Senate File 2408 - Introduced SENATE FILE BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SSB 3126) Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to the policy administration of the tax and 2 related laws by the department of revenue, including 3 administration of income, inheritance, and sales and use 4 taxes, and including a retroactive applicability date 5 provision. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 5475SV 82 8 mg/sc/5 PAG LIN 1 1 DIVISION I 1 2 TAX ADMINISTRATION 1 3 Section 1. Section 99B.10B, subsection 2, Code Supplement 1 4 2007, is amended to read as follows: 1 5 2. a. The department shall revoke a registration issued 1 6 pursuant to section 99B.10 or 99B.10A, for a period of ten 1 7 years if a person commits an offense of awarding a cash prize 1 8 in violation of section 99B.10, subsection 1, paragraph "b", 1 9 pursuant to rules adopted by the department. A person whose 1 10 registration is revoked under this subsection who is a person 1 11 for which a class "A", class "B", class "C", special class 1 12 "C", or class "D" liquor control license has been issued 1 13 pursuant to chapter 123 shall have the person's liquor control 1 14 license suspended for a period of fourteen days in the same 1 15 manner as provided in section 123.50, subsection 3, paragraph 1 16 "a". A person whose registration is revoked under this 1 17 subsection who is a person for which only a class "B" or class 1 18 "C" beer permit has been issued pursuant to chapter 123 shall 1 19 have the person's class "B" or class "C" beer permit suspended 1 20and that person's sales tax permit suspendedfor a period of 1 21 fourteen days in the same manner as provided in section 1 22 123.50, subsection 3, paragraph "a". 1 23 b. If a person owning or employed by an establishment 1 24 having a class "A", class "B", class "C", special class "C", 1 25 or class "D" liquor control license issued pursuant to chapter 1 26 123 commits an offense of awarding a cash prize in violation 1 27 of section 99B.10, subsection 1, paragraph "b", pursuant to 1 28 rules adopted by the department, the liquor control license of 1 29 the establishment shall be suspended for a period of fourteen 1 30 days in the same manner as provided in section 123.50, 1 31 subsection 3, paragraph "a". If a person owning or employed 1 32 by an establishment having a class "B" or class "C" beer 1 33 permit issued pursuant to chapter 123 awards a cash prize in 1 34 violation of section 99B.10, subsection 1, paragraph "b", 1 35 pursuant to rules adopted by the department, the beer permit 2 1 of the establishmentand the establishment's sales tax permit2 2 shall be suspended for a period of fourteen days in the same 2 3 manner as provided in section 123.50, subsection 3, paragraph 2 4 "a". 2 5 Sec. 2. Section 99B.14, subsection 1, Code 2007, is 2 6 amended to read as follows: 2 7 1. The department may deny, suspend, or revoke a license 2 8 if the department finds that an applicant, licensee, or an 2 9 agent of the licensee violated or permitted a violation of a 2 10 provision of this chapter or a departmental rule adopted 2 11 pursuant to chapter 17A, or for any other cause for which the 2 12 director of the department would be or would have been 2 13 justified in refusing to issue a license, or upon the 2 14 conviction of a person of a violation of this chapter or a 2 15 rule adopted under this chapter which occurred on the licensed 2 16 premises. However, the denial, suspension, or revocation of 2 17 one type of gambling license does not require, but may result 2 18 in, the denial, suspension, or revocation of a different type 2 19 of gambling license held by the same licensee. In addition, a 2 20 person whose license is revoked under this section who is a 2 21 person for which a class "A", class "B", class "C", or class 2 22 "D" liquor control license has been issued pursuant to chapter 2 23 123 shall have the person's liquor control license suspended 2 24 for a period of fourteen days in the same manner as provided 2 25 in section 123.50, subsection 3, paragraph "a". In addition, 2 26 a person whose license is revoked under this section who is a 2 27 person for which only a class "B" or class "C" beer permit has 2 28 been issued pursuant to chapter 123 shall have the person's 2 29 class "B" or class "C" beer permit suspendedand that person's 2 30 sales tax permit suspendedfor a period of fourteen days in 2 31 the same manner as provided in section 123.50, subsection 3, 2 32 paragraph "a". 2 33 Sec. 3. Section 331.434, subsection 1, Code Supplement 2 34 2007, is amended to read as follows: 2 35 1. The budget shall show the amount required for each 3 1 class of proposed expenditures, a comparison of the amounts 3 2 proposed to be expended with the amounts expended for like 3 3 purposes for the two preceding years, the revenues from 3 4 sources other than property taxation, and the amount to be 3 5 raised by property taxation, in the detail and form prescribed 3 6 by the director of the department of management. For each 3 7 county that has established an urban renewal area, the budget 3 8 shall include estimated and actual tax increment financing 3 9 revenues and all estimated and actual expenditures of the 3 10 revenues, proceeds from debt and all estimated and actual 3 11 expenditures of the debt proceeds, and identification of any 3 12 entity receiving a direct payment of taxes funded by tax 3 13 increment financing revenues and shall include the total 3 14 amount of loans, advances, indebtedness, or bonds outstanding 3 15 at the close of the most recently ended fiscal year, which 3 16 qualify for payment from the special fund created in section 3 17 403.19, including interest negotiated on such loans, advances, 3 18 indebtedness, or bonds. For purposes of this subsection, 3 19 "indebtedness" includes written agreements whereby the county 3 20 agrees to suspend, abate, exempt, rebate, refund, or reimburse 3 21 property taxes, provide a grant for property taxes paid, or 3 22 make a direct payment of taxes, with moneys in the special 3 23 fund. The amount of loans, advances, indebtedness, or bonds 3 24 shall be listed in the aggregate for each county reporting. 3 25The county finance committee, in consultation with the 3 26 department of management and the legislative services agency, 3 27 shall determine reporting criteria and shall prepare a form 3 28 for reports filed with the department pursuant to this 3 29 section. The department shall make the information available 3 30 by electronic means.3 31 Sec. 4. Section 384.16, subsection 1, unnumbered paragraph 3 32 2, Code Supplement 2007, is amended to read as follows: 3 33 A budget must show comparisons between the estimated 3 34 expenditures in each program in the following year, the latest 3 35 estimated expenditures in each program in the current year, 4 1 and the actual expenditures in each program from the annual 4 2 report as provided in section 384.22, or as corrected by a 4 3 subsequent audit report. Wherever practicable, as provided in 4 4 rules of the committee, a budget must show comparisons between 4 5 the levels of service provided by each program as estimated 4 6 for the following year, and actual levels of service provided 4 7 by each program during the two preceding years. For each city 4 8 that has established an urban renewal area, the budget shall 4 9 include estimated and actual tax increment financing revenues 4 10 and all estimated and actual expenditures of the revenues, 4 11 proceeds from debt and all estimated and actual expenditures 4 12 of the debt proceeds, and identification of any entity 4 13 receiving a direct payment of taxes funded by tax increment 4 14 financing revenues and shall include the total amount of 4 15 loans, advances, indebtedness, or bonds outstanding at the 4 16 close of the most recently ended fiscal year, which qualify 4 17 for payment from the special fund created in section 403.19, 4 18 including interest negotiated on such loans, advances, 4 19 indebtedness, or bonds. For purposes of this subsection, 4 20 "indebtedness" includes written agreements whereby the city 4 21 agrees to suspend, abate, exempt, rebate, refund, or reimburse 4 22 property taxes, provide a grant for property taxes paid, or 4 23 make a direct payment of taxes, with moneys in the special 4 24 fund. The amount of loans, advances, indebtedness, or bonds 4 25 shall be listed in the aggregate for each city reporting.The 4 26 city finance committee, in consultation with the department of 4 27 management and the legislative services agency, shall 4 28 determine reporting criteria and shall prepare a form for 4 29 reports filed with the department pursuant to this section. 4 30 The department shall make the information available by 4 31 electronic means.4 32 Sec. 5. Section 421.17, Code 2007, is amended by adding 4 33 the following new subsection: 4 34 NEW SUBSECTION. 30. If a natural disaster is declared by 4 35 the governor in any area of the state, the director may extend 5 1 for a period of up to one year the due date for the filing of 5 2 any tax return and may suspend any associated penalty or 5 3 interest that would accrue during that period of time for any 5 4 affected taxpayer whose principal residence or business is 5 5 located in the covered area if the director determines it 5 6 necessary for the efficient administration of the tax laws of 5 7 this state. 5 8 Sec. 6. Section 421.60, subsection 8, Code 2007, is 5 9 amended to read as follows: 5 10 8. REFUND OF UNTIMELY ASSESSED TAXES. Notwithstanding any 5 11 other refund statute, if it appears that an amount of tax, 5 12 penalty, or interest has been paid to the department after the 5 13 expiration of the statute of limitations for the department to 5 14 determine and assess or collect the amount of such tax due, 5 15 then the amount paid shall be credited against another tax 5 16 liability of the taxpayer which is outstanding, if the statute 5 17 of limitations for assessment or collection of that other tax 5 18 has not expired or the amount paid shall be refunded to the 5 19 person or, with the person's approval, credited to tax to 5 20 become due. An application for refund or credit under this 5 21 subsection must be filed within one year of payment. This 5 22 subsection shall not be construed to prohibit the department 5 23 from offsetting the refund claim against any tax due, if the 5 24 statute of limitations for that other tax has not expired. 5 25 However, any tax, penalty, or interest due for which a notice 5 26 of assessment was not issued by the department but which was 5 27 voluntarily paid by a taxpayer after the expiration of the 5 28 statute of limitations for assessment shall not be refunded. 5 29 DIVISION II 5 30 INCOME TAX 5 31 Sec. 7. Section 422.24A, Code 2007, is repealed. 5 32 Sec. 8. RETROACTIVE APPLICABILITY DATE. The section of 5 33 this division of this Act repealing section 422.24A applies 5 34 retroactively to January 1, 2008, for tax years beginning on 5 35 or after that date. 6 1 DIVISION III 6 2 INHERITANCE TAX 6 3 Sec. 9. Section 12D.9, Code 2007, is amended by adding the 6 4 following new subsection: 6 5 NEW SUBSECTION. 3. State inheritance tax treatment of 6 6 interests in Iowa educational savings plans shall be as 6 7 provided in section 450.4, subsection 10. This subsection 6 8 shall apply to all Iowa educational savings plans existing on 6 9 or after July 1, 1998. 6 10 Sec. 10. Section 450.4, Code Supplement 2007, is amended 6 11 by adding the following new subsection: 6 12 NEW SUBSECTION. 10. On the value of any interest in a 6 13 qualified tuition plan, as defined in section 529 of the 6 14 Internal Revenue Code, to the same extent to which the value 6 15 is excluded from the decedent's gross estate for federal 6 16 estate tax purposes. This subsection shall apply to all 6 17 qualified tuition plans that are in existence on or after July 6 18 1, 1998. 6 19 EXPLANATION 6 20 DIVISION I == TAX ADMINISTRATION. Code sections 99B.10B 6 21 and 99B.14 are amended to remove the authorization of the 6 22 department of inspections and appeals to suspend a person's 6 23 sales tax permit for a violation of Code chapter 99B, relating 6 24 to games of skill or chance and raffles. 6 25 Code sections 331.434 and 384.16 are amended by eliminating 6 26 the requirement for the county finance and city finance 6 27 committees to determine the budget and indebtedness reporting 6 28 criteria and the forms to be used for such reporting. 6 29 Code section 421.17 is amended by adding new subsection 30 6 30 to permit the director to extend the period of time for filing 6 31 tax returns and to suspend any penalty or interest associated 6 32 with those returns for taxpayers residing in an area declared 6 33 as a disaster area by the governor. 6 34 Code section 421.60, subsection 8, is amended to provide 6 35 that any tax, penalty, or interest due which was voluntarily 7 1 paid by a taxpayer after the expiration of the statute of 7 2 limitations for assessment, and a notice of assessment was not 7 3 issued by the department, shall not be refunded. 7 4 DIVISION II == INCOME TAX. Code section 422.24A is 7 5 repealed. This section provides for a start=up business tax 7 6 deferment whereby taxable income for the first three years 7 7 that an eligible business is in operation can be deferred. 7 8 Since this provision was enacted in 2002, no businesses have 7 9 applied for this deferral. This provision applies 7 10 retroactively to January 1, 2008, for tax years beginning on 7 11 or after that date. 7 12 DIVISION III == INHERITANCE TAX. Code sections 12D.9 and 7 13 450.4 are amended to exempt from the state inheritance tax the 7 14 value of any interest in an Iowa educational savings plan and 7 15 other section 529 of the Internal Revenue Code plans. The 7 16 exemptions apply to such plans in existence on or after July 7 17 1, 1998. 7 18 LSB 5475SV 82 7 19 mg/sc/5