Senate File 432 - Introduced SENATE FILE 432 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SSB 1243) A BILL FOR An Act relating to the administration of the tax and related 1 laws of the department of revenue, including administration 2 of income taxes, sales and use and excise taxes, an 3 environmental protection charge, and property taxes. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1258SV (2) 85 mm/sc

S.F. 432 DIVISION I 1 INCOME TAXES 2 Section 1. Section 422.25, subsection 1, paragraph b, Code 3 2013, is amended to read as follows: 4 b. The period for examination and determination of the 5 correct amount of tax is unlimited in the case of a false or 6 fraudulent return made with the intent to evade tax or in the 7 case of a failure to file a return. In lieu of the period 8 of limitation for any prior year for which an overpayment of 9 tax or an elimination or reduction of an underpayment of tax 10 due for that prior year results from the carryback to that 11 prior year of a net operating loss or net capital loss, the 12 period is the period of limitation for the taxable year of the 13 net operating loss or net capital loss which results in the 14 carryback. If the tax found due is greater than the amount 15 paid, the department shall compute the amount due, together 16 with interest and penalties as provided in subsection 2 , and 17 shall mail a notice of assessment to the taxpayer and, if 18 applicable, to the taxpayer’s authorized representative of the 19 total, which shall be computed as a sum certain if paid on or 20 before , with interest computed to the last day of the month 21 in which the notice is dated , or on or before the last day of 22 the following month if the notice is dated after the twentieth 23 day of any month. The notice shall also inform the taxpayer 24 of the additional interest and penalty which will be added to 25 the total due if not paid on or before the last day of the 26 applicable month . 27 DIVISION II 28 SALES TAXES 29 Sec. 2. Section 423.37, subsection 2, Code 2013, is amended 30 to read as follows: 31 2. If a return required by this subchapter is not filed, 32 or if a return when filed is incorrect or insufficient and 33 the maker fails to file a corrected or sufficient return 34 within twenty days after the same is required by notice from 35 -1- LSB 1258SV (2) 85 mm/sc 1/ 5

S.F. 432 the department , the department shall determine the amount of 1 tax due from information as the department may be able to 2 obtain and, if necessary, may estimate the tax on the basis of 3 external indices, such as number of employees of the person 4 concerned, rentals paid by the person, stock on hand, or other 5 factors. The determination may be made using any generally 6 recognized valid and reliable sampling technique, whether or 7 not the person being audited has complete records, as mutually 8 agreed upon by the department and the taxpayer. The department 9 shall give notice of the determination to the person liable 10 for the tax. The determination shall fix the tax unless the 11 person against whom it is assessed shall, within sixty days 12 after the giving of notice of the determination, apply to the 13 director for a hearing or unless the taxpayer contests the 14 determination by paying the tax, interest, and penalty and 15 timely filing a claim for refund. At the hearing, evidence may 16 be offered to support the determination or to prove that it is 17 incorrect. After the hearing the director shall give notice of 18 the decision to the person liable for the tax. 19 DIVISION III 20 ENVIRONMENTAL PROTECTION CHARGE 21 Sec. 3. Section 424.10, subsection 2, paragraph a, Code 22 2013, is amended to read as follows: 23 a. If a return required by this chapter is not filed, or 24 if a return when filed is incorrect or insufficient and the 25 maker fails to file a corrected or sufficient return within 26 twenty days after the return is required by notice from the 27 department , the department shall determine the amount of charge 28 due from information as the department may be able to obtain 29 and, if necessary, may estimate the charge on the basis of 30 external indices or factors. The department shall give notice 31 of the determination to the person liable for the charge. The 32 determination shall fix the charge unless the person against 33 whom it is assessed shall, within sixty days after the date 34 of the notice of the determination, apply to the director for 35 -2- LSB 1258SV (2) 85 mm/sc 2/ 5

S.F. 432 a hearing or unless the person against whom it is assessed 1 contests the determination by paying the charge, interest, and 2 penalty and timely filing a claim for refund. At the hearing 3 evidence may be offered to support the determination or to 4 prove that it is incorrect. After the hearing the director 5 shall give notice of the decision to the person liable for the 6 charge. 7 DIVISION IV 8 PROPERTY TAX 9 Sec. 4. Section 421.17, subsection 2, Code 2013, is amended 10 by adding the following new paragraph: 11 NEW PARAGRAPH . d. To facilitate uniformity and equalization 12 of assessments throughout the state of Iowa and to facilitate 13 transfers of funds to local governments, the director may 14 use geographic information system technology and may require 15 assessing authorities and local governments that have adopted 16 compatible technology to provide information to the department 17 electronically using electronic geographic information system 18 file formats. 19 Sec. 5. Section 441.5, subsection 1, Code 2013, is amended 20 to read as follows: 21 1. For the purpose of examining and certifying candidates 22 for the positions of assessor and deputy assessor, the 23 director of revenue shall prepare and administer a written 24 an examination and provide for an examination process . The 25 examinations shall be administered twice each year in the city 26 of Des Moines. Notification of the time, place, and date 27 of the examinations shall be mailed to each city and county 28 assessor, county auditor and chairperson of each city and 29 county conference board The director shall approve one or more 30 examination locations and shall make a list of the approved 31 locations available to applicants. Each applicant shall select 32 an examination location from the list of approved locations. 33 The director shall notify applicants of the date and time of 34 the examination at least thirty days prior to the date of the 35 -3- LSB 1258SV (2) 85 mm/sc 3/ 5

S.F. 432 examination. 1 Sec. 6. Section 441.5, subsection 4, Code 2013, is amended 2 to read as follows: 3 4. The director of revenue shall grade the examination 4 taken. The director shall notify , in writing, each applicant 5 of the score attained by the applicant on the examination. An 6 individual who attains a score of seventy percent or greater on 7 the examination is eligible to be certified by the director of 8 revenue as a candidate for any assessor position. Any person 9 who passes the examination and who possesses at least two years 10 of appraisal related experience as determined by the director 11 of revenue shall be granted regular certification and become 12 eligible for appointment to a six-year term as assessor. Any 13 person who passes the examination but who lacks such experience 14 shall be granted temporary certification, and shall be eligible 15 for a provisional appointment as assessor. 16 EXPLANATION 17 This bill relates to the administration of the tax and 18 related laws by the department of revenue. 19 Division I relates to the individual and corporate income 20 tax. The division strikes language in Code section 422.25 21 to eliminate the requirement that notices of assessment 22 issued after the twentieth day of a month include an interest 23 calculation for the next month. By reference, this change 24 applies to the real estate transfer tax in Code chapter 428A. 25 Division II relates to sales and use taxes and, by reference, 26 the monitor vending machine excise tax, motor vehicle fee for 27 new registration, the hotel and motel tax, the local option 28 sales and services tax, the automobile rental excise tax, and 29 the equipment tax. 30 The division strikes language in Code section 423.37 to 31 eliminate the requirement that the department send a notice 32 to filers of applicable tax returns if the return is either 33 incorrect or insufficient. The department would be authorized 34 to determine the amount of tax due and send a notice of 35 -4- LSB 1258SV (2) 85 mm/sc 4/ 5

S.F. 432 assessment to the person liable for the tax. 1 Division III relates to the environmental protection charge 2 on petroleum diminution. 3 The division strikes language in Code section 422.10 to 4 eliminate the requirement that the department send a notice to 5 filers of environmental protection charge returns if the return 6 is either incorrect or insufficient. The department would be 7 authorized to determine the amount of tax due and send a notice 8 of assessment to the person liable for the tax. 9 Division IV relates to property taxes. 10 The division amends the powers and duties of the director 11 of revenue in Code section 421.17 to allow the director to use 12 geographic information system (GIS) technology to facilitate 13 uniformity and equalization of assessments and to facilitate 14 transfers of funds to local governments. The director may also 15 require assessing authorities and local governments that have 16 adopted compatible technology to provide information to the 17 department electronically using GIS file formats. 18 The division amends the procedures related to the 19 examination in Code section 441.5 for assessors and deputy 20 assessors by removing requirements that the director of revenue 21 administer a written examination biannually in the city of Des 22 Moines, that notification of the time and place of examinations 23 be mailed 30 days in advance to each city and county assessor, 24 county auditor, and chairperson of each city and county 25 conference board, and that each applicant be notified in 26 writing of their examination score. The amended language would 27 require that the director prepare an examination and provide 28 for an examination process, approve one or more examination 29 locations and make a list of the approved locations available 30 to applicants, notify applicants 30 days in advance of the 31 date and time of their examination, and notify applicants of 32 their examination score. Applicants would be able to select 33 an examination location from the list of approved locations 34 provided by the director. 35 -5- LSB 1258SV (2) 85 mm/sc 5/ 5