Senate File 182 - Introduced SENATE FILE 182 BY ZAUN A BILL FOR An Act relating to state taxes by eliminating the individual 1 income tax, increasing the sales and use tax rates, making 2 conforming changes, and including effective date and 3 applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1658XS (9) 88 jm/jh
S.F. 182 DIVISION I 1 REPEAL OF THE INDIVIDUAL INCOME TAX 2 Section 1. Section 8.57E, subsection 2, Code 2019, is 3 amended to read as follows: 4 2. Moneys in the taxpayer relief fund shall only be used 5 pursuant to appropriations or transfers made by the general 6 assembly for tax relief , including but not limited to increases 7 in the general retirement income exclusion under section 422.7, 8 subsection 31 , or reductions in income tax rates . 9 Sec. 2. Section 12D.9, subsection 2, Code 2019, is amended 10 by striking the subsection. 11 Sec. 3. Section 12I.8, subsection 2, Code 2019, is amended 12 by striking the subsection. 13 Sec. 4. Section 12I.10, subsection 2, Code 2019, is amended 14 by striking the subsection. 15 Sec. 5. Section 15.293A, subsection 1, paragraph a, Code 16 2019, is amended to read as follows: 17 a. A redevelopment tax credit shall be allowed against 18 the taxes imposed in chapter 422, divisions II, III , and V , 19 and in chapter 432 , and against the moneys and credits tax 20 imposed in section 533.329 , for a portion of a taxpayer’s 21 equity investment, as provided in subsection 3 , in a qualifying 22 redevelopment project. 23 Sec. 6. Section 15.293A, subsection 1, paragraph b, Code 24 2019, is amended by striking the paragraph. 25 Sec. 7. Section 15.293A, subsection 2, paragraphs c and f, 26 Code 2019, are amended to read as follows: 27 c. The tax credit certificate, unless rescinded by the 28 authority, shall be accepted by the department of revenue as 29 payment for taxes imposed pursuant to chapter 422, divisions 30 II, III , and V , and in chapter 432 , and for the moneys and 31 credits tax imposed in section 533.329 , subject to any 32 conditions or restrictions placed by the authority upon 33 the face of the tax credit certificate and subject to the 34 limitations of this section . 35 -1- LSB 1658XS (9) 88 jm/jh 1/ 48
S.F. 182 f. A tax credit shall not be claimed by a transferee 1 under this section until a replacement tax credit certificate 2 identifying the transferee as the proper holder has been 3 issued. The transferee may use the amount of the tax credit 4 transferred against the taxes imposed in chapter 422, divisions 5 II, III , and V , and in chapter 432 , and against the moneys and 6 credits tax imposed in section 533.329 , for any tax year the 7 original transferor could have claimed the tax credit. Any 8 consideration received for the transfer of the tax credit shall 9 not be included as income under chapter 422, divisions II, III , 10 and V . Any consideration paid for the transfer of the tax 11 credit shall not be deducted from income under chapter 422, 12 divisions II, III , and V . 13 Sec. 8. Section 15.293A, subsection 4, Code 2019, is amended 14 to read as follows: 15 4. For purposes of individual and corporate income taxes and 16 the franchise tax, the increase in the basis of the redeveloped 17 property that would otherwise result from the qualified 18 redevelopment costs shall be reduced by the amount of the 19 credit computed under this part. 20 Sec. 9. Section 15.319, subsection 2, Code 2019, is amended 21 to read as follows: 22 2. The tax credit shall be allowed against taxes imposed 23 under chapter 422, division II or III . 24 Sec. 10. Section 15.319, subsection 4, Code 2019, is amended 25 by striking the subsection. 26 Sec. 11. Section 15.319, subsection 6, paragraph c, Code 27 2019, is amended to read as follows: 28 c. The tax credit certificate, unless rescinded by the 29 authority, shall be accepted by the department of revenue as 30 payment for taxes imposed pursuant to chapter 422, divisions 31 II and division III , subject to any conditions or restrictions 32 placed by the authority upon the face of the tax credit 33 certificate and subject to the limitations of the program. 34 Sec. 12. Section 15.333, subsection 2, Code 2019, is amended 35 -2- LSB 1658XS (9) 88 jm/jh 2/ 48
S.F. 182 to read as follows: 1 2. An eligible business may claim a tax credit equal to a 2 percentage of the new investment directly related to new jobs 3 created or retained by the project. The tax credit shall be 4 amortized equally over five calendar years. The tax credit 5 shall be allowed against taxes imposed under chapter 422, 6 division II, III , or V , and against the moneys and credits tax 7 imposed in section 533.329 . If the business is a partnership, 8 S corporation, limited liability company, cooperative organized 9 under chapter 501 and filing as a partnership for federal tax 10 purposes, or estate or trust electing to have the income taxed 11 directly to the individual, an individual may claim the tax 12 credit allowed. The amount claimed by the individual shall 13 be based upon the pro rata share of the individual’s earnings 14 of the partnership, S corporation, limited liability company, 15 cooperative organized under chapter 501 and filing as a 16 partnership for federal tax purposes, or estate or trust. The 17 percentage shall be determined as provided in section 15.335A . 18 Any tax credit in excess of the tax liability for the tax year 19 may be credited to the tax liability for the following seven 20 years or until depleted, whichever occurs first. 21 Sec. 13. Section 15.335, subsection 5, Code 2019, is amended 22 to read as follows: 23 5. The credit allowed in this section is in addition to 24 the credit authorized in section 422.10 and section 422.33, 25 subsection 5 . However, if the alternative credit computation 26 method is used in section 422.10 or section 422.33, subsection 27 5 , the credit allowed in this section shall also be computed 28 using that method. 29 Sec. 14. Section 15.335, subsection 6, Code 2019, is amended 30 by striking the subsection. 31 Sec. 15. Section 15.355, subsection 3, paragraph b, Code 32 2019, is amended to read as follows: 33 b. The tax credit shall be allowed against the taxes imposed 34 in chapter 422, divisions II, III , and V , and in chapter 432 , 35 -3- LSB 1658XS (9) 88 jm/jh 3/ 48
S.F. 182 and against the moneys and credits tax imposed in section 1 533.329 . 2 Sec. 16. Section 15.355, subsection 3, paragraph c, Code 3 2019, is amended by striking the paragraph. 4 Sec. 17. Section 15.355, subsection 3, paragraph e, 5 subparagraphs (3) and (6), Code 2019, are amended to read as 6 follows: 7 (3) The tax credit certificate, unless rescinded by the 8 authority, shall be accepted by the department of revenue as 9 payment for taxes imposed pursuant to chapter 422, divisions 10 II, III , and V , and in chapter 432 , and for the moneys and 11 credits tax imposed in section 533.329 , subject to any 12 conditions or restrictions placed by the authority upon 13 the face of the tax credit certificate and subject to the 14 limitations of this program. 15 (6) A tax credit shall not be claimed by a transferee 16 under this section until a replacement tax credit certificate 17 identifying the transferee as the proper holder has been 18 issued. The transferee may use the amount of the tax credit 19 transferred against the taxes imposed in chapter 422, divisions 20 II, III , and V , and in chapter 432 , and against the moneys and 21 credits tax imposed in section 533.329 , for any tax year the 22 original transferor could have claimed the tax credit. Any 23 consideration received for the transfer of the tax credit shall 24 not be included as income under chapter 422, divisions II, III , 25 and V. Any consideration paid for the transfer of the tax 26 credit shall not be deducted from income under chapter 422, 27 divisions II, III , and V . 28 Sec. 18. Section 15.355, subsection 3, paragraph f, Code 29 2019, is amended to read as follows: 30 f. For purposes of the individual and corporate income 31 taxes and the franchise tax, the increase in the basis of the 32 property that would otherwise result from the qualifying new 33 investment shall be reduced by the amount of the tax credit 34 computed under this subsection . 35 -4- LSB 1658XS (9) 88 jm/jh 4/ 48
S.F. 182 Sec. 19. Section 15A.7, subsection 1, Code 2019, is amended 1 to read as follows: 2 1. That the project shall be administered in the same 3 manner as a project under chapter 260E and that a supplemental 4 new jobs credit from withholding in an amount equal to one 5 and one-half percent of the gross wages paid by the employer 6 pursuant to section 422.16 , Code 2019, is authorized to fund 7 the program services for the additional project. 8 Sec. 20. Section 15E.43, subsection 1, Code 2019, is amended 9 to read as follows: 10 1. a. For tax years beginning on or after January 1, 2015, 11 a tax credit shall be allowed against the taxes imposed in 12 chapter 422, divisions II, III , and V , and in chapter 432 , and 13 against the moneys and credits tax imposed in section 533.329 , 14 for a portion of a taxpayer’s equity investment, as provided in 15 subsection 2 , in a qualifying business. 16 b. An individual may claim a tax credit under this section 17 of a partnership, limited liability company, S corporation, 18 estate, or trust electing to have income taxed directly to 19 the individual. The amount claimed by the individual shall 20 be based upon the pro rata share of the individual’s earnings 21 from the partnership, limited liability company, S corporation, 22 estate, or trust. 23 c. b. A tax credit shall be allowed only for an investment 24 made in the form of cash to purchase equity in a qualifying 25 business. 26 d. c. For a tax credit claimed against the taxes imposed 27 in chapter 422, division II , any tax credit in excess of the 28 tax liability is refundable. In lieu of claiming a refund, 29 the taxpayer may elect to have the overpayment shown on 30 the taxpayer’s final, completed return credited to the tax 31 liability for the following tax year. For a tax credit claimed 32 against the taxes imposed in chapter 422, divisions III and 33 V , and in chapter 432 , and against the moneys and credits tax 34 imposed in section 533.329 , any Any tax credit in excess of the 35 -5- LSB 1658XS (9) 88 jm/jh 5/ 48
S.F. 182 taxpayer’s liability for the tax year may be credited to the 1 tax liability for the following three years or until depleted, 2 whichever is earlier. A tax credit shall not be carried back 3 to a tax year prior to the tax year in which the taxpayer 4 redeems the tax credit. 5 Sec. 21. Section 15E.43, subsection 2, paragraph b, Code 6 2019, is amended by striking the paragraph. 7 Sec. 22. Section 15E.44, subsection 4, Code 2019, is amended 8 to read as follows: 9 4. After verifying the eligibility of a qualifying 10 business, the authority shall issue a tax credit certificate 11 to be included with the equity investor’s tax return. The tax 12 credit certificate shall contain the taxpayer’s name, address, 13 tax identification number, the amount of credit, the name of 14 the qualifying business, and other information required by the 15 department of revenue. The tax credit certificate, unless 16 rescinded by the authority, shall be accepted by the department 17 of revenue as payment for taxes imposed pursuant to chapter 18 422, divisions II, III , and V , and in chapter 432 , and for the 19 moneys and credits tax imposed in section 533.329 , subject to 20 any conditions or restrictions placed by the authority upon 21 the face of the tax credit certificate and subject to the 22 limitations of section 15E.43 . 23 Sec. 23. Section 15E.52, subsection 2, paragraph a, Code 24 2019, is amended to read as follows: 25 a. A tax credit shall be allowed against the taxes imposed 26 in chapter 422, divisions II, III , and V , and in chapter 432 , 27 and against the moneys and credits tax imposed in section 28 533.329 , for a portion of a taxpayer’s equity investment in the 29 form of cash in an innovation fund. 30 Sec. 24. Section 15E.52, subsection 2, paragraph b, Code 31 2019, is amended by striking the paragraph. 32 Sec. 25. Section 15E.52, subsection 13, Code 2019, is 33 amended to read as follows: 34 13. The transferee may use the amount of the tax credit 35 -6- LSB 1658XS (9) 88 jm/jh 6/ 48
S.F. 182 transferred against the taxes imposed in chapter 422, divisions 1 II, III , and V , and in chapter 432 , and against the moneys and 2 credits tax imposed in section 533.329 , for any tax year the 3 original transferor could have claimed the tax credit. Any 4 consideration received for the transfer of the tax credit shall 5 not be included as income under chapter 422, divisions II, III , 6 and V . Any consideration paid for the transfer of the tax 7 credit shall not be deducted from income under chapter 422, 8 divisions II, III , and V . 9 Sec. 26. Section 15E.62, subsection 8, Code 2019, is amended 10 to read as follows: 11 8. “Tax credit” means a contingent tax credit issued 12 pursuant to section 15E.66 that is available against tax 13 liabilities imposed by chapter 422, divisions II, III , and 14 V , and by chapter 432 and against the moneys and credits tax 15 imposed by section 533.329 . 16 Sec. 27. Section 15E.66, subsection 1, Code 2019, is amended 17 to read as follows: 18 1. The board may issue certificates and related tax credits 19 to designated investors which, if redeemed for the maximum 20 possible amount, shall not exceed a total aggregate of sixty 21 million dollars of tax credits. The certificates shall be 22 issued contemporaneously with a commitment to invest in the 23 Iowa fund of funds by a designated investor. A certificate 24 issued by the board shall have a specific maturity date or 25 dates designated by the board and shall be redeemable only in 26 accordance with the contingencies reflected on the certificate 27 or incorporated therein by reference. A certificate and the 28 related tax credit shall be transferable by the designated 29 investor. A tax credit shall not be claimed or redeemed except 30 by a designated investor or transferee in accordance with the 31 terms of a certificate from the board. A tax credit shall not 32 be claimed for a tax year that begins earlier than the maturity 33 date or dates stated on the certificate. An individual may 34 claim the credit of a partnership, limited liability company, 35 -7- LSB 1658XS (9) 88 jm/jh 7/ 48
S.F. 182 S corporation, estate, or trust electing to have the income 1 taxed directly to the individual. The amount claimed by the 2 individual shall be based upon the pro rata share of the 3 individual’s earnings from the partnership, limited liability 4 company, S corporation, estate, or trust. Any tax credit in 5 excess of the taxpayer’s tax liability for the tax year may be 6 credited to the tax liability for the following seven years, or 7 until depleted, whichever is earlier. 8 Sec. 28. Section 15E.305, subsection 1, Code 2019, is 9 amended to read as follows: 10 1. For tax years beginning on or after January 1, 2003, 11 a tax credit shall be allowed against the taxes imposed in 12 chapter 422, divisions II, III , and V , and in chapter 432 , and 13 against the moneys and credits tax imposed in section 533.329 14 equal to twenty-five percent of a taxpayer’s endowment gift to 15 an endow Iowa qualified community foundation. An individual 16 may claim a tax credit under this section of a partnership, 17 limited liability company, S corporation, estate, or trust 18 electing to have income taxed directly to the individual. The 19 amount claimed by the individual shall be based upon the pro 20 rata share of the individual’s earnings from the partnership, 21 limited liability company, S corporation, estate, or trust. A 22 tax credit shall be allowed only for an endowment gift made to 23 an endow Iowa qualified community foundation for a permanent 24 endowment fund established to benefit a charitable cause in 25 this state. The amount of the endowment gift for which the 26 tax credit is claimed shall not be deductible in determining 27 taxable income for state income tax purposes. Any tax credit 28 in excess of the taxpayer’s tax liability for the tax year may 29 be credited to the tax liability for the following five years 30 or until depleted, whichever occurs first. A tax credit shall 31 not be carried back to a tax year prior to the tax year in which 32 the taxpayer claims the tax credit. 33 Sec. 29. Section 16.64, subsection 2, Code 2019, is amended 34 to read as follows: 35 -8- LSB 1658XS (9) 88 jm/jh 8/ 48
S.F. 182 2. Bonds and notes issued by the authority for purposes of 1 financing the beginning farmer loan program provided in section 2 16.75 are exempt from taxation by the state, and interest 3 earned on the bonds and notes is deductible in determining 4 net income for purposes of the state individual and corporate 5 income tax under divisions II and division III of chapter 422. 6 Sec. 30. Section 16.80, subsection 1, Code 2019, is amended 7 to read as follows: 8 1. An agricultural assets transfer tax credit is allowed 9 under this section . The tax credit is allowed against the 10 taxes imposed in chapter 422, division II , as provided in 11 section 422.11M , and in chapter 422, division III, as provided 12 in section 422.33 , to facilitate the transfer of agricultural 13 assets from a taxpayer to a beginning farmer. 14 Sec. 31. Section 16.80, subsection 3, Code 2019, is amended 15 by striking the subsection. 16 Sec. 32. Section 16.80, subsection 7, Code 2019, is amended 17 to read as follows: 18 7. A tax credit in excess of the taxpayer’s liability 19 for the tax year may be credited to the tax liability for 20 the following ten tax years or until depleted, whichever is 21 earlier. A tax credit shall not be carried back to a tax year 22 prior to the tax year in which the taxpayer redeems the tax 23 credit. A tax credit shall not be transferable to any other 24 person other than the taxpayer’s estate or trust upon the 25 taxpayer’s death. 26 Sec. 33. Section 28A.24, Code 2019, is amended to read as 27 follows: 28 28A.24 Exemption from taxation. 29 Since an authority is performing essential governmental 30 functions, an authority is not required to pay any taxes or 31 assessments of any kind or nature upon any property required 32 or used by it for its purposes, or any rates, fees, rentals, 33 receipts, or incomes at any time received by it, and the 34 bonds issued by an authority, their transfer, and the income, 35 -9- LSB 1658XS (9) 88 jm/jh 9/ 48
S.F. 182 including any profits made on the sale of the bonds, is 1 deductible in determining net income for the purposes of the 2 state individual and corporate income tax under chapter 422, 3 divisions II and division III, and shall not be taxed by any 4 political subdivision of this state. 5 Sec. 34. Section 29C.24, subsection 3, paragraph a, 6 subparagraph (3), Code 2019, is amended to read as follows: 7 (3) The imposition of income taxes under chapter 422, 8 divisions II and division III, including the requirement to 9 file tax returns under sections 422.13 through 422.15 or 10 section 422.36 , as applicable, and including the requirement 11 to withhold and remit income tax from out-of-state employees 12 under section 422.16 . In addition, the performance of disaster 13 or emergency-related work during a disaster response period 14 by an out-of-state business or out-of-state employee shall 15 not require an out-of-state business to be included in a 16 consolidated return under section 422.37 , and shall not 17 increase the amount of net income of the out-of-state business 18 allocated and apportioned to the state under section 422.8 or 19 422.33 , as applicable . 20 Sec. 35. Section 29C.24, subsection 3, paragraph b, 21 subparagraph (2), Code 2019, is amended by striking the 22 subparagraph. 23 Sec. 36. Section 35A.13, subsection 2, paragraph b, Code 24 2019, is amended to read as follows: 25 b. Moneys credited to the fund pursuant to an income tax 26 checkoff provided in chapter 422, division II , Code 2019, if 27 applicable. 28 Sec. 37. Section 85.61, subsection 6, paragraph b, Code 29 2019, is amended by striking the paragraph. 30 Sec. 38. Section 96.3, subsection 4, unnumbered paragraph 31 2, Code 2019, is amended to read as follows: 32 The maximum weekly benefit amount, if not a multiple of one 33 dollar, shall be rounded to the lower multiple of one dollar. 34 However, until such time as sixty-five percent of the statewide 35 -10- LSB 1658XS (9) 88 jm/jh 10/ 48
S.F. 182 average weekly wage exceeds one hundred ninety dollars, the 1 maximum weekly benefit amounts shall be determined using the 2 statewide average weekly wage computed on the basis of wages 3 reported for calendar year 1981. As used in this section 4 “dependent” means dependent as defined in section 422.12, 5 subsection 1 , paragraph “a” has the same meaning as provided by 6 the Internal Revenue Code , as if the individual claimant was 7 a taxpayer, except that an individual claimant’s nonworking 8 spouse shall be deemed to be a dependent under this section . 9 “Nonworking spouse” means a spouse who does not earn more than 10 one hundred twenty dollars in gross wages in one week. 11 Sec. 39. Section 99B.8, Code 2019, is amended to read as 12 follows: 13 99B.8 Tax on prizes. 14 All prizes awarded pursuant to a gambling activity under 15 this chapter are Iowa earned income and are subject to state 16 and federal income tax laws. A person conducting a game of 17 skill, game of chance, bingo, or a raffle shall deduct state 18 income taxes, pursuant to section 422.16, subsection 1 , from a 19 cash prize awarded to an individual. An amount deducted from 20 the prize for payment of a state tax shall be remitted to the 21 department of revenue on behalf of the prize winner. 22 Sec. 40. Section 99D.16, Code 2019, is amended to read as 23 follows: 24 99D.16 Withholding tax on winnings. 25 All winnings provided in section 99D.11 are Iowa earned 26 income and are subject to state and federal income tax laws. 27 An amount deducted from winnings for payment of the state tax, 28 pursuant to section 422.16, subsection 1 , shall be remitted to 29 the department of revenue on behalf of the individual who won 30 the wager. 31 Sec. 41. Section 99F.18, Code 2019, is amended to read as 32 follows: 33 99F.18 Tax on winnings. 34 All winnings derived from slot machines operated pursuant to 35 -11- LSB 1658XS (9) 88 jm/jh 11/ 48
S.F. 182 this chapter are Iowa earned income and are subject to state 1 and federal income tax laws. An amount deducted from winnings 2 for payment of the state tax, pursuant to section 422.16, 3 subsection 1 , shall be remitted to the department of revenue 4 on behalf of the winner. 5 Sec. 42. Section 99G.31, subsection 2, paragraph i, Code 6 2019, is amended to read as follows: 7 i. The proceeds of any lottery prize shall be subject to 8 state and federal income tax laws. An amount deducted from the 9 prize for payment of a state tax, pursuant to section 422.16, 10 subsection 1 , shall be transferred by the authority to the 11 department of revenue on behalf of the prize winner. 12 Sec. 43. Section 100B.13, subsection 2, paragraph a, Code 13 2019, is amended to read as follows: 14 a. Moneys credited to the fund pursuant to an income tax 15 checkoff provided in chapter 422, division II , Code 2019, if 16 applicable. 17 Sec. 44. Section 173.22, subsection 2, Code 2019, is amended 18 to read as follows: 19 2. A foundation fund is created within the state treasury 20 composed of moneys appropriated or available to and obtained or 21 accepted by the foundation. The foundation fund shall include 22 moneys credited to the fund as provided in section 422.12D . 23 Sec. 45. Section 190B.103, Code 2019, is amended to read as 24 follows: 25 190B.103 From farm to food donation tax credit. 26 A from farm to food donation tax credit is allowed against 27 the taxes imposed in chapter 422, divisions II and division 28 III, as provided in this chapter . 29 Sec. 46. Section 216B.3, subsection 15, Code 2019, is 30 amended to read as follows: 31 15. Develop a plan to provide telephone yellow pages 32 information without charge to persons declared to be blind 33 under the standards in section 422.12, subsection 2 , paragraph 34 “a” , subparagraph (5) , Code 2019 . The department may apply for 35 -12- LSB 1658XS (9) 88 jm/jh 12/ 48
S.F. 182 federal funds to support the service. The program shall be 1 limited in scope by the availability of funds. 2 Sec. 47. Section 217.39, Code 2019, is amended to read as 3 follows: 4 217.39 Persecuted victims of World War II —— reparations —— 5 heirs. 6 Notwithstanding any other law of this state, payments paid 7 to and income from lost property of a victim of persecution for 8 racial, ethnic, or religious reasons by Nazi Germany or any 9 other Axis regime or as an heir of such victim which is exempt 10 from state income tax as provided in section 422.7, subsection 11 35 , Code 2019, shall not be considered as income or an asset 12 for determining the eligibility for state or local government 13 benefit or entitlement programs. The proceeds are not subject 14 to recoupment for the receipt of governmental benefits or 15 entitlements, and liens, except liens for child support, are 16 not enforceable against these sums for any reason. 17 Sec. 48. Section 235A.2, subsection 1, Code 2019, is amended 18 to read as follows: 19 1. A child abuse prevention program fund is created in 20 the state treasury under the control of the department of 21 human services. The fund is composed of moneys appropriated 22 or available to and obtained or accepted by the treasurer of 23 state for deposit in the fund. The fund shall include moneys 24 transferred to the fund pursuant to an income tax checkoff 25 provided in chapter 422, division II , Code 2019 , if applicable. 26 All interest earned on moneys in the fund shall be credited to 27 and remain in the fund. Section 8.33 does not apply to moneys 28 in the fund. 29 Sec. 49. Section 257.19, subsection 2, Code 2019, is amended 30 to read as follows: 31 2. Certification of a board’s intent to participate for 32 a budget year, the method of funding, and the amount to be 33 raised shall be made to the department of management not later 34 than April 15 of the base year. Funding for the instructional 35 -13- LSB 1658XS (9) 88 jm/jh 13/ 48
S.F. 182 support program shall be obtained from instructional support 1 state aid and from local funding using either an instructional 2 support property tax or a combination of an instructional 3 support property tax and an instructional support income 4 surtax . 5 Sec. 50. Section 257.19, subsection 3, Code 2019, is amended 6 by striking the subsection. 7 Sec. 51. Section 257.21, Code 2019, is amended to read as 8 follows: 9 257.21 Computation of instructional support amount. 10 1. The department of management shall establish the amount 11 of instructional support property tax to be levied and the 12 amount of instructional support income surtax to be imposed 13 by a district in accordance with the decision of the board 14 under section 257.19 for each school year for which the 15 instructional support program is authorized. The department 16 of management shall determine these amounts based upon the 17 most recent figures available for the district’s valuation of 18 taxable property , individual state income tax paid, and budget 19 enrollment in the district, and shall certify to the district’s 20 county auditor the amount of instructional support property 21 tax , and to the director of revenue the amount of instructional 22 support income surtax to be imposed if an instructional support 23 income surtax is to be imposed levied . 24 2. The instructional support income surtax shall be imposed 25 on the state individual income tax for the calendar year during 26 which the school’s budget year begins, or for a taxpayer’s 27 fiscal year ending during the second half of that calendar year 28 and after the date the board adopts a resolution to participate 29 in the program or the first half of the succeeding calendar 30 year, and shall be imposed on all individuals residing in the 31 school district on the last day of the applicable tax year. 32 As used in this section , “state individual income tax” means 33 the taxes computed under section 422.5 , less the amounts of 34 nonrefundable credits allowed under chapter 422, division II . 35 -14- LSB 1658XS (9) 88 jm/jh 14/ 48
S.F. 182 Sec. 52. Section 257.29, subsections 3 and 4, Code 2019, are 1 amended to read as follows: 2 3. The educational improvement program shall be funded 3 by either an educational improvement property tax or by a 4 combination of an educational improvement property tax and an 5 educational improvement income surtax . The method of raising 6 the educational improvement moneys shall be determined by the 7 board. Subject to the limitation in section 298.14 , if the 8 board uses a combination of an educational improvement property 9 tax and an educational improvement income surtax, the board 10 shall determine the percent of income surtax to be imposed, 11 expressed as full percentage points, not to exceed twenty 12 percent. 13 4. The department of management shall establish the amount 14 of the educational improvement property tax to be levied or 15 the amount of the combination of the educational improvement 16 property tax to be levied and the amount of the school district 17 income surtax to be imposed for each school year that the 18 educational improvement amount is authorized. The educational 19 improvement property tax and income surtax, if an income 20 surtax is imposed, shall be levied and imposed , collected, 21 and paid to the school district in the manner provided for 22 the instructional support program in sections section 257.21 23 through 257.26 . Moneys received by a school district under the 24 educational improvement program are miscellaneous income. 25 Sec. 53. Section 260E.2, subsection 6, Code 2019, is amended 26 to read as follows: 27 6. “Employee” means the person employed in a new job. 28 “Employee” does not include a person who would not be subject 29 to the withholding of Iowa income pursuant to a reciprocal 30 agreement under section 422.8, subsection 5 , Code 2019 . 31 Sec. 54. Section 260E.5, subsections 2 and 6, Code 2019, are 32 amended to read as follows: 33 2. An amount equal to one and one-half percent of the gross 34 wages paid by the employer to each employee participating in a 35 -15- LSB 1658XS (9) 88 jm/jh 15/ 48
S.F. 182 project shall be credited from the payment made by an employer 1 pursuant to section 422.16 , Code 2019 . If the amount of the 2 withholding by the employer is less than one and one-half 3 percent of the gross wages paid to the employees covered by the 4 agreement, then the employer shall receive a credit against 5 other withholding taxes due by the employer. The employer 6 shall remit the amount of the credit quarterly in the same 7 manner as withholding payments are reported to the department 8 of revenue, to the community college to be allocated to and 9 when collected paid into a special fund of the community 10 college to pay the principal of and interest on certificates 11 issued by the community college to finance or refinance, in 12 whole or in part, the project. When the principal and interest 13 on the certificates have been paid, the employer credits shall 14 cease and any money received after the certificates have 15 been paid shall be remitted to the treasurer of state to be 16 deposited in the general fund of the state. 17 6. An employee participating in a project will receive full 18 credit for the amount withheld as provided in section 422.16 , 19 Code 2019 . 20 Sec. 55. Section 260G.4A, subsections 2 and 5, Code 2019, 21 are amended to read as follows: 22 2. Eligibility for program job credits shall be based on 23 certification of program job positions and program job wages 24 by the employer at the time established in the agreement. An 25 amount up to ten percent of the gross program job wage as 26 certified by the employer in the agreement shall be credited 27 from the total payment made by an employer pursuant to section 28 422.16 , Code 2019 . The employer shall receive a credit against 29 all withholding taxes due by the employer regardless of whether 30 or not the withholding from the employer of current program 31 job wages is less than ten percent. The employer shall remit 32 the amount of the credit quarterly in the same manner as 33 withholding payments are reported to the department of revenue, 34 to the community college to be allocated to and when collected 35 -16- LSB 1658XS (9) 88 jm/jh 16/ 48
S.F. 182 paid into a special fund of the community college to pay, in 1 part, the program costs. When the program costs have been 2 paid, the employer credits shall cease and any moneys received 3 after the program costs have been paid shall be remitted to the 4 treasurer of state to be deposited in the general fund of the 5 state. 6 5. Employees from an employer participating in an agreement 7 shall receive full credit for the amount withheld as provided 8 in section 422.16 , Code 2019 . 9 Sec. 56. Section 279.63, subsection 2, paragraph a, Code 10 2019, is amended to read as follows: 11 a. All property tax levies , income surtaxes, and local 12 option sales taxes in place in the school district, listed by 13 type of levy, rate, amount, duration, and notification of the 14 maximum rate and amount limitations permitted by statute. 15 Sec. 57. Section 298.2, subsection 1, paragraph a, Code 16 2019, is amended to read as follows: 17 a. A physical plant and equipment levy of not exceeding 18 one dollar and sixty-seven cents per thousand dollars of 19 assessed valuation in the district is established except as 20 otherwise provided in this subsection . The physical plant 21 and equipment levy consists of the regular physical plant 22 and equipment levy of not exceeding thirty-three cents per 23 thousand dollars of assessed valuation in the district and 24 a voter-approved physical plant and equipment levy of not 25 exceeding one dollar and thirty-four cents per thousand 26 dollars of assessed valuation in the district. However, the 27 voter-approved physical plant and equipment levy may consist 28 of a combination of a physical plant and equipment property 29 tax levy and a physical plant and equipment income surtax as 30 provided in subsection 4 with the maximum amount levied and 31 imposed limited to an amount that could be raised by a one 32 dollar and thirty-four cent property tax levy. 33 Sec. 58. Section 298.2, subsection 4, Code 2019, is amended 34 to read as follows: 35 -17- LSB 1658XS (9) 88 jm/jh 17/ 48
S.F. 182 4. a. The board may on its own motion, and upon the 1 written request of not less than one hundred eligible electors 2 or thirty percent of the number of eligible electors voting 3 at the last regular school election, whichever is greater, 4 shall, direct the county commissioner of elections to provide 5 for submitting the proposition of levying the voter-approved 6 physical plant and equipment levy for a period of time 7 authorized by the voters at the election, not to exceed ten 8 years. The election shall be held on a date specified in 9 section 39.2, subsection 4 , paragraph “c” . The proposition is 10 adopted if a majority of those voting on the proposition at the 11 election approves it. The voter-approved physical plant and 12 equipment levy shall be funded either by a physical plant and 13 equipment property tax or by a combination of a physical plant 14 and equipment property tax and a physical plant and equipment 15 income surtax, as determined by the board . However, if the 16 board intends to enter into a rental or lease arrangement under 17 section 279.26 , or intends to enter into a loan agreement under 18 section 297.36 , only a property tax shall be levied for those 19 purposes. Subject to the limitations of section 298.14 , if 20 the board uses a combination of a physical plant and equipment 21 property tax and a physical plant and equipment surtax, for 22 each fiscal year the board shall determine the percent of 23 income surtax to be imposed expressed as full percentage 24 points, not to exceed twenty percent. 25 b. If a combination of a property tax and income surtax 26 is used, by April 15 of the previous school year, the board 27 shall certify the percent of the income surtax to be imposed 28 and the amount to be raised to the department of management 29 and the department of management shall establish the rate of 30 the property tax and income surtax for the school year. The 31 physical plant and equipment property tax and income surtax 32 shall be levied or imposed , collected, and paid to the school 33 district in the manner provided for the instructional support 34 program in sections section 257.21 through 257.26 . 35 -18- LSB 1658XS (9) 88 jm/jh 18/ 48
S.F. 182 Sec. 59. Section 403.19A, subsection 3, paragraphs b and i, 1 Code 2019, are amended to read as follows: 2 b. An amount equal to three percent of the gross wages paid 3 by an employer to each employee under a withholding agreement 4 shall be credited from the payment made by the employer 5 pursuant to section 422.16 , Code 2019 . If the amount of the 6 withholding by the employer is less than three percent of the 7 gross wages paid to the employees covered by the withholding 8 agreement, the employer shall receive a credit against other 9 withholding taxes due by the employer or may carry the credit 10 forward for up to ten years or until depleted, whichever is 11 the earlier. The employer shall remit the amount of the 12 credit quarterly, in the same manner as withholding payments 13 are reported to the department of revenue, to the pilot 14 project city to be allocated to and when collected paid into 15 a designated withholding project fund for the project. All 16 amounts so deposited shall be used or pledged by the pilot 17 project city for a project related to the employer pursuant to 18 the withholding agreement. 19 i. An employee whose wages are subject to a withholding 20 agreement shall receive full credit for the amount withheld as 21 provided in section 422.16 , Code 2019 . 22 Sec. 60. Section 404A.2, subsection 2, Code 2019, is amended 23 to read as follows: 24 2. The tax credit shall be allowed against the taxes imposed 25 in chapter 422, divisions II, III , and V , and in chapter 26 432 . An individual may claim a tax credit under this section 27 of a partnership, limited liability company, S corporation, 28 estate, or trust electing to have income taxed directly to the 29 individual. For an individual claiming a tax credit of an 30 estate or trust, the amount claimed by the individual shall be 31 based upon the pro rata share of the individual’s earnings from 32 the estate or trust. For an individual claiming a tax credit 33 of a partnership, limited liability company, or S corporation, 34 the amount claimed by the partner, member, or shareholder, 35 -19- LSB 1658XS (9) 88 jm/jh 19/ 48
S.F. 182 respectively, shall be based upon the amounts designated by 1 the eligible partnership, S corporation, or limited liability 2 company, as applicable. 3 Sec. 61. Section 404A.2, subsection 3, paragraph c, Code 4 2019, is amended to read as follows: 5 c. A tax credit shall not be claimed by a transferee 6 under this section until a replacement tax credit certificate 7 identifying the transferee as the proper holder has been 8 issued. The transferee may use the amount of the tax credit 9 transferred against the taxes imposed in chapter 422, divisions 10 II, III , and V , and in chapter 432 , for any tax year the 11 original transferor could have claimed the tax credit. Any 12 consideration received for the transfer of the tax credit shall 13 not be included as income under chapter 422, divisions II, III , 14 and V . Any consideration paid for the transfer of the tax 15 credit shall not be deducted from income under chapter 422, 16 divisions II, III , and V . 17 Sec. 62. Section 404A.2, subsection 5, paragraph c, Code 18 2019, is amended to read as follows: 19 c. The tax credit certificate, unless rescinded by the 20 authority, shall be accepted by the department of revenue 21 as payment for taxes imposed in chapter 422, divisions II, 22 III , and V , and in chapter 432 , subject to any conditions 23 or restrictions placed by the authority or the department of 24 revenue upon the face of the tax credit certificate and subject 25 to the limitations of this program. 26 Sec. 63. Section 404A.2, subsection 6, Code 2019, is amended 27 to read as follows: 28 6. For purposes of the individual and corporate income taxes 29 tax and the franchise tax, the increase in the basis of the 30 rehabilitated property that would otherwise result from the 31 qualified rehabilitation expenditures shall be reduced by the 32 amount of the credit computed under this section . 33 Sec. 64. Section 421.60, subsection 2, paragraph c, 34 subparagraph (1), Code 2019, is amended to read as follows: 35 -20- LSB 1658XS (9) 88 jm/jh 20/ 48
S.F. 182 (1) If the notice of assessment or denial of a claim for 1 refund relates to a tax return filed pursuant to section 422.14 2 or chapter 450 by the taxpayer which designates an individual 3 as an authorized representative of the taxpayer with respect to 4 that return, or if a power of attorney has been filed with the 5 department by the taxpayer which designates an individual as 6 an authorized representative of the taxpayer with respect to 7 any tax that is included in the notice of assessment or denial 8 of a claim for refund, a copy of the notice together with any 9 additional information required to be sent to the taxpayer 10 shall be sent to the authorized representative as well. 11 Sec. 65. Section 422.1, subsection 2, Code 2019, is amended 12 to read as follows: 13 2. Division II Personal net income tax Provisions 14 related to the business tax on corporations . 15 Sec. 66. Section 422.11L, subsection 1, unnumbered 16 paragraph 1, Code 2019, is amended to read as follows: 17 The taxes imposed under this division , less the credits 18 allowed under section 422.12 , III shall be reduced by a solar 19 energy system tax credit equal to the sum of the following: 20 Sec. 67. Section 422.11L, subsection 3, paragraph a, Code 21 2019, is amended by striking the paragraph. 22 Sec. 68. Section 422.11N, subsection 3, unnumbered 23 paragraph 1, Code 2019, is amended to read as follows: 24 The taxes imposed under this division , less the credits 25 allowed under section 422.12 , III shall be reduced by an 26 ethanol promotion tax credit for each tax year that the 27 taxpayer is eligible to claim the tax credit under this 28 section . In order to be eligible, all of the following must 29 apply: 30 Sec. 69. Section 422.11N, subsection 9, Code 2019, is 31 amended by striking the subsection. 32 Sec. 70. Section 422.11O, subsection 2, unnumbered 33 paragraph 1, Code 2019, is amended to read as follows: 34 The taxes imposed under this division , less the credits 35 -21- LSB 1658XS (9) 88 jm/jh 21/ 48
S.F. 182 allowed under section 422.12 , III shall be reduced by an 1 E-85 gasoline promotion tax credit for each tax year that 2 the taxpayer is eligible to claim the tax credit under this 3 subsection . 4 Sec. 71. Section 422.11O, subsection 7, Code 2019, is 5 amended by striking the subsection. 6 Sec. 72. Section 422.11P, subsection 3, unnumbered 7 paragraph 1, Code 2019, is amended to read as follows: 8 The taxes imposed under this division , less the credits 9 allowed under section 422.12 , III shall be reduced by a 10 biodiesel blended fuel tax credit for each tax year that 11 the taxpayer is eligible to claim a tax credit under this 12 subsection . 13 Sec. 73. Section 422.11P, subsection 7, Code 2019, is 14 amended by striking the subsection. 15 Sec. 74. Section 422.11S, subsection 1, Code 2019, is 16 amended to read as follows: 17 1. The taxes imposed under this division , less the credits 18 allowed under section 422.12 , III shall be reduced by a 19 school tuition organization tax credit equal to sixty-five 20 percent of the amount of the voluntary cash or noncash 21 contributions made by the taxpayer during the tax year to a 22 school tuition organization, subject to the total dollar value 23 of the organization’s tax credit certificates as computed in 24 subsection 8 . The tax credit shall be claimed by use of a tax 25 credit certificate as provided in subsection 7 . 26 Sec. 75. Section 422.11S, subsections 4 and 5, Code 2019, 27 are amended by striking the subsections. 28 Sec. 76. Section 422.11S, subsection 8, paragraph a, 29 subparagraph (2), Code 2019, is amended to read as follows: 30 (2) “Total approved tax credits” means for the tax year 31 beginning in the 2006 calendar year, two million five hundred 32 thousand dollars, for the tax year beginning in the 2007 33 calendar year, five million dollars, for tax years beginning 34 on or after January 1, 2008, but before January 1, 2012, seven 35 -22- LSB 1658XS (9) 88 jm/jh 22/ 48
S.F. 182 million five hundred thousand dollars, for tax years beginning 1 on or after January 1, 2012, but before January 1, 2014, eight 2 million seven hundred fifty thousand dollars, and for tax years 3 beginning on or after January 1, 2014, but before January 1, 4 2019, twelve million dollars, and for tax years beginning on or 5 after January 1, 2019, thirteen million dollars. 6 Sec. 77. Section 422.11Y, subsection 3, unnumbered 7 paragraph 1, Code 2019, is amended to read as follows: 8 The taxes imposed under this division , less the credits 9 allowed under section 422.12 , III shall be reduced by the 10 amount of the E-15 plus gasoline promotion tax credit for each 11 tax year that the taxpayer is eligible to claim a tax credit 12 under this subsection . 13 Sec. 78. Section 422.11Y, subsection 8, Code 2019, is 14 amended by striking the subsection. 15 Sec. 79. Section 422.15, subsections 2 and 3, Code 2019, are 16 amended by striking the subsections. 17 Sec. 80. Section 422.15, subsection 4, Code 2019, is amended 18 to read as follows: 19 4. Notwithstanding subsections subsection 1, 2, and 3, or 20 any other provision of this chapter , withholding of income 21 tax and any reporting requirement shall not be imposed upon 22 a person, corporation, or withholding agent or any payor of 23 deferred compensation, pensions, or annuities with regard to 24 such payments made to a nonresident of the state. 25 Sec. 81. Section 422.21, Code 2019, is amended by striking 26 the section and inserting in lieu thereof the following: 27 422.21 Form and time of return. 28 Returns shall be in the form the director prescribes, and 29 shall be filed with the department on or before the last day 30 of the fourth month after the expiration of the tax year. 31 However, cooperative associations as defined in section 6072(d) 32 of the Internal Revenue Code shall file their returns on or 33 before the fifteenth day of the ninth month following the 34 close of the taxable year and nonprofit corporations subject 35 -23- LSB 1658XS (9) 88 jm/jh 23/ 48
S.F. 182 to the unrelated business income tax imposed by section 1 422.33, subsection 1A, shall file their returns on or before 2 the fifteenth day of the fifth month following the close of 3 the taxable year. If, under the Internal Revenue Code, a 4 corporation is required to file a return covering a tax period 5 of less than twelve months, the state return shall be for the 6 same period and is due forty-five days after the due date of 7 the federal tax return, excluding any extension of time to 8 file. In case of sickness, absence, or other disability, or 9 if good cause exists, the director may allow further time for 10 filing returns. The director shall cause to be prepared blank 11 forms for the returns and shall cause them to be distributed 12 throughout the state and to be furnished upon application, 13 but failure to receive or secure the form does not relieve 14 the taxpayer from the obligation of making a return that is 15 required. The department may as far as consistent with the 16 Code draft income tax forms to conform to the income tax 17 forms of the internal revenue department of the United States 18 government. 19 Sec. 82. Section 422.22, Code 2019, is amended to read as 20 follows: 21 422.22 Supplementary returns. 22 If the director shall be of the opinion that any taxpayer 23 required under this division III to file a return has failed 24 to file such a return or to include in a return filed, either 25 intentionally or through error, items of taxable income, 26 the director may require from such taxpayer a return or 27 supplementary return in such form as the director shall 28 prescribe, of all the items of income which the taxpayer 29 received during the year for which the return is made, whether 30 or not taxable under the provisions of this division III . If 31 from a supplementary return, or otherwise, the director finds 32 that any items of income, taxable under this division III , have 33 been omitted from the original return, the director may require 34 the items so omitted to be added to the original return. Such 35 -24- LSB 1658XS (9) 88 jm/jh 24/ 48
S.F. 182 supplementary return and the correction of the original return 1 shall not relieve the taxpayer from any of the penalties to 2 which the taxpayer may be liable under any provisions of this 3 division III , whether or not the director required a return or 4 a supplementary return under this section . 5 Sec. 83. Section 422.32, Code 2019, is amended to read as 6 follows: 7 422.32 Definitions. 8 1. For the purpose of this division and unless otherwise 9 required by the context: 10 a. 1. “Affiliated group” means a group of corporations as 11 defined in section 1504(a) of the Internal Revenue Code. 12 b. 2. a. “Business income” means income arising from 13 transactions and activity in the regular course of the 14 taxpayer’s trade or business; or income from tangible and 15 intangible property if the acquisition, management, and 16 disposition of the property constitute integral parts of the 17 taxpayer’s regular trade or business operations; or gain or 18 loss resulting from the sale, exchange, or other disposition of 19 real property or of tangible or intangible personal property, 20 if the property while owned by the taxpayer was operationally 21 related to the taxpayer’s trade or business carried on in 22 Iowa or operationally related to sources within Iowa, or the 23 property was operationally related to sources outside this 24 state and to the taxpayer’s trade or business carried on in 25 Iowa; or gain or loss resulting from the sale, exchange, or 26 other disposition of stock in another corporation if the 27 activities of the other corporation were operationally related 28 to the taxpayer’s trade or business carried on in Iowa while 29 the stock was owned by the taxpayer. A taxpayer may have more 30 than one regular trade or business in determining whether 31 income is business income. 32 (1) b. It is the intent of the general assembly to treat as 33 apportionable business income all income that may be treated 34 as apportionable business income under the Constitution of the 35 -25- LSB 1658XS (9) 88 jm/jh 25/ 48
S.F. 182 United States. 1 (2) c. The filing of an Iowa income tax return on a 2 combined report basis is neither allowed nor required by this 3 paragraph “b” . 4 c. 3. “Commercial domicile” means the principal place from 5 which the trade or business of the taxpayer is directed or 6 managed. 7 d. 4. “Corporation” includes joint stock companies, and 8 associations organized for pecuniary profit, and partnerships 9 and limited liability companies taxed as corporations under the 10 Internal Revenue Code. 11 e. 5. “Domestic corporation” means any corporation 12 organized under the laws of this state. 13 6. “Fiduciary” means a guardian, trustee, executor, 14 administrator, receiver, conservator, or any person, whether 15 individual or corporate, acting in any fiduciary capacity for 16 any person, trust, or estate. 17 7. “Fiscal year” means an accounting period of twelve 18 months, ending on the last day of any month other than 19 December. 20 f. 8. “Foreign corporation” means any corporation other 21 than a domestic corporation. 22 9. “Foreign country” means any jurisdiction other than one 23 embraced within the United States. The words “United States” , 24 when used in a geographical sense, include the states, the 25 District of Columbia, and the possessions of the United States. 26 g. 10. “Income from sources within this state” means income 27 from real, tangible, or intangible property located or having 28 a situs in this state. 29 11. “Income year” means the calendar year or the fiscal year 30 upon the basis of which the net income is computed under this 31 division. 32 12. “Individual” means a natural person. 33 h. 13. “Internal Revenue Code” means one of the following: 34 (1) a. For tax years beginning during the 2019 calendar 35 -26- LSB 1658XS (9) 88 jm/jh 26/ 48
S.F. 182 year, “Internal Revenue Code” means the Internal Revenue Code of 1 1954, prior to the date of its redesignation as the Internal 2 Revenue Code of 1986 by the Tax Reform Act of 1986, or means 3 the Internal Revenue Code of 1986 as amended and in effect on 4 March 24, 2018. This definition shall not be construed to 5 include any amendment to the Internal Revenue Code enacted 6 after the date specified in the preceding sentence, including 7 any amendment with retroactive applicability or effectiveness. 8 (2) b. For tax years beginning on or after January 1, 9 2020, “Internal Revenue Code” means the Internal Revenue Code of 10 1954, prior to the date of its redesignation as the Internal 11 Revenue Code of 1986 by the Tax Reform Act of 1986, or means the 12 Internal Revenue Code of 1986, as amended. 13 i. 14. “Nonbusiness income” means all income other than 14 business income. 15 15. “Paid” , for the purposes of the deductions under this 16 division, means “paid or accrued” or “paid or incurred”, and 17 the terms “paid or incurred” and “paid or accrued” shall be 18 construed according to the method of accounting upon the basis 19 of which the net income is computed under this division. The 20 term “received” , for the purpose of the computation of net 21 income under this division, means “received or accrued”, and 22 the term “received or accrued” shall be construed according to 23 the method of accounting upon the basis of which the net income 24 is computed under this division. 25 16. “Resident” applies only to individuals and includes, for 26 the purpose of determining liability to the tax imposed by this 27 division upon or with reference to the income of any tax year, 28 any individual domiciled in the state, and any other individual 29 who maintains a permanent place of abode within the state. 30 j. 17. “State” means any state of the United States, the 31 District of Columbia, the Commonwealth of Puerto Rico, any 32 territory or possession of the United States, and any foreign 33 country or political subdivision thereof. 34 18. a. “Tax year” means the calendar year, or the fiscal 35 -27- LSB 1658XS (9) 88 jm/jh 27/ 48
S.F. 182 year ending during such calendar year, upon the basis of which 1 the net income is computed under this division. 2 b. If a taxpayer has made the election provided by section 3 441(f) of the Internal Revenue Code, “tax year” means the annual 4 period so elected, varying from fifty-two to fifty-three weeks. 5 c. If the effective date or the applicability of a provision 6 of this division is expressed in terms of a tax year beginning, 7 including, or ending with reference to a specified date which 8 is the first or last day of a month, a tax year described in 9 paragraph “a” of this subsection shall be treated as beginning 10 with the first day of the calendar month beginning nearest to 11 the first day of the tax year or as ending with the last day of 12 the calendar month ending nearest to the last day of the tax 13 year. 14 k. 19. “Taxable in another state”. For purposes of 15 allocation and apportionment of income under this division , a 16 taxpayer is “taxable in another state” if: 17 (1) a. In that state the taxpayer is subject to a net 18 income tax, a franchise tax measured by net income, a franchise 19 tax for the privilege of doing business, or a corporate stock 20 tax; or 21 (2) b. That state has jurisdiction to subject the taxpayer 22 to a net income tax regardless of whether, in fact, the state 23 does or does not. 24 l. 20. “Unitary business” means a business carried on 25 partly within and partly without a state where the portion 26 of the business carried on within the state depends on or 27 contributes to the business outside the state. 28 2. The words, terms, and phrases defined in section 422.4, 29 subsections 4 through 6, 8, 9, 13, and 15 through 17 , when used 30 in this division , shall have the meanings ascribed to them 31 in said section except where the context clearly indicates a 32 different meaning. 33 Sec. 84. Section 422.33, subsection 28, Code 2019, is 34 amended to read as follows: 35 -28- LSB 1658XS (9) 88 jm/jh 28/ 48
S.F. 182 28. The taxes imposed under this division shall be reduced 1 by a school tuition organization tax credit allowed under 2 section 422.11S . The maximum amount of tax credits that 3 may be approved under this subsection for a tax year equals 4 twenty-five percent of the school tuition organization’s tax 5 credits that may be approved pursuant to section 422.11S, 6 subsection 8 , for a tax year. 7 Sec. 85. Section 422.35, subsection 2, Code 2019, is amended 8 to read as follows: 9 2. Add interest and dividends from foreign securities, from 10 securities of state and other political subdivisions, and from 11 regulated investment companies exempt from federal income tax 12 under the Internal Revenue Code, except for those securities 13 the interest and dividends from which are exempt from taxation 14 by the state of Iowa as otherwise provided by law, including 15 those set forth in section 422.7, subsection 2 . : 16 a. Vision Iowa program bonds pursuant to section 12.71, 17 subsection 8. 18 b. School infrastructure program bonds pursuant to section 19 12.81, subsection 8. 20 c. Iowa jobs program revenue bonds pursuant to section 21 12.87, subsection 8. 22 d. Iowa utility board and Iowa consumer advocate building 23 project bonds pursuant to section 12.91, subsection 9. 24 e. Iowa finance authority beginning farmer loan program 25 bonds pursuant to section 16.64, subsection 2. 26 f. Water pollution control works and drinking facilities 27 financing program bonds pursuant to section 16.131, subsection 28 5. 29 g. Iowa prison infrastructure revenue bonds pursuant to 30 section 12.80, subsection 3, and section 16.177, subsection 8. 31 h. Quad cities interstate metropolitan authority bonds 32 pursuant to section 28A.24. 33 i. Iowa finance authority E911 program bonds pursuant to 34 section 34A.20, subsection 6. 35 -29- LSB 1658XS (9) 88 jm/jh 29/ 48
S.F. 182 j. Soil and water conservation subdistrict bonds pursuant 1 to section 161A.22. 2 k. Community college residence hall and dormitory bonds 3 pursuant to section 260C.61. 4 l. Community college bond program bonds pursuant to section 5 260C.71, subsection 6. 6 m. Higher education loan authority bonds pursuant to section 7 261A.27. 8 n. State board of regents bonds pursuant to sections 262.41, 9 262.51, 262.60, 262A.8, and 263A.6. 10 o. Interstate bridges bonds pursuant to section 313A.36. 11 p. Aviation authority bonds pursuant to section 330A.16. 12 q. County health center bonds pursuant to section 331.441, 13 subsection 2, paragraph “c” , subparagraph (7). 14 r. Rural water district bonds pursuant to section 357A.15. 15 s. Urban renewal bonds pursuant to section 403.9, subsection 16 2. 17 t. Municipal housing project bonds pursuant to section 18 403A.12. 19 u. Comprehensive petroleum underground storage tank fund 20 bonds pursuant to section 455G.6, subsection 14. 21 v. Honey creek premier destination park bonds pursuant to 22 section 463C.12, subsection 8. 23 Sec. 86. Section 422.39, Code 2019, is amended to read as 24 follows: 25 422.39 Statutes applicable to corporation tax. 26 All the provisions of sections 422.24 to 422.27 422.26 of 27 division II, respecting payment and collection, shall apply in 28 respect to the tax due and payable by a corporation taxable 29 under this division . 30 Sec. 87. Section 422.73, Code 2019, is amended to read as 31 follows: 32 422.73 Correction of errors —— refunds, credits, and 33 carrybacks. 34 1. If it appears that an amount of tax, penalty, or interest 35 -30- LSB 1658XS (9) 88 jm/jh 30/ 48
S.F. 182 has been paid which was not due under division II, III or V 1 of this chapter , then that amount shall be credited against 2 any tax due on the books of the department by the person who 3 made the excessive payment, or that amount shall be refunded 4 to the person or with the person’s approval, credited to tax 5 to become due. A claim for refund or credit that has not been 6 filed with the department within three years after the return 7 upon which a refund or credit claimed became due, or within one 8 year after the payment of the tax upon which a refund or credit 9 is claimed was made, whichever time is the later, shall not be 10 allowed by the director. If, as a result of a carryback of a 11 net operating loss or a net capital loss, the amount of tax 12 in a prior period is reduced and an overpayment results, the 13 claim for refund or credit of the overpayment shall be filed 14 with the department within the three years after the return 15 for the taxable year of the net operating loss or net capital 16 loss became due. Notwithstanding the period of limitation 17 specified, the taxpayer shall have six months from the day of 18 final disposition of any income tax matter between the taxpayer 19 and the internal revenue service with respect to the particular 20 tax year to claim an income tax refund or credit. 21 2. Notwithstanding subsection 1 , a claim for refund or 22 credit of the individual income tax paid which resulted from a 23 reduction in a person’s federal adjusted gross income due to 24 section 1106 of the FAA Modernization and Reform Act of 2012 , 25 Pub. L. No. 112-95 , shall be considered timely if the claim is 26 filed with the department on or before June 30, 2013. 27 3. The department shall enter into an agreement with the 28 internal revenue service for the transmission of federal income 29 tax reports on individuals required to file an Iowa income tax 30 return who have been involved in an income tax matter with 31 the internal revenue service. After final disposition of 32 the income tax matter between the taxpayer and the internal 33 revenue service, the department shall determine whether the 34 individual is due a state income tax refund as a result of 35 -31- LSB 1658XS (9) 88 jm/jh 31/ 48
S.F. 182 final disposition of such income tax matter. If the individual 1 is due a state income tax refund, the department shall notify 2 the individual within thirty days and request the individual to 3 file a claim for refund or credit with the department. 4 Sec. 88. Section 422.110, Code 2019, is amended to read as 5 follows: 6 422.110 Income tax credit in lieu of refund. 7 1. In lieu of the fuel tax refund provided in section 8 452A.17 , a person or corporation subject to taxation under 9 division II or III of this chapter may elect to receive an 10 income tax credit. The person or corporation which elects to 11 receive an income tax credit shall cancel its refund permit 12 obtained under section 452A.18 within thirty days after the 13 first day of its tax year or the permit becomes invalid at that 14 time. For the purposes of this section , “person” includes a 15 person claiming a tax credit based upon the person’s pro rata 16 share of the earnings from a partnership, limited liability 17 company, or corporation which is not subject to a tax under 18 division II or III of this chapter as a partnership, limited 19 liability company, or corporation “corporation” means the same 20 as defined in section 422.32 . If the election to receive 21 an income tax credit has been made, it remains effective for 22 at least one tax year, and for subsequent tax years unless 23 a change is requested and a new refund permit applied for 24 within thirty days after the first day of the person’s or 25 corporation’s tax year. The income tax credit shall be the 26 amount of the Iowa fuel tax paid on fuel purchased by the 27 person or corporation and is subject to the conditions provided 28 in section 452A.17 with the exception that the income tax 29 credit is not available for refunds relating to casualty 30 losses, transport diversions, pumping credits, blending 31 errors, idle time, power takeoffs, reefer units, and exports by 32 distributors. 33 2. The right to a credit under this section is not 34 assignable and the credit may be claimed only by the person or 35 -32- LSB 1658XS (9) 88 jm/jh 32/ 48
S.F. 182 corporation that purchased the fuel. 1 Sec. 89. Section 422D.1, Code 2019, is amended to read as 2 follows: 3 422D.1 Authorization —— election —— imposition and repeal —— 4 use of revenues. 5 1. a. A county board of supervisors may offer for voter 6 approval any of the following taxes or a combination of the 7 following taxes: 8 (1) Local option income surtax. 9 (2) An an ad valorem property tax. 10 b. Revenues generated from these taxes the ad valorem 11 property tax shall be used for emergency medical services as 12 provided in section 422D.6 . 13 2. a. The taxes property tax for emergency medical services 14 shall only be imposed after an election at which a majority of 15 those voting on the question of imposing the tax or combination 16 of taxes specified in subsection 1 , paragraph “a” , subparagraph 17 (1) or (2), vote in favor of the question. However, the tax 18 or combination of taxes specified in subsection 1 shall not 19 be imposed on property within or on residents of a benefited 20 emergency medical services district under chapter 357F . The 21 question of imposing the tax or combination of the taxes may 22 be submitted at the regular city election, a special election, 23 or the general election. Notice of the question shall be 24 provided by publication at least sixty days before the time of 25 the election and shall identify the tax or combination of taxes 26 and the levy rate or rates, as applicable . If a majority of 27 those voting on the question approve the imposition of the tax 28 or combination of taxes , the tax or combination of taxes shall 29 be imposed as follows: 30 (1) A local option income surtax shall be imposed for tax 31 years beginning on or after January 1 of the fiscal year in 32 which the favorable election was held. 33 (2) An ad valorem property tax shall be imposed levied for 34 the fiscal year in which the election was held. 35 -33- LSB 1658XS (9) 88 jm/jh 33/ 48
S.F. 182 b. Before a county imposes an income surtax as specified 1 in subsection 1 , paragraph “a” , subparagraph (1), a benefited 2 emergency medical services district in the county shall be 3 dissolved, and the county shall be liable for the outstanding 4 obligations of the benefited district. If the benefited 5 district extends into more than one county, the county imposing 6 the income surtax shall be liable for only that portion of the 7 obligations relating to the portion of the benefited district 8 in the county. 9 3. Revenues received by the county from the taxes imposed 10 tax levied under this chapter shall be deposited into the 11 emergency medical services trust fund created pursuant to 12 section 422D.6 and shall be used as provided in that section. 13 4. Any tax or combination of taxes imposed levied under this 14 chapter shall be for a maximum period of five years. 15 Sec. 90. Section 423.14A, subsection 3, paragraph f, 16 subparagraph (2), subparagraph division (c), subparagraph 17 subdivision (ii), Code 2019, is amended to read as follows: 18 (ii) “Resident” includes an individual who is a resident 19 of this state, as defined in section 422.4 422.32 , and any 20 business that owns any tangible or intangible property with 21 a situs in this state, or that has one or more employees 22 performing or providing services for the business in this 23 state. 24 Sec. 91. Section 425.17, subsection 7, Code 2019, is amended 25 to read as follows: 26 7. “Income” means the sum of Iowa net income as defined 27 in section 422.7 , Code 2019, plus all of the following to 28 the extent not already included in Iowa net income: capital 29 gains, alimony, child support money, cash public assistance 30 and relief, except property tax relief granted under this 31 subchapter , amount of in-kind assistance for housing expenses, 32 the gross amount of any pension or annuity, including but not 33 limited to railroad retirement benefits, payments received 34 under the federal Social Security Act, except child insurance 35 -34- LSB 1658XS (9) 88 jm/jh 34/ 48
S.F. 182 benefits received by a member of the claimant’s household, and 1 all military retirement and veterans’ disability pensions, 2 interest received from the state or federal government or 3 any of its instrumentalities, workers’ compensation and the 4 gross amount of disability income or “loss of time” insurance. 5 “Income” does not include gifts from nongovernmental sources, 6 or surplus foods or other relief in kind supplied by a 7 governmental agency. In determining income, net operating 8 losses and net capital losses shall not be considered. 9 Sec. 92. Section 425.23, subsection 4, paragraph b, Code 10 2019, is amended to read as follows: 11 b. The annual adjustment factor for the 1998 base year is 12 one hundred percent. For each subsequent base year, the annual 13 adjustment factor equals the annual inflation factor for the 14 calendar year, in which the base year begins, as computed in 15 section 422.4 for purposes of the individual income tax , Code 16 2019 . 17 Sec. 93. Section 476.20, subsection 2, Code 2019, is amended 18 to read as follows: 19 2. The board shall establish rules requiring a regulated 20 public utility furnishing gas or electricity to include in 21 the utility’s notice of pending disconnection of service a 22 written statement advising the customer that the customer 23 may be eligible to participate in the low income home energy 24 assistance program or weatherization assistance program 25 administered by the division of community action agencies of 26 the department of human rights. The written statement shall 27 list the address and telephone number of the local agency 28 which is administering the customer’s low income home energy 29 assistance program and the weatherization assistance program. 30 The written statement shall also state that the customer 31 is advised to contact the public utility to settle any of 32 the customer’s complaints with the public utility, but if a 33 complaint is not settled to the customer’s satisfaction, the 34 customer may file the complaint with the board. The written 35 -35- LSB 1658XS (9) 88 jm/jh 35/ 48
S.F. 182 statement shall include the address and phone number of the 1 board. If the notice of pending disconnection of service 2 applies to a residence, the written statement shall advise 3 that the disconnection does not apply from November 1 through 4 April 1 for a resident who is a “head of household”, as 5 defined in section 422.4 , head of household and who has been 6 certified to the public utility by the local agency which is 7 administering the low income home energy assistance program and 8 weatherization assistance program as being eligible for either 9 the low income home energy assistance program or weatherization 10 assistance program, and that if such a resident resides within 11 the serviced residence, the customer should promptly have 12 the qualifying resident notify the local agency which is 13 administering the low income home energy assistance program and 14 weatherization assistance program. The board shall establish 15 rules requiring that the written notice contain additional 16 information as it deems necessary and appropriate. 17 Sec. 94. Section 476.20, subsection 3, paragraph b, Code 18 2019, is amended to read as follows: 19 b. A qualified applicant for the low income home energy 20 assistance program or the weatherization assistance program who 21 is also a “head of household”, as defined in section 422.4, 22 subsection 7 , head of household shall be promptly certified 23 by the local agency administering the applicant’s program to 24 the applicant’s public utility that the resident is a “head 25 of household” as defined in section 422.4, subsection 7 , head 26 of household and is qualified for the low income home energy 27 assistance program or weatherization assistance program. 28 Notwithstanding subsection 1 , a public utility furnishing gas 29 or electricity shall not disconnect service from November 1 30 through April 1 to a residence which has a resident that has 31 been certified under this paragraph. For purposes of this 32 section, “head of household” has the same meaning as provided 33 by the Internal Revenue Code. 34 Sec. 95. Section 476B.2, Code 2019, is amended to read as 35 -36- LSB 1658XS (9) 88 jm/jh 36/ 48
S.F. 182 follows: 1 476B.2 General rule. 2 The owner of a qualified facility shall, for each 3 kilowatt-hour of qualified electricity that the owner sells 4 or uses for on-site consumption during the ten-year period 5 beginning on the date the qualified facility was originally 6 placed in service, be allowed a wind energy production tax 7 credit to the extent provided in this chapter against the tax 8 imposed in chapter 422, divisions II, III , and V, and chapter 9 432 , and may claim a refund of tax imposed by chapter 423 or 10 437A for any tax year within the time period set forth in 11 section 423.47 or 437A.14 . 12 Sec. 96. Section 476B.6, subsection 5, paragraphs a, b, and 13 c, Code 2019, are amended to read as follows: 14 a. If the tax credit application is filed by a partnership, 15 limited liability company, S corporation, estate, trust, or 16 other reporting entity all of the income of which is taxed 17 directly to its equity holders or beneficiaries, for the taxes 18 imposed under chapter 422, division II or III, the tax credit 19 certificate shall be issued directly to equity holders or 20 beneficiaries of the applicant in proportion to their pro rata 21 share of the income of such entity. The applicant shall, in 22 the application made under this section , identify its equity 23 holders or beneficiaries, and the percentage of such entity’s 24 income that is allocable to each equity holder or beneficiary. 25 b. If the tax credit applicant under this section is 26 eligible to receive renewable electricity production credits 27 authorized under section 45 of the Internal Revenue Code, 28 as amended, and the tax credit applicant is a partnership, 29 limited liability company, S corporation, estate, trust, or 30 other reporting entity all of the income of which is taxed 31 directly to its equity holders or beneficiaries, for the taxes 32 imposed under chapter 422, division II or III , the tax credit 33 certificate may be issued to a partner if the business is a 34 partnership, a shareholder if the business is an S corporation, 35 -37- LSB 1658XS (9) 88 jm/jh 37/ 48
S.F. 182 or a member if the business is a limited liability company 1 in the amounts designated by the eligible partnership, S 2 corporation, or limited liability company. In absence of 3 such designation, the credits under this section shall flow 4 through to the partners, shareholders, or members in accordance 5 with their pro rata share of the income of the entity. The 6 applicant shall, in the application made under this section , 7 identify the holders or beneficiaries that are to receive the 8 tax credit certificates and the percentage of the tax credit 9 that is allocable to each holder or beneficiary. 10 c. If an applicant under this section is eligible to 11 receive renewable electricity production credits authorized 12 under section 45 of the Internal Revenue Code, as amended, and 13 the tax credit applicant is a partnership, limited liability 14 company, S corporation, estate, trust, or other reporting 15 entity all of the income of which is taxed directly to its 16 equity holders or beneficiaries, for the taxes imposed under 17 chapter 422, division II or III , the tax credit certificates 18 and all future rights to the tax credit in this section may be 19 distributed to an equity holder or beneficiary as a liquidating 20 distribution or portion thereof, of a holder or beneficiary’s 21 interest in the applicant entity. The applicant shall, in the 22 application made under this section , designate the percentage 23 of the tax credit allocable to the liquidating equity holder 24 or beneficiary that is to receive the current and future tax 25 credit certificates under this section . 26 Sec. 97. Section 476B.7, subsection 2, Code 2019, is amended 27 to read as follows: 28 2. The tax credit shall be freely transferable. The 29 transferee may use the amount of the tax credit transferred 30 against the taxes imposed under chapter 422, divisions II, III , 31 and V , and chapter 432 for any tax year the original transferor 32 could have claimed the tax credit. The transferee may claim 33 a refund under chapter 423 or 437A for any tax year within 34 the time period set forth in section 423.47 or 437A.14 for 35 -38- LSB 1658XS (9) 88 jm/jh 38/ 48
S.F. 182 which the original transferor could have claimed a refund. 1 Any consideration received for the transfer of the tax credit 2 shall not be included as income under chapter 422, divisions 3 II, III , and V . Any consideration paid for the transfer of the 4 tax credit shall not be deducted from income under chapter 422, 5 divisions II, III , and V . 6 Sec. 98. Section 476C.4, subsection 4, paragraph a, Code 7 2019, is amended to read as follows: 8 a. If the tax credit application is filed by a partnership, 9 limited liability company, S corporation, estate, trust, or 10 other reporting entity all of the income of which is taxed 11 directly to its equity holders or beneficiaries, for the taxes 12 imposed under chapter 422, division II or III , the tax credit 13 certificate shall be issued directly to equity holders or 14 beneficiaries of the applicant in proportion to their pro rata 15 share of the income of such entity. The applicant shall, in 16 the application made under this section , identify its equity 17 holders or beneficiaries, and the percentage of such entity’s 18 income that is allocable to each equity holder or beneficiary. 19 Sec. 99. Section 476C.4, subsection 4, paragraph b, 20 subparagraph (1), Code 2019, is amended to read as follows: 21 (1) If the tax credit applicant under this section is 22 eligible to receive renewable electricity production credits 23 authorized under section 45 of the Internal Revenue Code, 24 as amended, and the tax credit applicant is a partnership, 25 limited liability company, S corporation, estate, trust, or 26 other reporting entity all of the income of which is taxed 27 directly to its equity holders or beneficiaries, for the taxes 28 imposed under chapter 422, division II or III , the tax credit 29 certificate may be issued to a partner if the business is a 30 partnership, a shareholder if the business is an S corporation, 31 or a member if the business is a limited liability company 32 in the amounts designated by the eligible partnership, S 33 corporation, or limited liability company. In absence of such 34 designation, the credits under this section shall flow through 35 -39- LSB 1658XS (9) 88 jm/jh 39/ 48
S.F. 182 to the partners, shareholders, or members in accordance with 1 their pro rata share of the income of the entity. 2 Sec. 100. Section 476C.4, subsection 4, paragraph c, 3 subparagraph (1), Code 2019, is amended to read as follows: 4 (1) If an applicant under this section is eligible to 5 receive renewable electricity production credits authorized 6 under section 45 of the Internal Revenue Code, as amended, and 7 the tax credit applicant is a partnership, limited liability 8 company, S corporation, estate, trust, or other reporting 9 entity all of the income of which is taxed directly to its 10 equity holders or beneficiaries, for the taxes imposed under 11 chapter 422, division II or III , the tax credit certificates 12 and all future rights to the tax credit in this section may be 13 distributed to an equity holder or beneficiary as a liquidating 14 distribution or portion thereof, of a holder or beneficiary’s 15 interest in the applicant entity. 16 Sec. 101. Section 476C.6, subsection 1, paragraph b, Code 17 2019, is amended to read as follows: 18 b. The transferee may use the amount of the tax credit 19 transferred against taxes imposed under chapter 422, divisions 20 II, III , and V , and chapter 432 for any tax year the original 21 transferor could have claimed the tax credit. The transferee 22 may claim a refund under chapter 423 or 437A for any tax 23 year within the time period set forth in section 423.47 or 24 437A.14 for which the original transferor could have claimed 25 the refund. Any consideration received for the transfer of 26 the tax credit shall not be included as income under chapter 27 422, divisions II, III , and V . Any consideration paid for the 28 transfer of the tax credit shall not be deducted from income 29 under chapter 422, divisions II, III , and V . 30 Sec. 102. Section 483A.1A, subsection 10, paragraph e, Code 31 2019, is amended to read as follows: 32 e. Is a member of the armed forces of the United States 33 who is serving on active duty , and claims residency in this 34 state , and has filed a state individual income tax return 35 -40- LSB 1658XS (9) 88 jm/jh 40/ 48
S.F. 182 as a resident pursuant to chapter 422, division II , for the 1 preceding tax year, or is stationed in this state. 2 Sec. 103. Section 541A.2, subsection 6, unnumbered 3 paragraph 1, Code 2019, is amended to read as follows: 4 An individual development account closed in accordance 5 with this subsection is not subject to the limitations and 6 benefits provided by this chapter but is subject to state tax 7 in accordance with the provisions of section 422.7, subsection 8 28 , and section 450.4, subsection 6 . An individual development 9 account may be closed for any of the following reasons: 10 Sec. 104. Section 541A.3, subsection 2, Code 2019, is 11 amended by striking the subsection. 12 Sec. 105. Section 541B.2, subsection 10, Code 2019, is 13 amended to read as follows: 14 10. “Resident” means the same as defined in section 422.4 15 422.32 . 16 Sec. 106. Section 633.479, unnumbered paragraph 2, Code 17 2019, is amended to read as follows: 18 An order approving the final report and discharging 19 the personal representative shall not be required if all 20 distributees otherwise entitled to notice are adults, under no 21 legal disability, have signed waivers of notice as provided in 22 section 633.478 , have signed statements of consent agreeing 23 that the prayer of the final report shall constitute an 24 order approving the final report and discharging the personal 25 representative, and if the statements of consent are dated 26 not more than thirty days prior to the date of the final 27 report, and if compliance with sections section 422.27 , Code 28 2019, and section 450.58 have been fulfilled and receipts, 29 sworn statements, and certificates, as any of these that are 30 required, are on file. In those instances final order shall 31 not be required and the prayer of the final report shall be 32 considered as granted and shall have the same force and effect 33 as an order of discharge of the personal representative and an 34 order approving the final report. 35 -41- LSB 1658XS (9) 88 jm/jh 41/ 48
S.F. 182 Sec. 107. Section 635.7, subsection 1, Code 2019, is amended 1 to read as follows: 2 1. The personal representative is required to file the 3 report and inventory for which provision is made in section 4 633.361 , including all probate and nonprobate assets. This 5 chapter does not exempt the personal representative from 6 complying with the requirements of section 422.27 , Code 2019, 7 450.22 , 450.58 , 633.480 , or 633.481 , and the administration of 8 an estate whether converted to or from a small estate shall be 9 considered one proceeding pursuant to section 633.330 . 10 Sec. 108. Section 904.809, subsection 5, paragraph a, 11 subparagraph (2), Code 2019, is amended to read as follows: 12 (2) The inmate’s employer shall provide each employed 13 inmate with the withholding statement required under section 14 422.16 , and any other employment information necessary for the 15 receipt of the remainder of an inmate’s payroll earnings. 16 Sec. 109. REPEAL. Sections 99B.8, 99D.16, 99F.18, 17 190B.105, 257.22 through 257.26, 298.14, 422.4 through 422.11D, 18 422.11F, 422.11H, 422.11J, 422.11M, 422.11Q, 422.11R, 422.11V, 19 422.11W, 422.11Z, 422.12, 422.12A through 422.12E, 422.12H, 20 422.12J through 422.12L, 422.13, 422.14, 422.16, 422.17, 21 422.19, 422.23, 422.27, 422.31, 422D.2 through 422D.4, 456A.16, 22 541B.6, Code 2019, are repealed. 23 Sec. 110. EFFECTIVE DATE. This division of this Act takes 24 effect January 1, 2021. 25 Sec. 111. APPLICABILITY. This division of this Act applies 26 to tax years beginning on or after January 1, 2021. 27 DIVISION II 28 SALES AND USE TAX 29 Sec. 112. Section 423.2, subsection 1, unnumbered paragraph 30 1, Code 2019, is amended to read as follows: 31 There is imposed a tax of six eleven percent upon the sales 32 price of all sales of tangible personal property, consisting 33 of goods, wares, or merchandise, sold at retail in the state 34 to consumers or users except as otherwise provided in this 35 -42- LSB 1658XS (9) 88 jm/jh 42/ 48
S.F. 182 subchapter . 1 Sec. 113. Section 423.2, subsections 2 and 3, Code 2019, are 2 amended to read as follows: 3 2. A tax of six eleven percent is imposed upon the sales 4 price of the sale or furnishing of gas, electricity, water, 5 heat, pay television service, and communication service, 6 including the sales price from such sales by any municipal 7 corporation or joint water utility furnishing gas, electricity, 8 water, heat, pay television service, and communication service 9 to the public in its proprietary capacity, except as otherwise 10 provided in this subchapter , when sold at retail in the state 11 to consumers or users. 12 3. A tax of six eleven percent is imposed upon the 13 sales price of all sales of tickets or admissions to places 14 of amusement, fairs, and athletic events except those of 15 elementary and secondary educational institutions. A tax 16 of six eleven percent is imposed on the sales price of an 17 entry fee or like charge imposed solely for the privilege of 18 participating in an activity at a place of amusement, fair, or 19 athletic event unless the sales price of tickets or admissions 20 charges for observing the same activity are taxable under this 21 subchapter . A tax of six eleven percent is imposed upon that 22 part of private club membership fees or charges paid for the 23 privilege of participating in any athletic sports provided club 24 members. 25 Sec. 114. Section 423.2, subsection 4, paragraph a, Code 26 2019, is amended to read as follows: 27 a. A tax of six eleven percent is imposed upon the sales 28 price derived from the operation of all forms of amusement 29 devices and games of skill, games of chance, raffles, and bingo 30 games as defined in chapter 99B , and card game tournaments 31 conducted under section 99B.27 , that are operated or conducted 32 within the state, the tax to be collected from the operator in 33 the same manner as for the collection of taxes upon the sales 34 price of tickets or admission as provided in this section . 35 -43- LSB 1658XS (9) 88 jm/jh 43/ 48
S.F. 182 Nothing in this subsection shall legalize any games of skill 1 or chance or slot-operated devices which are now prohibited by 2 law. 3 Sec. 115. Section 423.2, subsection 5, Code 2019, is amended 4 to read as follows: 5 5. There is imposed a tax of six eleven percent upon the 6 sales price from the furnishing of services as defined in 7 section 423.1 . 8 Sec. 116. Section 423.2, subsection 7, paragraph a, 9 unnumbered paragraph 1, Code 2019, is amended to read as 10 follows: 11 A tax of six eleven percent is imposed upon the sales 12 price from the sales, furnishing, or service of solid waste 13 collection and disposal service. 14 Sec. 117. Section 423.2, subsection 8, paragraph a, Code 15 2019, is amended to read as follows: 16 a. A tax of six eleven percent is imposed on the sales 17 price from sales of bundled transactions. For the purposes of 18 this subsection , a “bundled transaction” is the retail sale of 19 two or more distinct and identifiable products, except real 20 property and services to real property, which are sold for one 21 nonitemized price. A “bundled transaction” does not include 22 the sale of any products in which the sales price varies, or 23 is negotiable, based on the selection by the purchaser of the 24 products included in the transaction. 25 Sec. 118. Section 423.2, subsection 9, Code 2019, is amended 26 to read as follows: 27 9. A tax of six eleven percent is imposed upon the 28 sales price from any mobile telecommunications service, 29 including all paging services, that this state is allowed 30 to tax pursuant to the provisions of the federal Mobile 31 Telecommunications Sourcing Act, Pub. L. No. 106-252, 4 U.S.C. 32 §116 et seq. For purposes of this subsection , taxes on mobile 33 telecommunications service, as defined under the federal Mobile 34 Telecommunications Sourcing Act that are deemed to be provided 35 -44- LSB 1658XS (9) 88 jm/jh 44/ 48
S.F. 182 by the customer’s home service provider, shall be paid to 1 the taxing jurisdiction whose territorial limits encompass 2 the customer’s place of primary use, regardless of where the 3 mobile telecommunications service originates, terminates, 4 or passes through and shall in all other respects be taxed 5 in conformity with the federal Mobile Telecommunications 6 Sourcing Act. All other provisions of the federal Mobile 7 Telecommunications Sourcing Act are adopted by the state of 8 Iowa and incorporated into this subsection by reference. With 9 respect to mobile telecommunications service under the federal 10 Mobile Telecommunications Sourcing Act, the director shall, if 11 requested, enter into agreements consistent with the provisions 12 of the federal Act. 13 Sec. 119. Section 423.2, subsection 10, paragraph a, Code 14 2019, is amended to read as follows: 15 a. A tax of six eleven percent is imposed on the sales price 16 of specified digital products sold at retail in the state. The 17 tax applies whether the purchaser obtains permanent use or less 18 than permanent use of the specified digital product, whether 19 the sale is conditioned or not conditioned upon continued 20 payment from the purchaser, and whether the sale is on a 21 subscription basis or is not on a subscription basis. 22 Sec. 120. Section 423.2, subsection 12, Code 2019, is 23 amended to read as follows: 24 12. The sales tax rate of six eleven percent is reduced to 25 five ten percent on January 1, 2030. 26 Sec. 121. Section 423.2A, subsection 2, paragraph c, Code 27 2019, is amended to read as follows: 28 c. Transfer one-sixth nine and four thousand one hundred 29 eighteen ten-thousandths percent of the remaining revenues to 30 the secure an advanced vision for education fund created in 31 section 423F.2 . This paragraph “c” is repealed December 31, 32 2029. 33 Sec. 122. Section 423.5, subsection 1, unnumbered paragraph 34 1, Code 2019, is amended to read as follows: 35 -45- LSB 1658XS (9) 88 jm/jh 45/ 48
S.F. 182 Except as provided in paragraph “c” , an excise tax at the 1 rate of six eleven percent of the purchase price or installed 2 purchase price is imposed on the following: 3 Sec. 123. Section 423.5, subsection 4, Code 2019, is amended 4 to read as follows: 5 4. The use tax rate of six eleven percent is reduced to five 6 ten percent on January 1, 2030. 7 Sec. 124. Section 423.43, subsection 1, paragraph b, Code 8 2019, is amended to read as follows: 9 b. Subsequent to the deposit into the general fund of 10 the state and after the transfer of such revenues collected 11 under chapter 423B , the department shall transfer one-sixth 12 one-eleventh of such remaining revenues to the secure an 13 advanced vision for education fund created in section 423F.2 . 14 This paragraph is repealed December 31, 2029. 15 Sec. 125. EFFECTIVE DATE. This division of this Act takes 16 effect January 1, 2021. 17 DIVISION III 18 FUTURE INDIVIDUAL INCOME TAX CHANGES —— REPEAL 19 Sec. 126. REPEAL. 2018 Iowa Acts, chapter 1161, sections 99 20 through 127, 131, and 132, are repealed. 21 Sec. 127. EFFECTIVE DATE. This division of this Act takes 22 effect January 1, 2021. 23 DIVISION IV 24 CORRESPONDING AMENDMENTS LEGISLATION 25 Sec. 128. IMPLEMENTATION OF ACT. Additional legislation 26 is required to fully implement this Act. The director of the 27 department of revenue shall, in compliance with section 2.16, 28 prepare draft legislation for submission to the legislative 29 services agency, as necessary, to implement the repeal of the 30 individual income tax under this Act and under other provisions 31 of law. 32 EXPLANATION 33 The inclusion of this explanation does not constitute agreement with 34 the explanation’s substance by the members of the general assembly. 35 -46- LSB 1658XS (9) 88 jm/jh 46/ 48
S.F. 182 This bill relates to state taxes by repealing the individual 1 income tax and increasing the state sales and use tax rates. 2 Division I repeals the individual income tax and makes 3 numerous conforming changes to the Code to remove references 4 to the individual income tax and to update or move provisions 5 of the individual income tax that are also applicable by 6 reference to the corporate income tax and the franchise tax. 7 The division also repeals the emergency medical services income 8 surtax in Code chapter 422D, the instructional support income 9 surtax in Code section 257.21, the educational improvement 10 income surtax in Code section 257.29, and the physical plant 11 and equipment income surtax in Code section 298.2, because 12 income surtax revenues will no longer be generated without the 13 state individual income tax. 14 The repeal of the individual income tax will also affect the 15 industrial new jobs training program in Code chapter 260E, the 16 accelerated career education program in Code chapter 260G, and 17 the targeted jobs withholding credit in Code section 403.19A, 18 because those programs rely on income tax amounts withheld from 19 employee wages by employers. 20 The division provides that additional legislation is 21 required to fully implement the division and requires the 22 director of the department of revenue to prepare draft 23 legislation in compliance with Code section 2.16 for submission 24 to the legislative services agency to implement the repeal of 25 the individual income tax. 26 The division takes effect January 1, 2021, and applies to tax 27 years beginning on or after that date. 28 Division II increases the state sales and use tax rate to 29 11 percent from 6 percent. By operation of law as provided in 30 Article VII, section 10 of the Iowa Constitution, a portion 31 (0.375 percent) of the state sales tax generated and collected 32 from the rate increase provided in this division will be 33 transferred to the natural resources and outdoor recreation 34 trust fund in Code section 461.31. The division amends the 35 -47- LSB 1658XS (9) 88 jm/jh 47/ 48
S.F. 182 transfer of state sales tax revenues to the secure an advanced 1 vision for education fund (SAVE) in Code section 423.2A from 2 one-sixth (approximately 16.66 percent) of the revenues to 3 9.4118 percent of the revenues to ensure that SAVE receives 4 approximately the same amounts of sales tax revenue as it did 5 prior to the sales tax rate increase provided in the division. 6 The division takes effect January 1, 2021. 7 Division III strikes future contingent individual income tax 8 changes in 2018 Iowa Acts, chapter 1161, due to the repeal of 9 the individual income tax in the bill. Currently, the future 10 individual income tax changes are set to begin in tax year 2023 11 or in a later tax year, contingent upon the satisfaction of 12 certain net general fund revenue amount and growth targets. 13 The division takes effect January 1, 2021, and applies to tax 14 years beginning on or after that date. 15 Division IV requires the director of the department of