Senate
Study
Bill
1249
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
WAYS
AND
MEANS
BILL
BY
CHAIRPERSON
FEENSTRA)
A
BILL
FOR
An
Act
relating
to
the
administration
of
the
tax
and
1
related
laws
by
the
department
of
revenue,
including
the
2
administration
and
modification
of
certain
tax
credits
3
and
refunds,
the
individual
and
corporate
income
taxes,
4
franchise
taxes,
franchise
alternative
minimum
taxes,
moneys
5
and
credits
taxes,
sales
and
use
taxes,
and
automobile
6
rental
excise
taxes,
the
assessment
of
property
owned
by
7
certain
long
distance
telephone
companies,
establishing
8
a
taxation
and
exemption
of
computers
task
force,
and
9
providing
for
other
properly
related
matters,
making
10
penalties
applicable,
and
including
effective
date
and
11
retroactive
applicability
provisions.
12
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
13
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DIVISION
I
1
INCOME
AND
FRANCHISE
TAX
2
Section
1.
Section
422.4,
subsection
16,
paragraph
e,
3
unnumbered
paragraph
1,
Code
2019,
is
amended
to
read
as
4
follows:
5
Add
back
the
following
percentage
of
the
qualified
business
6
income
deduction
deductions
under
section
199A
sections
199A(a)
7
and
199A(g)
of
the
Internal
Revenue
Code
taken
and
allowable
in
8
calculating
federal
taxable
income
for
the
applicable
tax
year:
9
Sec.
2.
Section
422.9,
subsection
2A,
paragraph
a,
10
unnumbered
paragraph
1,
Code
2019,
is
amended
to
read
as
11
follows:
12
The
following
percentage
of
the
qualified
business
income
13
deduction
deductions
under
section
199A
sections
199A(a)
and
14
199A(g)
of
the
Internal
Revenue
Code
taken
and
allowable
in
15
calculating
federal
taxable
income
for
the
applicable
tax
year:
16
Sec.
3.
Section
422.9,
subsection
2A,
paragraph
b,
Code
17
2019,
is
amended
to
read
as
follows:
18
b.
Notwithstanding
paragraph
“a”
,
and
section
422.4,
19
subsection
16
,
paragraph
“e”
,
for
an
entity
electing
or
20
required
to
file
a
composite
return
under
section
422.13,
21
subsection
5
,
the
deduction
allowed
under
this
subsection
for
22
purposes
of
the
composite
return
shall
be
an
amount
equal
to
23
the
applicable
percentage
described
in
paragraph
“a”
of
the
24
deduction
deductions
that
would
be
allowable
for
federal
income
25
tax
purposes
under
section
199A
sections
199A(a)
and
199A(g)
of
26
the
Internal
Revenue
Code
by
an
individual
taxpayer
reporting
27
the
same
items
of
income
and
loss
that
are
included
in
the
28
composite
return.
29
Sec.
4.
Section
422.11S,
subsection
7,
paragraph
b,
Code
30
2019,
is
amended
to
read
as
follows:
31
b.
The
department
shall
authorize
a
school
tuition
32
organization
to
issue
tax
credit
certificates
for
contributions
33
made
to
the
school
tuition
organization.
The
aggregate
amount
34
of
tax
credit
certificates
that
the
department
shall
authorize
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for
a
school
tuition
organization
for
a
tax
calendar
year
shall
1
be
determined
for
that
organization
pursuant
to
subsection
8
.
2
However,
a
school
tuition
organization
shall
not
be
authorized
3
to
issue
tax
credit
certificates
unless
the
organization
is
4
controlled
by
a
board
of
directors
consisting
of
at
least
5
seven
members.
The
names
and
addresses
of
the
members
shall
6
be
provided
to
the
department
and
shall
be
made
available
7
by
the
department
to
the
public,
notwithstanding
any
state
8
confidentiality
restrictions.
9
Sec.
5.
Section
422.11S,
subsection
8,
paragraph
a,
10
subparagraph
(2),
Code
2019,
is
amended
to
read
as
follows:
11
(2)
“Total
approved
tax
credits”
means
for
the
tax
year
12
beginning
in
the
2006
calendar
year,
two
million
five
hundred
13
thousand
dollars,
for
the
tax
year
beginning
in
the
2007
14
calendar
year,
five
million
dollars,
for
tax
calendar
years
15
beginning
on
or
after
January
1,
2008,
but
before
January
1,
16
2012,
seven
million
five
hundred
thousand
dollars,
for
tax
17
calendar
years
beginning
on
or
after
January
1,
2012,
but
18
before
January
1,
2014,
eight
million
seven
hundred
fifty
19
thousand
dollars,
and
for
tax
calendar
years
beginning
on
or
20
after
January
1,
2014,
but
before
January
1,
2019,
twelve
21
million
dollars,
and
for
tax
calendar
years
beginning
on
or
22
after
January
1,
2019,
thirteen
million
dollars.
23
Sec.
6.
Section
422.11S,
subsection
8,
paragraph
b,
24
unnumbered
paragraph
1,
Code
2019,
is
amended
to
read
as
25
follows:
26
Each
year
by
December
1,
the
department
shall
authorize
27
school
tuition
organizations
to
issue
tax
credit
certificates
28
for
the
following
tax
calendar
year.
However,
for
the
tax
year
29
beginning
in
the
2006
calendar
year
only,
the
department,
by
30
September
1,
2006,
shall
authorize
school
tuition
organizations
31
to
issue
tax
credit
certificates
for
the
2006
calendar
tax
32
year.
For
the
tax
year
beginning
in
the
2006
calendar
year
33
only,
each
school
served
by
a
school
tuition
organization
shall
34
submit
a
participation
form
to
the
department
by
August
1,
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2006,
providing
the
certified
enrollment
as
of
the
third
Friday
1
of
September
2005,
along
with
the
school
tuition
organization
2
that
represents
the
school.
Tax
credit
certificates
available
3
for
issue
by
each
school
tuition
organization
shall
be
4
determined
in
the
following
manner:
5
Sec.
7.
Section
422.11S,
subsection
9,
unnumbered
paragraph
6
1,
Code
2019,
is
amended
to
read
as
follows:
7
A
school
tuition
organization
that
receives
a
voluntary
cash
8
or
noncash
contribution
pursuant
to
this
section
shall
report
9
to
the
department,
on
a
form
prescribed
by
the
department,
10
by
January
12
of
each
tax
calendar
year
all
of
the
following
11
information:
12
Sec.
8.
Section
422.11S,
subsection
9,
paragraphs
b
and
c,
13
Code
2019,
are
amended
to
read
as
follows:
14
b.
The
total
number
and
dollar
value
of
contributions
15
received
and
the
total
number
and
dollar
value
of
the
tax
16
credits
approved
during
the
previous
tax
calendar
year.
17
c.
A
list
of
the
individual
donors
for
the
previous
tax
18
calendar
year
that
includes
the
dollar
value
of
each
donation
19
and
the
dollar
value
of
each
approved
tax
credit.
20
Sec.
9.
Section
422.12C,
subsection
4,
Code
2019,
is
amended
21
to
read
as
follows:
22
4.
Married
taxpayers
who
have
filed
joint
federal
returns
23
electing
to
file
separate
returns
or
to
file
separately
on
a
24
combined
return
form
must
determine
the
child
and
dependent
25
care
credit
under
subsection
1
or
the
early
childhood
26
development
tax
credit
under
subsection
2
based
upon
their
27
combined
net
income
and
allocate
the
total
credit
amount
to
28
each
spouse
in
the
proportion
that
each
spouse’s
respective
net
29
income
bears
to
the
total
combined
net
income.
Nonresidents
or
30
part-year
residents
of
Iowa
must
determine
their
Iowa
child
and
31
dependent
care
credit
under
subsection
1
or
the
early
childhood
32
development
tax
credit
under
subsection
2
in
the
ratio
of
33
their
Iowa
source
net
income
to
their
all
source
net
income.
34
Nonresidents
or
part-year
residents
who
are
married
and
elect
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to
file
separate
returns
or
to
file
separately
on
a
combined
1
return
form
must
allocate
the
Iowa
child
and
dependent
care
2
credit
under
subsection
1
or
the
early
childhood
development
3
tax
credit
under
subsection
2
between
the
spouses
in
the
ratio
4
of
each
spouse’s
Iowa
source
net
income
to
the
combined
Iowa
5
source
net
income
of
the
taxpayers.
6
Sec.
10.
Section
422.60,
subsection
2,
paragraph
b,
Code
7
2019,
is
amended
by
adding
the
following
new
subparagraph:
8
NEW
SUBPARAGRAPH
.
(6)
For
purposes
of
this
paragraph,
9
“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
12
the
Internal
Revenue
Code
of
1986
as
amended
and
in
effect
on
13
December
21,
2017.
This
definition
shall
not
be
construed
to
14
include
any
amendment
to
the
Internal
Revenue
Code
enacted
15
after
the
date
specified
in
the
preceding
sentence,
including
16
any
amendment
with
retroactive
applicability
or
effectiveness.
17
Sec.
11.
LIKE-KIND
EXCHANGES
OF
PERSONAL
PROPERTY
18
UNDER
CORPORATE
INCOME
TAX
AND
FRANCHISE
TAX
FOR
TAX
YEAR
19
2019.
Notwithstanding
any
other
provision
of
law
to
the
20
contrary,
all
of
the
following
shall
apply
when
computing
net
21
income
for
purposes
of
the
corporation
income
tax
or
franchise
22
tax
under
section
422.35
for
tax
years
beginning
during
the
23
2019
calendar
year:
24
1.
The
rules
for
nonrecognition
of
gain
or
loss
from
25
exchanges
of
real
property
held
for
productive
use
or
26
investment
and
not
held
primarily
for
sale,
as
provided
in
27
section
1031
of
the
Internal
Revenue
Code,
as
amended
up
to
and
28
including
March
24,
2018,
apply
for
state
income
tax
purposes
29
with
regard
to
exchanges
of
real
property.
30
2.
The
rules
for
nonrecognition
of
gain
or
loss
from
31
exchanges
of
property
other
than
real
property
held
for
32
productive
use
or
investment
as
provided
in
section
1031
of
the
33
Internal
Revenue
Code,
as
amended
up
to
and
including
December
34
21,
2017,
apply
for
state
income
tax
purposes,
notwithstanding
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any
other
provision
of
law
to
the
contrary.
If
the
taxpayer’s
1
federal
taxable
income
includes
gain
or
loss
from
property,
2
other
than
real
property
described
in
subsection
1,
and
the
3
taxpayer
elects
to
have
this
subsection
apply,
the
following
4
adjustments
shall
be
made:
5
a.
(1)
Subtract
the
total
amount
of
gain
related
to
the
6
sale
or
exchange
of
the
property
as
properly
reported
for
7
federal
tax
purposes
under
the
Internal
Revenue
Code.
8
(2)
Add
back
any
gain
related
to
the
sale
or
exchange
of
the
9
property
to
the
extent
such
gain
does
not
qualify
for
deferral
10
under
section
1031
of
the
Internal
Revenue
Code,
as
amended
11
up
to
and
including
December
21,
2017,
which
gain
shall
be
12
calculated
using
the
taxpayer’s
adjusted
basis
in
the
property
13
for
state
tax
purposes.
14
b.
(1)
Add
the
total
amount
of
loss
related
to
the
sale
or
15
exchange
of
the
property
as
properly
reported
for
federal
tax
16
purposes
under
the
Internal
Revenue
Code.
17
(2)
Subtract
any
loss
related
to
the
sale
or
exchange
of
the
18
property
to
the
extent
such
loss
does
not
qualify
for
deferral
19
under
section
1031
of
the
Internal
Revenue
Code,
as
amended
20
up
to
and
including
December
21,
2017,
which
loss
shall
be
21
calculated
using
the
taxpayer’s
adjusted
basis
in
the
property
22
for
state
tax
purposes.
23
c.
Any
other
adjustments
to
gains,
losses,
deductions,
or
24
tax
basis
for
the
property
given
up
or
received
in
the
sale
or
25
exchange
pursuant
to
rules
adopted
by
the
director.
26
Sec.
12.
REFUNDS
——
EARLY
CHILDHOOD
DEVELOPMENT
TAX
27
CREDIT.
Notwithstanding
any
provision
of
law
to
the
contrary,
28
for
tax
years
beginning
prior
to
January
1,
2019,
refunds
of
29
the
early
childhood
development
tax
credit
provided
in
section
30
422.12C,
subsection
2,
requested
on
or
after
the
effective
31
date
of
the
provision
of
this
division
of
this
Act
amending
32
section
422.12C,
subsection
4,
shall
not
exceed
the
amount
33
allowed
under
section
422.12C,
subsection
4,
as
amended
by
this
34
division
of
this
Act.
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Sec.
13.
LEGISLATIVE
INTENT.
It
is
the
intent
of
the
1
general
assembly
that
the
provisions
of
this
division
of
2
this
Act
amending
section
422.11S
are
conforming
amendments
3
consistent
with
current
state
law,
and
that
the
amendments
do
4
not
change
the
application
of
current
law
but
instead
reflect
5
current
law
both
before
and
after
the
enactment
of
this
Act.
6
Sec.
14.
EFFECTIVE
DATE.
The
following,
being
deemed
of
7
immediate
importance,
take
effect
upon
enactment:
8
1.
The
section
of
this
division
of
this
Act
amending
section
9
422.12C,
subsection
4.
10
2.
The
section
of
this
division
of
this
Act
relating
to
11
refunds
for
the
early
childhood
development
tax
credit.
12
3.
The
section
of
this
division
of
this
Act
relating
to
13
like-kind
exchanges
of
personal
property
under
corporate
income
14
tax
and
franchise
tax.
15
Sec.
15.
RETROACTIVE
APPLICABILITY.
The
following
apply
16
retroactively
to
January
1,
2019,
for
tax
years
beginning
on
17
or
after
that
date:
18
1.
The
section
of
this
division
of
this
Act
amending
section
19
422.4,
subsection
16,
paragraph
“e”,
unnumbered
paragraph
1.
20
2.
The
sections
of
this
division
of
this
Act
amending
21
section
422.9,
subsection
2A.
22
3.
The
section
of
this
division
of
this
Act
amending
section
23
422.12C,
subsection
4.
24
4.
The
section
of
this
division
of
this
Act
amending
section
25
422.60,
subsection
2,
paragraph
“b”.
26
Sec.
16.
RETROACTIVE
APPLICABILITY
——
LIKE-KIND
EXCHANGES
27
OF
PERSONAL
PROPERTY.
The
section
of
this
division
of
this
28
Act
relating
to
like-kind
exchanges
of
personal
property
under
29
corporate
income
tax
and
franchise
tax
applies
retroactively
to
30
January
1,
2019,
for
tax
years
beginning
on
or
after
that
date,
31
but
before
January
1,
2020.
32
DIVISION
II
33
ADMINISTRATIVE
PROVISIONS
34
Sec.
17.
Section
422.20,
Code
2019,
is
amended
by
adding
the
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following
new
subsection:
1
NEW
SUBSECTION
.
5.
The
department
may
permit,
by
rule,
the
2
disclosure
of
state
tax
information
to
a
person
a
taxpayer
has
3
authorized
to
receive
such
state
tax
information,
in
the
manner
4
prescribed
by
the
department.
5
Sec.
18.
Section
422.72,
Code
2019,
is
amended
by
adding
the
6
following
new
subsection:
7
NEW
SUBSECTION
.
8.
The
department
may
permit,
by
rule,
the
8
disclosure
of
state
tax
information
to
a
person
a
taxpayer
has
9
authorized
to
receive
such
state
tax
information,
in
the
manner
10
prescribed
by
the
department.
11
DIVISION
III
12
SALES
AND
USE
TAX
13
Sec.
19.
Section
423.2,
subsection
1,
paragraph
a,
14
subparagraph
(5),
subparagraph
division
(a),
Code
2019,
is
15
amended
to
read
as
follows:
16
(a)
If
a
service
or
warranty
contract
does
not
specify
a
fee
17
amount
for
nontaxable
services
or
taxable
personal
property,
18
the
tax
imposed
pursuant
to
this
section
shall
be
imposed
upon
19
an
amount
equal
to
one-half
of
the
sales
price
of
the
contract.
20
Sec.
20.
Section
423.2,
subsection
6,
paragraph
k,
Code
21
2019,
is
amended
to
read
as
follows:
22
k.
Carpentry
repair
and
installation
.
23
Sec.
21.
Section
423.3,
Code
2019,
is
amended
by
adding
the
24
following
new
subsection:
25
NEW
SUBSECTION
.
16A.
a.
The
sales
price
from
the
sale
of
26
a
grain
bin,
including
material
or
replacement
parts
used
to
27
construct
or
repair
a
grain
bin.
28
b.
For
purposes
of
this
subsection,
“grain
bin”
means
29
property
that
is
vented
and
covered
with
corrugated
metal
or
30
similar
material,
and
that
is
primarily
used
to
hold
loose
31
grain
for
drying
or
storage.
32
Sec.
22.
Section
423.3,
subsection
47,
paragraph
c,
33
subparagraph
(3),
Code
2019,
is
amended
by
striking
the
34
subparagraph
and
inserting
in
lieu
thereof
the
following:
35
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(3)
The
following
within
the
scope
of
section
427A.1,
1
subsection
1,
paragraphs
“h”
and
“i”
:
2
(a)
Computers.
3
(b)
Machinery.
4
(c)
Equipment,
including
pollution
control
equipment.
5
(d)
Replacement
parts.
6
(e)
Supplies.
7
(f)
Materials
used
to
construct
or
self-construct
the
8
following:
9
(i)
Computers.
10
(ii)
Machinery.
11
(iii)
Equipment,
including
pollution
control
equipment.
12
(iv)
Replacement
parts.
13
(v)
Supplies.
14
Sec.
23.
Section
423.3,
subsection
104,
paragraph
a,
Code
15
2019,
is
amended
to
read
as
follows:
16
a.
The
sales
price
of
specified
digital
products
and
of
17
prewritten
computer
software
sold,
and
of
enumerated
services
18
described
in
section
423.2,
subsection
1,
paragraph
“a”
,
19
subparagraph
(5),
or
section
423.2,
subsection
6
,
paragraphs
20
“bq”
,
“br”
,
“bs”
,
and
“bu”
furnished,
to
a
commercial
enterprise
21
for
use
exclusively
by
the
commercial
enterprise.
The
use
of
22
prewritten
computer
software,
a
specified
digital
product,
or
23
service
fails
to
qualify
as
a
use
exclusively
by
the
commercial
24
enterprise
if
its
use
for
noncommercial
purposes
is
more
than
25
de
minimis.
26
Sec.
24.
Section
423.14A,
subsection
3,
paragraph
b,
Code
27
2019,
is
amended
by
striking
the
paragraph.
28
Sec.
25.
Section
423.14A,
subsection
3,
paragraph
d,
29
subparagraph
(1),
Code
2019,
is
amended
to
read
as
follows:
30
(1)
A
marketplace
facilitator
that
makes
or
facilitates
31
Iowa
sales
on
its
own
behalf
or
for
one
or
more
marketplace
32
sellers
equal
to
or
exceeding
one
hundred
thousand
dollars
,
33
or
in
two
hundred
or
more
separate
transactions,
for
an
34
immediately
preceding
calendar
year
or
a
current
calendar
year.
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Sec.
26.
Section
423.14A,
subsection
3,
paragraph
e,
1
subparagraph
(1),
unnumbered
paragraph
1,
Code
2019,
is
amended
2
to
read
as
follows:
3
A
referrer
if,
for
any
immediately
preceding
calendar
year
4
or
a
current
calendar
year,
one
hundred
thousand
dollars
or
5
more
in
Iowa
sales
or
two
hundred
or
more
separate
Iowa
sales
6
transactions
result
from
referrals
from
a
platform
of
the
7
referrer.
A
referrer
is
not
required
to
collect
and
remit
8
sales
and
use
tax
pursuant
to
this
paragraph
if
the
referrer
9
does
all
of
the
following:
10
Sec.
27.
Section
423.14A,
subsection
3,
paragraph
e,
11
subparagraph
(1),
subparagraph
division
(c),
unnumbered
12
paragraph
1,
Code
2019,
is
amended
to
read
as
follows:
13
The
referrer
provides
the
department
with
monthly
annual
14
reports
in
an
electronic
format
and
in
the
manner
prescribed
15
by
the
department,
which
monthly
annual
reports
contain
all
of
16
the
following:
17
Sec.
28.
Section
423.14A,
subsection
3,
paragraph
e,
Code
18
2019,
is
amended
by
adding
the
following
new
subparagraph:
19
NEW
SUBPARAGRAPH
.
(5)
This
paragraph
is
subject
to
20
implementation
by
the
department
by
rule
and
shall
not
require
21
a
referrer
to
collect
tax
or
comply
with
the
notice
and
22
reporting
requirements
and
other
provisions
of
this
paragraph
23
unless
and
until
such
administrative
rules
take
effect.
24
Sec.
29.
Section
423.48,
subsection
2,
paragraph
c,
Code
25
2019,
is
amended
by
striking
the
paragraph.
26
Sec.
30.
TAXATION
AND
EXEMPTION
OF
COMPUTERS
TASK
FORCE.
A
27
taxation
and
exemption
of
computers
task
force
is
created.
The
28
department
of
revenue
shall
initiate
and
coordinate
the
task
29
force
and
provide
staff
assistance.
It
is
the
intent
of
the
30
general
assembly
that
the
task
force
include
representatives
31
of
appropriate
stakeholders
identified
by
the
director
of
32
the
department
of
revenue.
The
director
of
revenue
or
the
33
director’s
designee
shall
serve
as
chairperson
of
the
task
34
force.
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The
task
force
shall
be
charged
with
reviewing
the
1
definition
of
“computer”
as
used
throughout
the
portions
of
the
2
Iowa
Code
and
the
Iowa
Administrative
Code
administered
by
the
3
department
of
revenue
including
the
exemption
for
computers
4
provided
in
section
423.3,
subsection
47,
paragraph
“a”,
5
subparagraph
(4).
If
the
task
force
recommends
modifications
6
to
the
current
definition
of
“computer”
including
the
exemption
7
for
computers
provided
in
section
423.3,
subsection
47,
8
paragraph
“a”,
subparagraph
(4),
the
department
of
revenue
9
shall
provide
any
recommendations
to
the
general
assembly
by
10
January
1,
2020.
11
Sec.
31.
REFUNDS.
Refunds
of
taxes,
interest,
or
penalties
12
that
arise
from
claims
resulting
from
the
enactment
of
section
13
423.3,
subsection
16A,
for
sales
occurring
between
January
14
1,
2015,
and
the
effective
date
of
the
enactment
of
section
15
423.3,
subsection
16A,
shall
be
limited
to
twenty-five
thousand
16
dollars
in
the
aggregate
and
shall
not
be
allowed
unless
refund
17
claims
are
filed
prior
to
October
1,
2019,
notwithstanding
any
18
other
law
to
the
contrary.
If
the
amount
of
claims
totals
19
more
than
twenty-five
thousand
dollars
in
the
aggregate,
the
20
department
of
revenue
shall
prorate
the
twenty-five
thousand
21
dollars
among
all
claimants
in
relation
to
the
amounts
of
the
22
claimants’
valid
claims.
23
Sec.
32.
EFFECTIVE
DATE.
The
following,
being
deemed
of
24
immediate
importance,
take
effect
upon
enactment:
25
1.
The
section
of
this
division
of
this
Act
enacting
section
26
423.3,
subsection
16A.
27
2.
The
section
of
this
division
of
this
Act
amending
section
28
423.3,
subsection
47,
paragraph
“c”,
subparagraph
(3).
29
3.
The
section
of
this
division
of
this
Act
relating
to
30
refunds
that
arise
from
claims
resulting
from
the
enactment
of
31
section
423.3,
subsection
16A.
32
Sec.
33.
RETROACTIVE
APPLICABILITY.
The
following
applies
33
retroactively
to
January
1,
2016,
for
tax
years
beginning
on
34
or
after
that
date:
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The
section
of
this
division
of
this
Act
amending
section
1
423.3,
subsection
47,
paragraph
“c”,
subparagraph
(3).
2
Sec.
34.
RETROACTIVE
APPLICABILITY.
The
following
applies
3
retroactively
to
tax
years
beginning
on
or
after
January
1,
4
2015:
5
The
section
of
this
division
of
this
Act
enacting
section
6
423.3,
subsection
16A.
7
DIVISION
IV
8
AUTOMOBILE
RENTAL
EXCISE
TAX
9
Sec.
35.
Section
423.14A,
subsection
1,
paragraph
b,
10
subparagraph
(3),
Code
2019,
is
amended
to
read
as
follows:
11
(3)
A
“rental
platform”
,
as
defined
in
section
423C.2
,
that
12
meets
the
requirements
described
in
person
who
is
not
required
13
to
collect
and
remit
automobile
rental
excise
tax
pursuant
to
14
section
423C.3,
subsection
3
,
paragraph
“c”
,
subparagraph
(2),
15
shall
not
be
considered
a
“marketplace
facilitator”
with
respect
16
to
any
sale
of
a
transportation
service
under
section
423.2,
17
subsection
6
,
paragraph
“bf”
,
or
section
423.5,
subsection
1
,
18
paragraph
“e”
,
consisting
of
the
rental
of
vehicles
subject
19
to
registration
which
are
registered
for
a
gross
weight
of
20
thirteen
tons
or
less
for
a
period
of
sixty
days
or
less.
21
Sec.
36.
Section
423C.2,
subsection
3,
paragraphs
a
and
b,
22
Code
2019,
are
amended
to
read
as
follows:
23
a.
A
person
or
any
affiliate
of
a
person
that
owns
or
24
controls
an
automobile
and
makes
the
automobile
available
for
25
rent
through
the
person
or
any
affiliate,
or
through
a
rental
26
platform
or
rental
facilitator
any
other
person
required
to
27
collect
sales
or
use
tax
under
chapter
423
.
28
b.
A
person
or
any
affiliate
of
a
person
who
possesses
or
29
acquires
a
right
or
interest
in
any
automobile
with
an
intent
30
to
rent
the
automobile
to
another
person
,
or
through
the
person
31
or
any
affiliate,
or
through
a
rental
platform
or
a
rental
32
facilitator
any
other
person
required
to
collect
sales
or
use
33
tax
under
chapter
423
.
34
Sec.
37.
Section
423C.2,
subsection
6,
Code
2019,
is
amended
35
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to
read
as
follows:
1
6.
“Facilitation
fee”
means
any
consideration,
by
whatever
2
name
called,
that
a
rental
facilitator
or
a
rental
platform
3
person
charges
to
a
user
for
facilitating
the
user’s
rental
4
of
an
automobile.
“Facilitation
fee”
does
not
include
any
5
commission
an
automobile
provider
pays
to
a
rental
facilitator
6
or
a
rental
platform
person
for
facilitating
the
rental
of
an
7
automobile.
8
Sec.
38.
Section
423C.2,
subsections
9
and
10,
Code
2019,
9
are
amended
by
striking
the
subsections.
10
Sec.
39.
Section
423C.2,
subsection
11,
Code
2019,
is
11
amended
to
read
as
follows:
12
11.
“Rental
price”
means
all
consideration
charged
for
13
the
renting
and
facilitation
of
renting
of
an
automobile
14
before
taxes,
including
but
not
limited
to
facilitation
fees,
15
reservation
fees,
services
fees,
nonrefundable
deposits,
and
16
any
other
direct
or
indirect
charge
made
or
consideration
17
provided
in
connection
with
the
renting
or
facilitation
of
18
renting
of
an
automobile
the
same
as
“sales
price”
as
defined
19
in
section
423.1,
which
term
includes
but
is
not
limited
20
to
facilitation
fees,
reservation
fees,
services
fees,
21
nonrefundable
deposits,
and
any
other
direct
or
indirect
charge
22
made
or
consideration
provided
in
connection
with
the
renting
23
or
facilitation
of
renting
an
automobile
.
24
Sec.
40.
Section
423C.3,
Code
2019,
is
amended
to
read
as
25
follows:
26
423C.3
Tax
on
rental
of
automobiles
——
collection
and
27
remittance
of
tax.
28
1.
For
purposes
of
this
section
:
29
a.
“Discount
rental
charge”
means
the
amount
an
automobile
30
provider
charges
to
a
rental
facilitator
for
the
rental
of
an
31
automobile,
excluding
any
applicable
tax.
32
b.
“Travel
package”
means
an
automobile
rental
bundled
33
with
one
or
more
separate
components
such
as
lodging,
air
34
transportation,
or
similar
items
and
charged
for
a
single
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retail
price.
1
2.
1.
A
tax
of
five
percent
is
imposed
upon
the
rental
2
price
of
an
automobile
if
the
rental
transaction
is
subject
to
3
the
sales
and
services
tax
under
chapter
423,
subchapter
II
,
or
4
the
use
tax
under
chapter
423,
subchapter
III
.
The
tax
shall
5
not
be
imposed
on
any
rental
transaction
not
taxable
under
the
6
state
sales
and
services
tax,
as
provided
in
section
423.3
,
or
7
the
state
use
tax,
as
provided
in
section
423.6
,
on
automobile
8
rental
receipts.
9
3.
2.
This
subsection
shall
govern
the
collection
and
10
remittance
of
the
tax
imposed
under
subsection
2
The
tax
11
imposed
under
subsection
1
shall
be
collected
and
remitted
to
12
the
department
by
all
persons
required
to
collect
state
sales
13
and
use
tax
on
the
rental
transaction
under
chapter
423
.
14
a.
Unless
otherwise
provided
in
this
subsection
,
the
15
automobile
provider
shall
collect
the
tax
by
adding
the
tax
to
16
the
rental
price
of
the
automobile
and
the
tax,
when
collected,
17
shall
be
stated
as
a
distinct
item
separate
and
apart
from
18
the
rental
price
of
the
automobile
and
the
sales
and
services
19
tax
imposed
under
chapter
423,
subchapter
II
,
or
the
use
tax
20
imposed
under
chapter
423,
subchapter
III
.
21
b.
If
a
transaction
for
the
rental
of
an
automobile
involves
22
a
rental
facilitator,
all
of
the
following
shall
occur
in
the
23
order
prescribed:
24
(1)
The
rental
facilitator
shall
collect
the
tax
on
any
25
rental
price
that
the
user
pays
to
the
rental
facilitator
in
26
the
same
manner
as
an
automobile
provider
under
paragraph
“a”
.
27
(2)
(a)
Unless
otherwise
required
by
rule
or
order
of
28
the
department,
the
rental
facilitator
shall
remit
to
the
29
automobile
provider
that
portion
of
the
tax
collected
on
the
30
rental
price
that
represents
the
discount
rental
charge.
31
(b)
No
assessment
shall
be
made
against
a
rental
facilitator
32
for
tax
due
on
a
discount
rental
charge
if
the
rental
33
facilitator
collected
the
tax
and
remitted
it
to
an
automobile
34
provider
that
has
a
valid
tax
permit
required
under
this
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chapter
or
under
chapter
423
.
This
subparagraph
division
shall
1
not
apply
if
the
rental
facilitator
and
automobile
provider
2
are
affiliates,
or
if
the
department
requires
the
rental
3
facilitator
to
remit
taxes
collected
on
that
portion
of
the
4
sales
price
that
represents
the
discount
rental
charge
directly
5
to
the
department.
6
(3)
The
rental
facilitator
shall
remit
any
remaining
tax
it
7
collected
to
the
department.
8
(4)
(a)
The
automobile
provider
shall
collect
and
remit
9
to
the
department
any
taxes
the
rental
facilitator
remitted
to
10
the
automobile
provider,
and
shall
collect
and
remit
to
the
11
department
any
taxes
due
on
any
amount
of
rental
price
the
user
12
paid
to
the
automobile
provider.
13
(b)
No
assessment
shall
be
made
against
an
automobile
14
provider
for
any
tax
due
on
a
discount
rental
charge
that
15
was
not
remitted
to
the
automobile
provider
by
a
rental
16
facilitator.
This
subparagraph
division
shall
not
apply
if
the
17
automobile
provider
and
the
rental
facilitator
are
affiliates.
18
(5)
Notwithstanding
any
other
provision
of
this
paragraph
19
to
the
contrary,
if
a
rental
facilitator
and
its
affiliates
20
facilitate
total
rentals
under
this
chapter
and
chapter
21
423A
that
are
equal
to
or
less
than
an
aggregate
amount
of
22
rental
price
and
sales
price
of
ten
thousand
dollars
for
an
23
immediately
preceding
calendar
year
or
a
current
calendar
year,
24
or
in
ten
or
fewer
separate
transactions
for
an
immediately
25
preceding
calendar
year
or
a
current
calendar
year,
the
26
rental
facilitator
shall
not
be
required
to
collect
tax
on
the
27
amount
of
sales
price
that
represents
the
rental
facilitator’s
28
facilitation
fee.
29
c.
(1)
If
a
transaction
for
the
rental
of
an
automobile
30
involves
a
rental
platform,
other
than
a
rental
platform
31
described
in
subparagraph
(2),
the
rental
platform
shall
32
collect
and
remit
the
tax
imposed
under
this
chapter
in
the
33
same
manner
as
an
automobile
provider
under
paragraph
“a”
.
34
(2)
3.
A
rental
platform
person
is
not
required
to
collect
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and
remit
the
tax
imposed
under
this
chapter
in
the
same
manner
1
as
an
automobile
provider
under
paragraph
“a”
if
the
rental
2
platform
person
meets
all
of
the
following
requirements:
3
a.
The
person
or
any
affiliate
of
the
person
is
not
an
4
automobile
provider.
5
b.
The
person
or
any
affiliate
of
the
person
facilitates
the
6
renting
of
an
automobile
by
doing
all
of
the
following:
7
(1)
The
person
owns,
operates,
or
controls
an
automobile
8
rental
marketplace
that
allows
an
automobile
provider
who
is
9
not
an
affiliate
of
the
person
to
offer
or
list
an
automobile
10
for
rent
on
the
marketplace.
For
purposes
of
this
paragraph,
11
it
is
immaterial
whether
or
not
the
automobile
provider
has
12
a
tax
permit
under
this
chapter
or
chapter
423
or
whether
13
the
automobile
is
owned
by
a
natural
person
or
by
a
business
14
entity.
15
(2)
The
person
or
affiliate
of
the
person
collects
or
16
processes
the
rental
price
charged
to
the
user.
17
(a)
c.
The
only
sales
the
rental
platform
person
and
18
its
affiliates
of
the
person
facilitate
that
are
subject
to
19
tax
under
chapter
423
are
sales
of
a
transportation
service
20
under
section
423.2,
subsection
6
,
paragraph
“bf”
,
or
section
21
423.5,
subsection
1
,
paragraph
“e”
,
consisting
of
the
rental
22
of
vehicles
subject
to
registration
which
are
registered
for
23
a
gross
weight
of
thirteen
tons
or
less
for
a
period
of
sixty
24
days
or
less.
25
(b)
d.
The
rental
platform
person
operates
a
peer-to-peer
26
automobile
sharing
marketplace.
27
(3)
4.
For
any
rental
transaction
for
which
the
rental
28
platform
a
person
is
required
to
or
elects
to
collect
and
29
remit
the
tax
under
this
chapter
,
the
rental
platform
person
30
shall
also
be
liable
for
the
collection
and
remittance
of
any
31
sales
or
use
tax
due
on
that
transaction
under
section
423.2,
32
subsection
6
,
paragraph
“bf”
,
or
section
423.5,
subsection
33
1
,
paragraph
“e”
,
notwithstanding
any
other
provision
to
the
34
contrary
in
chapter
423
.
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(4)
5.
For
any
rental
transaction
for
which
the
rental
1
platform
person
is
not
required
to
collect
and
remit
the
2
tax
under
this
chapter
as
provided
under
subparagraph
(2)
3
subsection
3
,
the
automobile
provider
shall
be
solely
liable
4
for
any
amount
of
uncollected
or
unremitted
tax
under
this
5
chapter
and
chapter
423
.
6
DIVISION
V
7
TELEPHONE
COMPANY
PROPERTY
8
Sec.
41.
Section
476.1D,
Code
2019,
is
amended
by
adding
the
9
following
new
subsection:
10
NEW
SUBSECTION
.
10.
a.
The
board,
at
the
request
of
a
11
long
distance
telephone
company,
shall
classify
such
company
12
as
a
competitive
long
distance
telephone
company
if
more
13
than
half
of
the
company’s
revenues
from
its
Iowa
intrastate
14
telecommunications
services
and
facilities
are
received
15
from
services
and
facilities
that
the
board
has
determined
16
to
be
subject
to
effective
competition,
or
if
more
than
17
half
of
the
company’s
revenues
from
its
Iowa
intrastate
18
telecommunications
services
and
facilities
are
received
from
19
intralata
interexchange
services
and
facilities.
For
purposes
20
of
this
subsection,
“intralata
interexchange
services”
means
21
those
interexchange
services
that
originate
and
terminate
22
within
the
same
local
access
transport
area.
23
b.
The
board
shall
promptly
notify
the
director
of
revenue
24
that
a
long
distance
telephone
company
has
been
classified
25
as
a
competitive
long
distance
telephone
company.
Upon
such
26
notification
by
the
board,
the
director
of
revenue
shall
assess
27
the
property
of
such
competitive
long
distance
telephone
28
company,
which
property
is
first
assessed
for
taxation
in
this
29
state
on
or
after
January
1,
1996,
in
the
same
manner
as
all
30
other
property
assessed
as
commercial
property
by
the
local
31
assessor
under
chapters
427,
427A,
427B,
428,
and
441.
As
used
32
in
this
section,
“long
distance
telephone
company”
means
an
33
entity
that
provides
telephone
service
and
facilities
between
34
local
exchanges,
but
does
not
include
a
cellular
service
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provider
or
a
local
exchange
utility
holding
a
certificate
1
issued
under
section
476.29,
subsection
12.
2
Sec.
42.
Section
476.1D,
subsection
10,
as
enacted
in
this
3
division
of
this
Act,
is
amended
by
striking
the
subsection.
4
Sec.
43.
EFFECTIVE
DATE.
The
following,
being
deemed
of
5
immediate
importance,
takes
effect
upon
enactment:
6
The
section
of
this
division
of
this
Act
enacting
section
7
476.1D,
subsection
10.
8
Sec.
44.
RETROACTIVE
APPLICABILITY.
The
following
applies
9
retroactively
to
July
1,
2018,
for
assessment
years
beginning
10
on
or
after
that
date:
11
The
section
of
this
division
of
this
Act
enacting
section
12
476.1D,
subsection
10.
13
Sec.
45.
EFFECTIVE
DATE.
The
following
takes
effect
July
14
1,
2021:
15
The
section
of
this
division
of
this
Act
striking
section
16
476.1D,
subsection
10.
17
Sec.
46.
APPLICABILITY.
The
following
applies
to
18
assessment
years
beginning
on
or
after
January
1,
2022:
19
The
section
of
this
division
of
this
Act
striking
section
20
476.1D,
subsection
10.
21
DIVISION
VI
22
CHILD
AND
DEPENDENT
CARE
CREDIT
AND
EARLY
CHILDHOOD
DEVELOPMENT
23
CREDIT
24
Sec.
47.
Section
422.12C,
subsection
1,
Code
2019,
is
25
amended
to
read
as
follows:
26
1.
The
taxes
imposed
under
this
division
,
less
the
amounts
27
of
nonrefundable
credits
allowed
under
this
division
,
shall
28
be
reduced
by
a
child
and
dependent
care
credit
equal
to
the
29
following
percentages
of
the
federal
child
and
dependent
care
30
credit
provided
in
section
21
of
the
Internal
Revenue
Code,
31
without
regard
to
whether
or
not
the
federal
credit
was
limited
32
by
the
taxpayer’s
federal
tax
liability:
33
a.
For
a
taxpayer
with
net
income
of
less
than
ten
twelve
34
thousand
seven
hundred
fifty
dollars,
seventy-five
percent.
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b.
For
a
taxpayer
with
net
income
of
ten
twelve
thousand
1
seven
hundred
fifty
dollars
or
more
but
less
than
twenty
2
twenty-five
thousand
four
hundred
ninety
dollars,
sixty-five
3
percent.
4
c.
For
a
taxpayer
with
net
income
of
twenty
twenty-five
5
thousand
four
hundred
ninety
dollars
or
more
but
less
than
6
twenty-five
thirty-one
thousand
eight
hundred
sixty
dollars,
7
fifty-five
percent.
8
d.
For
a
taxpayer
with
net
income
of
twenty-five
thirty-one
9
thousand
eight
hundred
sixty
dollars
or
more
but
less
than
10
thirty-five
forty-four
thousand
six
hundred
ten
dollars,
fifty
11
percent.
12
e.
For
a
taxpayer
with
net
income
of
thirty-five
forty-four
13
thousand
six
hundred
ten
dollars
or
more
but
less
than
forty
14
fifty
thousand
nine
hundred
eighty
dollars,
forty
percent.
15
f.
For
a
taxpayer
with
net
income
of
forty
fifty
thousand
16
nine
hundred
eighty
dollars
or
more
but
less
than
forty-five
17
fifty-seven
thousand
three
hundred
sixty
dollars,
thirty
18
percent.
19
g.
For
a
taxpayer
with
net
income
of
forty-five
fifty-seven
20
thousand
three
hundred
sixty
dollars
or
more,
zero
percent.
21
Sec.
48.
Section
422.12C,
subsection
2,
paragraph
a,
Code
22
2019,
is
amended
to
read
as
follows:
23
a.
The
taxes
imposed
under
this
division
,
less
the
amounts
24
of
nonrefundable
credits
allowed
under
this
division
,
may
be
25
reduced
by
an
early
childhood
development
tax
credit
equal
to
26
twenty-five
percent
of
the
first
one
thousand
dollars
which
27
the
taxpayer
has
paid
to
others
for
each
dependent,
as
defined
28
in
the
Internal
Revenue
Code,
ages
three
through
five
for
29
early
childhood
development
expenses.
In
determining
the
30
amount
of
early
childhood
development
expenses
for
the
tax
year
31
beginning
in
the
2006
calendar
year
only,
such
expenses
paid
32
during
November
and
December
of
the
previous
tax
year
shall
33
be
considered
paid
in
the
tax
year
for
which
the
tax
credit
34
is
claimed.
This
credit
is
available
to
a
taxpayer
whose
net
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income
is
less
than
forty-five
fifty-seven
thousand
three
1
hundred
sixty
dollars.
If
the
early
childhood
development
2
tax
credit
is
claimed
for
a
tax
year,
the
taxpayer
and
the
3
taxpayer’s
spouse
shall
not
claim
the
child
and
dependent
care
4
credit
under
subsection
1
.
5
Sec.
49.
Section
422.12C,
Code
2019,
is
amended
by
adding
6
the
following
new
subsection:
7
NEW
SUBSECTION
.
5.
a.
Upon
determination
of
the
latest
8
cumulative
inflation
factor,
the
director
shall
multiply
9
each
net
income
level
set
forth
in
subsection
1
or
2
by
this
10
cumulative
inflation
factor,
shall
round
off
the
resulting
11
product
to
the
nearest
one
dollar,
and
shall
incorporate
the
12
result
into
the
net
income
levels
in
subsection
1
or
2
for
each
13
tax
year
beginning
on
or
after
January
1,
2019.
14
b.
For
purposes
of
this
subsection,
“cumulative
inflation
15
factor”
means
the
product
of
the
annual
inflation
factor
for
16
the
2019
calendar
year
and
all
annual
inflation
factors
for
17
subsequent
calendar
years
as
determined
by
section
422.4,
18
subsection
1,
paragraph
“a”
.
The
cumulative
inflation
factor
19
applies
to
all
tax
years
beginning
on
or
after
January
1
of
20
the
calendar
year
for
which
the
latest
annual
inflation
factor
21
has
been
determined.
Notwithstanding
any
other
provision,
22
the
annual
inflation
factor
for
the
2019
calendar
year
is
one
23
hundred
percent.
24
Sec.
50.
EFFECTIVE
DATE.
This
division
of
this
Act,
being
25
deemed
of
immediate
importance,
takes
effect
upon
enactment.
26
Sec.
51.
RETROACTIVE
APPLICABILITY.
This
division
of
this
27
Act
applies
retroactively
to
tax
years
beginning
on
or
after
28
January
1,
2019.
29
DIVISION
VII
30
APPORTIONMENT
OF
CERTAIN
BUSINESS
INCOME
OF
AN
AIRLINE
31
Sec.
52.
Section
422.33,
subsection
2,
paragraph
a,
32
subparagraph
(2),
Code
2019,
is
amended
by
adding
the
following
33
new
subparagraph
divisions:
34
NEW
SUBPARAGRAPH
DIVISION
.
(0f)
Notwithstanding
35
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subparagraph
division
(c),
where
income
is
derived
by
an
1
airline
from
transportation
operations,
the
part
attributable
2
to
business
within
the
state
shall
be
in
the
proportion
that
3
the
miles
of
the
airline
traveled
in
this
state
bears
to
the
4
total
miles
of
such
airline
traveled
everywhere.
5
NEW
SUBPARAGRAPH
DIVISION
.
(00f)
(i)
Notwithstanding
6
subparagraph
division
(c),
where
income
is
derived
by
a
7
qualified
air
freight
forwarder
from
transportation
operations
8
through
an
affiliated
airline,
such
income
shall
be
apportioned
9
as
follows:
10
(A)
For
tax
years
beginning
during
the
2020
calendar
year,
11
ninety
percent
of
such
income
shall
be
equitably
apportioned
12
as
provided
in
subparagraph
division
(c),
and
of
the
remaining
13
ten
percent
of
such
income,
the
part
attributable
to
business
14
within
the
state
shall
be
in
the
proportion
that
the
miles
15
of
the
qualified
air
freight
forwarder’s
affiliated
airline
16
traveled
in
this
state
bears
to
the
total
miles
of
the
17
affiliated
airline
traveled
everywhere.
18
(B)
For
tax
years
beginning
during
the
2021
calendar
year,
19
eighty
percent
of
such
income
shall
be
equitably
apportioned
20
as
provided
in
subparagraph
division
(c),
and
of
the
remaining
21
twenty
percent
of
such
income,
the
part
attributable
to
22
business
within
the
state
shall
be
in
the
proportion
that
the
23
miles
of
the
qualified
air
freight
forwarder’s
affiliated
24
airline
traveled
in
this
state
bears
to
the
total
miles
of
the
25
affiliated
airline
traveled
everywhere.
26
(C)
For
tax
years
beginning
during
the
2022
calendar
year,
27
seventy
percent
of
such
income
shall
be
equitably
apportioned
28
as
provided
in
subparagraph
division
(c),
and
of
the
remaining
29
thirty
percent
of
such
income,
the
part
attributable
to
30
business
within
the
state
shall
be
in
the
proportion
that
the
31
miles
of
the
qualified
air
freight
forwarder’s
affiliated
32
airline
traveled
in
this
state
bears
to
the
total
miles
of
the
33
affiliated
airline
traveled
everywhere.
34
(D)
For
tax
years
beginning
during
the
2023
calendar
year,
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sixty
percent
of
such
income
shall
be
equitably
apportioned
as
1
provided
in
subparagraph
division
(c),
and
of
the
remaining
2
forty
percent
of
such
income,
the
part
attributable
to
business
3
within
the
state
shall
be
in
the
proportion
that
the
miles
4
of
the
qualified
air
freight
forwarder’s
affiliated
airline
5
traveled
in
this
state
bears
to
the
total
miles
of
the
6
affiliated
airline
traveled
everywhere.
7
(E)
For
tax
years
beginning
during
the
2024
calendar
year,
8
fifty
percent
of
such
income
shall
be
equitably
apportioned
as
9
provided
in
subparagraph
division
(c),
and
of
the
remaining
10
fifty
percent
of
such
income,
the
part
attributable
to
business
11
within
the
state
shall
be
in
the
proportion
that
the
miles
12
of
the
qualified
air
freight
forwarder’s
affiliated
airline
13
traveled
in
this
state
bears
to
the
total
miles
of
the
14
affiliated
airline
traveled
everywhere.
15
(F)
For
tax
years
beginning
during
the
2025
calendar
year,
16
forty
percent
of
such
income
shall
be
equitably
apportioned
as
17
provided
in
subparagraph
division
(c),
and
of
the
remaining
18
sixty
percent
of
such
income,
the
part
attributable
to
business
19
within
the
state
shall
be
in
the
proportion
that
the
miles
20
of
the
qualified
air
freight
forwarder’s
affiliated
airline
21
traveled
in
this
state
bears
to
the
total
miles
of
the
22
affiliated
airline
traveled
everywhere.
23
(G)
For
tax
years
beginning
during
the
2026
calendar
year,
24
thirty
percent
of
such
income
shall
be
equitably
apportioned
25
as
provided
in
subparagraph
division
(c),
and
of
the
remaining
26
seventy
percent
of
such
income,
the
part
attributable
to
27
business
within
the
state
shall
be
in
the
proportion
that
the
28
miles
of
the
qualified
air
freight
forwarder’s
affiliated
29
airline
traveled
in
this
state
bears
to
the
total
miles
of
the
30
affiliated
airline
traveled
everywhere.
31
(H)
For
tax
years
beginning
during
the
2027
calendar
year,
32
twenty
percent
of
such
income
shall
be
equitably
apportioned
33
as
provided
in
subparagraph
division
(c),
and
of
the
remaining
34
eighty
percent
of
such
income,
the
part
attributable
to
35
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business
within
the
state
shall
be
in
the
proportion
that
the
1
miles
of
the
qualified
air
freight
forwarder’s
affiliated
2
airline
traveled
in
this
state
bears
to
the
total
miles
of
the
3
affiliated
airline
traveled
everywhere.
4
(I)
For
tax
years
beginning
during
the
2028
calendar
year,
5
ten
percent
of
such
income
shall
be
equitably
apportioned
as
6
provided
in
subparagraph
division
(c),
and
of
the
remaining
7
ninety
percent
of
such
income,
the
part
attributable
to
8
business
within
the
state
shall
be
in
the
proportion
that
the
9
miles
of
the
qualified
air
freight
forwarder’s
affiliated
10
airline
traveled
in
this
state
bears
to
the
total
miles
of
the
11
affiliated
airline
traveled
everywhere.
12
(J)
For
tax
years
beginning
on
or
after
January
1,
2029,
13
the
part
attributable
to
business
within
the
state
shall
be
14
in
the
proportion
that
the
miles
of
the
qualified
air
freight
15
forwarder’s
affiliated
airline
traveled
in
this
state
bears
to
16
the
total
miles
of
the
affiliated
airline
traveled
everywhere.
17
(ii)
For
purposes
of
this
subparagraph
division
(00f),
18
“qualified
air
freight
forwarder”
means
a
taxpayer
who
meets
all
19
of
the
following
requirements:
20
(A)
The
taxpayer
is
primarily
engaged
in
the
facilitation
of
21
the
transportation
of
property
by
air.
22
(B)
The
taxpayer
does
not
itself
operate
aircraft.
23
(C)
The
taxpayer
is
in
the
same
affiliated
group
as
an
24
airline.
25
Sec.
53.
Section
422.33,
subsection
2,
paragraph
a,
26
subparagraph
(2),
subparagraph
division
(g),
Code
2019,
is
27
amended
to
read
as
follows:
28
(g)
Where
income
consists
of
more
than
one
class
of
income
29
as
provided
in
subparagraph
divisions
(a)
through
(e)
(00f)
30
of
this
subparagraph,
it
shall
be
reasonably
apportioned
by
31
the
business
activity
ratio
provided
in
rules
adopted
by
the
32
director.
33
Sec.
54.
APPLICABILITY.
This
division
of
this
Act
applies
34
to
tax
years
beginning
on
or
after
January
1,
2020.
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DIVISION
VIII
1
BURIAL
TRUSTS
2
Sec.
55.
Section
422.7,
Code
2019,
is
amended
by
adding
the
3
following
new
subsection:
4
NEW
SUBSECTION
.
6.
Subtract,
to
the
extent
included,
income
5
from
interest
and
earnings
received
from
a
burial
trust
fund
6
as
defined
in
section
523A.102.
7
DIVISION
IX
8
ADOPTION
TAX
CREDIT
9
Sec.
56.
Section
422.12A,
subsection
2,
Code
2019,
is
10
amended
to
read
as
follows:
11
2.
The
taxes
imposed
under
this
division
,
less
the
credits
12
allowed
under
section
422.12
,
shall
be
reduced
by
an
adoption
13
tax
credit
equal
to
the
amount
of
qualified
adoption
expenses
14
paid
or
incurred
by
the
taxpayer
during
the
tax
year
in
15
connection
with
the
adoption
of
a
child
by
the
taxpayer,
not
to
16
exceed
five
thousand
dollars
per
adoption.
17
Sec.
57.
Section
422.12A,
Code
2019,
is
amended
by
adding
18
the
following
new
subsection:
19
NEW
SUBSECTION
.
3A.
The
credit
under
this
section
with
20
respect
to
any
qualified
adoption
expense
shall
be
allowed
21
during
a
tax
year
as
follows:
22
a.
For
any
qualified
adoption
expense
paid
or
incurred
prior
23
to
or
during
the
tax
year
in
which
the
adoption
becomes
final,
24
the
tax
year
in
which
the
adoption
becomes
final.
25
b.
For
any
qualified
adoption
expense
paid
or
incurred
after
26
the
tax
year
in
which
the
adoption
becomes
final,
the
tax
year
27
in
which
an
adoption
expense
is
paid
or
incurred.
28
Sec.
58.
RETROACTIVE
APPLICABILITY.
This
division
of
this
29
Act
applies
retroactively
to
January
1,
2019,
for
tax
years
30
beginning
on
or
after
that
date.
31
DIVISION
X
32
TARGETED
JOBS
WITHHOLDING
CREDIT
33
Sec.
59.
Section
403.19A,
subsection
1,
Code
2019,
is
34
amended
by
adding
the
following
new
paragraph:
35
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NEW
PARAGRAPH
.
0b.
“Created
job”
means
a
new
and
permanent
1
full-time
equivalent
position
added
to
the
payroll
of
a
2
business
in
excess
of
the
base
employment
level
at
the
time
of
3
application
for
withholding
credits
under
this
section.
4
Sec.
60.
Section
403.19A,
subsection
1,
paragraph
c,
Code
5
2019,
is
amended
to
read
as
follows:
6
c.
“Employer”
means
a
business
creating
or
retaining
7
targeted
jobs
in
a
pilot
project
city
pursuant
to
a
withholding
8
agreement.
9
Sec.
61.
Section
403.19A,
subsection
1,
paragraph
f,
Code
10
2019,
is
amended
by
striking
the
paragraph.
11
Sec.
62.
Section
403.19A,
subsection
1,
paragraph
g,
Code
12
2019,
is
amended
to
read
as
follows:
13
g.
“Targeted
job”
means
a
job
in
a
business
which
is
or
will
14
be
located
in
a
pilot
project
city
that
pays
a
wage
at
least
15
equal
to
the
countywide
average
wage.
“Targeted
job”
includes
16
new
or
retained
created
jobs
from
Iowa
business
expansions
or
17
retentions
within
the
city
limits
of
the
pilot
project
city
and
18
those
jobs
resulting
from
established
out-of-state
businesses,
19
as
defined
by
the
economic
development
authority,
moving
to
or
20
expanding
in
Iowa.
21
Sec.
63.
Section
403.19A,
subsection
3,
paragraph
c,
22
subparagraphs
(1)
and
(2),
Code
2019,
are
amended
to
read
as
23
follows:
24
(1)
The
pilot
project
city
and
the
economic
development
25
authority
shall
enter
into
a
withholding
agreement
with
26
each
employer
concerning
the
targeted
jobs
withholding
27
credit.
The
withholding
agreement
shall
provide
for
the
28
total
amount
of
withholding
credits
awarded,
as
negotiated
29
by
the
economic
development
authority,
the
pilot
project
30
city,
and
the
employer.
An
agreement
shall
not
provide
for
31
an
amount
of
withholding
credits
that
exceeds
the
amount
of
32
the
qualifying
investment
made
in
the
project.
An
agreement
33
shall
not
be
entered
into
with
a
business
currently
located
34
in
this
state
unless
the
business
either
creates
or
retains
35
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ten
jobs
or
makes
a
qualifying
investment
of
at
least
five
1
hundred
thousand
dollars
within
the
pilot
project
city.
The
2
withholding
agreement
may
have
a
term
of
years
negotiated
by
3
the
economic
development
authority,
the
pilot
project
city,
and
4
the
employer,
of
up
to
ten
years.
A
withholding
agreement
5
specifying
a
term
of
years
or
a
total
amount
of
withholding
6
credits
shall
terminate
upon
the
expiration
of
the
term
of
7
years
specified
in
the
agreement
or
upon
the
award
of
the
total
8
amount
of
withholding
credits
specified
in
the
agreement,
9
whichever
occurs
first.
An
employer
shall
not
be
obligated
to
10
enter
into
a
withholding
agreement.
An
agreement
shall
not
be
11
entered
into
with
an
employer
not
already
located
in
a
pilot
12
project
city
when
another
Iowa
community
is
competing
for
the
13
same
project
and
both
the
pilot
project
city
and
the
other
Iowa
14
community
are
seeking
assistance
from
the
authority.
15
(2)
The
pilot
project
city
and
the
economic
development
16
authority
shall
not
enter
into
a
withholding
agreement
after
17
June
30,
2019
2023
.
18
Sec.
64.
Section
403.19A,
subsection
3,
paragraphs
f
and
g,
19
Code
2019,
are
amended
to
read
as
follows:
20
f.
Pursuant
to
rules
adopted
by
the
economic
development
21
authority,
the
pilot
project
city
shall
provide
on
an
annual
22
basis
to
the
economic
development
authority
information
23
documenting
the
compliance
of
each
employer
with
each
24
requirement
of
the
withholding
agreement,
including
but
not
25
limited
to
the
number
of
jobs
created
or
retained
and
the
26
amount
of
investment
made
by
the
employer.
The
economic
27
development
authority
shall,
in
response
to
receiving
such
28
information
from
the
pilot
project
city,
assess
the
level
29
of
compliance
by
each
employer
and
provide
to
the
pilot
30
project
city
recommendations
for
either
maintaining
employer
31
compliance
with
the
withholding
agreement
or
terminating
the
32
agreement
for
noncompliance
under
paragraph
“g”
.
The
economic
33
development
authority
shall
also
provide
each
such
assessment
34
and
recommendation
report
to
the
department
of
revenue.
35
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g.
If
the
economic
development
authority,
following
an
1
eighteen-month
performance
period
beginning
on
the
date
the
2
withholding
agreement
is
approved
by
the
authority
board,
3
determines
that
the
employer
ceases
to
meet
the
requirements
4
of
the
withholding
agreement
relating
to
retaining
jobs,
if
5
applicable,
the
agreement
shall
be
terminated
by
the
economic
6
development
authority
and
the
pilot
project
city
and
any
7
withholding
credits
for
the
benefit
of
the
employer
shall
8
cease.
If
the
economic
development
authority,
following
9
a
three-year
performance
period
beginning
on
the
date
the
10
withholding
agreement
is
approved
by
the
authority
board,
11
determines
that
the
employer
has
not
or
is
incapable
of
12
meeting
the
requirements
of
the
withholding
agreement
relating
13
to
creating
jobs,
if
applicable,
or
the
requirement
of
the
14
withholding
agreement
relating
to
the
qualifying
investment
15
prior
to
the
end
of
the
withholding
agreement,
the
economic
16
development
authority
may
reduce
the
future
benefits
to
the
17
employer
under
the
agreement
or
negotiate
with
the
other
18
parties
to
terminate
the
agreement
early.
Notice
shall
be
19
provided
promptly
by
the
pilot
project
city
to
the
department
20
of
revenue
following
termination
of
a
withholding
agreement.
21
Sec.
65.
Section
403.19A,
subsection
3,
paragraph
l,
22
subparagraph
(1),
Code
2019,
is
amended
to
read
as
follows:
23
(1)
The
total
number
of
targeted
jobs
and
a
breakdown
as
to
24
those
that
are
Iowa
business
expansions
or
retentions
within
25
the
city
limits
of
the
pilot
project
city
and
those
that
are
26
jobs
resulting
from
established
out-of-state
businesses
moving
27
to
or
expanding
in
Iowa.
28
Sec.
66.
APPLICABILITY.
The
amendments
to
section
403.19A
29
in
this
division
of
this
Act
do
not
apply
to
a
withholding
30
agreement
entered
into
prior
to
the
effective
date
of
this
31
division
of
this
Act.
32
DIVISION
XI
33
SCHOOL
TUITION
ORGANIZATION
TAX
CREDITS
34
Sec.
67.
Section
422.11S,
subsection
8,
paragraph
a,
35
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subparagraph
(2),
Code
2019,
is
amended
to
read
as
follows:
1
(2)
“Total
approved
tax
credits”
means
for
the
tax
year
2
beginning
in
the
2006
calendar
year,
two
million
five
hundred
3
thousand
dollars,
for
the
tax
year
beginning
in
the
2007
4
calendar
year,
five
million
dollars,
for
tax
years
beginning
5
on
or
after
January
1,
2008,
but
before
January
1,
2012,
seven
6
million
five
hundred
thousand
dollars,
for
tax
years
beginning
7
on
or
after
January
1,
2012,
but
before
January
1,
2014,
eight
8
million
seven
hundred
fifty
thousand
dollars,
and
for
tax
years
9
beginning
on
or
after
January
1,
2014,
but
before
January
1,
10
2019,
twelve
million
dollars,
and
for
tax
years
beginning
on
11
or
after
January
1,
2019,
but
before
January
1,
2020,
thirteen
12
million
dollars
,
and
for
tax
years
beginning
on
or
after
13
January
1,
2020,
seventeen
million
dollars
.
14
Sec.
68.
CONTINGENT
CODE
EDITOR
DIRECTIVE.
The
Code
editor
15
is
directed
to
harmonize
the
section
of
this
division
of
this
16
Act
amending
section
422.11S
with
the
other
division
of
this
17
Act
amending
section
422.11S,
if
enacted,
by
changing
tax
year
18
to
calendar
year
where
appropriate
and
to
make
other
related
19
changes,
if
necessary,
to
effectuate
such
changes.
20
DIVISION
XII
21
DEDUCTING
RESIDUAL
FERTILIZER
22
Sec.
69.
Section
422.7,
Code
2019,
is
amended
by
adding
the
23
following
new
subsection:
24
NEW
SUBSECTION
.
60.
a.
For
purposes
of
this
subsection,
25
“residual
fertilizer
supply”
means
an
asset
or
an
improvement
to
26
land
that
meets
all
of
the
following
requirements:
27
(1)
The
asset
or
improvement
consists
of
residual
28
fertilizer
or
excess
available
nutrients
that
are
incorporated
29
into
and
inseparable
from
land.
30
(2)
The
asset
or
improvement
is
sold
or
exchanged
in
31
conjunction
with
the
sale
or
exchange
of
land
upon
which
the
32
asset
or
improvement
is
located.
33
(3)
Following
the
sale
or
exchange,
an
expense
deduction,
34
amortization
deduction,
or
depreciation
deduction
is
allowable
35
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_____
for
federal
tax
purposes
under
the
Internal
Revenue
Code
with
1
respect
to
the
asset
or
improvement
in
the
hands
of
a
taxpayer
2
other
than
the
seller.
3
b.
For
any
sale
or
exchange
of
a
residual
fertilizer
supply
4
executed
on
or
after
July
1,
2019,
an
expense
deduction,
5
depreciation
deduction,
or
amortization
deduction
with
respect
6
to
the
residual
fertilizer
supply
shall
not
be
allowed
under
7
this
division
unless
all
of
the
following
requirements
are
8
satisfied:
9
(1)
The
expense
deduction,
depreciation
deduction,
or
10
amortization
deduction
is
allowable
to
the
taxpayer
under
the
11
Internal
Revenue
Code.
12
(2)
The
residual
fertilizer
supply
is
part
of
a
signed,
13
written
agreement
between
the
seller
and
buyer
that
identifies
14
the
residual
fertilizer
supply
and
the
consideration
paid
by
15
the
buyer
for
the
residual
fertilizer
supply.
16
c.
If
a
taxpayer
has
taken
a
deduction
in
computing
federal
17
adjusted
gross
income
that
is
disallowed
under
paragraph
“b”
,
18
the
taxpayer
shall
make
the
following
adjustments:
19
(1)
Add
back
the
total
amount
of
the
deduction
in
computing
20
net
income
for
state
tax
purposes.
21
(2)
Reallocate
the
amount
of
the
deduction
to
the
taxpayer’s
22
basis,
if
any,
in
the
land
upon
which
the
residual
fertilizer
23
supply
is
located.
24
(3)
Any
other
adjustments
to
gains,
losses,
deductions,
or
25
tax
basis
of
assets
pursuant
to
rules
adopted
by
the
director.
26
Sec.
70.
Section
422.35,
Code
2019,
is
amended
by
adding
the
27
following
new
subsection:
28
NEW
SUBSECTION
.
26.
a.
For
purposes
of
this
subsection,
29
“residual
fertilizer
supply”
means
an
asset
or
an
improvement
to
30
land
that
meets
all
of
the
following
requirements:
31
(1)
The
asset
or
improvement
consists
of
residual
32
fertilizer
or
excess
available
nutrients
that
are
incorporated
33
into
and
inseparable
from
land.
34
(2)
The
asset
or
improvement
is
sold
or
exchanged
in
35
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_____
conjunction
with
the
sale
or
exchange
of
land
upon
which
the
1
asset
or
improvement
is
located.
2
(3)
Following
the
sale
or
exchange,
an
expense
deduction,
3
amortization
deduction,
or
depreciation
deduction
is
allowable
4
for
federal
tax
purposes
under
the
Internal
Revenue
Code
with
5
respect
to
the
asset
or
improvement
in
the
hands
of
a
taxpayer
6
other
than
the
seller.
7
b.
For
any
sale
or
exchange
of
a
residual
fertilizer
supply
8
executed
on
or
after
July
1,
2019,
an
expense
deduction,
9
depreciation
deduction,
or
amortization
deduction
with
respect
10
to
the
residual
fertilizer
supply
shall
not
be
allowed
under
11
this
division
unless
all
of
the
following
requirements
are
12
satisfied:
13
(1)
The
expense
deduction,
depreciation
deduction,
or
14
amortization
deduction
is
allowable
to
the
taxpayer
under
the
15
Internal
Revenue
Code.
16
(2)
The
residual
fertilizer
supply
is
part
of
a
signed,
17
written
agreement
between
the
seller
and
buyer
that
identifies
18
the
residual
fertilizer
supply
and
the
consideration
paid
by
19
the
buyer
for
the
residual
fertilizer
supply.
20
c.
If
a
taxpayer
has
taken
a
deduction
in
computing
federal
21
taxable
income
that
is
disallowed
under
paragraph
“b”
,
the
22
taxpayer
shall
make
the
following
adjustments:
23
(1)
Add
back
the
total
amount
of
the
deduction
in
computing
24
net
income
for
state
tax
purposes.
25
(2)
Reallocate
the
amount
of
the
deduction
to
the
taxpayer’s
26
basis,
if
any,
in
the
land
upon
which
the
residual
fertilizer
27
supply
is
located.
28
(3)
Any
other
adjustments
to
gains,
losses,
deductions,
or
29
tax
basis
of
assets
pursuant
to
rules
adopted
by
the
director.
30
DIVISION
XIII
31
FRANCHISE
TAX
——
ALTERNATIVE
MINIMUM
TAX
(AMT)
REPEAL
32
Sec.
71.
Section
422.60,
subsection
2,
Code
2019,
is
amended
33
by
adding
the
following
new
paragraph:
34
NEW
PARAGRAPH
.
c.
This
subsection
is
repealed
January
1,
35
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_____
2021,
for
tax
years
beginning
on
or
after
that
date.
1
Sec.
72.
Section
422.60,
subsection
3,
Code
2019,
is
amended
2
to
read
as
follows:
3
3.
a.
(1)
There
For
tax
years
beginning
before
January
1,
4
2022,
there
is
allowed
as
a
credit
against
the
tax
determined
5
in
section
422.63
for
a
tax
year
an
amount
equal
to
the
minimum
6
tax
credit
for
that
tax
year.
7
(2)
The
minimum
tax
credit
for
a
tax
year
is
the
excess,
8
if
any,
of
the
net
minimum
tax
imposed
for
all
prior
tax
years
9
beginning
on
or
after
January
1,
1987,
but
before
January
10
1,
2021,
over
the
amount
allowable
as
a
credit
under
this
11
subsection
for
those
prior
tax
years.
12
b.
(1)
The
allowable
credit
under
paragraph
“a”
for
a
tax
13
year
beginning
before
January
1,
2021,
shall
not
exceed
the
14
excess,
if
any,
of
the
tax
determined
in
section
422.63
over
15
the
state
alternative
minimum
tax
as
determined
in
subsection
16
2
.
The
allowable
credit
under
paragraph
“a”
for
a
tax
year
17
beginning
in
the
2021
calendar
year
shall
not
exceed
the
tax
18
determined
in
section
422.63.
19
(2)
The
net
minimum
tax
for
a
tax
year
is
the
excess,
if
20
any,
of
the
tax
determined
in
subsection
2
for
the
tax
year
21
over
the
tax
determined
in
section
422.63
for
the
tax
year.
22
c.
This
subsection
is
repealed
January
1,
2022,
for
tax
23
years
beginning
on
or
after
that
date.
24
DIVISION
XIV
25
GROSS
GLOBAL
INCOME
LOW-TAXED
INCOME
26
Sec.
73.
Section
422.35,
subsection
21,
Code
2019,
is
27
amended
to
read
as
follows:
28
21.
Subtract
the
amount
of
net
foreign
dividend
income
,
29
including
based
upon
the
percentage
of
ownership
as
set
forth
30
in
section
243
of
the
Internal
Revenue
Code.
Net
foreign
31
dividend
income
includes
subpart
F
income
as
defined
in
section
32
952
of
the
Internal
Revenue
Code,
based
upon
the
percentage
of
33
ownership
as
set
forth
in
section
243
of
the
Internal
Revenue
34
Code
and
includes
global
intangible
low-taxed
income
as
defined
35
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_____
in
section
951A
of
the
Internal
Revenue
Code
after
applying
1
the
deduction
allowed
for
global
intangible
low-taxed
income
2
allowed
under
section
250(a)(1)(B)
of
the
Internal
Revenue
3
Code
.
4
Sec.
74.
RETROACTIVE
APPLICABILITY.
This
division
of
this
5
Act
applies
retroactively
to
January
1,
2019,
for
tax
years
6
beginning
on
or
after
that
date.
7
DIVISION
XV
8
FEDERAL
RESEARCH
CREDIT
——
INTERNAL
REVENUE
CODE
9
Sec.
75.
Section
15.335,
subsection
4,
paragraph
a,
Code
10
2019,
is
amended
to
read
as
follows:
11
a.
In
lieu
of
the
credit
amount
computed
in
subsection
2
,
an
12
eligible
business
may
elect
to
compute
the
credit
amount
for
13
qualified
research
expenses
incurred
in
this
state
in
a
manner
14
consistent
with
the
alternative
simplified
credit
described
in
15
section
41(c)(5)
41(c)(4)
of
the
Internal
Revenue
Code.
The
16
taxpayer
may
make
this
election
regardless
of
the
method
used
17
for
the
taxpayer’s
federal
income
tax.
The
election
made
under
18
this
paragraph
is
for
the
tax
year
and
the
taxpayer
may
use
19
another
or
the
same
method
for
any
subsequent
year.
20
Sec.
76.
Section
15.335,
subsection
4,
paragraph
b,
21
unnumbered
paragraph
1,
Code
2019,
is
amended
to
read
as
22
follows:
23
For
purposes
of
the
alternate
credit
computation
method
in
24
paragraph
“a”
,
the
credit
percentages
applicable
to
qualified
25
research
expenses
described
in
section
41(c)(5)(A)
41(c)(4)(A)
26
and
clause
(ii)
of
section
41(c)(5)(B)
41(c)(4)(B)
of
the
27
Internal
Revenue
Code
are
as
follows:
28
Sec.
77.
Section
422.10,
subsection
1,
paragraphs
c
and
d,
29
Code
2019,
are
amended
to
read
as
follows:
30
c.
In
lieu
of
the
credit
amount
computed
in
paragraph
“b”
,
31
subparagraph
(1),
subparagraph
division
(a),
a
taxpayer
may
32
elect
to
compute
the
credit
amount
for
qualified
research
33
expenses
incurred
in
this
state
in
a
manner
consistent
with
the
34
alternative
simplified
credit
described
in
section
41(c)(5)
35
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_____
41(c)(4)
of
the
Internal
Revenue
Code.
The
taxpayer
may
make
1
this
election
regardless
of
the
method
used
for
the
taxpayer’s
2
federal
income
tax.
The
election
made
under
this
paragraph
is
3
for
the
tax
year
and
the
taxpayer
may
use
another
or
the
same
4
method
for
any
subsequent
year.
5
d.
For
purposes
of
the
alternate
credit
computation
6
method
in
paragraph
“c”
,
the
credit
percentages
applicable
to
7
qualified
research
expenses
described
in
section
41(c)(5)(A)
8
41(c)(4)(A)
and
clause
(ii)
of
section
41(c)(5)(B)
41(c)(4)(B)
9
of
the
Internal
Revenue
Code
are
four
and
fifty-five
10
hundredths
percent
and
one
and
ninety-five
hundredths
percent,
11
respectively.
12
Sec.
78.
Section
422.33,
subsection
5,
paragraphs
c
and
d,
13
Code
2019,
are
amended
to
read
as
follows:
14
c.
In
lieu
of
the
credit
amount
computed
in
paragraph
15
“a”
,
subparagraph
(1),
a
corporation
may
elect
to
compute
the
16
credit
amount
for
qualified
research
expenses
incurred
in
this
17
state
in
a
manner
consistent
with
the
alternative
simplified
18
credit
described
in
section
41(c)(5)
41(c)(4)
of
the
Internal
19
Revenue
Code.
The
taxpayer
may
make
this
election
regardless
20
of
the
method
used
for
the
taxpayer’s
federal
income
tax.
The
21
election
made
under
this
paragraph
is
for
the
tax
year
and
the
22
taxpayer
may
use
another
or
the
same
method
for
any
subsequent
23
year.
24
d.
For
purposes
of
the
alternate
credit
computation
25
method
in
paragraph
“c”
,
the
credit
percentages
applicable
to
26
qualified
research
expenses
described
in
section
41(c)(5)(A)
27
41(c)(4)(A)
and
clause
(ii)
of
section
41(c)(5)(B)
41(c)(4)(B)
28
of
the
Internal
Revenue
Code
are
four
and
fifty-five
29
hundredths
percent
and
one
and
ninety-five
hundredths
percent,
30
respectively.
31
Sec.
79.
RETROACTIVE
APPLICABILITY.
This
division
of
this
32
Act
applies
retroactively
to
January
1,
2019,
for
tax
years
33
beginning
on
or
after
that
date.
34
DIVISION
XVI
35
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RESEARCH
ACTIVITIES
TAX
CREDIT
1
Sec.
80.
Section
422.10,
subsection
1,
paragraph
a,
2
subparagraph
(1),
subparagraph
division
(a),
Code
2019,
is
3
amended
to
read
as
follows:
4
(a)
The
business
is
engaged
in
the
manufacturing,
life
5
sciences,
agriscience,
agricultural
animal
production,
software
6
engineering,
or
aviation
and
aerospace
industry.
7
Sec.
81.
Section
422.10,
subsection
1,
paragraph
a,
8
subparagraph
(1),
subparagraph
division
(b),
unnumbered
9
paragraph
1,
Code
2019,
is
amended
to
read
as
follows:
10
Persons
that
shall
not
be
considered
to
be
engaged
in
the
11
manufacturing,
life
sciences,
agriscience,
agricultural
animal
12
production,
software
engineering,
or
aviation
and
aerospace
13
industry,
and
thus
are
not
eligible
for
the
credit,
include
but
14
are
not
limited
to
all
of
the
following:
15
Sec.
82.
Section
422.10,
subsection
3,
Code
2019,
is
amended
16
by
adding
the
following
new
paragraphs:
17
NEW
PARAGRAPH
.
c.
For
purposes
of
this
section,
18
“agricultural
animal”
means
an
animal
belonging
to
the
bovine,
19
caprine,
equine,
ovine,
or
porcine
species;
ostriches,
rheas,
20
or
emus;
farm
deer
as
defined
in
section
170.1;
or
poultry.
21
NEW
PARAGRAPH
.
d.
For
purposes
of
this
section,
22
“agricultural
animal
production”
means
activities
related
to
23
producing
or
maintaining
an
agricultural
animal.
24
Sec.
83.
Section
422.33,
subsection
5,
paragraph
e,
25
subparagraph
(1),
subparagraph
division
(a),
Code
2019,
is
26
amended
to
read
as
follows:
27
(a)
The
business
is
engaged
in
the
manufacturing,
life
28
sciences,
agriscience,
agricultural
animal
production,
software
29
engineering,
or
aviation
and
aerospace
industry.
30
Sec.
84.
Section
422.33,
subsection
5,
paragraph
e,
31
subparagraph
(1),
subparagraph
division
(b),
unnumbered
32
paragraph
1,
Code
2019,
is
amended
to
read
as
follows:
33
Persons
that
shall
not
be
considered
to
be
engaged
in
the
34
manufacturing,
life
sciences,
agriscience,
agricultural
animal
35
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51
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_____
production,
software
engineering,
or
aviation
and
aerospace
1
industry,
and
thus
are
not
eligible
for
the
credit,
include
but
2
are
not
limited
to
all
of
the
following:
3
Sec.
85.
Section
422.33,
subsection
5,
Code
2019,
is
amended
4
by
adding
the
following
new
paragraph:
5
NEW
PARAGRAPH
.
0g.
As
used
in
this
subsection:
6
(1)
“Agricultural
animal”
means
an
animal
belonging
to
the
7
bovine,
caprine,
equine,
ovine,
or
porcine
species;
ostriches,
8
rheas,
or
emus;
farm
deer
as
defined
in
section
170.1;
or
9
poultry.
10
(2)
“Agricultural
animal
production”
means
activities
11
related
to
producing
or
maintaining
an
agricultural
animal.
12
Sec.
86.
EFFECTIVE
DATE.
This
division
of
this
Act,
being
13
deemed
of
immediate
importance,
takes
effect
upon
enactment.
14
Sec.
87.
RETROACTIVE
APPLICABILITY.
This
division
of
this
15
Act
applies
retroactively
to
January
1,
2017,
for
tax
years
16
beginning
on
or
after
that
date.
17
DIVISION
XVII
18
NEW
JOBS
CREDIT
——
FRANCHISE
TAXES
——
MONEYS
AND
CREDITS
TAXES
19
Sec.
88.
Section
422.60,
Code
2019,
is
amended
by
adding
the
20
following
new
subsection:
21
NEW
SUBSECTION
.
14.
The
taxes
imposed
under
this
division
22
shall
be
reduced
by
a
new
jobs
tax
credit.
An
industry
which
23
has
entered
into
an
agreement
under
chapter
260E
and
which
has
24
increased
its
base
employment
level
by
at
least
ten
percent
25
within
the
time
set
in
the
agreement
or,
in
the
case
of
an
26
industry
without
a
base
employment
level,
adds
new
jobs
within
27
the
time
set
in
the
agreement
is
entitled
to
this
new
jobs
28
tax
credit
for
the
tax
year
selected
by
the
industry.
In
29
determining
if
the
industry
has
increased
its
base
employment
30
level
by
ten
percent
or
added
new
jobs,
only
those
new
jobs
31
directly
resulting
from
the
project
covered
by
the
agreement
32
and
those
directly
related
to
those
new
jobs
shall
be
counted.
33
The
amount
of
this
credit
is
equal
to
the
product
of
six
34
percent
of
the
taxable
wages
upon
which
an
employer
is
required
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to
contribute
to
the
state
unemployment
compensation
fund,
as
1
defined
in
section
96.19,
subsection
37,
times
the
number
of
2
new
jobs
existing
in
the
tax
year
that
directly
result
from
3
the
project
covered
by
the
agreement
or
new
jobs
that
directly
4
result
from
those
new
jobs.
The
tax
year
chosen
by
the
5
industry
shall
either
begin
or
end
during
the
period
beginning
6
with
the
date
of
the
agreement
and
ending
with
the
date
by
7
which
the
project
is
to
be
completed
under
the
agreement.
Any
8
credit
in
excess
of
the
tax
liability
for
the
tax
year
may
be
9
credited
to
the
tax
liability
for
the
following
ten
tax
years
10
or
until
depleted
in
less
than
the
ten
years.
For
purposes
11
of
this
subsection,
“agreement”
,
“industry”
,
“new
job”
,
and
12
“project”
mean
the
same
as
defined
in
section
260E.2
and
“base
13
employment
level”
means
the
number
of
full-time
jobs
an
industry
14
employs
at
the
site
which
is
covered
by
an
agreement
under
15
chapter
260E
on
the
date
of
that
agreement.
16
Sec.
89.
Section
533.329,
subsection
2,
Code
2019,
is
17
amended
by
adding
the
following
new
paragraph:
18
NEW
PARAGRAPH
.
l.
The
moneys
and
credits
tax
imposed
under
19
this
section
shall
be
reduced
by
a
new
jobs
tax
credit.
An
20
industry
which
has
entered
into
an
agreement
under
chapter
21
260E
and
which
has
increased
its
base
employment
level
by
at
22
least
ten
percent
within
the
time
set
in
the
agreement
or,
23
in
the
case
of
an
industry
without
a
base
employment
level,
24
adds
new
jobs
within
the
time
set
in
the
agreement
is
entitled
25
to
this
new
jobs
tax
credit
for
the
tax
year
selected
by
the
26
industry.
In
determining
if
the
industry
has
increased
its
27
base
employment
level
by
ten
percent
or
added
new
jobs,
only
28
those
new
jobs
directly
resulting
from
the
project
covered
by
29
the
agreement
and
those
directly
related
to
those
new
jobs
30
shall
be
counted.
The
amount
of
this
credit
is
equal
to
the
31
product
of
six
percent
of
the
taxable
wages
upon
which
an
32
employer
is
required
to
contribute
to
the
state
unemployment
33
compensation
fund,
as
defined
in
section
96.19,
subsection
37,
34
times
the
number
of
new
jobs
existing
in
the
tax
year
that
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directly
result
from
the
project
covered
by
the
agreement
or
1
new
jobs
that
directly
result
from
those
new
jobs.
The
tax
2
year
chosen
by
the
industry
shall
either
begin
or
end
during
3
the
period
beginning
with
the
date
of
the
agreement
and
ending
4
with
the
date
by
which
the
project
is
to
be
completed
under
5
the
agreement.
Any
credit
in
excess
of
the
tax
liability
for
6
the
tax
year
may
be
credited
to
the
moneys
and
credits
tax
7
liability
for
the
following
ten
tax
years
or
until
depleted
8
in
less
than
the
ten
years.
For
purposes
of
this
paragraph,
9
“agreement”
,
“industry”
,
“new
job”
,
and
“project”
mean
the
same
10
as
defined
in
section
260E.2
and
“base
employment
level”
means
11
the
number
of
full-time
jobs
an
industry
employs
at
the
site
12
which
is
covered
by
an
agreement
under
chapter
260E
on
the
date
13
of
that
agreement.
14
DIVISION
XVIII
15
UTILITY
REPLACEMENT
TASK
FORCE
16
Sec.
90.
Section
437A.15,
subsection
7,
paragraph
b,
Code
17
2019,
is
amended
to
read
as
follows:
18
b.
The
task
force
shall
study
the
effects
of
the
replacement
19
taxes
under
this
chapter
and
chapter
437B
on
local
taxing
20
authorities,
local
taxing
districts,
consumers,
and
taxpayers
21
through
January
1,
2019
2029
.
If
the
task
force
recommends
22
modifications
to
the
replacement
tax
that
will
further
the
23
purposes
of
tax
neutrality
for
local
taxing
authorities,
local
24
taxing
districts,
taxpayers,
and
consumers,
consistent
with
the
25
stated
purposes
of
this
chapter
,
the
department
of
management
26
shall
transmit
those
recommendations
to
the
general
assembly.
27
DIVISION
XIX
28
MONEYS
AND
CREDITS
TAX
ON
STATE
CREDIT
UNIONS
29
Sec.
91.
Section
533.329,
subsection
2,
paragraph
a,
Code
30
2019,
is
amended
to
read
as
follows:
31
a.
The
moneys
and
credits
tax
on
state
credit
unions
is
32
imposed
at
a
rate
of
one-half
cent
on
each
dollar
of
the
legal
33
and
special
reserves
that
are
required
to
be
maintained
by
the
34
state
credit
union
under
section
533.303
,
and
shall
be
levied
35
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by
the
board
of
supervisors
and
placed
upon
the
tax
list
and
1
collected
by
the
county
treasurer
.
However,
an
exemption
shall
2
be
given
to
each
state
credit
union
in
the
amount
of
forty
3
thousand
dollars.
4
DIVISION
XX
5
SALES
AND
USE
TAX
EXEMPTIONS
RELATED
TO
MANUFACTURERS
6
Sec.
92.
Section
423.3,
subsection
47,
paragraph
d,
7
subparagraph
(4),
subparagraph
division
(c),
unnumbered
8
paragraph
1,
Code
2019,
is
amended
to
read
as
follows:
9
“Manufacturer”
does
not
include
persons
who
are
not
commonly
10
understood
as
manufacturers,
including
but
not
limited
to
11
persons
primarily
engaged
in
any
of
the
following
activities:
12
EXPLANATION
13
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
14
the
explanation’s
substance
by
the
members
of
the
general
assembly.
15
This
bill
relates
to
the
administration
of
the
tax
and
16
related
laws
by
the
department
of
revenue,
including
the
17
administration
and
modification
of
certain
taxes,
tax
credits,
18
and
refunds.
19
DIVISION
I
——
INCOME
AND
FRANCHISE
TAX.
The
amendments
to
20
Code
sections
422.4(16)
and
422.9
modify
Internal
Revenue
Code
21
references
relating
to
the
qualified
business
income
deduction.
22
The
amendments
to
Code
sections
422.4(16)
and
422.9
apply
23
retroactively
for
tax
years
beginning
on
or
after
January
1,
24
2019.
25
The
amendments
to
Code
section
422.11S
specify
that
school
26
tuition
organization
tax
credits
shall
be
authorized
by
the
27
department
of
revenue
on
a
calendar
year
basis
rather
than
28
a
tax
year
basis.
The
amendments
to
Code
section
422.11S
29
also
specify
that
a
school
tuition
organization
shall
be
30
controlled
by
a
board
of
directors
consisting
of
at
least
seven
31
members.
Under
current
law,
the
board
of
directors
shall
be
32
seven
members.
The
bill
provides
that
it
is
the
intent
of
the
33
general
assembly
that
the
amendments
to
Code
section
422.11S
34
are
conforming
amendments
consistent
with
current
law,
and
that
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the
amendments
do
not
change
the
application
of
current
law.
1
The
amendment
to
Code
section
422.12C
specifies
that
a
2
nonresident
or
part-year
resident
shall
determine
their
early
3
childhood
development
tax
credit
in
the
ratio
of
the
taxpayer’s
4
Iowa
source
net
income
to
their
all
source
net
income.
The
5
amendment
to
Code
section
422.12C
takes
effect
upon
enactment
6
and
applies
retroactively
for
tax
years
beginning
on
or
7
after
January
1,
2019.
The
bill
specifies
that
for
tax
years
8
beginning
prior
to
January
1,
2019,
refunds
of
the
early
9
childhood
development
tax
credit
requested
on
or
after
July
1,
10
2019,
shall
not
exceed
the
amount
allowed
under
Code
section
11
422.12C(4),
as
amended
by
the
bill.
12
The
amendment
to
Code
section
422.60
aligns
the
definition
13
of
“Internal
Revenue
Code”
for
franchise
alternative
minimum
14
tax
purposes
with
the
definition
of
“Internal
Revenue
Code”
15
for
corporate
alternative
minimum
tax
purposes.
The
amendment
16
to
Code
section
422.60
applies
retroactively
for
tax
years
17
beginning
on
or
after
January
1,
2019.
18
The
bill
provides
for
a
deferral
of
a
gain
or
loss
resulting
19
from
exchanging
of
property
(1031
exchange)
that
meet
certain
20
conditions.
The
federal
Tax
Cuts
and
Jobs
Act
of
2017
repealed
21
1031
exchanges
with
respect
to
exchanges
of
personal
property.
22
The
Iowa
tax
bill
enacted
last
year
(2018
Iowa
Acts,
chapter
23
1161)
decouples,
for
Iowa
individual
tax
purposes,
from
the
24
federal
repeal
of
1031
exchanges
relating
to
personal
property,
25
and
permits
individuals
to
defer
gain
or
loss
on
qualifying
26
personal
property
for
tax
year
2019
to
the
extent
such
deferral
27
would
have
been
permitted
under
federal
law
prior
to
its
28
amendment
by
the
federal
Tax
Cuts
and
Jobs
Act
of
2017.
The
29
bill
permits
a
corporation
or
financial
institution,
for
Iowa
30
corporate
income
tax
or
franchise
income
tax
purposes,
the
same
31
deferral
of
gain
or
loss
as
individuals
on
qualifying
personal
32
property
for
tax
year
2019
to
the
extent
such
deferral
would
33
have
been
permitted
under
federal
law
prior
to
its
amendment
34
by
the
federal
Tax
Cuts
and
Jobs
Act
of
2017.
The
1031
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exchange
provision
takes
effect
upon
enactment,
and
applies
1
retroactively
for
tax
years
beginning
January
1,
2019,
but
2
before
January
1,
2020.
3
DIVISION
II
——
ADMINISTRATIVE
PROVISIONS.
The
amendments
4
to
Code
sections
422.20
and
422.72
permit
the
department
of
5
revenue,
by
rule,
to
disclose
state
tax
information
to
a
person
6
a
taxpayer
has
identified
to
receive
such
information
in
the
7
manner
prescribed
by
the
department
of
revenue.
8
DIVISION
III
——
SALES
AND
USE
TAX.
The
amendment
to
Code
9
section
423.2(1)
provides
that
if
a
service
or
warranty
10
contract
does
not
specify
a
fee
amount
for
nontaxable
services
11
or
taxable
personal
property,
the
sales
tax
shall
be
imposed
12
upon
an
amount
equal
to
the
sales
price
of
the
contract.
13
Currently,
the
sales
tax
is
imposed
upon
an
amount
equal
to
14
one-half
of
the
sales
price
of
such
a
contract.
15
The
amendment
to
Code
section
432.2(6)
specifies
that
16
the
sales
price
from
the
furnishing
of
carpentry
repair
and
17
installation
services
are
subject
to
the
sales
tax.
Currently,
18
carpentry
services
are
subject
to
sales
tax.
19
The
bill
enacts
new
Code
section
423.3(16A),
exempting
from
20
the
state
sales
and
use
tax
the
purchase
price
of
a
grain
bin,
21
including
material
or
replacement
parts
used
to
construct
or
22
repair
a
grain
bin.
“Grain
bin”
is
defined
to
mean
property
23
that
is
vented
and
covered
with
corrugated
metal
or
similar
24
material,
and
that
is
primarily
used
to
hold
loose
grain
for
25
drying
or
storage.
This
provision
takes
effect
upon
enactment
26
and
applies
retroactively
to
January
1,
2015,
and
applies
to
27
tax
years
beginning
on
or
after
that
date.
The
bill
also
28
provides
for
refunds
of
taxes,
interest,
or
penalties
that
29
arise
from
claims
resulting
from
the
enactment
of
Code
section
30
423.3(16A)
for
sales
occurring
between
January
1,
2015,
and
the
31
effective
date
of
the
enactment
of
Code
section
423.3(16A).
32
The
bill
limits
the
refunds
to
$25,000
in
the
aggregate.
33
The
amendment
to
Code
section
423.3(47)
changes
the
34
exclusions
from
the
sales
tax
exemptions
in
that
subsection
by
35
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aligning
the
exclusions
with
the
changes
made
to
the
exemptions
1
enacted
in
2016
Iowa
Acts,
chapter
1007.
This
provision
takes
2
effect
upon
enactment
and
applies
retroactively
to
tax
years
3
beginning
January
1,
2016,
for
tax
years
beginning
on
or
after
4
that
date.
5
The
amendment
to
Code
section
423.3(104)
exempts
from
the
6
sales
tax
the
sales
of
optional
service
or
warranty
contracts
7
for
computer
software
maintenance
or
support
services
furnished
8
to
a
commercial
enterprise
used
exclusively
by
the
commercial
9
enterprise.
“Commercial
enterprise”
is
defined
in
Code
section
10
423.3(104).
11
Currently,
a
retailer
making
Iowa
sales,
as
defined
in
Code
12
section
423.14A(1)(a),
shall
collect
and
remit
sales,
use,
and
13
local
option
taxes,
if
the
retailer
has
gross
revenue
from
14
Iowa
sales
equal
to
or
exceeding
$100,000
for
an
immediately
15
preceding
calendar
year
or
a
current
calendar
year,
or
has
200
16
or
more
separate
transactions
for
an
immediately
preceding
17
calendar
year
or
a
current
calendar
year.
The
bill
amends
18
Code
section
423.14A(3)(b)
by
striking
the
requirement
that
19
retailers
making
Iowa
sales
collect
such
taxes
if
the
retailer
20
has
200
or
more
separate
transactions
for
an
immediately
21
preceding
calendar
year
or
a
current
calendar
year.
22
The
bill
amends
Code
section
423.14A(3)(d)
by
striking
23
the
requirement
that
a
marketplace
facilitator,
as
defined
24
in
Code
section
423.14A(1)(b),
making
Iowa
sales,
as
defined
25
in
Code
section
423.14A(1)(a),
collect
sales,
use,
and
local
26
option
taxes
if
the
marketplace
facilitator
has
200
or
more
27
separate
transactions
for
an
immediately
preceding
calendar
28
year
or
a
current
calendar
year.
The
bill
does
not
strike
the
29
requirement
that
a
marketplace
facilitator
collect
such
taxes
30
if
the
marketplace
facilitator
makes
or
facilitates
Iowa
sales
31
on
its
own
behalf
or
for
one
or
more
marketplace
sellers
equal
32
to
or
exceeding
$100,000.
33
The
bill
amends
Code
section
423.14A(3)(e)
by
striking
34
the
requirement
that
a
referrer,
as
defined
in
Code
section
35
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423.14A(3)(e)(3),
making
Iowa
sales,
as
defined
in
Code
section
1
423.14A(1)(a),
collect
sales,
use,
and
local
option
taxes
if
2
the
referrer
has
200
or
more
separate
transactions
for
an
3
immediately
preceding
calendar
year
or
a
current
calendar
4
year.
The
bill
does
not
strike
the
requirement
that
a
referrer
5
collect
such
taxes
if
the
referrer
has
Iowa
sales
equal
to
or
6
exceeding
$100,000.
7
Currently,
a
referrer
is
required
to
provide
the
department
8
of
revenue,
on
a
monthly
basis,
a
list
of
marketplace
sellers
9
who
collect
and
remit
Iowa
sales
and
use
tax
on
the
platform
10
of
the
referrer.
Otherwise,
the
referrer
is
required
to
11
collect
and
remit
Iowa
sales
and
use
tax.
The
amendment
to
12
Code
section
423A.14A(3)(e)(1)(c)
provides
that
a
referrer
may
13
provide
the
department
of
revenue
such
a
report
on
an
annual
14
basis,
and
avoid
collecting
the
sales
and
use
tax
if
other
15
conditions
in
Code
section
423.14(3)(e)(1)
are
met.
16
The
bill
enacts
new
Code
section
423.14A(3)(e)(5)
specifying
17
that
the
paragraph
relating
to
“referrers”
is
subject
to
18
implementation
by
the
department
of
revenue
by
rule,
and
shall
19
not
require
a
referrer
to
collect
tax
or
comply
with
the
notice
20
and
reporting
requirements
unless
such
administrative
rules
21
take
effect.
22
The
bill
amends
Code
section
423.48(2)(c)
by
striking
the
23
paragraph
specifying
that
registering
under
the
streamlined
24
sales
and
use
tax
agreement
in
another
member
state
shall
be
25
considered
to
be
registered
in
this
state
for
purposes
of
the
26
streamlined
sales
and
use
tax
agreement.
27
The
bill
establishes
a
taxation
and
exemption
computers
28
task
force
to
be
initiated,
coordinated,
and
staffed
by
29
the
department
of
revenue.
The
task
force
shall
review
the
30
definition
of
“computer”
as
used
throughout
the
portions
of
31
the
Iowa
Code
and
the
Iowa
Administrative
Code
administered
32
by
the
department
of
revenue
including
the
exemption
for
33
computers
provided
in
Code
section
423.3(47)(a)(4).
If
the
34
task
force
recommends
modifications
to
the
current
definition
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of
“computer”
including
the
exemption
for
computers
provided
in
1
Code
section
423.3(47)(a)(4),
the
department
of
revenue
shall
2
provide
any
recommendations
to
the
general
assembly
by
January
3
1,
2020.
4
DIVISION
IV
——
AUTOMOBILE
RENTAL
EXCISE
TAX.
The
amendment
5
to
Code
section
423.14A
provides
that
a
person
who
is
not
6
required
to
collect
and
remit
automobile
rental
excise
tax
7
shall
not
be
considered
a
“marketplace
facilitator”
with
8
respect
to
the
sale
of
certain
transportation
services.
9
The
amendment
to
Code
section
423C.2
substitutes
a
person
10
required
to
collect
sales
or
use
tax
under
Code
chapter
423
11
for
“rental
facilitator”
and
“rental
platform”
and
strikes
the
12
definitions
of
“rental
facilitator”
and
“rental
platform”
from
13
Code
section
423C.2.
14
The
amendment
to
Code
section
423C.2(11)
modifies
the
15
definition
of
“rental
price”
to
mean
the
same
as
“sales
price”
16
defined
in
Code
section
423.1,
which
includes
facilitation
17
fees,
reservation
fees,
service
fees,
nonrefundable
deposits,
18
and
any
other
direct
or
indirect
charge
made
or
consideration
19
provided
in
connection
with
the
renting
or
facilitation
of
20
renting
automobiles.
21
The
amendment
to
Code
section
423C.3
strikes
the
definitions
22
of
“discount
rental
charge”
and
“travel
package”.
23
The
amendment
to
Code
section
423C.3
specifies
that
the
24
automobile
rental
excise
tax
shall
be
imposed
upon
the
rental
25
price
of
an
automobile
if
the
rental
is
subject
to
the
state
26
sales
or
use
tax.
27
The
bill
strikes
numerous
provisions
in
Code
section
423C.3
28
relating
to
the
collection
of
the
automobile
rental
excise
tax
29
by
a
“rental
facilitator”
and
“rental
platform”
due
to
these
30
definitions
being
stricken
by
another
part
of
this
division
of
31
the
bill.
32
The
amendment
to
Code
section
423C.3
requires
that
any
33
person
required
to
collect
state
sales
and
use
tax
on
the
34
rental
transaction
under
Code
chapter
423
shall
collect
the
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automobile
rental
excise
tax
as
applicable.
The
amendment
to
1
Code
section
423C.3
provides
that
a
person
is
not
required
2
to
collect
and
remit
the
automobile
rental
excise
tax
if
the
3
person
meets
certain
circumstances.
For
any
rental
transaction
4
for
which
the
person
is
not
required
to
collect
and
remit
the
5
automobile
rental
excise
tax,
the
amendment
to
Code
section
6
423C.3
requires
an
automobile
provider
to
be
solely
liable
7
for
any
amount
of
uncollected
or
unremitted
automobile
rental
8
excise
tax
and
sales
and
use
tax
under
Code
chapter
423.
9
DIVISION
V
——
TELEPHONE
COMPANY
PROPERTY.
Division
V
of
10
the
bill
authorizes
the
Iowa
utilities
board
to
classify
a
11
long
distance
telephone
company
as
a
competitive
long
distance
12
telephone
company
if
certain
revenue
source
criteria
are
13
met.
In
the
event
of
such
a
classification,
the
board
is
14
required
to
promptly
notify
the
director
of
revenue.
Upon
15
such
notification
by
the
board,
the
director
of
revenue
is
16
required
to
assess
the
property
of
such
competitive
long
17
distance
telephone
company,
which
property
is
first
assessed
18
for
taxation
in
this
state
on
or
after
January
1,
1996,
in
19
the
same
manner
as
all
other
property
assessed
as
commercial
20
property
by
the
local
assessor.
The
provisions
established
in
21
the
bill
are
the
same
as
provisions
repealed
on
July
1,
2018,
22
by
2018
Iowa
Acts,
chapter
1160.
23
The
section
of
Division
V
of
the
bill
enacting
Code
section
24
476.1D,
subsection
10,
takes
effect
upon
enactment
and
applies
25
retroactively
to
July
1,
2018,
for
assessment
years
beginning
26
on
or
after
that
date.
27
Division
V
also
strikes
Code
section
476.1D,
subsection
10,
28
as
enacted
in
the
bill,
effective
July
1,
2021.
The
future
29
strike
of
Code
section
476.1D,
subsection
10,
applies
to
30
assessment
years
beginning
on
or
after
January
1,
2022.
31
DIVISION
VI
——
CHILDHOOD
AND
DEPENDENT
CARE
CREDIT
AND
32
EARLY
CHILDHOOD
DEVELOPMENT
CREDIT.
The
amendment
to
Code
33
section
422.12C(4)
increases
the
Iowa
net
income
threshold
34
levels
for
purposes
of
calculating
the
Iowa
child
and
dependent
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child
care
tax
credit
and
the
early
childhood
development
tax
1
credit
available
against
the
individual
income
tax.
The
Iowa
2
child
and
dependent
care
tax
credit
is
a
refundable
credit
3
calculated
as
a
percentage
of
the
nonrefundable
federal
child
4
and
dependent
care
tax
credit,
depending
on
the
Iowa
net
income
5
of
the
taxpayer.
The
early
childhood
development
tax
credit
6
is
a
refundable
credit
equaling
25
percent
of
the
first
$1,000
7
which
the
taxpayer
has
paid
to
others
for
each
dependent
ages
8
three
through
five
for
early
childhood
development
expenses.
9
IOWA
CHILD
AND
DEPENDENT
CHILD
CARE
TAX
CREDIT.
Currently,
10
there
are
seven
graduated
Iowa
net
income
thresholds
used
to
11
calculate
the
credit.
The
bill
increases
these
graduated
12
thresholds,
but
does
not
change
the
percentage
of
the
13
nonrefundable
federal
child
and
dependent
care
tax
credit
14
used
to
calculate
the
Iowa
child
and
dependent
child
care
tax
15
credit.
16
Currently,
the
credit
percentages
in
these
seven
Iowa
17
net
income
thresholds
range
from
a
high
of
75
percent
of
18
the
federal
credit
for
taxpayers
with
net
income
of
less
19
than
$10,000,
to
a
low
of
30
percent
of
the
federal
credit
20
for
taxpayers
with
net
income
of
$40,000
or
more
but
less
21
than
$45,000.
Under
the
bill,
the
credit
percentages
in
the
22
thresholds
range
from
a
high
of
75
percent
of
the
federal
23
credit
for
taxpayers
with
a
net
income
of
less
than
$12,750,
24
to
a
low
of
30
percent
of
the
federal
credit
for
taxpayers
with
25
net
income
of
$50,980
or
more
but
less
than
$57,360.
26
The
bill
also
adjusts
the
future
amount
of
each
of
the
Iowa
27
net
income
amounts
in
the
seven
graduated
Iowa
net
income
28
thresholds
by
indexing
the
thresholds
to
inflation.
29
EARLY
CHILDHOOD
DEVELOPMENT
TAX
CREDIT.
The
bill
increases
30
the
income
threshold
determining
the
eligibility
of
a
taxpayer
31
for
the
early
childhood
development
tax
credit.
The
bill
32
increases
the
eligibility
threshold
from
a
taxpayer
earning
33
$45,000
per
year
to
$57,360
per
year.
By
increasing
the
34
eligibility
threshold,
taxpayers
earning
less
than
$57,360
are
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now
eligible
to
take
the
early
childhood
development
tax
credit
1
equaling
25
percent
of
the
first
$1,000
which
the
taxpayer
has
2
paid
to
others
for
early
childhood
development
expenses
for
3
each
dependent
ages
three
through
five.
The
bill
also
adjusts
4
the
future
amount
of
the
net
income
threshold
by
indexing
the
5
threshold
to
inflation.
6
EFFECTIVE
DATE
AND
APPLICABILITY.
The
division
takes
effect
7
upon
enactment
and
applies
retroactively
to
tax
years
beginning
8
on
or
after
January
1,
2019.
9
DIVISION
VII
——
APPORTIONMENT
OF
CERTAIN
BUSINESS
INCOME
10
OF
AN
AIRLINE.
The
amendment
to
Code
section
422.33(2)(a)(2)
11
relates
to
the
apportionment
of
income
of
an
airline
and
of
12
a
qualified
air
freight
forwarder
for
purposes
of
the
Iowa
13
corporate
income
tax.
14
A
corporation
doing
business
both
within
and
without
Iowa
is
15
required
to
apportion
its
business
income
among
Iowa
and
the
16
other
states
in
which
it
does
business.
The
amount
of
business
17
income
apportioned
to
Iowa
is
generally
in
the
same
percentage
18
as
the
business’s
gross
sales
made
within
Iowa
if
the
business
19
involves
the
manufacture
or
sale
of
goods
and
products,
or
in
20
the
same
percentage
as
the
business’s
gross
receipts
earned
21
within
Iowa
if
the
business
involves
something
other
than
the
22
manufacture
or
sale
of
goods
and
products.
However,
airlines
23
and
other
specified
industries
have
special
rules
provided
24
by
administrative
rule
for
apportioning
the
income
of
those
25
industries.
26
Under
current
law
pursuant
to
701
Iowa
administrative
code,
27
rule
54.7(2),
an
airline
deriving
income
from
transportation
28
operations
is
required
to
apportion
its
business
income
to
29
Iowa
in
the
same
proportion
that
its
mileage
traveled
in
Iowa
30
bears
to
its
total
mileage
traveled
everywhere.
The
bill
31
specifies
that
an
airline
shall
apportion
this
business
income
32
in
the
same
manner
described
above
as
required
under
701
Iowa
33
administrative
code,
rule
54.7(2).
34
The
bill
also
provides
rules
for
apportioning
income
derived
35
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by
a
qualified
air
freight
forwarder
from
transportation
1
operations
through
an
affiliated
airline.
The
bill
defines
2
“qualified
air
freight
forwarder”
to
be
a
taxpayer
that
is
3
primarily
engaged
in
the
facilitation
of
the
transportation
of
4
property
by
air,
and
that
does
not
itself
operate
aircraft
but
5
that
is
in
the
same
affiliated
group
as
an
airline.
6
The
bill
states
that
the
qualified
air
freight
forwarder
7
income
derived
from
transportation
operations
shall
be
8
apportioned
to
Iowa
either
under
the
current
rules
of
the
9
director
of
revenue
(current
statutory
rules),
or
in
the
10
same
proportion
that
the
miles
of
the
qualified
air
freight
11
forwarder’s
affiliated
airline
traveled
in
this
state
bears
to
12
the
total
miles
of
the
affiliated
airline
traveled
everywhere
13
(affiliated
airline
mileage
rules),
based
on
increasing
14
percentages
as
enumerated
in
the
bill
over
a
number
of
tax
15
years.
16
The
division
applies
to
tax
years
beginning
on
or
after
17
January
1,
2020.
18
DIVISION
VIII
——
BURIAL
TRUSTS.
The
bill
enacts
new
Code
19
section
422.7(6)
by
exempting
from
the
individual
income
tax
20
interest
and
earnings
received
from
a
burial
trust
fund.
21
DIVISION
IX
——
ADOPTION
TAX
CREDIT.
The
amendment
to
Code
22
section
422.12A
relates
to
claiming
the
adoption
tax
credit
for
23
qualified
adoption
expenses
paid
or
incurred
by
an
individual
24
taxpayer
during
a
tax
year.
25
Currently,
in
order
to
claim
the
adoption
tax
credit
the
26
taxpayer
must
pay
or
incur
“qualified
adoption
expenses”
during
27
the
tax
year,
which
are
unreimbursed,
and
connected
with
the
28
adoption.
The
bill
strikes
the
requirement
that
the
“qualified
29
adoption
expenses”
be
paid
or
incurred
by
the
taxpayer
during
30
the
tax
year.
31
The
bill
specifies
that
if
a
qualified
adoption
expense
is
32
incurred
prior
to
or
during
the
tax
year
in
which
the
adoption
33
becomes
final,
the
qualified
adoption
expense
shall
be
allowed
34
during
the
tax
year
in
which
the
adoption
becomes
final.
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For
qualified
adoption
expenses
incurred
after
the
tax
year
1
in
which
the
adoption
becomes
final,
the
qualified
adoption
2
expense
shall
be
allowed
during
the
tax
year
such
adoption
3
expense
was
paid
or
incurred.
4
The
division
applies
retroactively
to
tax
years
beginning
on
5
or
after
January
1,
2019.
6
DIVISION
X
——
TARGETED
JOBS
WITHHOLDING
CREDIT.
The
7
amendment
to
Code
section
403.19A
strikes
a
provision
defining
8
“retained
job”
and
establishes
a
definition
for
“created
job”.
9
The
bill
defines
“created
job”
to
mean
a
new
and
permanent
10
full-time
equivalent
position,
added
to
the
payroll
of
a
11
business
in
excess
of
the
base
employment
level
at
the
time
of
12
application
for
withholding
credits
under
the
Code
section.
13
The
amendment
to
Code
section
403.19A
also
extends
by
four
14
years
the
deadline
for
entering
into
withholding
agreements
15
under
the
targeted
jobs
withholding
credit
pilot
project
from
16
June
30,
2019,
to
June
30,
2023.
17
A
“withholding
agreement”
means
an
agreement
between
a
18
pilot
project
city,
the
economic
development
authority,
and
an
19
employer
concerning
the
targeted
jobs
withholding
credit.
20
The
amendments
to
Code
section
403.19A
do
not
apply
to
a
21
withholding
agreement
entered
into
prior
to
the
effective
date
22
of
this
division.
23
DIVISION
XI
——
SCHOOL
TUITION
ORGANIZATION
TAX
CREDITS.
The
24
amendment
to
Code
section
422.11S
increases
the
total
amount
25
of
school
tuition
organization
tax
credits
that
may
be
issued
26
per
tax
year
to
$17
million
from
$13
million
for
tax
years
27
beginning
on
or
after
January
1,
2020.
28
The
Code
editor
is
directed
to
harmonize
the
amendment
to
29
Code
section
422.11S
in
this
division
with
the
amendments
to
30
Code
section
422.11S
in
another
division
of
the
bill.
31
DIVISION
XII
——
DEDUCTING
RESIDUAL
FERTILIZER.
The
bill
32
enacts
new
Code
section
422.7(60),
which
relates
to
deducting
33
residual
fertilizer
supply
in
the
soil
for
purposes
of
34
individual
and
corporate
income
taxes.
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The
bill
defines
“residual
fertilizer
supply”
to
mean
an
1
asset
or
an
improvement
to
land
that
meets
all
of
the
following
2
requirements:
the
asset
or
improvement
consists
of
residual
3
fertilizer
or
excess
available
nutrients
that
are
in
the
soil;
4
the
land
upon
which
the
asset
or
improvement
is
located
is
5
sold
or
exchanged;
and
following
the
sale
or
exchange
of
the
6
land
containing
the
residual
fertilizer
supply,
an
expense
7
deduction,
amortization
deduction,
or
depreciation
deduction
is
8
allowable
for
federal
tax
purposes
with
respect
to
the
residual
9
fertilizer
in
the
hands
of
a
taxpayer
other
than
the
seller
of
10
the
land.
11
The
bill
provides
that
for
any
sale
or
exchange
of
a
land
12
containing
residual
fertilizer
supply
executed
on
or
after
13
July
1,
2019,
an
expense
deduction,
depreciation
deduction,
or
14
amortization
deduction
with
respect
to
the
residual
fertilizer
15
supply
shall
not
be
allowed
for
individual
or
corporate
income
16
tax
purposes
unless
all
of
the
following
requirements
are
17
satisfied:
the
expense
deduction,
depreciation
deduction,
or
18
amortization
deduction
is
allowable
to
the
taxpayer
under
the
19
Internal
Revenue
Code;
and
the
residual
fertilizer
supply
is
20
part
of
a
written
agreement
between
the
seller
and
buyer
that
21
identifies
the
residual
fertilizer
supply
and
the
consideration
22
paid
for
the
residual
fertilizer
supply.
23
If
a
taxpayer
has
taken
a
deduction
relating
to
residual
24
fertilizer
supply
in
computing
federal
adjusted
gross
income
25
that
is
disallowed
under
the
bill,
the
taxpayer
shall
make
26
the
following
adjustments:
add
back
the
total
amount
of
the
27
deduction
in
computing
net
income
for
state
tax
purposes;
28
reallocate
the
amount
of
the
deduction
to
the
taxpayer’s
basis,
29
if
any,
in
the
land
upon
which
the
residual
fertilizer
supply
30
is
located;
and
make
any
other
adjustments
to
gains,
losses,
31
deductions,
or
tax
basis
of
assets
pursuant
to
rules
adopted
by
32
the
director
of
revenue.
33
DIVISION
XIII
——
FRANCHISE
TAX
——
ALTERNATIVE
MINIMUM
TAX
34
(AMT)
REPEAL.
Current
law
imposes
an
AMT
on
a
financial
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institution
to
the
extent
the
AMT
exceeds
the
financial
1
institution’s
regular
tax
liability.
The
AMT
is
generally
2
calculated
by
adding
certain
“preference”
items
(deductions,
3
exemptions,
and
other
adjustments)
back
to
taxable
income,
4
applying
an
exemption
amount,
and
then
multiplying
the
5
resulting
income
amount
by
an
AMT
rate.
The
amendments
to
Code
6
section
422.60
repeal
the
AMT
for
the
franchise
tax
beginning
7
in
tax
year
2021.
8
Current
law
also
provides
an
alternative
minimum
tax
credit,
9
which
allows
AMT
paid
by
a
financial
institution
in
prior
tax
10
years
to
be
claimed
against
regular
tax
liability
in
future
tax
11
years
if
the
financial
institution
is
not
subject
to
the
AMT
12
in
that
year.
With
the
repeal
of
the
franchise
AMT
in
2021,
13
the
bill
allows
a
taxpayer
to
claim
any
remaining
alternative
14
minimum
tax
credit
against
the
financial
institution’s
regular
15
tax
liability
for
the
2021
tax
year,
and
the
bill
then
repeals
16
the
alternative
minimum
tax
credit
beginning
in
tax
year
2022.
17
DIVISION
XIV
——
GROSS
GLOBAL
INCOME
LOW-TAXED
INCOME.
18
Federal
law
includes
in
a
taxpayer’s
gross
income
global
19
intangible
low-taxed
income
(GILTI)
as
defined
in
section
20
951A
of
the
Internal
Revenue
Code,
subject
to
a
deduction
21
equal
to
50
percent
of
the
corporation’s
GILTI
under
section
22
250(a)(1)(B)
of
the
Internal
Revenue
Code.
The
amendment
to
23
Code
section
422.35(21)
directs
corporate
taxpayers
to
treat
24
the
taxpayer’s
net
GILTI
amount
as
a
foreign
dividend
for
Iowa
25
income
tax
purposes,
meaning
the
taxpayer
qualifies
for
the
26
same
dividends
received
deduction
that
applies
to
subpart
F
27
income
and
other
foreign
dividends.
28
The
division
applies
retroactively
to
January
1,
2019,
for
29
tax
years
beginning
on
or
after
that
date.
30
DIVISION
XV
——
FEDERAL
RESEARCH
CREDIT
——
INTERNAL
REVENUE
31
CODE.
The
Consolidated
Appropriations
Act
of
2018
(Pub.
L.
32
No.
115-141),
which
Iowa
is
conformed
to
for
tax
year
2019
33
and
beyond,
struck
and
renumbered
a
provision
of
the
federal
34
research
credit,
which
resulted
in
a
renumbering
of
the
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simplified
credit
in
the
Internal
Revenue
Code.
The
amendments
1
in
the
division
change
the
Internal
Revenue
references
in
the
2
Iowa
Code
to
reflect
the
changes
to
the
references
in
the
3
Internal
Revenue
Code.
4
The
division
applies
retroactively
to
January
1,
2019,
and
5
applies
to
tax
years
beginning
on
or
after
that
date.
6
DIVISION
XVI
——
RESEARCH
ACTIVITIES
TAX
CREDIT.
The
7
amendments
to
Code
section
422.10(1)(a)
specify
that
the
8
research
and
activities
tax
credit
is
available
against
9
the
individual
income
tax
if
an
individual
is
engaged
in
10
agriscience
or
agricultural
animal
production,
and
if
11
certain
conditions
are
met.
The
amendments
to
Code
section
12
422.33(5)(e)(1)
specify
that
a
corporation
engaged
in
13
agriscience
or
agricultural
animal
production
shall
be
eligible
14
for
the
research
activities
tax
credit
if
certain
conditions
15
are
met.
16
The
bill
defines
“agricultural
animal
production”
to
mean
17
activities
related
to
producing
or
maintaining
an
agricultural
18
animal.
19
The
division
takes
effect
upon
enactment
and
applies
20
retroactively
to
tax
years
beginning
on
or
after
January
1,
21
2017.
22
DIVISION
XVII
——
NEW
JOBS
CREDIT
——
FRANCHISE
TAXES
——
MONEYS
23
AND
CREDITS
TAXES.
The
amendments
to
Code
sections
422.60
and
24
533.329
make
the
new
jobs
tax
credit
under
Code
chapter
260E
25
available
against
franchise
taxes
and
moneys
and
credits
taxes
26
imposed
on
financial
institutions
and
state
credit
unions,
27
respectively.
28
DIVISION
XVIII
——
UTILITY
REPLACEMENT
TASK
FORCE.
The
29
amendment
to
Code
section
437A.15
extends
the
utility
30
replacement
tax
task
force
from
January
1,
2019,
to
January
31
1,
2029.
The
task
force
is
charged
with
studying
the
effects
32
of
the
replacement
taxes
under
Code
chapter
437A
(taxes
on
33
electricity
and
natural
gas
providers)
and
Code
chapter
437B
34
(taxes
on
rate-regulated
water
utilities)
on
local
taxing
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authorities,
local
taxing
districts,
consumers,
and
taxpayers.
1
DIVISION
XIX
——
MONEYS
AND
CREDITS
TAX
ON
STATE
CREDIT
2
UNIONS.
The
amendment
to
Code
section
533.329
strikes
a
3
provision
requiring
the
board
of
supervisors
to
impose
the
4
moneys
and
credits
tax
on
state
credit
unions
and
the
county
5
treasurer
to
collect
such
tax,
and
aligns
the
imposition
and
6
the
collection
of
the
tax
with
Code
section
533.329(2)(b)
and
7
Code
section
533.329(3).
8
DIVISION
XX
——
SALES
AND
USE
TAX
EXEMPTIONS
RELATED
9
TO
MANUFACTURERS.
The
amendment
to
Code
section
10
423.3(47)(d)(4)(c)
modifies
the
definition
of
“manufacturer”
11
relating
to
the
sales
and
use
tax
exemption
for
machinery,
12
equipment,
and
other
items
used
directly
and
primarily
in
13
processing
by
a
manufacturer.
The
bill
expands
the
definition
14
of
“manufacturer”
by
adding
the
word
“primarily”
to
the
15
exclusions
of
the
definition
of
“manufacturer”,
thereby
16
allowing
persons
who
do
not
primarily
engage
in
certain
17
activities
to
qualify
as
a
“manufacturer”.
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