House File 255 - Introduced HOUSE FILE 255 BY SHIPLEY A BILL FOR An Act relating to the taxation of virtual currencies, and 1 including retroactive applicability provisions. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1618HH (3) 88 jm/jh

H.F. 255 Section 1. Section 422.3, Code 2019, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 7. “Virtual currency” means a type of 3 unregulated, digital money, which is issued and usually 4 controlled by the developers of the currency, and used and 5 accepted as a medium of exchange, but does not have legal 6 tender status as recognized by the United States. 7 Sec. 2. Section 422.7, Code 2019, is amended by adding the 8 following new subsection: 9 NEW SUBSECTION . 60. Subtract, to the extent included, a 10 gain from the sale of a virtual currency. Add, to the extent 11 taken, a loss from such a sale. 12 Sec. 3. Section 422.35, Code 2019, is amended by adding the 13 following new subsection: 14 NEW SUBSECTION . 26. Subtract, to the extent included, a 15 gain from the sale of a virtual currency. Add, to the extent 16 taken, a loss from such a sale. 17 Sec. 4. Section 423.3, Code 2019, is amended by adding the 18 following new subsection: 19 NEW SUBSECTION . 107. The sales price from sales of tangible 20 personal property, services, and specified digital products to 21 the extent the sales price was paid in a virtual currency as 22 defined in section 422.3. 23 Sec. 5. Section 423.14A, subsection 1, paragraph b, 24 subparagraph (1), subparagraph division (b), subparagraph 25 subdivision (v), Code 2019, is amended by striking the 26 subparagraph subdivision. 27 Sec. 6. Section 450.4, Code 2019, is amended by adding the 28 following new subsection: 29 NEW SUBSECTION . 10. On the value of virtual currency as 30 defined in section 422.3. 31 Sec. 7. RETROACTIVE APPLICABILITY. This Act applies 32 retroactively to January 1, 2019, for tax years beginning on 33 or after that date. 34 EXPLANATION 35 -1- LSB 1618HH (3) 88 jm/jh 1/ 2

H.F. 255 The inclusion of this explanation does not constitute agreement with 1 the explanation’s substance by the members of the general assembly. 2 This bill relates to the taxation of virtual currencies. The 3 bill defines “virtual currency” to mean a type of unregulated, 4 digital money, which is issued and usually controlled by its 5 developers, and used and accepted as a medium of exchange, but 6 does not have legal tender status as recognized by the United 7 States. 8 The bill exempts virtual currencies from individual, 9 corporate, franchise, sales and use, and inheritance taxes. 10 The bill strikes a reference to “virtual currency” in Code 11 section 423.14A(1)(b)(1)(b)(v) relating to the responsibility 12 of a “marketplace facilitator” to collect sales tax when 13 purchasers of tangible personal property, services, or digital 14 products use virtual currency. 15 The bill applies retroactively to January 1, 2019, for tax 16 years beginning on or after that date. 17 -2- LSB 1618HH (3) 88 jm/jh 2/ 2