HF 2087 (LSB 5030YH (7) 83)

HOUSE FILE 2087

BY  JACOBY and WAGNER

A BILL FOR

An Act exempting from the sales tax the services of certain executive search agencies and private employment agencies and including effective and retroactive applicability date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 423.2, subsection 6, Code 2009, is amended to read as follows:
   6.  a.  The sales price of any of the following enumerated services is subject to the tax imposed by subsection 5:  alteration and garment repair; armored car; vehicle repair; battery, tire, and allied; investment counseling; service charges of all financial institutions; barber and beauty; boat repair; vehicle wash and wax; campgrounds; carpentry; roof, shingle, and glass repair; dance schools and dance studios; dating services; dry cleaning, pressing, dyeing, and laundering; electrical and electronic repair and installation; excavating and grading; farm implement repair of all kinds; flying service; furniture, rug, carpet, and upholstery repair and cleaning; fur storage and repair; golf and country clubs and all commercial recreation; gun and camera repair; house and building moving; household appliance, television, and radio repair; janitorial and building maintenance or cleaning; jewelry and watch repair; lawn care, landscaping, and tree trimming and removal; limousine service, including driver; machine operator; machine repair of all kinds; motor repair; motorcycle, scooter, and bicycle repair; oilers and lubricators; office and business machine repair; painting, papering, and interior decorating; parking facilities; pay television; pet grooming; pipe fitting and plumbing; wood preparation; executive search agencies; private employment agencies, excluding services for placing a person in employment where the principal place of employment of that person is to be located outside of the state; reflexology; security and detective services; sewage services for nonresidential commercial operations; sewing and stitching; shoe repair and shoeshine; sign construction and installation; storage of household goods, mini-storage, and warehousing of raw agricultural products; swimming pool cleaning and maintenance; tanning beds or salons; taxidermy services; telephone answering service; test laboratories, including mobile testing laboratories and field testing by testing laboratories, and excluding tests on humans or animals; termite, bug, roach, and pest eradicators; tin and sheet metal repair; transportation service consisting of the rental of recreational vehicles or recreational boats, or the rental of motor vehicles subject to registration which are registered for a gross weight of thirteen tons or less for a period of sixty days or less, or the rental of aircraft for a period of sixty days or less; Turkish baths, massage, and reducing salons, excluding services provided by massage therapists licensed under chapter 152C; water conditioning and softening; weighing; welding; well drilling; wrapping, packing, and packaging of merchandise other than processed meat, fish, fowl, and vegetables; wrecking service; wrecker and towing.
   b.  For the purposes of this subsection, “financial institutions” means all national banks, federally chartered savings and loan associations, federally chartered savings banks, federally chartered credit unions, banks organized under chapter 524, savings and loan associations and savings banks organized under chapter 534, credit unions organized under chapter 533, and all banks, savings banks, credit unions, and savings and loan associations chartered or otherwise created under the laws of any state and doing business in Iowa.
    Sec. 2.  REFUNDS.  Refunds of taxes, interest, or penalties which arise from claims resulting from the amendment of section 423.2, subsection 6, in this Act, for the exemption of sales of executive search agencies and private employment agencies occurring between January 1, 2002, and the effective date of this Act, shall be limited to fifty thousand dollars in the aggregate and shall not be allowed unless refund claims are filed prior to October 1, 2010, notwithstanding any other provision of law. If the amount of claims totals more than fifty thousand dollars in the aggregate, the department of revenue shall prorate the fifty thousand dollars among all claimants in relation to the amounts of the claimants’ valid claims. Claimants shall not be entitled to interest on any refunds.
    Sec. 3.  EFFECTIVE UPON ENACTMENT AND RETROACTIVE APPLICABILITY.  This Act, being deemed of immediate importance, takes effect upon enactment and applies retroactively to January 1, 2002.
EXPLANATION
   This bill relates to the imposition of the sales tax on certain enumerated services. 
   Currently, the sales tax is imposed on the services provided by executive search agencies and private employment agencies. The bill exempts such agencies’ services from the list of enumerated services upon which the sales tax is imposed. 
   Because the exemptions are retroactive to January 1, 2002, the bill provides for refunds of taxes, interest, or penalties which arise from claims resulting from the change to exemption from taxation of these services. These refunds are limited to $50,000 in the aggregate. Claims for refund must be filed by October 1, 2010. 
   The bill takes effect upon enactment and applies retroactively to January 1, 2002.