Senate File 194 - Introduced SENATE FILE BY COMMITTEE ON ECONOMIC GROWTH (SUCCESSOR TO SSB 1084) Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to a sales tax exemption for the operation of 2 nonprofit private performing arts centers and allowing a sales 3 tax refund for construction of such centers. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1294SV 83 6 ak/sc/5 PAG LIN 1 1 Section 1. Section 423.3, subsection 22, Code 2009, is 1 2 amended to read as follows: 1 3 22. The sales price from sales of goods, wares, or 1 4 merchandise, or from services furnished, to a nonprofit 1 5 private art center or performing arts center to be used in the 1 6 operation of the art center or performing arts center. 1 7 Sec. 2. Section 423.4, subsection 1, Code 2009, is amended 1 8 by striking the subsection and inserting in lieu thereof the 1 9 following: 1 10 1. a. The following designated entities may make 1 11 application to the department for a refund of the sales or use 1 12 tax upon the sales price of all sales of goods, wares, or 1 13 merchandise, or from services furnished, to a contractor used 1 14 in the fulfillment of a written contract with the designated 1 15 entity: 1 16 (1) A private nonprofit educational institution in this 1 17 state. 1 18 (2) A nonprofit Iowa affiliate of a nonprofit 1 19 international organization whose primary activity is the 1 20 promotion of the construction, remodeling, or rehabilitation 1 21 of one=family or two=family dwellings for low=income families. 1 22 (3) A nonprofit private museum in this state. 1 23 (4) A nonprofit private performing arts center in this 1 24 state. 1 25 (5) A tax=certifying or tax=levying body or governmental 1 26 subdivision of the state, including the state board of 1 27 regents, the state department of human services, and the state 1 28 department of transportation. 1 29 (6) A municipally owned solid waste facility that sells 1 30 all or part of its processed waste as fuel to a municipally 1 31 owned public utility. 1 32 (7) All divisions, boards, commissions, agencies, or 1 33 instrumentalities of state, federal, county, or municipal 1 34 government that do not have earnings going to the benefit of 1 35 an equity investor or stockholder. 2 1 (8) The state of Iowa, any political subdivision of the 2 2 state, or a division, board, commission, agency, or 2 3 instrumentality of the state or a political subdivision. 2 4 b. In order to receive the refund, the goods, wares, or 2 5 merchandise, or services furnished to a contractor shall be 2 6 used in the fulfillment of a written contract with one of the 2 7 designated entities in paragraph "a" for property that becomes 2 8 an integral part of the project under contract and at the 2 9 completion of the project becomes one of the following: 2 10 (1) Public property. 2 11 (2) Devoted to educational uses. 2 12 (3) Part of a low=income one=family or two=family dwelling 2 13 in the state. 2 14 (4) A nonprofit private museum. 2 15 (5) A nonprofit performing arts center. 2 16 c. The refund does not apply to goods, wares, or 2 17 merchandise, or services furnished, which are used in the 2 18 following: 2 19 (1) The performance of any contract in connection with the 2 20 operation of any municipal utility engaged in selling gas, 2 21 electricity, or heat to the general public or in connection 2 22 with the operation of a municipal pay television system. 2 23 (2) The performance of a contract for a project under 2 24 chapter 419 as defined in that chapter other than goods, 2 25 wares, or merchandise used in the performance of a contract 2 26 for a project under chapter 419 for which a bond issue was 2 27 approved by a municipality prior to July 1, 1968, or for which 2 28 the goods, wares, or merchandise becomes an integral part of 2 29 the project under contract and at the completion of the 2 30 project becomes public property or is devoted to educational 2 31 uses. 2 32 d. Such contractor shall state under oath, on forms 2 33 provided by the department, the amount of such sales of goods, 2 34 wares, or merchandise, or services furnished, and used in the 2 35 performance of such contract, and upon which sales or use tax 3 1 has been paid, and shall file such forms with the appropriate 3 2 designated entity in paragraph "a" that has made any written 3 3 contract for performance by the contractor. The forms shall 3 4 be filed by the contractor with the designated entity in 3 5 paragraph "a" before final settlement is made. 3 6 e. A designated entity in paragraph "a" shall, not more 3 7 than one year after the final settlement has been made, make 3 8 application to the department for any refund of the amount of 3 9 the sales or use tax which shall have been paid upon any 3 10 goods, wares, or merchandise, or services furnished, the 3 11 application to be made in the manner and upon forms to be 3 12 provided by the department, and the department shall forthwith 3 13 audit the claim and, if approved, issue a warrant to the 3 14 applicable designated entity in paragraph "a" in the amount of 3 15 the sales or use tax which has been paid to the state of Iowa 3 16 under the contract. 3 17 f. Refunds authorized under this subsection shall accrue 3 18 interest at the rate in effect under section 421.7 from the 3 19 first day of the second calendar month following the date the 3 20 refund claim is received by the department. 3 21 g. Any contractor who willfully makes a false report of 3 22 tax paid under the provisions of this subsection is guilty of 3 23 a simple misdemeanor and in addition shall be liable for the 3 24 payment of the tax and any applicable penalty and interest. 3 25 EXPLANATION 3 26 This bill exempts from sales tax the sale of materials and 3 27 services provided that are used in the operation of a 3 28 nonprofit private performing arts center. The bill allows the 3 29 sales tax from construction materials and services used to 3 30 build a nonprofit private performing arts center to be 3 31 refunded upon application to the Iowa department of revenue. 3 32 LSB 1294SV 83 3 33 ak/sc/5