House File 175 - Introduced HOUSE FILE BY SCHUELLER Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to the sales tax by providing an exemption for 2 certain casual sales by nonprofit organizations. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1026HH 83 5 tw/mg:sc/14 PAG LIN 1 1 Section 1. Section 423.3, subsection 39, Code 2009, is 1 2 amended to read as follows: 1 3 39. a. The sales price from "casual sales". 1 4 b. "Casual sales" means: 1 5a.(1) Sales of tangible personal property, or the 1 6 furnishing of services, of a nonrecurring nature, by the 1 7 owner, if the seller, at the time of the sale, is not engaged 1 8 for profit in the business of selling tangible personal 1 9 property or services taxed under section 423.2. 1 10b.(2) The sale of all or substantially all of the 1 11 tangible personal property or services held or used by a 1 12 seller in the course of the seller's trade or business for 1 13 which the seller is required to hold a sales tax permit when 1 14 the seller sells or otherwise transfers the trade or business 1 15 to another person who shall engage in a similar trade or 1 16 business. 1 17c.(3) Notwithstandingparagraph "a"subparagraph (1), 1 18 the sale, furnishing, or performance of a service that is of a 1 19 recurring nature by the owner if, at the time of the sale, all 1 20 of the following apply: 1 21(1)(a) The seller is not engaged for profit in the 1 22 business of the selling, furnishing, or performance of 1 23 services taxed under section 423.2. For purposes of this 1 24 subparagraph subdivision (a), the fact of the recurring nature 1 25 of selling, furnishing, or performance of services does not 1 26 constitute by itself engaging for profit in the business of 1 27 selling, furnishing, or performance of services. 1 28(2)(b) The owner of the business is the only person 1 29 performing the service. 1 30(3)(c) The owner of the business is a full=time student. 1 31(4)(d) The total gross receipts from the sales, 1 32 furnishing, or performance of services during the calendar 1 33 year does not exceed five thousand dollars. 1 34 (4) Notwithstanding subparagraph (1), sales of tangible 1 35 personal property or the sale, furnishing, or performance of a 2 1 service that is of a recurring nature by the owner if, at the 2 2 time of the sale, all of the following conditions are met: 2 3 (a) The seller is a nonprofit organization exempt from 2 4 federal income taxation pursuant to section 501(c)(3) of the 2 5 Internal Revenue Code. 2 6 (b) The sales of tangible personal property or the sale, 2 7 furnishing, or performance of a service takes place at a 2 8 fundraising event conducted by the seller. 2 9 (c) The seller's total gross receipts from the sales of 2 10 tangible personal property or the sale, furnishing, or 2 11 performance of services of a recurring nature during the 2 12 calendar year do not exceed five thousand dollars. 2 13 c. The exemption under this subsection does not apply to 2 14 vehicles subject to registration, aircraft, or commercial or 2 15 pleasure watercraft or water vessels. 2 16 EXPLANATION 2 17 This bill relates to the sales tax by providing an 2 18 exemption for certain casual sales by nonprofit organizations. 2 19 The bill provides that the sale of tangible personal 2 20 property or services, despite being of a recurring nature, 2 21 qualifies for an exemption as a casual sale under the 2 22 following conditions: (1) the seller is a nonprofit 2 23 organization exempt from federal income taxation; (2) the sale 2 24 takes place at a fundraising event; (3) the seller's total 2 25 gross receipts from such sales during the calendar year do not 2 26 exceed $5,000. 2 27 LSB 1026HH 83 2 28 tw/mg:sc/14