House
File
460
-
Introduced
HOUSE
FILE
460
BY
JACOBY
A
BILL
FOR
An
Act
concerning
retailers
who
do
not
collect
and
remit
Iowa
1
sales
and
use
tax
by
creating
certain
reporting
requirements
2
and
modifying
the
powers
and
duties
of
the
director
of
3
revenue.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
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Section
1.
Section
421.17,
Code
2017,
is
amended
by
adding
1
the
following
new
subsection:
2
NEW
SUBSECTION
.
35.
To
subpoena
from
retailers
subject
to
3
section
421.62
any
and
all
records
and
documents
necessary
to
4
assist
the
department
in
administering
that
section.
If
any
5
retailer
subject
to
section
421.62
refuses
to
comply
with
such
6
subpoena,
the
director
may
make
application
to
the
district
7
court
or
judicial
magistrate
in
any
county
to
enforce
such
8
subpoena
by
any
appropriate
order,
including
but
not
limited
9
to
attachment.
10
Sec.
2.
NEW
SECTION
.
421.62
Certain
retailer
reporting
11
requirements
——
penalties.
12
1.
Definitions.
For
purposes
of
this
section,
unless
the
13
context
otherwise
requires:
14
a.
“Department”
means
the
department
of
revenue.
15
b.
“Iowa
purchaser”
means
a
person
who
purchases
tangible
16
personal
property
and
requests
that
the
tangible
personal
17
property
be
delivered
to
a
location
within
Iowa.
18
c.
“Iowa
sale”
means
a
sale
of
tangible
personal
property
19
which
tangible
personal
property
is
delivered
to
a
location
20
within
Iowa.
“Iowa
sale”
does
not
include
the
sale
of
any
21
tangible
personal
property
to
the
extent
that
disclosure
of
the
22
purchaser
of
such
tangible
personal
property
would
violate
18
23
U.S.C.
§2710.
24
d.
“Purchase”
and
“purchaser”
mean
the
same
as
defined
in
25
section
423.1.
26
e.
“Retailer”
means
the
same
as
defined
in
section
423.1,
27
except
that,
with
respect
to
any
calendar
year,
it
does
not
28
include
any
of
the
following:
29
(1)
A
retailer
whose
total
Iowa
sales
to
Iowa
purchasers
30
during
the
calendar
year
are
delivered
to
the
purchaser
31
digitally,
electronically,
or
utilizing
cable,
or
by
radio
32
waves,
microwaves,
satellites,
or
fiber
optics.
33
(2)
A
retailer
whose
total
gross
Iowa
sales
to
Iowa
34
purchasers
during
the
calendar
year
are
less
than
one
hundred
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thousand
dollars.
For
purposes
of
this
subparagraph,
the
total
1
gross
Iowa
sales
of
a
retailer
shall
include
Iowa
sales
made
by
2
the
retailer
and
Iowa
sales
made
by
any
entity
controlled
by
or
3
under
common
control
with
the
retailer.
4
f.
“Sale”
and
“tangible
personal
property”
mean
the
same
as
5
defined
in
section
423.1.
6
2.
Required
notifications
and
statements.
Each
retailer
7
who
does
not
collect
and
remit
sales
or
use
tax
under
chapter
8
423
on
Iowa
sales
to
Iowa
purchasers
shall
provide
all
of
the
9
following
notifications
and
statements:
10
a.
A
notification
for
each
Iowa
sale
to
the
Iowa
purchaser
11
containing
sufficient
information
to
alert
the
Iowa
purchaser
12
that
Iowa
sales
or
use
tax
is
due
on
certain
purchases
13
made
from
the
retailer
and
that
the
state
of
Iowa
requires
14
purchasers
to
pay
sales
or
use
tax
and
file
sales
or
use
tax
15
returns,
and
including
any
other
information
required
by
the
16
department
by
rule.
The
notification
shall
be
made
in
the
17
manner,
form,
and
time
period
prescribed
by
the
department
by
18
rule.
19
b.
(1)
An
annual
notification
to
each
Iowa
purchaser
to
20
whom
Iowa
sales
totaling
five
hundred
dollars
or
more
are
made
21
during
the
calendar
year,
in
the
manner
and
form
prescribed
by
22
the
department
by
rule.
23
(2)
The
annual
notification
shall
include
all
of
the
24
following:
25
(a)
The
total
amount
of
Iowa
sales
made
by
the
retailer
to
26
the
Iowa
purchaser
during
the
calendar
year.
27
(b)
The
date,
amount,
and
description
of
each
Iowa
sale,
if
28
available.
29
(c)
Whether
each
Iowa
sale
is
taxable
or
exempt
from
30
taxation
under
chapter
423,
if
known
by
the
retailer.
31
(d)
Sufficient
information
to
alert
the
Iowa
purchaser
that
32
Iowa
sales
or
use
tax
is
due
on
certain
purchases
made
from
the
33
retailer
and
that
the
state
of
Iowa
requires
purchasers
to
pay
34
sales
or
use
tax
and
file
sales
or
use
tax
returns.
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(e)
Any
other
information
required
by
the
department
by
1
rule.
2
(3)
The
annual
notification
shall
meet
all
of
the
following
3
requirements:
4
(a)
It
shall
be
sent
separately
by
first
class
mail
by
5
January
31
following
the
calendar
year
which
is
the
subject
of
6
the
notification.
7
(b)
It
shall
include
the
words
“Important
Tax
Document
8
Enclosed”
on
the
exterior
of
the
mailing.
9
(c)
It
shall
include
the
name
of
the
retailer.
10
c.
(1)
An
annual
statement
to
the
department
in
the
manner
11
and
form
prescribed
by
the
department
showing
the
total
amounts
12
paid
to
the
retailer
by
each
Iowa
purchaser
for
Iowa
sales
13
during
the
calendar
year,
and
any
other
information
required
by
14
the
department
by
rule.
The
annual
statement
shall
be
filed
15
by
March
1
following
the
calendar
year
which
is
the
subject
of
16
the
statement.
17
(2)
The
department
may
require
any
retailer
whose
total
18
gross
sales
to
Iowa
purchasers
during
the
calendar
year
exceeds
19
one
hundred
thousand
dollars
to
provide
the
annual
statement
20
required
in
this
paragraph
in
an
electronic
format.
21
(3)
A
retailer
who
is
not
required
to
send
any
annual
22
notices
under
paragraph
“b”
shall
be
exempt
from
the
annual
23
statement
requirement
in
this
paragraph
“c”
.
24
3.
Penalties.
25
a.
Failure
to
timely
provide
a
notice
required
in
subsection
26
2,
paragraph
“a”
,
shall
subject
a
retailer
to
a
penalty
of
27
five
dollars
for
each
such
failure,
subject
to
the
following
28
limitations:
29
(1)
The
total
penalty
imposed
upon
a
retailer
under
this
30
paragraph
for
the
first
calendar
year
for
which
the
retailer
31
is
obligated
to
provide
the
notices
shall
not
exceed
fifty
32
thousand
dollars.
33
(2)
If
a
retailer
has
no
actual
knowledge
of
the
notice
34
requirement
before
being
issued
a
demand
from
the
department,
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and
begins
providing
the
required
notices
within
sixty
days
of
1
being
issued
such
demand,
the
total
penalty
imposed
under
this
2
paragraph
for
the
year
in
which
the
demand
was
issued,
and
for
3
each
previous
year,
shall
not
exceed
five
thousand
dollars
per
4
year.
The
burden
of
proving
that
the
retailer
had
no
actual
5
knowledge
of
the
notice
requirement
is
upon
the
retailer.
6
b.
Failure
to
timely
provide
an
annual
notification
required
7
in
subsection
2,
paragraph
“b”
,
shall
subject
the
retailer
to
a
8
penalty
of
ten
dollars
for
each
such
failure,
subject
to
the
9
following
limitations:
10
(1)
If
for
any
calendar
year
a
retailer
provides
all
the
11
required
annual
notifications
within
thirty
days
of
the
due
12
date,
the
total
penalty
imposed
under
this
paragraph
for
that
13
calendar
year
shall
not
exceed
one
thousand
dollars.
14
(2)
If
a
retailer
has
no
actual
knowledge
of
the
annual
15
notification
requirement
before
being
issued
a
demand
from
the
16
department,
and
provides
the
required
annual
notifications
17
within
sixty
days
of
being
issued
such
demand,
the
total
18
penalty
imposed
under
this
paragraph
for
the
year
in
which
the
19
demand
was
issued,
and
for
each
previous
year,
shall
not
exceed
20
ten
thousand
dollars
per
year.
The
burden
of
proving
that
the
21
retailer
had
no
actual
knowledge
of
the
notice
requirement
is
22
upon
the
retailer.
23
(3)
The
total
penalty
imposed
upon
a
retailer
under
this
24
paragraph
for
the
first
calendar
year
for
which
the
retailer
is
25
obligated
to
provide
the
annual
notification
under
subsection
26
2,
paragraph
“b”
,
shall
not
exceed
fifty
thousand
dollars.
27
c.
Failure
to
timely
provide
an
annual
statement
required
28
in
subsection
2,
paragraph
“c”
,
shall
subject
the
retailer
to
29
a
penalty
equal
to
the
product
of
ten
dollars
multiplied
by
30
the
number
of
Iowa
purchasers
for
which
the
retailer
failed
31
to
provide
the
required
information
in
its
annual
statement,
32
subject
to
the
following
limitations:
33
(1)
If
for
any
calendar
year
a
retailer
provides
a
complete
34
annual
statement
within
thirty
days
of
the
due
date,
the
total
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penalty
imposed
under
this
paragraph
for
that
calendar
year
1
shall
not
exceed
one
thousand
dollars.
2
(2)
If
a
retailer
has
no
actual
knowledge
of
the
annual
3
statement
requirement
before
being
issued
a
demand
from
the
4
department,
and
provides
the
required
annual
statements
within
5
sixty
days
of
being
issued
such
demand,
the
total
penalty
6
imposed
under
this
paragraph
for
the
year
in
which
the
demand
7
was
issued,
and
for
each
previous
year,
shall
not
exceed
ten
8
thousand
dollars
per
year.
The
burden
of
proving
that
the
9
retailer
had
no
actual
knowledge
of
the
notice
requirement
is
10
upon
the
retailer.
11
4.
Penalty
exception
and
waiver.
12
a.
The
penalties
in
subsection
3
shall
not
apply
to
a
13
retailer
for
any
calendar
year
in
which
all
of
the
retailer’s
14
Iowa
sales
to
Iowa
purchasers
are
exempt
from
the
sales
or
use
15
tax
under
chapter
423.
16
b.
The
department
may
waive
all
or
a
portion
of
the
17
penalties
imposed
in
subsection
3
upon
a
showing
of
reasonable
18
cause
by
the
retailer.
19
5.
Rules.
The
department
shall
adopt
rules
pursuant
to
20
chapter
17A
to
administer
this
section.
21
EXPLANATION
22
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
23
the
explanation’s
substance
by
the
members
of
the
general
assembly.
24
This
bill
concerns
retailers
who
do
not
collect
and
remit
25
Iowa
sales
and
use
tax
(noncollecting
retailer).
The
bill
26
creates
three
reporting
requirements
for
noncollecting
27
retailers
who
make
sales
of
tangible
personal
property
that
28
are
delivered
to
purchasers
within
Iowa.
The
bill
defines
29
several
terms,
including
“Iowa
purchaser”
and
“Iowa
sale”.
The
30
bill
exempts
from
the
reporting
requirements
any
noncollecting
31
retailer
whose
Iowa
sales
during
a
calendar
year
are
all
32
delivered
digitally,
and
any
noncollecting
retailer
whose
33
total
gross
Iowa
sales
during
a
calendar
year
are
less
than
34
$100,000.
For
purposes
of
this
$100,000
threshold,
total
gross
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Iowa
sales
includes
the
sales
of
the
noncollecting
retailer
and
1
of
any
entity
controlled
by
or
under
common
control
with
the
2
noncollecting
retailer.
3
SALE
NOTIFICATION.
The
bill
requires
a
noncollecting
4
retailer
to
provide
Iowa
purchasers
with
a
notification
for
5
each
sale
(sale
notification)
that
contains
information
as
6
described
in
the
bill
and
as
prescribed
by
the
department
of
7
revenue
(department)
by
rule
regarding
the
obligations
to
pay
8
applicable
Iowa
sales
and
use
tax
and
file
Iowa
sales
and
use
9
tax
returns.
The
bill
requires
each
sale
notification
to
be
10
made
in
the
manner,
form,
and
time
period
prescribed
by
the
11
department.
12
The
bill
imposes
a
penalty
of
$5
for
each
failure
to
timely
13
provide
a
sale
notification,
but
also
imposes
fine
limits
14
under
certain
circumstances.
First,
the
total
amount
of
sale
15
notification
penalties
for
the
first
year
the
noncollecting
16
retailer
is
required
to
provide
sale
notifications
shall
not
17
exceed
$50,000.
Second,
if
a
noncollecting
retailer
has
no
18
actual
knowledge
of
the
sale
notification
requirement
before
19
being
issued
a
demand
from
the
department,
and
begins
providing
20
the
required
sale
notifications
within
60
days
of
the
demand,
21
the
total
sale
notification
penalties
for
that
year,
and
for
22
each
previous
year,
shall
not
exceed
$5,000
per
year.
The
23
noncollecting
retailer
bears
the
burden
of
proving
it
did
not
24
have
actual
knowledge.
25
ANNUAL
NOTIFICATION.
The
bill
requires
a
noncollecting
26
retailer
to
provide
an
annual
notification
to
Iowa
purchasers
27
who
make
Iowa
purchases
of
$500
or
more
from
the
noncollecting
28
retailer
during
the
year.
The
annual
notification
must
be
made
29
by
January
31
of
each
year
summarizing
the
sales
made
to
the
30
Iowa
purchaser
for
the
previous
year.
The
annual
notification
31
must
also
contain
other
information
and
meet
other
requirements
32
as
described
in
the
bill
and
as
prescribed
by
the
department.
33
The
bill
imposes
a
penalty
of
$10
for
each
failure
to
timely
34
provide
an
annual
notification,
but
also
imposes
fine
limits
35
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460
under
certain
circumstances.
First,
the
total
amount
of
annual
1
notification
penalties
for
the
first
year
the
noncollecting
2
retailer
is
required
to
provide
annual
notifications
shall
3
not
exceed
$50,000.
Second,
if
for
any
calendar
year
a
4
noncollecting
retailer
provides
all
the
annual
notifications
5
within
30
days
of
the
due
date,
the
total
annual
notification
6
penalties
for
that
year
shall
not
exceed
$1,000.
Third,
if
a
7
noncollecting
retailer
has
no
actual
knowledge
of
the
annual
8
notification
requirement
before
being
issued
a
demand
from
the
9
department,
and
provides
the
required
annual
notifications
10
within
60
days
of
the
demand,
the
total
annual
notification
11
penalties
for
that
year,
and
for
each
previous
year,
shall
not
12
exceed
$10,000
per
year.
The
noncollecting
retailer
bears
the
13
burden
of
proving
it
did
not
have
actual
knowledge.
14
ANNUAL
STATEMENT.
The
bill
requires
a
noncollecting
15
retailer
to
provide
by
March
31
of
each
year
an
annual
16
statement
to
the
department
showing
the
Iowa
sales
made
to
each
17
Iowa
purchaser
for
the
previous
year,
and
any
other
information
18
prescribed
by
the
department.
Noncollecting
retailers
who
19
are
not
required
to
provide
any
annual
notifications
are
20
exempt
from
filing
an
annual
statement
with
the
department.
21
The
department
may
require
noncollecting
retailers
with
over
22
$100,000
in
total
gross
Iowa
sales
during
a
calendar
year
to
23
file
the
annual
statement
in
an
electronic
format.
24
The
bill
imposes
a
penalty
for
failure
to
timely
file
an
25
annual
statement
that
is
equal
to
the
product
of
$10
multiplied
26
by
the
number
of
Iowa
purchasers
for
which
the
retailer
failed
27
to
provide
the
required
information
in
the
annual
statement,
28
but
imposes
fine
limits
under
certain
circumstances.
First,
if
29
for
any
calendar
year
the
annual
statement
is
filed
within
30
30
days
of
the
due
date,
the
total
annual
statement
penalties
for
31
that
year
shall
not
exceed
$1,000.
Second,
if
a
noncollecting
32
retailer
has
no
actual
knowledge
of
the
annual
statement
33
requirement
before
being
issued
a
demand
from
the
department,
34
and
provides
the
required
annual
statements
within
60
days
of
35
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8
H.F.
460
the
demand,
the
total
annual
statement
penalties
for
that
year,
1
and
for
each
previous
year,
shall
not
exceed
$10,000
per
year.
2
The
noncollecting
retailer
bears
the
burden
of
proving
it
did
3
not
have
actual
knowledge.
4
The
bill
provides
that
the
sale
notification,
annual
5
notification,
or
annual
statement
penalties
shall
not
apply
to
6
a
noncollecting
retailer
for
any
calendar
year
in
which
all
of
7
the
noncollecting
retailer’s
Iowa
sales
to
Iowa
purchasers
are
8
exempt
from
the
Iowa
sales
or
use
tax.
Also,
the
bill
allows
9
the
department
to
waive
all
or
a
portion
of
any
penalty
upon
a
10
showing
of
reasonable
cause
by
the
noncollecting
retailer.
11
Finally,
the
bill
provides
that
the
director
of
the
12
department
shall
have
the
power
to
subpoena
from
noncollecting
13
retailers
any
records
and
documents
necessary
to
administer
14
the
reporting
requirements,
and
may
make
application
to
15
any
district
court
or
judicial
magistrate
to
enforce
such
16
subpoenas.
17
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