Senate File 335 SENATE FILE BY HOUSER Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to a countywide hotel and motel tax by providing 2 for the imposition of the tax and the use of the revenues from 3 the tax. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1939XS 80 6 mg/pj/5 PAG LIN 1 1 Section 1. Section 422A.1, unnumbered paragraph 8, Code 1 2 2003, is amended to read as follows: 1 3 The tax levied shall be in addition to any state sales tax 1 4 imposed under section 422.43 or countywide lodging tax imposed 1 5 under section 422F.1. Section 422.25, subsection 4, sections 1 6 422.30, 422.48 to 422.52, 422.54 to 422.58, 422.67, 422.68, 1 7 422.69, subsection 1, and sections 422.70 to 422.75, 1 8 consistent with the provisions of this chapter, apply with 1 9 respect to the taxes authorized under this chapter, in the 1 10 same manner and with the same effect as if the hotel and motel 1 11 taxes were retail sales taxes within the meaning of those 1 12 statutes. Notwithstanding this paragraph, the director shall 1 13 provide for quarterly filing of returns as prescribed in 1 14 section 422.51 and for other than quarterly filing of returns 1 15 as prescribed in section 422.51, subsection 2. The director 1 16 may require all persons, as defined in section 422.42, who are 1 17 engaged in the business of deriving gross receipts subject to 1 18 tax under this chapter, to register with the department. 1 19 Sec. 2. Section 422B.8, unnumbered paragraph 1, Code 2003, 1 20 is amended to read as follows: 1 21 A local sales and services tax at the rate of not more than 1 22 one percent may be imposed by a county on the gross receipts 1 23 taxed by the state under chapter 422, division IV. A local 1 24 sales and services tax shall be imposed on the same basis as 1 25 the state sales and services tax or in the case of the use of 1 26 natural gas, natural gas service, electricity, or electric 1 27 service on the same basis as the state use tax and shall not 1 28 be imposed on the sale of any property or on any service not 1 29 taxed by the state, except the tax shall not be imposed on the 1 30 gross receipts from the sale of motor fuel or special fuel as 1 31 defined in chapter 452A which is consumed for highway use or 1 32 in watercraft or aircraft if the fuel tax is paid on the 1 33 transaction and a refund has not or will not be allowed, on 1 34 the gross receipts from the rental of rooms, apartments, or 1 35 sleeping quarters which are taxed under chapter 422A or 2 1 chapter 422F during the period the hotel and motel tax or 2 2 lodging tax is imposed, on the gross receipts from the sale of 2 3 equipment by the state department of transportation, on the 2 4 gross receipts from the sale of self=propelled building 2 5 equipment, pile drivers, motorized scaffolding, or attachments 2 6 customarily drawn or attached to self=propelled building 2 7 equipment, pile drivers, and motorized scaffolding, including 2 8 auxiliary attachments which improve the performance, safety, 2 9 operation, or efficiency of the equipment and replacement 2 10 parts and are directly and primarily used by contractors, 2 11 subcontractors, and builders for new construction, 2 12 reconstruction, alterations, expansion, or remodeling of real 2 13 property or structures, and on the gross receipts from the 2 14 sale of a lottery ticket or share in a lottery game conducted 2 15 pursuant to chapter 99E and except the tax shall not be 2 16 imposed on the gross receipts from the sale or use of natural 2 17 gas, natural gas service, electricity, or electric service in 2 18 a city or county where the gross receipts from the sale of 2 19 natural gas or electric energy are subject to a franchise fee 2 20 or user fee during the period the franchise or user fee is 2 21 imposed. A local sales and services tax is applicable to 2 22 transactions within those incorporated and unincorporated 2 23 areas of the county where it is imposed and shall be collected 2 24 by all persons required to collect state gross receipts taxes. 2 25 However, a person required to collect state retail sales tax 2 26 under chapter 422, division IV, is not required to collect 2 27 local sales and services tax on transactions delivered within 2 28 the area where the local sales and services tax is imposed 2 29 unless the person has physical presence in that taxing area. 2 30 All cities contiguous to each other shall be treated as part 2 31 of one incorporated area and the tax would be imposed in each 2 32 of those contiguous cities only if the majority of those 2 33 voting in the total area covered by the contiguous cities 2 34 favor its imposition. 2 35 Sec. 3. Section 422E.3, subsection 2, Code 2003, is 3 1 amended to read as follows: 3 2 2. The tax shall be imposed on the same basis as the state 3 3 sales and services tax or in the case of the use of natural 3 4 gas, natural gas service, electricity, or electric service on 3 5 the same basis as the state use tax and shall not be imposed 3 6 on the sale of any property or on any service not taxed by the 3 7 state, except the tax shall not be imposed on the gross 3 8 receipts from the sale of motor fuel or special fuel as 3 9 defined in chapter 452A which is consumed for highway use or 3 10 in watercraft or aircraft if the fuel tax is paid on the 3 11 transaction and a refund has not or will not be allowed, on 3 12 the gross receipts from the rental of rooms, apartments, or 3 13 sleeping quarters which are taxed under chapter 422A or 3 14 chapter 422F during the period the hotel and motel tax or 3 15 lodging tax is imposed, on the gross receipts from the sale of 3 16 equipment by the state department of transportation, on the 3 17 gross receipts from the sale of self=propelled building 3 18 equipment, pile drivers, motorized scaffolding, or attachments 3 19 customarily drawn or attached to self=propelled building 3 20 equipment, pile drivers, and motorized scaffolding, including 3 21 auxiliary attachments which improve the performance, safety, 3 22 operation, or efficiency of the equipment, and replacement 3 23 parts and are directly and primarily used by contractors, 3 24 subcontractors, and builders for new construction, 3 25 reconstruction, alterations, expansion, or remodeling of real 3 26 property or structures, and on the gross receipts from the 3 27 sale of a lottery ticket or share in a lottery game conducted 3 28 pursuant to chapter 99E and except the tax shall not be 3 29 imposed on the gross receipts from the sale or use of natural 3 30 gas, natural gas service, electricity, or electric service in 3 31 a city or county where the gross receipts from the sale of 3 32 natural gas or electric energy are subject to a franchise fee 3 33 or user fee during the period the franchise or user fee is 3 34 imposed. 3 35 Sec. 4. NEW SECTION. 422F.1 COUNTYWIDE LODGING TAX. 4 1 A county may impose by resolution of the board of 4 2 supervisors a countywide lodging tax, at a rate not to exceed 4 3 two percent, which shall be imposed in increments of one or 4 4 more full percentage points upon the gross receipts from the 4 5 renting of sleeping rooms, apartments, or sleeping quarters in 4 6 a hotel, motel, inn, public lodging house, rooming house, 4 7 manufactured or mobile home which is tangible personal 4 8 property, or tourist court, or in any place where sleeping 4 9 accommodations are furnished to transient guests for rent, 4 10 whether with or without meals; except the gross receipts from 4 11 the renting of sleeping rooms in dormitories and in memorial 4 12 unions at all universities and colleges located in the state 4 13 of Iowa and the guests of a religious institution if the 4 14 property is exempt under section 427.1, subsection 8, and the 4 15 purpose of renting is to provide a place for a religious 4 16 retreat or function and not a place for transient guests 4 17 generally. The tax when imposed by a county shall apply to 4 18 all incorporated and unincorporated areas within that county. 4 19 "Renting" and "rent" include any kind of direct or indirect 4 20 charge for such sleeping rooms, apartments, or sleeping 4 21 quarters, or their use. However, the tax does not apply to 4 22 the gross receipts from the renting of a sleeping room, 4 23 apartment, or sleeping quarters while rented by the same 4 24 person for a period of more than thirty=one consecutive days. 4 25 Within ten days of the election at which a majority of 4 26 those voting on the question favors the imposition, repeal, or 4 27 change in the rate of the countywide lodging tax, the county 4 28 auditor shall give written notice by sending a copy of the 4 29 abstract of votes from the favorable election to the director 4 30 of revenue and finance. 4 31 A countywide lodging tax shall be imposed on January 1, 4 32 April 1, July 1, or October 1, following the notification of 4 33 the director of revenue and finance. Once imposed, the tax 4 34 shall remain in effect at the rate imposed for a minimum of 4 35 one year. A countywide lodging tax shall terminate only on 5 1 March 31, June 30, September 30, or December 31. At least 5 2 forty=five days prior to the tax being effective or prior to a 5 3 revision in the tax rate, or prior to the repeal of the tax, a 5 4 county shall provide notice by mail of such action to the 5 5 director of revenue and finance. 5 6 A county shall impose a countywide lodging tax or increase 5 7 the tax rate only after an election at which a majority of 5 8 those voting on the question favors imposition or increase. 5 9 The election shall be held countywide and at the time of the 5 10 county's general election or at the time of a special 5 11 election. 5 12 The director of revenue and finance shall administer a 5 13 countywide lodging tax as nearly as possible in conjunction 5 14 with the administration of the state sales tax law. The 5 15 director shall provide appropriate forms, or provide on the 5 16 regular state tax forms, for reporting countywide lodging tax 5 17 liability. All moneys received or refunded one hundred eighty 5 18 days after the date on which a county terminates its 5 19 countywide lodging tax shall be deposited in or withdrawn from 5 20 the general fund of the state. 5 21 The director, in consultation with local officials, shall 5 22 collect and account for a countywide lodging tax and shall 5 23 credit all revenues to the countywide lodging tax fund created 5 24 in section 422F.2. 5 25 No tax permit other than the state tax permit required 5 26 under section 422.53 may be required by local authorities. 5 27 The tax levied shall be in addition to any state sales tax 5 28 imposed under section 422.43 or any local hotel and motel tax 5 29 imposed under section 422A.1. Section 422.25, subsection 4, 5 30 sections 422.30, 422.48 to 422.52, 422.54 to 422.58, 422.67, 5 31 422.68, 422.69, subsection 1, and sections 422.70 to 422.75, 5 32 consistent with the provisions of this chapter, apply with 5 33 respect to the taxes authorized under this chapter, in the 5 34 same manner and with the same effect as if the countywide 5 35 lodging taxes were retail sales taxes within the meaning of 6 1 those statutes. Notwithstanding this paragraph, the director 6 2 shall provide for quarterly filing of returns as prescribed in 6 3 section 422.51 and for other than quarterly filing of returns 6 4 as prescribed in section 422.51, subsection 2. The director 6 5 may require all persons, as defined in section 422.42, who are 6 6 engaged in the business of deriving gross receipts subject to 6 7 tax under this chapter, to register with the department. 6 8 Sec. 5. NEW SECTION. 422F.2 COUNTYWIDE LODGING TAX FUND 6 9 == USE OF REVENUES. 6 10 1. A countywide lodging tax fund is created in the state 6 11 treasury under the control of the department of revenue and 6 12 finance which shall consist of all moneys credited to this 6 13 fund under section 422F.1. 6 14 2. a. All moneys in the countywide lodging tax fund shall 6 15 be remitted at least quarterly by the department of revenue 6 16 and finance, pursuant to rules of the director of revenue and 6 17 finance, to each county in the amount collected from 6 18 businesses in the incorporated and unincorporated areas of the 6 19 county. 6 20 b. Moneys received by the county from this fund shall be 6 21 credited to the special tourism fund of the county. 6 22 3. The special tourism fund shall be administered by a 6 23 five=member county tourism board consisting of a member of the 6 24 board of supervisors, an individual representing rural 6 25 interests, a representative of the tourist attraction industry 6 26 in the county, a representative of city interests, and an at= 6 27 large representative. Each member shall be a representative 6 28 of the county and shall serve at the pleasure of the board of 6 29 supervisors with a term of not more than three years. 6 30 4. Moneys in the special tourism fund shall only be used 6 31 to do any of the following: 6 32 a. Assist the county or a community within the county in 6 33 the development and creation of attractions and tourism 6 34 facilities. 6 35 b. Promote and advertise tourist attractions located in 7 1 the county. 7 2 c. Provide grants or loans to nonprofit organizations that 7 3 promote, advertise, or maintain tourist attractions or 7 4 facilities within the county. 7 5 EXPLANATION 7 6 Present law allows a city or county to impose a local hotel 7 7 and motel tax of up to 7 percent on the renting of lodging 7 8 rooms. The city tax applies to rooms located in the city and 7 9 the county tax applies only to those rooms located in areas 7 10 outside the cities. This bill allows a county to impose a 2 7 11 percent tax countywide. The tax would only be imposed if a 7 12 majority of those voting on the question of imposition at a 7 13 countywide election votes in favor of the imposition. The 7 14 moneys from the tax would be administered by a five=member 7 15 tourism board that may only spend the moneys for development 7 16 and creation of attractions and tourism facilities; for 7 17 promoting and advertising tourist attractions; or for 7 18 providing grants or loans to nonprofit organizations that 7 19 promote, advertise, or maintain tourist attractions or 7 20 facilities. 7 21 LSB 1939XS 80 7 22 mg/pj/5