Senate File 2320 - Introduced SENATE FILE 2320 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SSB 3045) A BILL FOR An Act relating to the administration of the streamlined sales 1 tax agreement by the department of revenue. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5302SV (2) 84 mm/sc

S.F. 2320 Section 1. Section 423.1, subsection 51, paragraph a, 1 subparagraph (2), Code Supplement 2011, is amended to read as 2 follows: 3 (2) The cost of materials used, labor or service cost, 4 interest, losses, all costs of transportation to the seller, 5 all taxes imposed on the seller except as provided in paragraph 6 “b” , subparagraphs (5) and (6) , and any other expenses of the 7 seller. 8 Sec. 2. Section 423.1, subsection 51, paragraph b, Code 9 Supplement 2011, is amended by adding the following new 10 subparagraphs: 11 NEW SUBPARAGRAPH . (5) Any state or local tax on a retail 12 sale that is imposed on the seller if the statute, rule, or 13 local ordinance imposing the tax provides that the seller may, 14 but is not required to, collect such tax from the consumer, and 15 if the tax is separately stated on the invoice, bill of sale, 16 or similar document given to the purchaser. 17 NEW SUBPARAGRAPH . (6) Any tribal tax on a retail sale that 18 is imposed on the seller if the tribal law imposing the tax 19 provides that the seller may but is not required to collect 20 such tax from the consumer, and if the tax is separately stated 21 on the invoice, bill of sale, or similar document given to the 22 purchaser. 23 Sec. 3. Section 423.31, Code 2011, is amended by adding the 24 following new subsection: 25 NEW SUBSECTION . 8. Persons required to file a return under 26 this section may instead file a simplified electronic return 27 pursuant to section 423.49. 28 Sec. 4. Section 423.49, subsection 4, paragraph d, Code 29 2011, is amended to read as follows: 30 d. A model 4 seller , or a seller not registered under the 31 agreement who is otherwise registered in the state, may elect 32 to file a simplified return. Model 4 sellers , or sellers not 33 registered under the agreement who are otherwise registered in 34 the state, electing to do so shall file the first part of the 35 -1- LSB 5302SV (2) 84 mm/sc 1/ 3

S.F. 2320 return each month. 1 Sec. 5. Section 423.49, subsection 4, paragraph e, 2 unnumbered paragraph 1, Code 2011, is amended to read as 3 follows: 4 A model 4 seller required to register in the state , or a 5 seller not registered under the agreement who is otherwise 6 registered in the state, may submit the information collected 7 in the second part of the return in one of the following ways: 8 Sec. 6. Section 423.52, subsection 1, Code 2011, is amended 9 to read as follows: 10 1. Sellers and certified service providers using 11 databases derived from zip codes or state or vendor provided 12 address-based databases are relieved from liability to this 13 state or its local taxing jurisdictions for having charged and 14 collected the incorrect amount of sales or use tax resulting 15 from the seller or certified service provider relying on 16 erroneous data provided by this state on tax rates, boundaries, 17 or taxing jurisdiction assignments. If this state provides an 18 address-based system for assigning taxing jurisdictions, the 19 director is not required to provide liability relief for errors 20 resulting from reliance on the information a database derived 21 from zip codes and provided by this state if the director has 22 given adequate notice, as determined by the governing board, to 23 affected parties of the decision to end this relief. 24 EXPLANATION 25 This bill relates to the administration of the sales and use 26 taxes under the streamlined sales and use tax agreement. 27 Iowa is a member of the streamlined sales and use tax 28 agreement, which is an effort to administer state sales and 29 use taxes in all participating states according to the same 30 simplified system. Under the agreement, Iowa must periodically 31 make changes in the administration of the sales and use taxes 32 in order to remain in compliance. 33 The bill amends the definition of “sales price” to exclude 34 any state or local tax on a retail sale that is imposed on the 35 -2- LSB 5302SV (2) 84 mm/sc 2/ 3

S.F. 2320 seller if by law the seller may but is not required to collect 1 the tax from the consumer, and if the tax is separately stated 2 on the invoice, bill of sale, or similar document given to the 3 purchaser. 4 The bill further amends the definition of “sales price” to 5 exclude any tribal tax on a retail sale that is imposed on the 6 seller if by law the seller may but is not required to collect 7 such tax from the consumer, and if the tax is separately stated 8 on the invoice, bill of sale, or similar document given to the 9 purchaser. 10 The bill allows sellers that have not registered under the 11 streamlined sales and use tax agreement but that are otherwise 12 registered in the state and required to file sales tax returns 13 to elect to file using the simplified electronic return. 14 The bill amends Code section 423.52 relating to liability 15 relief for sellers and certified service providers. Under 16 current law, relief from liability is granted to sellers and 17 certified service providers who charge incorrect sales and 18 use tax after relying on erroneous tax rate, boundary, or 19 jurisdiction data provided by the state in databases derived 20 from zip codes or addresses. However, the state may deny 21 liability relief to a seller or certified service provider for 22 reliance on either database as long as the state maintains an 23 address-based system for assigning taxing jurisdictions, and 24 provides adequate notice to the affected parties. The bill 25 provides that if the state maintains an address-based system 26 for assigning taxing jurisdictions, it may only deny liability 27 relief to sellers and certified service providers for errors 28 resulting from the seller’s or certified service provider’s 29 reliance on a database derived from zip codes. 30 -3- LSB 5302SV (2) 84 mm/sc 3/ 3