and garter 13 belts; girdles; gloves and mittens for general use; hats 14 and caps; hosiery; insoles for shoes; lab coats; neckties; 15 overshoes; pantyhose; rainwear; rubber pants; sandals; 16 scarves; shoes and shoelaces; slippers; sneakers; socks and 17 stockings; steel-toed shoes; underwear; uniforms, athletic and 18 nonathletic; and wedding apparel. 19 Sec. 43. Section 423.3, Code 2022, is amended by adding the 20 following new subsections: 21 NEW SUBSECTION . 108. The sales price from the sale of 22 feminine hygiene products. For purposes of this subsection, 23 “feminine hygiene products” means tampons, panty liners, 24 menstrual cups, sanitary napkins, and other similar tangible 25 personal property designed for feminine hygiene in connection 26 with the human menstrual cycle. 27 NEW SUBSECTION . 109. The sales price from the sale of a 28 child or adult diaper, whether cloth or disposable. 29 Sec. 44. EFFECTIVE DATE. Except as otherwise provided, this 30 division of this Act takes effect January 1, 2023. 31 Sec. 45. EFFECTIVE DATE. The following takes effect January 32 1, 2024: 33 The section of this division of this Act amending section 34 423.3, subsection 47, paragraph “a”, subparagraph (4). 35 -17- SF 2367.4592 (2) 89 jm/jh 17/ 30

DIVISION III 1 DISTRIBUTIONS OF REVENUE TO LOCAL GOVERNMENTS AND SCHOOL 2 DISTRICTS 3 Sec. 46. Section 423B.7, subsection 2, paragraph a, Code 4 2022, is amended to read as follows: 5 a. The director of revenue by August 15 of each fiscal 6 year the last day of each month shall send transfer to each 7 city or county where the local option tax is imposed , an 8 estimate of the amount of tax moneys remitted to the department 9 attributable to each city or county will receive for the year 10 and for each month of the year from the preceding month . At the 11 end of each month, the director may revise the estimates for 12 the year and remaining months. 13 Sec. 47. Section 423B.7, subsection 2, paragraphs b and c, 14 Code 2022, are amended by striking the paragraphs. 15 Sec. 48. Section 423F.2, subsection 4, paragraph a, Code 16 2022, is amended to read as follows: 17 a. The director of revenue by August 15 of each fiscal year 18 the last day of each month shall send transfer to each school 19 district an estimate of the amount of tax moneys remitted 20 to the department attributable to each school district will 21 receive for the year and for each month of the year from the 22 preceding month . At the end of each month, the director may 23 revise the estimates for the year and remaining months. 24 Sec. 49. Section 423F.2, subsection 4, paragraph b, Code 25 2022, is amended by striking the paragraph and inserting in 26 lieu thereof the following: 27 b. On or before August 15 of each fiscal year the director 28 of revenue shall provide to each school district an estimate 29 of the amount of tax moneys to be distributed to each school 30 district for the current fiscal year. 31 Sec. 50. Section 423F.2, subsection 4, paragraph c, Code 32 2022, is amended by striking the paragraph. 33 Sec. 51. TRANSITION PROVISION FOR LOCAL OPTION SALES TAX 34 AND SECURING AN ADVANCED VISION FOR EDUCATION —— TRANSFER 35 -18- SF 2367.4592 (2) 89 jm/jh 18/ 30