House File 341 - Introduced HOUSE FILE BY PAULSEN Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to sales and use taxes and including effective 2 date provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2369YH 83 5 tw/rj/5 PAG LIN 1 1 Section 1. SALES TAX DECREASE == EFFECTIVE DATE. 1 2 1. Notwithstanding any provision to the contrary in 1 3 section 423.2, the tax imposed upon the sales price of all 1 4 sales of tangible personal property sold at retail in the 1 5 state shall be five and five=eighths of one percent. 1 6 2. This section of this Act takes effect at the end of the 1 7 calendar day on November 1, 2010. 1 8 Sec. 2. SALES TAX INCREASE == EFFECTIVE DATE. 1 9 1. Notwithstanding any provision of law to the contrary, 1 10 the tax imposed upon the sales price of all sales of tangible 1 11 personal property sold at retail in the state shall be six 1 12 percent. 1 13 2. This section of this Act takes effect at the beginning 1 14 of the calendar day on November 3, 2010. 1 15 EXPLANATION 1 16 This bill relates to the sales and use taxes and to a 1 17 proposed amendment to the Iowa constitution dedicating a 1 18 portion of state revenue for purposes of benefiting natural 1 19 resources. 1 20 In 2008, the 82nd General Assembly passed Senate Joint 1 21 Resolution 2002 proposing an amendment to the Constitution of 1 22 the State of Iowa to dedicate a portion of state revenue from 1 23 the tax imposed on certain retail sales of tangible personal 1 24 property and services for the benefit of the state's natural 1 25 resources. The resolution creates a natural resources and 1 26 outdoor recreation trust fund within the state treasury and 1 27 not within the general fund of the state. Moneys in the fund 1 28 cannot be used for any purpose other than protecting and 1 29 enhancing water quality and natural areas in this state 1 30 including parks, trails, and fish and wildlife habitat, and 1 31 conserving agricultural soils in this state. No revenue is 1 32 credited to the fund until the sales and use tax rate is 1 33 increased. Whenever the sales tax is increased, the amount 1 34 generated by the increase is credited to the fund, but the 1 35 amount credited cannot exceed the amount that a sales and use 2 1 tax of 3/8ths of 1 percent would generate. 2 2 Before it can become law, Senate Joint Resolution 2002 must 2 3 be passed by a majority of the 83rd General Assembly and then 2 4 approved by a majority of the voters of Iowa at the 2010 2 5 general election. The 2010 general election will take place 2 6 on November 2. If approved by a majority of Iowa voters, the 2 7 constitution of the state is amended effective as of the date 2 8 of the general election. 2 9 Currently, the sales and use taxes in Iowa are imposed at 2 10 the rate of 6 percent. This bill provides for a decrease in 2 11 the sales and use taxes to 5 and 5/8ths percent. This 2 12 decrease takes effect at the end of the calendar day on 2 13 November 1, 2010. The bill also provides for a sales tax 2 14 increase from 5 and 5/8ths percent to 6 percent, effectively 2 15 restoring the sales and use taxes to their current rate. This 2 16 increase takes effect at the beginning of the calendar day on 2 17 November 3, 2010. If the voters approve the amendment to the 2 18 constitution of the state, this increase of the sales and use 2 19 taxes would trigger the provisions of the constitutional 2 20 amendment, thereby directing revenue to the natural resources 2 21 and outdoor recreation trust fund in an amount not to exceed 2 22 3/8ths of 1 percent. 2 23 LSB 2369YH 83 2 24 tw/rj/5.1