Senate File 2206 - Introduced SENATE FILE 2206 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SSB 3074) A BILL FOR An Act relating to state and local revenue and finances by 1 modifying sales and use taxes, individual and corporate 2 income taxes, the franchise tax, the insurance premiums tax, 3 the equipment tax, the automobile rental excise tax, the 4 water service tax, and local option taxes, crediting moneys 5 to the natural resources and outdoor recreation trust fund, 6 and including effective date and applicability provisions. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 8 TLSB 5099SV (3) 89 jm/jh

S.F. 2206 DIVISION I 1 SALES AND USE TAX RATES AND DISTRIBUTION 2 Section 1. Section 423.2, subsection 1, unnumbered 3 paragraph 1, Code 2022, is amended to read as follows: 4 There is imposed a tax of six percent at the rate specified 5 in subsection 12 upon the sales price of all sales of tangible 6 personal property, sold at retail in the state to consumers or 7 users except as otherwise provided in this subchapter . 8 Sec. 2. Section 423.2, subsections 2 and 3, Code 2022, are 9 amended to read as follows: 10 2. A tax of six percent at the rate specified in subsection 11 12 is imposed upon the sales price of the sale or furnishing 12 of gas, electricity, water, heat, pay television service, and 13 communication service, including the sales price from such 14 sales by any municipal corporation or joint water utility 15 furnishing gas, electricity, water, heat, pay television 16 service, and communication service to the public in its 17 proprietary capacity, except as otherwise provided in this 18 subchapter , when sold at retail in the state to consumers or 19 users. 20 3. A tax of six percent at the rate specified in subsection 21 12 is imposed upon the sales price of all sales of tickets 22 or admissions to places of amusement, fairs, and athletic 23 events except those of elementary and secondary educational 24 institutions. A tax of six percent at the rate specified in 25 subsection 12 is imposed on the sales price of an entry fee or 26 like charge imposed solely for the privilege of participating 27 in an activity at a place of amusement, fair, or athletic event 28 unless the sales price of tickets or admissions charges for 29 observing the same activity are taxable under this subchapter . 30 A tax of six percent at the rate specified in subsection 12 31 is imposed upon that part of private club membership fees or 32 charges paid for the privilege of participating in any athletic 33 sports provided club members. 34 Sec. 3. Section 423.2, subsection 4, paragraph a, Code 2022, 35 -1- LSB 5099SV (3) 89 jm/jh 1/ 118

S.F. 2206 is amended to read as follows: 1 a. A tax of six percent at the rate specified in subsection 2 12 is imposed upon the sales price derived from the operation 3 of all forms of amusement devices and games of skill, games of 4 chance, raffles, and bingo games as defined in chapter 99B , and 5 card game tournaments conducted under section 99B.27 , that are 6 operated or conducted within the state, the tax to be collected 7 from the operator in the same manner as for the collection of 8 taxes upon the sales price of tickets or admission as provided 9 in this section . Nothing in this subsection shall legalize any 10 games of skill or chance or slot-operated devices which are now 11 prohibited by law. 12 Sec. 4. Section 423.2, subsection 5, Code 2022, is amended 13 to read as follows: 14 5. There is imposed a tax of six percent at the rate 15 specified in subsection 12 upon the sales price from the 16 furnishing of services as defined in section 423.1 . 17 Sec. 5. Section 423.2, subsection 7, paragraph a, 18 unnumbered paragraph 1, Code 2022, is amended to read as 19 follows: 20 A tax of six percent at the rate specified in subsection 12 21 is imposed upon the sales price from the sales, furnishing, or 22 service of solid waste collection and disposal service. 23 Sec. 6. Section 423.2, subsection 8, paragraph a, Code 2022, 24 is amended to read as follows: 25 a. A tax of six percent at the rate specified in subsection 26 12 is imposed on the sales price from sales of bundled 27 transactions. For the purposes of this subsection , a “bundled 28 transaction” is the retail sale of two or more distinct and 29 identifiable products, except real property and services to 30 real property, which are sold for one nonitemized price. A 31 “bundled transaction” does not include the sale of any products 32 in which the sales price varies, or is negotiable, based on 33 the selection by the purchaser of the products included in the 34 transaction. 35 -2- LSB 5099SV (3) 89 jm/jh 2/ 118

S.F. 2206 Sec. 7. Section 423.2, subsection 9, Code 2022, is amended 1 to read as follows: 2 9. A tax of six percent at the rate specified in 3 subsection 12 is imposed upon the sales price from any mobile 4 telecommunications service, including all paging services, 5 that this state is allowed to tax pursuant to the provisions 6 of the federal Mobile Telecommunications Sourcing Act, Pub. 7 L. No. 106-252, 4 U.S.C. §116 et seq. For purposes of this 8 subsection , taxes on mobile telecommunications service, as 9 defined under the federal Mobile Telecommunications Sourcing 10 Act that are deemed to be provided by the customer’s home 11 service provider, shall be paid to the taxing jurisdiction 12 whose territorial limits encompass the customer’s place of 13 primary use, regardless of where the mobile telecommunications 14 service originates, terminates, or passes through and 15 shall in all other respects be taxed in conformity with 16 the federal Mobile Telecommunications Sourcing Act. All 17 other provisions of the federal Mobile Telecommunications 18 Sourcing Act are adopted by the state of Iowa and incorporated 19 into this subsection by reference. With respect to mobile 20 telecommunications service under the federal Mobile 21 Telecommunications Sourcing Act, the director shall, if 22 requested, enter into agreements consistent with the provisions 23 of the federal Act. 24 Sec. 8. Section 423.2, subsection 10, paragraph a, Code 25 2022, is amended to read as follows: 26 a. A tax of six percent at the rate specified in subsection 27 12 is imposed on the sales price of specified digital products 28 sold at retail in the state. The tax applies whether the 29 purchaser obtains permanent use or less than permanent use of 30 the specified digital product, whether the sale is conditioned 31 or not conditioned upon continued payment from the purchaser, 32 and whether the sale is on a subscription basis or is not on a 33 subscription basis. 34 Sec. 9. Section 423.2, subsection 12, Code 2022, is amended 35 -3- LSB 5099SV (3) 89 jm/jh 3/ 118

S.F. 2206 by striking the subsection and inserting in lieu thereof the 1 following: 2 12. a. For the period beginning January 1, 2023, through 3 December 31, 2050, the sales tax rate is seven percent. 4 b. Beginning January 1, 2051, the sales tax rate is six 5 percent. 6 Sec. 10. Section 423.2A, subsection 2, paragraphs a, b, and 7 c, Code 2022, are amended to read as follows: 8 a. (1) Transfer For the period beginning January 1, 2023, 9 through December 31, 2050, transfer one-seventh of the revenues 10 collected under deposited into the general fund of the state 11 under subsection 1 to the appropriate county accounts under 12 chapter 423B for the counties from which the tax was collected . 13 (2) Beginning January 1, 2051, transfer one-sixth of the 14 revenues deposited into the general fund of the state under 15 subsection 1 to the appropriate county accounts under chapter 16 423B for the counties from which the tax was collected. 17 b. Transfer from the remaining revenues the amounts required 18 under Article VII, section 10, of the Constitution of the State 19 of Iowa to the natural resources and outdoor recreation trust 20 fund created in section 461.31 , if applicable . 21 c. Transfer one-sixth of from the remaining revenues an 22 amount equal to one-seventh of the revenues deposited into the 23 general fund of the state under subsection 1 to the secure an 24 advanced vision for education fund created in section 423F.2 . 25 This paragraph “c” is repealed January 1, 2051. 26 Sec. 11. Section 423.5, subsection 1, unnumbered paragraph 27 1, Code 2022, is amended to read as follows: 28 Except as provided in paragraph “b” , an excise tax at the 29 rate of six percent specified in subsection 4 of the purchase 30 price or installed purchase price is imposed on the following: 31 Sec. 12. Section 423.5, subsection 4, Code 2022, is amended 32 by striking the subsection and inserting in lieu thereof the 33 following: 34 4. a. For the period beginning January 1, 2023, through 35 -4- LSB 5099SV (3) 89 jm/jh 4/ 118

S.F. 2206 December 31, 2050, the use tax rate is seven percent. 1 b. Beginning January 1, 2051, the use tax rate is six 2 percent. 3 Sec. 13. Section 423.43, subsection 1, paragraph b, Code 4 2022, is amended by striking the paragraph and inserting in 5 lieu thereof the following: 6 b. Subsequent to the deposit into the general fund of 7 the state the department shall do the following in the order 8 prescribed: 9 (1) (a) For the period beginning January 1, 2023, through 10 December 31, 2050, transfer one-seventh of such revenues to the 11 appropriate county accounts under chapter 423B for the counties 12 from which the tax was paid. 13 (b) Beginning January 1, 2051, transfer one-sixth of such 14 revenues to the appropriate county accounts under chapter 423B 15 for the counties from which the tax was paid. 16 (2) Transfer one-sixth of such remaining revenues to the 17 secure an advanced vision for education fund created in section 18 423F.2. This subparagraph is repealed January 1, 2051. 19 Sec. 14. EFFECTIVE DATE. This division of this Act takes 20 effect January 1, 2023. 21 DIVISION II 22 SALES AND USE TAX ON SERVICES AND EXEMPTIONS 23 Sec. 15. Section 423.2, subsection 6, paragraph bu, Code 24 2022, is amended to read as follows: 25 bu. Software as a service Cloud computing . 26 Sec. 16. Section 423.2, subsection 6, Code 2022, is amended 27 by adding the following new paragraphs: 28 NEW PARAGRAPH . bv. Web hosting. 29 NEW PARAGRAPH . bw. Digital automated services. 30 NEW PARAGRAPH . bx. Scooter rentals. 31 Sec. 17. Section 423.3, subsection 47, paragraph a, 32 subparagraph (4), Code 2022, is amended by striking the 33 subparagraph. 34 Sec. 18. Section 423.3, subsection 104, paragraph a, Code 35 -5- LSB 5099SV (3) 89 jm/jh 5/ 118

S.F. 2206 2022, is amended to read as follows: 1 a. The sales price of specified digital products and of 2 prewritten computer software sold, and of enumerated services 3 described in section 423.2, subsection 1 , paragraph “a” , 4 subparagraph (5), or section 423.2, subsection 6 , paragraphs 5 “bq” , “br” , “bs” , and “bu” , “bv” , and “bw” furnished, to a 6 commercial enterprise for use exclusively by the commercial 7 enterprise. The use of prewritten computer software, a 8 specified digital product, or service fails to qualify as a 9 use exclusively by the commercial enterprise if its use for 10 noncommercial purposes is more than de minimis. 11 Sec. 19. Section 423.3, subsection 104, paragraph b, 12 subparagraph (1), Code 2022, is amended to read as follows: 13 (1) “Commercial enterprise” means the same as defined in 14 section 423.3, subsection 47 , paragraph “d” , subparagraph (1) , 15 but also includes professions and occupations . 16 Sec. 20. EFFECTIVE DATE. This division of this Act takes 17 effect January 1, 2023. 18 DIVISION III 19 SALES, USE, AND EXCISE TAX —— RETURNS DUE 20 Sec. 21. Section 9C.3, subsection 3, Code 2022, is amended 21 to read as follows: 22 3. The application shall state whether or not the applicant 23 has an Iowa retailers sales or use tax permit and if the 24 applicant has such permit, shall state the number of such 25 permit. 26 Sec. 22. Section 9C.5, Code 2022, is amended to read as 27 follows: 28 9C.5 Issuance of license. 29 Upon receiving an application for a transient merchant’s 30 license, the secretary of state shall investigate or cause to 31 be investigated, the reputation and character of the applicant. 32 If, upon making such investigation, the secretary of state is 33 satisfied that the statements and representations contained in 34 the application are true, and that the applicant is of good 35 -6- LSB 5099SV (3) 89 jm/jh 6/ 118

S.F. 2206 reputation and character, and the holder of an Iowa retailer’s 1 sales or use tax permit, and if a foreign corporation, has 2 authority to do business in the state of Iowa, the secretary 3 shall issue to the applicant a license as a transient merchant 4 upon payment of the fee as herein prescribed for the period of 5 time requested in said application and for use at the location 6 and place where it is stated in said application the sale will 7 be held or the business conducted, both of which shall be set 8 out in said license. Such license shall be valid only for the 9 period of time and at the location and place described therein. 10 Sec. 23. Section 99G.30A, subsection 2, paragraph c, Code 11 2022, is amended to read as follows: 12 c. Frequency of deposits and quarterly monthly reports of 13 the monitor vending machine excise tax with the department of 14 revenue are governed by the tax provisions in section 423.31 . 15 Monitor vending machine excise tax collections shall not be 16 included in computation of the total tax to determine frequency 17 of filing under section 423.31 . 18 Sec. 24. Section 321.105A, subsection 4, paragraph b, Code 19 2022, is amended to read as follows: 20 b. Section 422.25, subsection 4 , sections 422.30 , 422.67 , 21 and 422.68 , section 422.69, subsection 1 , sections 422.70 , 22 422.71 , 422.72 , 422.74 , and 422.75 , section 423.14, subsection 23 2 , and sections 423.23 , 423.24 , 423.25 , 423.32 , 423.33 , 423.35 , 24 423.37 through 423.42 , 423.45 , and 423.47 , consistent with the 25 provisions of this section , apply with respect to the fees 26 for new registration authorized under this section in the 27 same manner and with the same effect as if the fees for new 28 registration were retail use taxes within the meaning of those 29 statutes. 30 Sec. 25. Section 421.26, Code 2022, is amended to read as 31 follows: 32 421.26 Personal liability for tax due. 33 If a licensee or other person under section 452A.65 , a 34 retailer or purchaser under chapter 423A , 423B , 423C , 423D , 35 -7- LSB 5099SV (3) 89 jm/jh 7/ 118

S.F. 2206 or 423E , or section 423.14 , 423.14A , 423.29 , 423.31 , 423.32 , 1 or 423.33 , or a user under section 423.34 , or a permit holder 2 or licensee under section 453A.13 , 453A.16 , or 453A.44 fails 3 to pay a tax under those sections when due, an officer of a 4 corporation or association, notwithstanding section 489.304 , 5 a member or manager of a limited liability company, or a 6 partner of a partnership, having control or supervision of 7 or the authority for remitting the tax payments and having 8 a substantial legal or equitable interest in the ownership 9 of the corporation, association, limited liability company, 10 or partnership, who has intentionally failed to pay the tax 11 is personally liable for the payment of the tax, interest, 12 and penalty due and unpaid. However, this section shall 13 not apply to taxes on accounts receivable. The dissolution 14 of a corporation, association, limited liability company, 15 or partnership shall not discharge a person’s liability for 16 failure to remit the tax due. 17 Sec. 26. Section 423.2, subsection 1, paragraph b, Code 18 2022, is amended to read as follows: 19 b. Sales of building materials, supplies, and equipment 20 to owners, contractors, subcontractors, or builders for the 21 erection of buildings or the alteration, repair, or improvement 22 of real property are retail sales of tangible personal property 23 in whatever quantity sold. Where the owner, contractor, 24 subcontractor, or builder is also a retailer holding a retail 25 sales or use tax permit and transacting retail sales of 26 building materials, supplies, and equipment, the person shall 27 purchase such items of tangible personal property without 28 liability for the tax if such property will be subject to the 29 tax at the time of resale or at the time it is withdrawn from 30 inventory for construction purposes. The sales tax shall be 31 due in the reporting period when the materials, supplies, 32 and equipment are withdrawn from inventory for construction 33 purposes or when sold at retail. The tax shall not be due when 34 materials are withdrawn from inventory for use in construction 35 -8- LSB 5099SV (3) 89 jm/jh 8/ 118

S.F. 2206 outside of Iowa and the tax shall not apply to tangible 1 personal property purchased and consumed by the manufacturer as 2 building materials in the performance by the manufacturer or 3 its subcontractor of construction outside of Iowa. The sale 4 of carpeting is not a sale of building materials. The sale of 5 carpeting to owners, contractors, subcontractors, or builders 6 shall be treated as the sale of ordinary tangible personal 7 property and subject to the tax imposed under this subsection 8 and the use tax. 9 Sec. 27. Section 423.3, subsection 39, paragraph a, 10 subparagraph (2), Code 2022, is amended to read as follows: 11 (2) The sale of all or substantially all of the tangible 12 personal property, or specified digital products, or services 13 held or used by a seller in the course of the seller’s trade 14 or business for which the seller is required to hold a sales 15 or use tax permit when the seller sells or otherwise transfers 16 the trade or business to another person who shall engage in a 17 similar trade or business. 18 Sec. 28. Section 423.3, subsection 80, paragraph d, Code 19 2022, is amended to read as follows: 20 d. Subject to the limitations in paragraph “c” , where the 21 owner, contractor, subcontractor, or builder is also a retailer 22 holding a retail sales or use tax permit and transacting 23 retail sales of building materials, supplies, and equipment, 24 the tax shall not be due when materials are withdrawn from 25 inventory for use in construction performed for a designated 26 exempt entity if an exemption certificate is received from such 27 entity. 28 Sec. 29. Section 423.5, subsection 2, Code 2022, is amended 29 to read as follows: 30 2. The excise tax is imposed upon every person using 31 the property within this state until the tax has been paid 32 directly to the county treasurer, the state department of 33 transportation, a retailer, or the department. This tax is 34 imposed on every person using the services or the product of 35 -9- LSB 5099SV (3) 89 jm/jh 9/ 118

S.F. 2206 the services in this state until the user has paid the tax 1 either to an Iowa sales or use tax permit holder or to the 2 department. 3 Sec. 30. Section 423.14, subsection 2, paragraph b, Code 4 2022, is amended to read as follows: 5 b. The tax upon the use of all tangible personal property 6 and specified digital products other than that enumerated in 7 paragraph “a” , which is sold by a seller who is a retailer or 8 its agent that is not otherwise required to collect sales tax 9 under the provisions of this chapter , may be collected by the 10 retailer or agent and remitted to the department, pursuant to 11 the provisions of paragraph “e” , and sections 423.24 , 423.29 , 12 423.30 , 423.32 423.31 , and 423.33 . 13 Sec. 31. Section 423.14A, subsection 3, paragraph c, 14 subparagraph (2), Code 2022, is amended to read as follows: 15 (2) A marketplace facilitator shall collect sales and 16 use tax on the entire sales price or purchase price paid by 17 a purchaser on each Iowa sale subject to sales and use tax 18 that is made or facilitated by the marketplace facilitator, 19 regardless of whether the marketplace seller for whom an Iowa 20 sale is made or facilitated has or is required to have a retail 21 sales or use tax permit or would have been required to collect 22 sales and use tax had the sale not been facilitated by the 23 marketplace facilitator, and regardless of the amount of the 24 sales price or purchase price that will ultimately accrue 25 to or benefit the marketplace facilitator, the marketplace 26 seller, or any other person. This sales and use tax collection 27 responsibility of a marketplace facilitator applies but shall 28 not be limited to sales facilitated through a computer software 29 application, commonly referred to as in-app purchases, or 30 through another specified digital product. 31 Sec. 32. Section 423.31, subsections 1, 3, 5, and 6, Code 32 2022, are amended to read as follows: 33 1. a. Each Except as provided in paragraph “b” , each person 34 subject to this section and section 423.36 and in accordance 35 -10- LSB 5099SV (3) 89 jm/jh 10/ 118

S.F. 2206 with the provisions of this section and section 423.36 shall, 1 on or before the last day of the month following the close of 2 each calendar quarter month during which such person is or 3 has become or ceased being subject to the provisions of this 4 section and section 423.36 , make, sign, and file electronically 5 a return for the calendar quarter month in the form as may be 6 required. Returns shall show information relating to sales 7 prices including tangible personal property, specified digital 8 products, and services converted to the use of such person, 9 the amounts of sales prices excluded and exempt from the tax, 10 the amounts of sales prices subject to tax, a calculation of 11 tax due, and any other information for the period covered by 12 the return as may be required. Returns shall be signed by 13 the retailer or the retailer’s authorized agent and must be 14 certified by the retailer to be correct in accordance with 15 forms and rules prescribed by the director. A person required 16 to file a sales or use tax return who is unable to do so may 17 request permission from the director to file a return by 18 another method. 19 b. Notwithstanding paragraph “a” , each person subject to 20 this section who collects and remits less than one thousand 21 two hundred dollars in sales or use tax to the department per 22 calendar year may file a return on or before the last day of the 23 month following the close of the calendar year. 24 3. The sales tax forms prescribed by the director shall be 25 referred to as “retailers tax deposit”. Deposit forms shall 26 be signed by the retailer or the retailer’s duly authorized 27 agent, and shall be duly certified by the retailer or agent to 28 be correct. The director may authorize incorporated banks and 29 trust companies or other depositories authorized by law which 30 are depositories or financial agents of the United States, 31 or of this state, to receive any sales or use tax imposed 32 under this chapter , in the manner, at the times, and under 33 the conditions the director prescribes. The director shall 34 prescribe the manner, times, and conditions under which the 35 -11- LSB 5099SV (3) 89 jm/jh 11/ 118

S.F. 2206 receipt of the tax by those depositories is to be treated as 1 payment of the tax to the department. 2 5. a. Upon making application and receiving approval 3 from the director, a person and its affiliates that make 4 retail sales of tangible personal property, specified digital 5 products, or taxable enumerated services may make deposits and 6 file a consolidated sales or use tax return for the affiliated 7 group, pursuant to rules adopted by the director. A person and 8 each affiliate that files a consolidated return are jointly and 9 severally liable for all tax, penalty, and interest found due 10 for the tax period for which a consolidated return is filed or 11 required to be filed. 12 b. A business required to file a consolidated sales or use 13 tax return shall file a form entitled “schedule of consolidated 14 business locations” with its quarterly sales or use tax 15 return that shows the taxpayer’s consolidated permit number, 16 the permit number for each Iowa business location, the state 17 sales tax amount by business location, and the amount of state 18 sales tax due on goods consumed that are not assigned to a 19 specific business location. Consolidated quarterly sales or 20 use tax returns that are not accompanied by the schedule of 21 consolidated business locations form are considered incomplete 22 and are subject to penalty under section 421.27 . 23 6. If necessary or advisable in order to insure ensure 24 the payment of the tax, the director may require returns and 25 payment of the tax to be made for other than quarterly monthly 26 periods, the provisions of this section or other provision to 27 the contrary notwithstanding. 28 Sec. 33. Section 423.31, subsection 2, Code 2022, is amended 29 by striking the subsection. 30 Sec. 34. Section 423.33, subsection 1, paragraph a, Code 31 2022, is amended to read as follows: 32 a. If a purchaser fails to pay sales tax to the retailer 33 required to collect the tax, then in addition to all of the 34 rights, obligations, and remedies provided, a use tax is 35 -12- LSB 5099SV (3) 89 jm/jh 12/ 118

S.F. 2206 payable by the purchaser directly to the department, and 1 sections 423.31 , 423.32 , 423.37 , 423.38 , 423.39 , 423.40 , 2 423.41 , and 423.42 apply to the purchaser. 3 Sec. 35. Section 423.33, subsection 3, Code 2022, is amended 4 to read as follows: 5 3. Event sponsor’s liability for sales tax. A person 6 sponsoring a flea market or a craft, antique, coin, or stamp 7 show or similar event shall obtain from every retailer selling 8 tangible personal property, specified digital products, or 9 taxable services at the event proof that the retailer possesses 10 a valid sales or use tax permit or secure from the retailer 11 a statement, taken in good faith, that tangible personal 12 property, specified digital products, or services offered for 13 sale are not subject to sales tax. Failure to do so renders 14 a sponsor of the event liable for payment of any sales tax, 15 interest, and penalty due and owing from any retailer selling 16 property or services at the event. Sections 423.31 , 423.32 , 17 423.37 , 423.38 , 423.39 , 423.40 , 423.41 , and 423.42 apply to the 18 sponsors. For purposes of this subsection , a “person sponsoring 19 a flea market or a craft, antique, coin, or stamp show or similar 20 event” does not include a marketplace facilitator as defined in 21 section 423.14A, subsection 1, an organization which sponsors 22 an event determined to qualify as an event involving casual 23 sales pursuant to section 423.3, subsection 39 , or the state 24 fair or a fair as defined in section 174.1 . 25 Sec. 36. Section 423.34, Code 2022, is amended to read as 26 follows: 27 423.34 Liability of user. 28 Any person who uses any tangible personal property, 29 specified digital products, or services enumerated in section 30 423.2 upon which the use tax has not been paid, either to the 31 county treasurer or to a retailer or direct to the department 32 as required by this subchapter , shall be liable for the payment 33 of tax, and shall on or before the last day of the month next 34 succeeding each quarterly monthly period pay the use tax upon 35 -13- LSB 5099SV (3) 89 jm/jh 13/ 118

S.F. 2206 all tangible personal property, specified digital products, 1 or services used by the person during the preceding quarterly 2 monthly period in the manner and accompanied by such returns 3 as the director shall prescribe. All of the provisions of 4 sections 423.32 423.31 and 423.33 with reference to the returns 5 and payments shall be applicable to the returns and payments 6 required by this section . 7 Sec. 37. Section 423.36, subsection 4, paragraph b, Code 8 2022, is amended to read as follows: 9 b. If an applicant is making sales outside Iowa for use in 10 this state or furnishing services outside Iowa, the product 11 or result of which will be used in this state, that applicant 12 shall be issued one sales or use tax permit by the department 13 applicable to these out-of-state sales or services. 14 Sec. 38. Section 423.36, subsection 4, Code 2022, is amended 15 by adding the following new paragraph: 16 NEW PARAGRAPH . c. If an applicant is required to collect 17 sales or use tax and is not included in the definition of a 18 retailer maintaining a place of business in this state in 19 section 423.1, subsection 48, paragraph “a” , subparagraph (1), 20 the applicant shall be issued one sales or use tax permit by 21 the department regardless of the number of locations from which 22 sales are made. 23 Sec. 39. Section 423.36, subsections 7 and 8, Code 2022, are 24 amended to read as follows: 25 7. a. Sellers who are not regularly engaged in selling 26 at retail and do not have a permanent place of business, but 27 who are temporarily engaged in selling from trucks, portable 28 roadside stands, concessionaires at state, county, district, 29 or local fairs, carnivals, or the like, shall report and remit 30 the sales tax on a temporary seasonal basis, under rules 31 the director shall provide for the efficient collection of 32 the sales tax. This subsection applies to sellers who are 33 temporarily engaged in furnishing services. 34 b. Persons engaged in selling tangible personal property, 35 -14- LSB 5099SV (3) 89 jm/jh 14/ 118

S.F. 2206 specified digital products, or furnishing services shall not 1 be required to obtain or retain a sales or use tax permit for a 2 place of business at which taxable sales of tangible personal 3 property, specified digital products, or taxable performance of 4 services will not occur. 5 8. The provisions of subsection 1 , dealing with the lawful 6 right of a retailer to transact business, as applicable, apply 7 to persons having receipts from furnishing services enumerated 8 in section 423.2 , except that a person holding a permit 9 pursuant to subsection 1 shall not be required to obtain any 10 separate sales or use tax permit for the purpose of engaging in 11 business involving the services. 12 Sec. 40. Section 423.40, subsections 1, 2, 3, and 5, Code 13 2022, are amended to read as follows: 14 1. In addition to the sales or use tax or additional sales 15 or use tax, the taxpayer shall pay a penalty as provided in 16 section 421.27 . The taxpayer shall also pay interest on the 17 sales or use tax or additional sales or use tax at the rate 18 in effect under section 421.7 for each month counting each 19 fraction of a month as an entire month, computed from the date 20 the semimonthly or monthly tax deposit form or return was 21 required to be filed. The penalty and interest shall be paid 22 to the department and disposed of in the same manner as other 23 receipts under this subchapter . Unpaid penalties and interest 24 may be enforced in the same manner as the taxes imposed by this 25 chapter . 26 2. a. Any person who knowingly sells tangible personal 27 property, specified digital products, tickets or admissions 28 to places of amusement and athletic events, or gas, water, 29 electricity, or communication service at retail, or engages in 30 the furnishing of services enumerated in section 423.2 , in this 31 state without procuring a permit to collect tax, as provided 32 in section 423.36 , or who violates section 423.24 and the 33 officers of any corporation who so act are guilty of a serious 34 misdemeanor. 35 -15- LSB 5099SV (3) 89 jm/jh 15/ 118

S.F. 2206 b. A person who knowingly sells tangible personal property, 1 specified digital products, tickets or admissions to places of 2 amusement and athletic events, or gas, water, electricity, or 3 communication service at retail, or engages in the furnishing 4 of services enumerated in section 423.2 , in this state after 5 the person’s sales or use tax permit has been revoked and 6 before it has been restored as provided in section 423.36, 7 subsection 6 , and the officers of any corporation who so act 8 are guilty of an aggravated misdemeanor. 9 3. A person who willfully attempts in any manner to evade 10 any tax imposed by this chapter or the payment of the tax or 11 a person who makes or causes to be made a false or fraudulent 12 semimonthly or monthly tax deposit form or return with intent 13 to evade any tax imposed by subchapter II or III or the payment 14 of the tax is guilty of a class “D” felony. 15 5. A person required to pay sales or use tax, or to make, 16 sign, or file a tax deposit form or return or supplemental 17 return, who willfully makes a false or fraudulent tax deposit 18 form or return, or willfully fails to pay at least ninety 19 percent of the tax or willfully fails to make, sign, or file 20 the tax deposit form or return, at the time required by law, is 21 guilty of a fraudulent practice. 22 Sec. 41. Section 423.45, subsection 4, paragraph b, Code 23 2022, is amended to read as follows: 24 b. The sales tax liability for all sales of tangible 25 personal property and specified digital products and all sales 26 of services is upon the seller and the purchaser unless the 27 seller takes from the purchaser a valid exemption certificate 28 stating under penalty of perjury that the purchase is for a 29 nontaxable purpose and is not a retail sale as defined in 30 section 423.1 , or the seller is not obligated to collect tax 31 due, or unless the seller takes a fuel exemption certificate 32 pursuant to subsection 5 . If the tangible personal property, 33 specified digital products, or services are purchased tax free 34 pursuant to a valid exemption certificate and the tangible 35 -16- LSB 5099SV (3) 89 jm/jh 16/ 118

S.F. 2206 personal property, specified digital products, or services are 1 used or disposed of by the purchaser in a nonexempt manner, the 2 purchaser is solely liable for the taxes and shall remit the 3 taxes directly to the department and sections 423.31 , 423.32 , 4 423.37 , 423.38 , 423.39 , 423.40 , 423.41 , and 423.42 shall apply 5 to the purchaser. 6 Sec. 42. Section 423.45, subsection 5, paragraph c, Code 7 2022, is amended to read as follows: 8 c. The seller may accept a completed fuel exemption 9 certificate, as prepared by the purchaser, for three 10 years unless the purchaser files a new completed exemption 11 certificate. If the fuel is purchased tax free pursuant to a 12 fuel exemption certificate which is taken by the seller, and 13 the fuel is used or disposed of by the purchaser in a nonexempt 14 manner, the purchaser is solely liable for the taxes, and shall 15 remit the taxes directly to the department and sections 423.31 , 16 423.32 , 423.37 , 423.38 , 423.39 , 423.40 , 423.41 , and 423.42 17 shall apply to the purchaser. 18 Sec. 43. Section 423.50, subsection 1, Code 2022, is amended 19 to read as follows: 20 1. Only one remittance of tax per return is required except 21 as provided in this subsection . Sellers that collect more 22 than thirty thousand dollars in sales and use taxes for this 23 state during the preceding calendar year shall be required to 24 make additional remittances as required under rules adopted by 25 the director. The filing of a return is not required with an 26 additional remittance. 27 Sec. 44. Section 423.57, Code 2022, is amended to read as 28 follows: 29 423.57 Statutes applicable. 30 The director shall administer this subchapter as it relates 31 to the taxes imposed in this chapter in the same manner and 32 subject to all the provisions of, and all of the powers, 33 duties, authority, and restrictions contained in sections 34 423.14 , 423.14A , 423.14B , 423.15 , 423.16 , 423.17 , 423.19 , 35 -17- LSB 5099SV (3) 89 jm/jh 17/ 118