House File 262
HOUSE FILE
BY TYMESON and HOFFMAN
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to property tax relief and school infrastructure
2 purposes by increasing the state sales and use taxes and
3 distributing certain state sales and use tax revenues to
4 school districts for property tax relief or school
5 infrastructure purposes if approved by a vote of the
6 electorate, providing a penalty, and including an effective
7 date.
8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
9 TLSB 1997YH 80
10 mg/cf/24
PAG LIN
1 1 Section 1. NEW SECTION. 293.1 SCHOOL DISTRICT SALES TAX
1 2 FUND.
1 3 1. A school district sales tax fund is created as a
1 4 separate and distinct fund in the state treasury under the
1 5 control of the department of revenue and finance. Moneys in
1 6 the fund include revenues credited to the fund pursuant to
1 7 section 422.69, subsection 2, and section 423.24,
1 8 appropriations made to the fund, and other moneys deposited
1 9 into the fund. The moneys credited in a fiscal year to the
1 10 fund shall be distributed as follows:
1 11 a. (1) A school district located in whole or in part in a
1 12 county that voted on and approved prior to March 31, 2003, the
1 13 local sales and services tax for school infrastructure
1 14 purposes under chapter 422E shall receive an amount equal to
1 15 its guaranteed school infrastructure amount as calculated
1 16 under subsection 2 if the board of directors notifies the
1 17 director of revenue and finance that the school district wants
1 18 to receive its guaranteed school infrastructure amount. The
1 19 notification shall be provided by July 1, 2003. If
1 20 notification is not received by July 1, 2003, the school
1 21 district shall receive moneys pursuant to paragraph "b".
1 22 Nothing in this chapter shall prevent a school district from
1 23 using its guaranteed school infrastructure amount to pay
1 24 principal and interest on obligations issued pursuant to
1 25 section 422E.4.
1 26 (2) A school district receiving moneys pursuant to
1 27 subparagraph (1) shall cease to receive its guaranteed school
1 28 infrastructure amount and shall receive moneys pursuant to
1 29 paragraph "b" starting with the fiscal year immediately
1 30 following the fiscal year in which occurs the end of the
1 31 original ten=year period or the date of repeal listed on the
1 32 original ballot proposition, whichever is the earlier, as
1 33 provided in chapter 422E. However, a school district
1 34 receiving moneys pursuant to subparagraph (1) may elect at
1 35 anytime to receive moneys pursuant to paragraph "b" by
2 1 providing notification to receive moneys pursuant to paragraph
2 2 "b" to the director of revenue and finance and the director of
2 3 the department of management by February 15 preceding the
2 4 fiscal year for which the election will apply. Once a school
2 5 district makes this election it is irrevocable.
2 6 b. (1) Moneys remaining after computations made pursuant
2 7 to paragraph "a" shall be distributed to school districts not
2 8 receiving moneys under paragraph "a" on a per student basis
2 9 calculated by the director of revenue and finance by dividing
2 10 the moneys available during the fiscal year by the combined
2 11 actual enrollment for all school districts receiving
2 12 distributions under this paragraph.
2 13 (2) The combined actual enrollment for school districts,
2 14 for purposes of subparagraph (1), shall be calculated by
2 15 adding together the actual enrollment for each school district
2 16 receiving distributions under subparagraph (1) as determined
2 17 by the department of management based on the actual enrollment
2 18 figures reported by October 1 to the department of management
2 19 by the department of education pursuant to section 257.6,
2 20 subsection 1. The combined actual enrollment count shall be
2 21 forwarded to the director of revenue and finance by March 1,
2 22 annually, for purposes of supplying estimated tax payment
2 23 figures and making estimated tax payments pursuant to
2 24 subsection 3 for the following fiscal year.
2 25 2. a. For purposes of distributions under subsection 1,
2 26 paragraph "a", the school district's guaranteed school
2 27 infrastructure amount shall be calculated according to the
2 28 following formula:
2 29 The district's guaranteed school infrastructure amount
2 30 equals the product of the county guaranteed school
2 31 infrastructure amount and the district's county actual
2 32 enrollment divided by the county combined actual enrollment.
2 33 b. For purposes of the formula in paragraph "a":
2 34 (1) "Base year" means the fiscal year beginning July 1,
2 35 2002.
3 1 (2) "Base year county taxable sales percentage" means the
3 2 percentage that the taxable sales in the county during the
3 3 base year is of the total state taxable sales during the base
3 4 year.
3 5 (3) "County combined actual enrollment" means the actual
3 6 enrollment figures determined by the department of management
3 7 for the county based on the actual enrollment figures reported
3 8 by October 1 to the department of management by the department
3 9 of education pursuant to section 257.6, subsection 1.
3 10 (4) "County guaranteed school infrastructure amount" means
3 11 an amount equal to the county's chapter 422E proportionate
3 12 share times the amount deposited in the school district sales
3 13 tax fund for the current year times the current year county
3 14 taxable sales percentage divided by the base year county
3 15 taxable sales percentage.
3 16 (5) "County's chapter 422E proportionate share" means the
3 17 percentage that the annualized revenues received or which
3 18 would have been received in the county under chapter 422E for
3 19 the base year is of one=fifth of the total state sales tax
3 20 revenues collected for deposit into the general fund of the
3 21 state for the base year.
3 22 (6) "Current year" means the fiscal year for which
3 23 distributions under this section are being made.
3 24 (7) "Current year county taxable sales percentage" means
3 25 the percentage that the taxable sales in the county during the
3 26 current fiscal year is of the total state taxable sales during
3 27 the current fiscal year.
3 28 (8) "District's county actual enrollment" means the actual
3 29 enrollment of the school district that attends school in the
3 30 county for which the county combined actual enrollment is
3 31 determined.
3 32 (9) "Taxable sales" means sales subject to the state sales
3 33 and services tax under chapter 422, division IV.
3 34 3. a. The director of revenue and finance by August 15 of
3 35 each fiscal year shall send to each school district an
4 1 estimate of the amount of tax moneys each school district will
4 2 receive for the year and for each quarter of the year. At the
4 3 end of each quarter, the director may revise the estimates for
4 4 the year and remaining quarters.
4 5 b. The director shall remit ninety=five percent of the
4 6 estimated tax receipts for the school district to the school
4 7 district on or before September 30 of the fiscal year and on
4 8 or before the last day of each following quarter.
4 9 c. The director shall remit a final payment of the
4 10 remainder of tax moneys due for the fiscal year before
4 11 November 10 of the next fiscal year. If an overpayment has
4 12 resulted during the previous fiscal year, the November payment
4 13 shall be adjusted to reflect any overpayment.
4 14 d. If the distributions are to school districts described
4 15 in subsection 1, paragraph "a", the payments to these school
4 16 districts shall be made on a monthly basis beginning with the
4 17 month of August.
4 18 Sec. 2. NEW SECTION. 293.2 USE OF SCHOOL DISTRICT SALES
4 19 TAX FUND MONEYS.
4 20 1. A school district receiving moneys from the school
4 21 district sales tax fund under section 293.1, subsection 1,
4 22 paragraph "a", shall use the moneys as provided on the
4 23 original ballot proposition pursuant to chapter 422E, for the
4 24 payment of principal and interest on general obligation bonds
4 25 issued pursuant to chapter 296, or section 298.20 or loan
4 26 agreements under section 297.36, for payments made pursuant to
4 27 real property lease or lease=purchase agreements, or for
4 28 payment of principal and interest on bonds issued under
4 29 section 293.3 or 422E.4. However, moneys shall not be used
4 30 for the construction, reconstruction, repair, purchasing, or
4 31 remodeling of stadiums, gyms, or fieldhouses unless the use
4 32 was listed in the original ballot proposition.
4 33 2. a. Moneys received by a school district from the
4 34 school district sales tax fund under section 293.1, subsection
4 35 1, paragraph "b", shall be spent for property tax relief or
5 1 infrastructure purposes according to an infrastructure plan
5 2 developed by the board of directors. The infrastructure plan
5 3 may apply to more than one fiscal year. Prior to adoption of
5 4 the plan, the board of directors shall hold a public hearing
5 5 on the question of approval of the proposed plan. The board
5 6 shall set forth its proposal and shall publish the notice of
5 7 the time and place of a public hearing on the proposed plan.
5 8 Notice of the time and place of the public hearing shall be
5 9 published not less than ten nor more than twenty days before
5 10 the public hearing in a newspaper which is a newspaper of
5 11 general circulation in the school district. At the hearing,
5 12 or no later than thirty days after the date of the hearing,
5 13 the board shall take action to adopt the proposed plan.
5 14 b. If the board adopts the plan, the board shall direct
5 15 the county commissioner of elections to submit the question of
5 16 the approval or disapproval of the infrastructure plan to the
5 17 registered voters of the school district at the next following
5 18 regular school election or a special election. If a majority
5 19 of those voting on the question favor the plan of the board,
5 20 the moneys received shall be used according to the plan
5 21 beginning with the first fiscal year following that election
5 22 until a change in the plan is approved at a subsequent
5 23 election by a majority of those voting on the question. If a
5 24 majority of those voting on the question at the election does
5 25 not favor the plan of the board, the district shall use the
5 26 moneys received as provided in paragraph "c" for the fiscal
5 27 year.
5 28 A plan approved at an election shall only be valid for up
5 29 to ten years at which time the board must approve another plan
5 30 or the same one and submit this plan at an election in the
5 31 same manner and under the same conditions as provided for the
5 32 original plan.
5 33 c. If the infrastructure plan is not approved at an
5 34 election as provided in paragraph "b", or if a plan is not
5 35 approved by the board, moneys received by a school district or
6 1 moneys in excess of those needed for infrastructure purposes
6 2 according to an approved plan shall be used for the fiscal
6 3 year to reduce the following levies in the following order:
6 4 (1) Bond levies under sections 298.18 and 298.18A and all
6 5 other debt levies until the moneys received or the levies are
6 6 reduced to zero.
6 7 (2) The public educational and recreational levy under
6 8 section 300.2, until the moneys received or the levy is
6 9 reduced to zero.
6 10 (3) The nonvoter=approved instructional support levy under
6 11 section 257.18, until the moneys received or the levy is
6 12 reduced to zero.
6 13 (4) The voter=approved physical plant and equipment levy
6 14 under section 298.2, until the moneys received or the levy is
6 15 reduced to zero.
6 16 (5) The voter=approved instructional support levy under
6 17 section 257.18, until the moneys received or the levy is
6 18 reduced to zero.
6 19 (6) The additional property tax levy under section 257.4,
6 20 until the moneys received or the levy is reduced to zero.
6 21 Any money remaining after the reduction of the levies
6 22 specified in this paragraph "c" may be used for any property
6 23 tax levy reduction purpose of the school district.
6 24 d. For purposes of this subsection, "infrastructure
6 25 purposes" means those purposes for which a school district is
6 26 authorized to contract indebtedness and issue general
6 27 obligation bonds under chapter 296 or to expend tax revenues
6 28 under section 298.3, the payment of principal and interest on
6 29 general obligation bonds issued under chapter 296 or section
6 30 298.20 or loan agreements under section 297.36, the purchase
6 31 of school buses or technology, payments made pursuant to a
6 32 real property lease or lease=purchase agreement, or the
6 33 payment of principal and interest on bonds issued under
6 34 section 293.3 or 422E.4. However, "infrastructure purposes"
6 35 does not include the construction, reconstruction, repair,
7 1 purchasing, or remodeling of stadiums, gyms, or fieldhouses.
7 2 e. Notwithstanding any other provision in this subsection,
7 3 moneys received by a school district from the school district
7 4 sales tax fund under section 293.1, subsection 1, paragraph
7 5 "b", during the fiscal year beginning July 1, 2003, shall be
7 6 dedicated for property tax relief by reducing the levies
7 7 specified in paragraph "c" for taxes payable in the fiscal
7 8 year beginning July 1, 2004. However, if an infrastructure
7 9 plan is approved at an election prior to March 1, 2004, any
7 10 amount of such dedicated moneys may be used for the purposes
7 11 specified under the plan.
7 12 3. a. Notwithstanding the use for which moneys received
7 13 may be used under subsection 1 or the definition of school
7 14 infrastructure under subsection 2, paragraph "d", a school
7 15 district shall not use moneys received from the school
7 16 district sales tax fund for new construction or the payment of
7 17 bonds issued for new construction without prior application to
7 18 the department of education and receipt of a certificate of
7 19 need pursuant to this subsection.
7 20 b. In determining whether a certificate of need shall be
7 21 issued, the department shall consider all of the following:
7 22 (1) Whether the school district has increasing enrollment
7 23 in the grades that will be served at the new construction
7 24 site.
7 25 (2) The infeasibility of remodeling, reconstructing, or
7 26 repairing existing buildings.
7 27 (3) The fire and health safety needs of the school
7 28 district.
7 29 (4) The distance, convenience, cost of transportation, and
7 30 accessibility of the new construction site to the students to
7 31 be served at the new construction site.
7 32 (5) Availability of alternative, less costly, or more
7 33 effective means of serving the needs of the students.
7 34 (6) Any other criteria deemed appropriate as set by rules
7 35 of the director of the department of education.
8 1 c. A school district receiving moneys from the school
8 2 district sales tax fund under section 293.1, subsection 1,
8 3 paragraph "a", is not required to obtain a certificate of need
8 4 for new construction which was listed on the original ballot
8 5 proposition.
8 6 Sec. 3. NEW SECTION. 293.3 BONDING.
8 7 A school district receiving moneys pursuant to section
8 8 293.1, subsection 1, paragraph "a", or a school district
8 9 receiving moneys pursuant to section 293.1, subsection 1,
8 10 paragraph "b", which has approved by election the use of the
8 11 moneys for infrastructure purposes, may anticipate the amount
8 12 of moneys to be received pursuant to section 293.1 as provided
8 13 in this section.
8 14 The board of directors of a school district may issue
8 15 negotiable, interest=bearing school bonds, without election,
8 16 and utilize tax receipts derived from the school district
8 17 sales tax fund for principal and interest repayment. Proceeds
8 18 of the bonds issued pursuant to this section shall be utilized
8 19 solely for infrastructure purposes as defined in section
8 20 293.2, subsection 2.
8 21 Bonds issued under this section may be sold at public sale
8 22 as provided in chapter 75. Notice shall be given and a
8 23 hearing shall be held as provided in section 73A.12. Bonds
8 24 may bear dates, bear interest at rates not exceeding that
8 25 permitted by chapter 74A, mature in one or more installments,
8 26 be in either coupon or registered form, carry registration and
8 27 conversion privileges, be payable as to principal and interest
8 28 at times and places, be subject to terms of redemption prior
8 29 to maturity with or without premium, and be in one or more
8 30 denominations, all as provided by the resolution of the board
8 31 of directors authorizing their issuance. However, the maximum
8 32 period during which principal on the bonds is payable shall
8 33 not exceed a ten=year period or the length of time the
8 34 infrastructure plan is valid. The resolution may also
8 35 prescribe additional provisions, terms, conditions, and
9 1 covenants which the board of directors deems advisable,
9 2 including provisions for creating and maintaining reserve
9 3 funds, the issuance of additional bonds ranking on a parity
9 4 with such bonds and additional bonds junior and subordinate to
9 5 such bonds, and that such bonds shall rank on a parity with or
9 6 be junior and subordinate to any bonds which may be then
9 7 outstanding. Bonds may be issued to refund outstanding and
9 8 previously issued bonds under this section. Bonds are a
9 9 contract between the school district and holders, and the
9 10 resolution issuing the bonds and pledging tax revenues to be
9 11 received from the school district sales tax fund to the
9 12 payment of principal and interest on the bonds is a part of
9 13 the contract. Bonds issued pursuant to this section shall not
9 14 constitute indebtedness within the meaning of any
9 15 constitutional or statutory debt limitation or restriction,
9 16 and shall not be subject to any other law relating to the
9 17 authorization, issuance, or sale of bonds.
9 18 A school district may enter into a chapter 28E agreement
9 19 with another school district or other political subdivision of
9 20 the state. The school district shall only expend its
9 21 designated portion of tax revenues to be received from the
9 22 school district sales tax fund for infrastructure purposes.
9 23 Sec. 4. NEW SECTION. 293.4 REPEAL.
9 24 This chapter is repealed July 1, 2023, for fiscal years
9 25 beginning on or after that date.
9 26 Sec. 5. Section 298.2, Code 2003, is amended by adding the
9 27 following new subsection:
9 28 NEW SUBSECTION. 7. The regular physical plant and
9 29 equipment levy shall not be certified for levy after the
9 30 effective date of this section of this Act. A voter=approved
9 31 physical plant and equipment levy may continue to be approved
9 32 and certified for levy after the effective date of this
9 33 section of this Act.
9 34 Sec. 6. Section 298.18, unnumbered paragraph 4, Code 2003,
9 35 is amended to read as follows:
10 1 The amount estimated and certified to apply on principal
10 2 and interest for any one year may exceed two dollars and
10 3 seventy cents per thousand dollars of assessed value by the
10 4 amount approved by the voters of the school corporation, but
10 5 not exceeding four dollars and five cents per thousand of the
10 6 assessed value of the taxable property within any school
10 7 corporation, provided that the registered voters of such
10 8 school corporation have first approved such increased amount
10 9 at a special election, which may be was held at the same time
10 10 as the regular school election prior to July 1, 2003, or
10 11 subsequent to January 1, 2023. The proposition submitted to
10 12 the voters at such special election shall be in substantially
10 13 the following form:
10 14 Sec. 7. Section 298.18, unnumbered paragraph 8, Code 2003,
10 15 is amended to read as follows:
10 16 The ability of a school corporation to exceed two dollars
10 17 and seventy cents per thousand dollars of assessed value to
10 18 service principal and interest payments on bonded indebtedness
10 19 is limited and conferred only to those school corporations
10 20 engaged in the administration of elementary and secondary
10 21 education and whose registered voters have voted to exceed
10 22 that levy limitation prior to July 1, 2003, or subsequent to
10 23 January 1, 2023.
10 24 Sec. 8. Section 422.43, subsections 1, 2, 4, 5, 6, 7, 10,
10 25 and 12, Code 2003, are amended to read as follows:
10 26 1. There is imposed a tax of five six percent upon the
10 27 gross receipts from all sales of tangible personal property,
10 28 consisting of goods, wares, or merchandise, except as
10 29 otherwise provided in this division, sold at retail in the
10 30 state to consumers or users; a like rate of tax upon the gross
10 31 receipts from the sales, furnishing, or service of gas,
10 32 electricity, water, heat, pay television service, and
10 33 communication service, including the gross receipts from such
10 34 sales by any municipal corporation or joint water utility
10 35 furnishing gas, electricity, water, heat, pay television
11 1 service, and communication service to the public in its
11 2 proprietary capacity, except as otherwise provided in this
11 3 division, when sold at retail in the state to consumers or
11 4 users; a like rate of tax upon the gross receipts from all
11 5 sales of tickets or admissions to places of amusement, fairs,
11 6 and athletic events except those of elementary and secondary
11 7 educational institutions; a like rate of tax on the gross
11 8 receipts from an entry fee or like charge imposed solely for
11 9 the privilege of participating in an activity at a place of
11 10 amusement, fair, or athletic event unless the gross receipts
11 11 from the sales of tickets or admissions charges for observing
11 12 the same activity are taxable under this division; and a like
11 13 rate of tax upon that part of private club membership fees or
11 14 charges paid for the privilege of participating in any
11 15 athletic sports provided club members.
11 16 2. There is imposed a tax of five six percent upon the
11 17 gross receipts derived from the operation of all forms of
11 18 amusement devices and games of skill, games of chance,
11 19 raffles, and bingo games as defined in chapter 99B, operated
11 20 or conducted within the state, the tax to be collected from
11 21 the operator in the same manner as for the collection of taxes
11 22 upon the gross receipts of tickets or admission as provided in
11 23 this section. The tax shall also be imposed upon the gross
11 24 receipts derived from the sale of lottery tickets or shares
11 25 pursuant to chapter 99E. The tax on the lottery tickets or
11 26 shares shall be included in the sales price and distributed to
11 27 the general fund as provided in section 99E.10.
11 28 4. There is imposed a tax of five six percent upon the
11 29 gross receipts from the sales of engraving, photography,
11 30 retouching, printing, and binding services. For the purpose
11 31 of this division, the sales of engraving, photography,
11 32 retouching, printing, and binding services are sales of
11 33 tangible property.
11 34 5. There is imposed a tax of five six percent upon the
11 35 gross receipts from the sales of vulcanizing, recapping, and
12 1 retreading services. For the purpose of this division, the
12 2 sales of vulcanizing, recapping, and retreading services are
12 3 sales of tangible property.
12 4 6. There is imposed a tax of five six percent upon the
12 5 gross receipts from the sales of optional service or warranty
12 6 contracts, except residential service contracts regulated
12 7 under chapter 523C, which provide for the furnishing of labor
12 8 and materials and require the furnishing of any taxable
12 9 service enumerated under this section. The gross receipts are
12 10 subject to tax even if some of the services furnished are not
12 11 enumerated under this section. For the purpose of this
12 12 division, the sale of an optional service or warranty
12 13 contract, other than a residential service contract regulated
12 14 under chapter 523C, is a sale of tangible personal property.
12 15 Additional sales, services, or use taxes shall not be levied
12 16 on services, parts, or labor provided under optional service
12 17 or warranty contracts which are subject to tax under this
12 18 section.
12 19 If the optional service or warranty contract is a computer
12 20 software maintenance or support service contract and there is
12 21 no separately stated fee for the taxable personal property or
12 22 for the nontaxable service, the tax of five six percent
12 23 imposed by this subsection shall be imposed on fifty percent
12 24 of the gross receipts from the sale of such contract. If the
12 25 contract provides for technical support services only, no tax
12 26 shall be imposed under this subsection. The provisions of
12 27 this subsection also apply to the tax imposed by chapter 423.
12 28 7. There is imposed a tax of five six percent upon the
12 29 gross receipts from the renting of rooms, apartments, or
12 30 sleeping quarters in a hotel, motel, inn, public lodging
12 31 house, rooming house, manufactured or mobile home which is
12 32 tangible personal property, or tourist court, or in any place
12 33 where sleeping accommodations are furnished to transient
12 34 guests for rent, whether with or without meals. "Renting" and
12 35 "rent" include any kind of direct or indirect charge for such
13 1 rooms, apartments, or sleeping quarters, or their use. For
13 2 the purposes of this division, such renting is regarded as a
13 3 sale of tangible personal property at retail. However, this
13 4 tax does not apply to the gross receipts from the renting of a
13 5 room, apartment, or sleeping quarters while rented by the same
13 6 person for a period of more than thirty=one consecutive days.
13 7 10. There is imposed a tax of five six percent upon the
13 8 gross receipts from the rendering, furnishing, or performing
13 9 of services as defined in section 422.42.
13 10 12. A tax of five six percent is imposed upon the gross
13 11 receipts from the sales of prepaid telephone calling cards and
13 12 prepaid authorization numbers. For the purpose of this
13 13 division, the sales of prepaid telephone calling cards and
13 14 prepaid authorization numbers are sales of tangible personal
13 15 property.
13 16 Sec. 9. Section 422.43, subsection 13, paragraph a,
13 17 unnumbered paragraph 1, Code 2003, is amended to read as
13 18 follows:
13 19 A tax of five six percent is imposed upon the gross
13 20 receipts from the sales, furnishing, or service of solid waste
13 21 collection and disposal service.
13 22 Sec. 10. Section 422.43, subsections 16 and 17, Code 2003,
13 23 are amended to read as follows:
13 24 16. a. A tax of five six percent is imposed upon the
13 25 gross receipts from sales of bundled services contracts. For
13 26 purposes of this subsection, a "bundled services contract"
13 27 means an agreement providing for a retailer's performance of
13 28 services, one or more of which is a taxable service enumerated
13 29 in this section and one or more of which is not, in return for
13 30 a consumer's or user's single payment for the performance of
13 31 the services, with no separate statement to the consumer or
13 32 user of what portion of that payment is attributable to any
13 33 one service which is a part of the contract.
13 34 b. For purposes of the administration of the tax on
13 35 bundled services contracts, the director may enter into
14 1 agreements of limited duration with individual retailers,
14 2 groups of retailers, or organizations representing retailers
14 3 of bundled services contracts. Such an agreement shall impose
14 4 the tax rate only upon that portion of the gross receipts from
14 5 a bundled services contract which is attributable to taxable
14 6 services provided under the contract.
14 7 17. A tax of five six percent is imposed upon the gross
14 8 receipts from any mobile telecommunication service which this
14 9 state is allowed to tax by the provisions of the federal
14 10 Mobile Telecommunications Sourcing Act, Pub. L. No. 106=252, 4
14 11 U.S.C. } 116 et seq. For purposes of this subsection, taxes
14 12 on mobile telecommunications service, as defined under the
14 13 federal Mobile Telecommunications Sourcing Act, that are
14 14 deemed to be provided by the customer's home service provider
14 15 shall be paid to the taxing jurisdiction whose territorial
14 16 limits encompass the customer's place of primary use,
14 17 regardless of where the mobile telecommunication service
14 18 originates, terminates, or passes through and shall in all
14 19 other respects be taxed in conformity with the federal Mobile
14 20 Telecommunications Sourcing Act. All other provisions of the
14 21 federal Mobile Telecommunications Sourcing Act are adopted by
14 22 the state of Iowa and incorporated into this subsection by
14 23 reference. With respect to mobile telecommunications service
14 24 under the federal Mobile Telecommunications Sourcing Act the
14 25 director shall, if requested, enter into agreements consistent
14 26 with the provisions of the federal Act.
14 27 Sec. 11. Section 422.43, Code 2003, is amended by adding
14 28 the following new subsection:
14 29 NEW SUBSECTION. 18. The sales tax rate of six percent is
14 30 reduced to five percent on July 1, 2023.
14 31 Sec. 12. Section 422.47, Code 2003, is amended by adding
14 32 the following new subsection:
14 33 NEW SUBSECTION. 2. Construction contractors may make
14 34 application to the department for a refund of the additional
14 35 one percent tax paid under this division by reason of the
15 1 increase in the tax from five to six percent for taxes paid on
15 2 goods, wares, or merchandise under the following conditions:
15 3 a. The goods, wares, or merchandise are incorporated into
15 4 an improvement to real estate in fulfillment of a written
15 5 contract fully executed prior to July 1, 2003. The refund
15 6 shall not apply to equipment transferred in fulfillment of a
15 7 mixed construction contract.
15 8 b. The contractor has paid to the department or to a
15 9 retailer the full six percent tax.
15 10 c. The claim is filed on forms provided by the department
15 11 and is filed within one year of the date the tax is paid.
15 12 A contractor who makes an erroneous application for refund
15 13 shall be liable for payment of the excess refund paid plus
15 14 interest at the rate in effect under section 421.7. In
15 15 addition, a contractor who willfully makes a false application
15 16 for refund is guilty of a simple misdemeanor and is liable for
15 17 a penalty equal to fifty percent of the excess refund claimed.
15 18 Excess refunds, penalties, and interest due under this
15 19 subsection may be enforced and collected in the same manner as
15 20 the tax imposed by this division.
15 21 Sec. 13. Section 422.69, subsection 2, Code 2003, is
15 22 amended to read as follows:
15 23 2. a. Unless Except as provided in paragraph "b", or as
15 24 otherwise provided, the fees, taxes, interest, and penalties
15 25 collected under this chapter shall be credited to the general
15 26 fund.
15 27 b. One=sixth of the fees, taxes, interest, and penalties
15 28 collected pursuant to division IV shall be credited to the
15 29 school district sales tax fund created in section 293.1. This
15 30 paragraph is repealed July 1, 2023.
15 31 Sec. 14. Section 422E.1, Code 2003, is amended by adding
15 32 the following new subsection:
15 33 NEW SUBSECTION. 4. a. This chapter does not apply to any
15 34 county after the effective date of this section of this Act.
15 35 b. In the case of a county that has voted on and approved
16 1 prior to March 31, 2003, a local sales and services tax for
16 2 school infrastructure purposes, the increase in the state
16 3 sales and services tax under chapter 422, division IV, from
16 4 five percent to six percent shall replace the county's local
16 5 sales and services tax for school infrastructure purposes and
16 6 to this extent the local sales and services tax for school
16 7 infrastructure purposes is repealed.
16 8 Sec. 15. Section 423.2, Code 2003, is amended to read as
16 9 follows:
16 10 423.2 IMPOSITION OF TAX.
16 11 An excise tax is imposed on the use in this state of
16 12 tangible personal property, including aircraft subject to
16 13 registration under section 328.20, purchased for use in this
16 14 state, at the rate of five six percent of the purchase price
16 15 of the property. An excise tax is imposed on the use of
16 16 manufactured housing in this state at the rate of five six
16 17 percent of the purchase price if the manufactured housing is
16 18 sold in the form of tangible personal property and at the rate
16 19 of five six percent of the installed purchase price if the
16 20 manufactured housing is sold in the form of realty. An excise
16 21 tax is imposed on the use in this state of vehicles subject to
16 22 registration or subject only to the issuance of a certificate
16 23 of title at the rate of five percent. An excise tax is
16 24 imposed on the use of leased vehicles at the rate of five
16 25 percent of the amount otherwise subject to tax as calculated
16 26 pursuant to section 423.7A. The excise tax is imposed upon
16 27 every person using the property within this state until the
16 28 tax has been paid directly to the county treasurer or the
16 29 state department of transportation, to a retailer, or to the
16 30 department. An excise tax is imposed on the use in this state
16 31 of services enumerated in section 422.43 at the rate of five
16 32 six percent. This tax is applicable where services are
16 33 rendered, furnished, or performed in this state or where the
16 34 product or result of the service is used in this state. This
16 35 tax is imposed on every person using the services or the
17 1 product of the services in this state until the user has paid
17 2 the tax either to an Iowa use tax permit holder or to the
17 3 department. The use tax of six percent is reduced to five
17 4 percent on July 1, 2023.
17 5 Sec. 16. Section 423.24, Code 2003, is amended by adding
17 6 the following new subsection:
17 7 NEW SUBSECTION. 2A. One=sixth of all other revenue
17 8 arising under the operation of this chapter shall be credited
17 9 to the school district sales and use tax fund created in
17 10 section 293.1. This subsection is repealed July 1, 2023.
17 11 Sec. 17. Section 423.24, subsection 3, Code 2003, is
17 12 amended to read as follows:
17 13 3. All other revenue arising under the operation of this
17 14 chapter not credited as specified in subsections 1, 2, and 2A
17 15 shall be credited to the general fund of the state.
17 16 Sec. 18. APPLICABILITY. This section applies in regard to
17 17 the increase in the state sales tax from five to six percent.
17 18 The six percent rate applies to all sales of taxable personal
17 19 property, consisting of goods, wares, or merchandise if
17 20 delivery occurs on or after July 1, 2003. The six percent
17 21 rate applies to the gross receipts from the sale, furnishing,
17 22 or service of gas, electricity, water, heat, pay television
17 23 service, and communication service if the date of billing the
17 24 customer is on or after July 1, 2003. In the case of a
17 25 service contract entered into prior to July 1, 2003, which
17 26 contract calls for periodic payments, the six percent rate
17 27 applies to those payments made or due on or after July 1,
17 28 2003. This periodic payment applies, but is not limited to,
17 29 tickets or admissions, private club membership fees, sources
17 30 of amusement, equipment rental, dry cleaning, reducing salons,
17 31 dance schools, and all other services subject to tax, except
17 32 the aforementioned utility services which are subject to a
17 33 special transitional rule. Unlike periodic payments under
17 34 service contracts, installment sales of goods, wares, and
17 35 merchandise are subject to the full amount of sales or use tax
18 1 when the sales contract is entered into.
18 2 Sec. 19. EFFECTIVE DATE. Sections 1, 2, and 5 of this
18 3 Act, enacting sections 293.1 and 293.2, and section 298.2,
18 4 subsection 7, being deemed of immediate importance, take
18 5 effect upon enactment.
18 6 EXPLANATION
18 7 This bill increases the state sales and use tax rates from
18 8 5 percent to 6 percent. However, the use tax on motor
18 9 vehicles remains at 5 percent. The increased revenues are
18 10 deposited into a school district sales tax fund to be
18 11 distributed to school districts throughout the state to be
18 12 used for infrastructure or property tax relief purposes.
18 13 Because the increase in the state sales tax rate replaces the
18 14 local option sales and services tax for school infrastructure
18 15 purposes, those school districts that were or would be
18 16 receiving revenues from the local option tax may continue to
18 17 receive, according to a formula, revenues from the school
18 18 district sales tax fund in an amount that approximates what
18 19 those districts would have received under the local option
18 20 tax. These districts will receive their distributions first.
18 21 The remaining moneys will be distributed to the other school
18 22 districts on a per pupil basis. School districts that were
18 23 receiving or voted to receive the local option tax may elect
18 24 to receive the distributions on a per pupil basis rather than
18 25 pursuant to the formula.
18 26 Revenues received by the school districts according to the
18 27 formula must be used for the purposes specified in the ballot
18 28 when the local option tax was first passed or to pay principal
18 29 and interest on general obligation bonds, real property lease=
18 30 purchase agreements, or other loan agreements. Other
18 31 districts will be required to spend the revenues for property
18 32 tax relief by lowering the debt service levies, the public
18 33 educational and recreational levy, the voter=approved physical
18 34 plant and equipment levy, the instructional support levy or
18 35 the additional property tax levy under the school aid formula
19 1 unless the school board adopts an infrastructure plan which is
19 2 approved at an election by a majority of those voting.
19 3 However, moneys shall not be used for athletic facilities and
19 4 may be used for buses and technology. Bonds may be issued by
19 5 a school district, without an election, in anticipation of the
19 6 distributions the district will receive from the school
19 7 district sales tax fund. In order for moneys received by a
19 8 school district to be used for new construction, a certificate
19 9 of need for the new construction must be obtained from the
19 10 department of education.
19 11 The regular physical plant and equipment levy is
19 12 eliminated. However, any voter=approved physical plant and
19 13 equipment levy may continue to be voted on and imposed.
19 14 The school district debt service levy is also reduced from
19 15 a maximum $4.05 per $1,000 of taxable value to $2.70 per
19 16 $1,000 of taxable value. However, if the voters in the
19 17 district have voted to exceed the $2.70 per $1,000 of taxable
19 18 value levy amount prior to July 1, 2003, then the maximum levy
19 19 may remain at $4.05 per $1,000 of taxable value until the
19 20 bonds are retired.
19 21 The bill has some effective date provisions. However, the
19 22 sales and use tax rates are increased as of July 1, 2003, if
19 23 the bill is enacted before that date. The sales and use tax
19 24 rates are reduced from 6 percent to 5 percent on July 1, 2023.
19 25 In addition the local sales and services tax for school
19 26 infrastructure purposes is repealed.
19 27 LSB 1997YH 80
19 28 mg/cf/24