House File 2069
HOUSE FILE
BY QUIRK
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to an exemption from the sales and use taxes of
2 building materials used in the construction of certain
3 nonprofit hospitals, providing refunds, and including
4 effective and retroactive date provisions.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
6 TLSB 5116HH 80
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PAG LIN
1 1 Section 1. Section 422.45, subsection 7, Code Supplement
1 2 2003, is amended to read as follows:
1 3 7. A private nonprofit educational institution in this
1 4 state, nonprofit private museum in this state, nonprofit
1 5 hospital licensed pursuant to chapter 135B in a city in this
1 6 state with a population of less than twenty thousand, tax=
1 7 certifying or tax=levying body or governmental subdivision of
1 8 the state, including the state board of regents, state
1 9 department of human services, state department of
1 10 transportation, a municipally owned solid waste facility which
1 11 sells all or part of its processed waste as fuel to a
1 12 municipally owned public utility, and all divisions, boards,
1 13 commissions, agencies, or instrumentalities of state, federal,
1 14 county, or municipal government which do not have earnings
1 15 going to the benefit of an equity investor or stockholder, may
1 16 make application to the department for the refund of the
1 17 sales, services, or use tax upon the gross receipts of all
1 18 sales of goods, wares, or merchandise, or from services
1 19 rendered, furnished, or performed, to a contractor, used in
1 20 the fulfillment of a written contract with the state of Iowa,
1 21 any political subdivision of the state, or a division, board,
1 22 commission, agency, or instrumentality of the state or a
1 23 political subdivision, a private nonprofit educational
1 24 institution in this state, or a nonprofit private museum in
1 25 this state, or a nonprofit hospital in a city in this state
1 26 with a population of less than twenty thousand, if the
1 27 property becomes an integral part of the project under
1 28 contract and at the completion of the project becomes public
1 29 property, is devoted to educational uses, or becomes a
1 30 nonprofit private museum, or becomes part of the nonprofit
1 31 hospital; except goods, wares, or merchandise, or services
1 32 rendered, furnished, or performed used in the performance of
1 33 any contract in connection with the operation of any municipal
1 34 utility engaged in selling gas, electricity, or heat to the
1 35 general public or in connection with the operation of a
2 1 municipal pay television system; and except goods, wares, and
2 2 merchandise used in the performance of a contract for a
2 3 "project" under chapter 419 as defined in that chapter other
2 4 than goods, wares, or merchandise used in the performance of a
2 5 contract for a "project" under chapter 419 for which a bond
2 6 issue was approved by a municipality prior to July 1, 1968, or
2 7 for which the goods, wares, or merchandise becomes an integral
2 8 part of the project under contract and at the completion of
2 9 the project becomes public property, or is devoted to
2 10 educational uses, or becomes part of a nonprofit hospital in a
2 11 city in this state with a population of less than twenty
2 12 thousand.
2 13 a. Such contractor shall state under oath, on forms
2 14 provided by the department, the amount of such sales of goods,
2 15 wares, or merchandise or services rendered, furnished, or
2 16 performed and used in the performance of such contract, and
2 17 upon which sales or use tax has been paid, and shall file such
2 18 forms with the governmental unit, private nonprofit
2 19 educational institution, or nonprofit private museum, or
2 20 nonprofit hospital which has made any written contract for
2 21 performance by the contractor. The forms shall be filed by
2 22 the contractor with the governmental unit, educational
2 23 institution, or nonprofit private museum, or nonprofit
2 24 hospital before final settlement is made.
2 25 b. Such governmental unit, educational institution, or
2 26 nonprofit private museum, or nonprofit hospital shall, not
2 27 more than one year after the final settlement has been made,
2 28 make application to the department for any refund of the
2 29 amount of the sales or use tax which shall have been paid upon
2 30 any goods, wares, or merchandise, or services rendered,
2 31 furnished, or performed, the application to be made in the
2 32 manner and upon forms to be provided by the department, and
2 33 the department shall forthwith audit the claim and, if
2 34 approved, issue a warrant to the governmental unit,
2 35 educational institution, or nonprofit private museum, or
3 1 nonprofit hospital in the amount of the sales or use tax which
3 2 has been paid to the state of Iowa under the contract.
3 3 Refunds authorized under this subsection shall accrue
3 4 interest at the rate in effect under section 421.7 from the
3 5 first day of the second calendar month following the date the
3 6 refund claim is received by the department.
3 7 c. Any contractor who shall willfully make false report of
3 8 tax paid under the provisions of this subsection shall be
3 9 guilty of a simple misdemeanor and in addition thereto shall
3 10 be liable for the payment of the tax and any applicable
3 11 penalty and interest.
3 12 Sec. 2. Section 422.45, Code Supplement 2003, is amended
3 13 by adding the following new subsection:
3 14 NEW SUBSECTION. 54C. The gross receipts from the sales of
3 15 goods, wares, or merchandise, or from services rendered,
3 16 furnished, or performed to a nonprofit hospital licensed
3 17 pursuant to chapter 135B in a city in this state with a
3 18 population of less than twenty thousand to be used for
3 19 construction at such hospital.
3 20 Sec. 3. Section 423.3, as enacted by 2003 Iowa Acts, First
3 21 Extraordinary Session, chapter 2, section 96, is amended by
3 22 adding the following new subsection:
3 23 NEW SUBSECTION. 29A. The sales price of goods, wares, or
3 24 merchandise sold, or of services furnished to a nonprofit
3 25 hospital licensed pursuant to chapter 135B in a city in this
3 26 state with a population of less than twenty thousand which are
3 27 used for construction at such hospital.
3 28 Sec. 4. Section 423.4, subsection 1, as enacted by 2003
3 29 Iowa Acts, First Extraordinary Session, chapter 2, section 97,
3 30 is amended to read as follows:
3 31 1. A private nonprofit educational institution in this
3 32 state, nonprofit private museum in this state, nonprofit
3 33 hospital licensed pursuant to chapter 135B in a city in this
3 34 state with a population of less than twenty thousand, tax=
3 35 certifying or tax=levying body or governmental subdivision of
4 1 the state, including the state board of regents, state
4 2 department of human services, state department of
4 3 transportation, a municipally owned solid waste facility which
4 4 sells all or part of its processed waste as fuel to a
4 5 municipally owned public utility, and all divisions, boards,
4 6 commissions, agencies, or instrumentalities of state, federal,
4 7 county, or municipal government which do not have earnings
4 8 going to the benefit of an equity investor or stockholder, may
4 9 make application to the department for the refund of the sales
4 10 or use tax upon the sales price of all sales of goods, wares,
4 11 or merchandise, or from services furnished to a contractor,
4 12 used in the fulfillment of a written contract with the state
4 13 of Iowa, any political subdivision of the state, or a
4 14 division, board, commission, agency, or instrumentality of the
4 15 state or a political subdivision, a private nonprofit
4 16 educational institution in this state, or a nonprofit private
4 17 museum in this state, or a nonprofit hospital in a city in
4 18 this state with a population of less than twenty thousand, if
4 19 the property becomes an integral part of the project under
4 20 contract and at the completion of the project becomes public
4 21 property, is devoted to educational uses, or becomes a
4 22 nonprofit private museum, or becomes part of the nonprofit
4 23 hospital; except goods, wares, or merchandise, or services
4 24 furnished which are used in the performance of any contract in
4 25 connection with the operation of any municipal utility engaged
4 26 in selling gas, electricity, or heat to the general public or
4 27 in connection with the operation of a municipal pay television
4 28 system; and except goods, wares, and merchandise used in the
4 29 performance of a contract for a "project" under chapter 419 as
4 30 defined in that chapter other than goods, wares, or
4 31 merchandise used in the performance of a contract for a
4 32 "project" under chapter 419 for which a bond issue was
4 33 approved by a municipality prior to July 1, 1968, or for which
4 34 the goods, wares, or merchandise becomes an integral part of
4 35 the project under contract and at the completion of the
5 1 project becomes public property, or is devoted to educational
5 2 uses, or becomes part of a nonprofit hospital in a city in
5 3 this state with a population of less than twenty thousand.
5 4 a. Such contractor shall state under oath, on forms
5 5 provided by the department, the amount of such sales of goods,
5 6 wares, or merchandise, or services furnished and used in the
5 7 performance of such contract, and upon which sales or use tax
5 8 has been paid, and shall file such forms with the governmental
5 9 unit, private nonprofit educational institution, or nonprofit
5 10 private museum, or nonprofit hospital which has made any
5 11 written contract for performance by the contractor. The forms
5 12 shall be filed by the contractor with the governmental unit,
5 13 educational institution, or nonprofit private museum, or
5 14 nonprofit hospital before final settlement is made.
5 15 b. Such governmental unit, educational institution, or
5 16 nonprofit private museum, or nonprofit hospital shall, not
5 17 more than one year after the final settlement has been made,
5 18 make application to the department for any refund of the
5 19 amount of the sales or use tax which shall have been paid upon
5 20 any goods, wares, or merchandise, or services furnished, the
5 21 application to be made in the manner and upon forms to be
5 22 provided by the department, and the department shall forthwith
5 23 audit the claim and, if approved, issue a warrant to the
5 24 governmental unit, educational institution, or nonprofit
5 25 private museum, or nonprofit hospital in the amount of the
5 26 sales or use tax which has been paid to the state of Iowa
5 27 under the contract.
5 28 Refunds authorized under this subsection shall accrue
5 29 interest at the rate in effect under section 421.7 from the
5 30 first day of the second calendar month following the date the
5 31 refund claim is received by the department.
5 32 c. Any contractor who willfully makes a false report of
5 33 tax paid under the provisions of this subsection is guilty of
5 34 a simple misdemeanor and in addition shall be liable for the
5 35 payment of the tax and any applicable penalty and interest.
6 1 Sec. 5. REFUNDS. Refunds of taxes, interest, or penalties
6 2 which arise from claims resulting from the enactment of
6 3 sections 1 and 2 of this Act, for sales of goods, wares, or
6 4 merchandise or services furnished which are used in the
6 5 construction of a nonprofit hospital occurring between July 1,
6 6 2002, and the effective date of sections 1 and 2 of this Act,
6 7 shall be limited to fifty thousand dollars in the aggregate
6 8 and shall not be allowed unless refund claims are filed prior
6 9 to October 1, 2004, notwithstanding any other provision of
6 10 law. If the amount of claims totals more than fifty thousand
6 11 dollars in the aggregate, the department of revenue shall
6 12 prorate the fifty thousand dollars among all claimants in
6 13 relation to the amounts of the claimants' valid claims.
6 14 Sec. 6. EFFECTIVE DATE AND RETROACTIVE APPLICABILITY
6 15 PROVISIONS.
6 16 1. This Act, except for sections 3 and 4 of this Act,
6 17 being deemed of immediate importance, takes effect upon
6 18 enactment and applies retroactively to July 1, 2002.
6 19 2. Sections 3 and 4 of this Act take effect July 1, 2004.
6 20 3. Sections 1 and 2 of this Act are void on and after July
6 21 1, 2004.
6 22 4. Section 5 of this Act ceases to apply after September
6 23 30, 2004.
6 24 EXPLANATION
6 25 This bill exempts the sale of goods, wares, or merchandise
6 26 or the furnishing of services to a nonprofit hospital located
6 27 in an Iowa city with a population of less than 20,000 for use
6 28 in the construction of such hospital. The exemption also
6 29 applies to the contractor who purchases or furnishes such
6 30 items in fulfillment of a construction contract for such
6 31 hospital. The bill also provides that if the sales or use tax
6 32 has been paid, the hospital may file for a refund of the tax
6 33 paid.
6 34 The bill provides for retroactive applicability to July 1,
6 35 2002, and provides that any refunds that may be claimed as a
7 1 result of the retroactive applicability of the exemption is
7 2 limited to $50,000 in the aggregate and the claims must be
7 3 filed by October 1, 2004.
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