Senate Study Bill 3074 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON DAWSON) 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 5099XC (21) 89 jm/jh

S.F. _____ 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 5099XC (21) 89 jm/jh 1/ 117

S.F. _____ 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 5099XC (21) 89 jm/jh 2/ 117

S.F. _____ 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 5099XC (21) 89 jm/jh 3/ 117

S.F. _____ 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 5099XC (21) 89 jm/jh 4/ 117

S.F. _____ 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 b, 35 -5- LSB 5099XC (21) 89 jm/jh 5/ 117

S.F. _____ subparagraph (1), Code 2022, is amended to read as follows: 1 (1) “Commercial enterprise” means the same as defined in 2 section 423.3, subsection 47 , paragraph “d” , subparagraph (1) , 3 but also includes professions and occupations . 4 Sec. 19. EFFECTIVE DATE. This division of this Act takes 5 effect January 1, 2023. 6 DIVISION III 7 SALES, USE, AND EXCISE TAX —— RETURNS DUE 8 Sec. 20. Section 9C.3, subsection 3, Code 2022, is amended 9 to read as follows: 10 3. The application shall state whether or not the applicant 11 has an Iowa retailers sales or use tax permit and if the 12 applicant has such permit, shall state the number of such 13 permit. 14 Sec. 21. Section 9C.5, Code 2022, is amended to read as 15 follows: 16 9C.5 Issuance of license. 17 Upon receiving an application for a transient merchant’s 18 license, the secretary of state shall investigate or cause to 19 be investigated, the reputation and character of the applicant. 20 If, upon making such investigation, the secretary of state is 21 satisfied that the statements and representations contained in 22 the application are true, and that the applicant is of good 23 reputation and character, and the holder of an Iowa retailer’s 24 sales or use tax permit, and if a foreign corporation, has 25 authority to do business in the state of Iowa, the secretary 26 shall issue to the applicant a license as a transient merchant 27 upon payment of the fee as herein prescribed for the period of 28 time requested in said application and for use at the location 29 and place where it is stated in said application the sale will 30 be held or the business conducted, both of which shall be set 31 out in said license. Such license shall be valid only for the 32 period of time and at the location and place described therein. 33 Sec. 22. Section 99G.30A, subsection 2, paragraph c, Code 34 2022, is amended to read as follows: 35 -6- LSB 5099XC (21) 89 jm/jh 6/ 117

S.F. _____ c. Frequency of deposits and quarterly monthly reports of 1 the monitor vending machine excise tax with the department of 2 revenue are governed by the tax provisions in section 423.31 . 3 Monitor vending machine excise tax collections shall not be 4 included in computation of the total tax to determine frequency 5 of filing under section 423.31 . 6 Sec. 23. Section 321.105A, subsection 4, paragraph b, Code 7 2022, is amended to read as follows: 8 b. Section 422.25, subsection 4 , sections 422.30 , 422.67 , 9 and 422.68 , section 422.69, subsection 1 , sections 422.70 , 10 422.71 , 422.72 , 422.74 , and 422.75 , section 423.14, subsection 11 2 , and sections 423.23 , 423.24 , 423.25 , 423.32 , 423.33 , 423.35 , 12 423.37 through 423.42 , 423.45 , and 423.47 , consistent with the 13 provisions of this section , apply with respect to the fees 14 for new registration authorized under this section in the 15 same manner and with the same effect as if the fees for new 16 registration were retail use taxes within the meaning of those 17 statutes. 18 Sec. 24. Section 421.26, Code 2022, is amended to read as 19 follows: 20 421.26 Personal liability for tax due. 21 If a licensee or other person under section 452A.65 , a 22 retailer or purchaser under chapter 423A , 423B , 423C , 423D , 23 or 423E , or section 423.14 , 423.14A , 423.29 , 423.31 , 423.32 , 24 or 423.33 , or a user under section 423.34 , or a permit holder 25 or licensee under section 453A.13 , 453A.16 , or 453A.44 fails 26 to pay a tax under those sections when due, an officer of a 27 corporation or association, notwithstanding section 489.304 , 28 a member or manager of a limited liability company, or a 29 partner of a partnership, having control or supervision of 30 or the authority for remitting the tax payments and having 31 a substantial legal or equitable interest in the ownership 32 of the corporation, association, limited liability company, 33 or partnership, who has intentionally failed to pay the tax 34 is personally liable for the payment of the tax, interest, 35 -7- LSB 5099XC (21) 89 jm/jh 7/ 117

S.F. _____ and penalty due and unpaid. However, this section shall 1 not apply to taxes on accounts receivable. The dissolution 2 of a corporation, association, limited liability company, 3 or partnership shall not discharge a person’s liability for 4 failure to remit the tax due. 5 Sec. 25. Section 423.2, subsection 1, paragraph b, Code 6 2022, is amended to read as follows: 7 b. Sales of building materials, supplies, and equipment 8 to owners, contractors, subcontractors, or builders for the 9 erection of buildings or the alteration, repair, or improvement 10 of real property are retail sales of tangible personal property 11 in whatever quantity sold. Where the owner, contractor, 12 subcontractor, or builder is also a retailer holding a retail 13 sales or use tax permit and transacting retail sales of 14 building materials, supplies, and equipment, the person shall 15 purchase such items of tangible personal property without 16 liability for the tax if such property will be subject to the 17 tax at the time of resale or at the time it is withdrawn from 18 inventory for construction purposes. The sales tax shall be 19 due in the reporting period when the materials, supplies, 20 and equipment are withdrawn from inventory for construction 21 purposes or when sold at retail. The tax shall not be due when 22 materials are withdrawn from inventory for use in construction 23 outside of Iowa and the tax shall not apply to tangible 24 personal property purchased and consumed by the manufacturer as 25 building materials in the performance by the manufacturer or 26 its subcontractor of construction outside of Iowa. The sale 27 of carpeting is not a sale of building materials. The sale of 28 carpeting to owners, contractors, subcontractors, or builders 29 shall be treated as the sale of ordinary tangible personal 30 property and subject to the tax imposed under this subsection 31 and the use tax. 32 Sec. 26. Section 423.3, subsection 39, paragraph a, 33 subparagraph (2), Code 2022, is amended to read as follows: 34 (2) The sale of all or substantially all of the tangible 35 -8- LSB 5099XC (21) 89 jm/jh 8/ 117

S.F. _____ personal property, or specified digital products, or services 1 held or used by a seller in the course of the seller’s trade 2 or business for which the seller is required to hold a sales 3 or use tax permit when the seller sells or otherwise transfers 4 the trade or business to another person who shall engage in a 5 similar trade or business. 6 Sec. 27. Section 423.3, subsection 80, paragraph d, Code 7 2022, is amended to read as follows: 8 d. Subject to the limitations in paragraph “c” , where the 9 owner, contractor, subcontractor, or builder is also a retailer 10 holding a retail sales or use tax permit and transacting 11 retail sales of building materials, supplies, and equipment, 12 the tax shall not be due when materials are withdrawn from 13 inventory for use in construction performed for a designated 14 exempt entity if an exemption certificate is received from such 15 entity. 16 Sec. 28. Section 423.5, subsection 2, Code 2022, is amended 17 to read as follows: 18 2. The excise tax is imposed upon every person using 19 the property within this state until the tax has been paid 20 directly to the county treasurer, the state department of 21 transportation, a retailer, or the department. This tax is 22 imposed on every person using the services or the product of 23 the services in this state until the user has paid the tax 24 either to an Iowa sales or use tax permit holder or to the 25 department. 26 Sec. 29. Section 423.14, subsection 2, paragraph b, Code 27 2022, is amended to read as follows: 28 b. The tax upon the use of all tangible personal property 29 and specified digital products other than that enumerated in 30 paragraph “a” , which is sold by a seller who is a retailer or 31 its agent that is not otherwise required to collect sales tax 32 under the provisions of this chapter , may be collected by the 33 retailer or agent and remitted to the department, pursuant to 34 the provisions of paragraph “e” , and sections 423.24 , 423.29 , 35 -9- LSB 5099XC (21) 89 jm/jh 9/ 117

S.F. _____ 423.30 , 423.32 423.31 , and 423.33 . 1 Sec. 30. Section 423.14A, subsection 3, paragraph c, 2 subparagraph (2), Code 2022, is amended to read as follows: 3 (2) A marketplace facilitator shall collect sales and 4 use tax on the entire sales price or purchase price paid by 5 a purchaser on each Iowa sale subject to sales and use tax 6 that is made or facilitated by the marketplace facilitator, 7 regardless of whether the marketplace seller for whom an Iowa 8 sale is made or facilitated has or is required to have a retail 9 sales or use tax permit or would have been required to collect 10 sales and use tax had the sale not been facilitated by the 11 marketplace facilitator, and regardless of the amount of the 12 sales price or purchase price that will ultimately accrue 13 to or benefit the marketplace facilitator, the marketplace 14 seller, or any other person. This sales and use tax collection 15 responsibility of a marketplace facilitator applies but shall 16 not be limited to sales facilitated through a computer software 17 application, commonly referred to as in-app purchases, or 18 through another specified digital product. 19 Sec. 31. Section 423.31, subsections 1, 3, 5, and 6, Code 20 2022, are amended to read as follows: 21 1. a. Each Except as provided in paragraph “b” , each person 22 subject to this section and section 423.36 and in accordance 23 with the provisions of this section and section 423.36 shall, 24 on or before the last day of the month following the close of 25 each calendar quarter month during which such person is or 26 has become or ceased being subject to the provisions of this 27 section and section 423.36 , make, sign, and file electronically 28 a return for the calendar quarter month in the form as may be 29 required. Returns shall show information relating to sales 30 prices including tangible personal property, specified digital 31 products, and services converted to the use of such person, 32 the amounts of sales prices excluded and exempt from the tax, 33 the amounts of sales prices subject to tax, a calculation of 34 tax due, and any other information for the period covered by 35 -10- LSB 5099XC (21) 89 jm/jh 10/ 117

S.F. _____ the return as may be required. Returns shall be signed by 1 the retailer or the retailer’s authorized agent and must be 2 certified by the retailer to be correct in accordance with 3 forms and rules prescribed by the director. A person required 4 to file a sales or use tax return who is unable to do so may 5 request permission from the director to file a return by 6 another method. 7 b. Notwithstanding paragraph “a” , each person subject to 8 this section who collects and remits less than one thousand 9 two hundred dollars in sales or use tax to the department per 10 calendar year may file a return on or before the last day of the 11 month following the close of the calendar year. 12 3. The sales tax forms prescribed by the director shall be 13 referred to as “retailers tax deposit”. Deposit forms shall 14 be signed by the retailer or the retailer’s duly authorized 15 agent, and shall be duly certified by the retailer or agent to 16 be correct. The director may authorize incorporated banks and 17 trust companies or other depositories authorized by law which 18 are depositories or financial agents of the United States, 19 or of this state, to receive any sales or use tax imposed 20 under this chapter , in the manner, at the times, and under 21 the conditions the director prescribes. The director shall 22 prescribe the manner, times, and conditions under which the 23 receipt of the tax by those depositories is to be treated as 24 payment of the tax to the department. 25 5. a. Upon making application and receiving approval 26 from the director, a person and its affiliates that make 27 retail sales of tangible personal property, specified digital 28 products, or taxable enumerated services may make deposits and 29 file a consolidated sales or use tax return for the affiliated 30 group, pursuant to rules adopted by the director. A person and 31 each affiliate that files a consolidated return are jointly and 32 severally liable for all tax, penalty, and interest found due 33 for the tax period for which a consolidated return is filed or 34 required to be filed. 35 -11- LSB 5099XC (21) 89 jm/jh 11/ 117

S.F. _____ b. A business required to file a consolidated sales or use 1 tax return shall file a form entitled “schedule of consolidated 2 business locations” with its quarterly sales or use tax 3 return that shows the taxpayer’s consolidated permit number, 4 the permit number for each Iowa business location, the state 5 sales tax amount by business location, and the amount of state 6 sales tax due on goods consumed that are not assigned to a 7 specific business location. Consolidated quarterly sales or 8 use tax returns that are not accompanied by the schedule of 9 consolidated business locations form are considered incomplete 10 and are subject to penalty under section 421.27 . 11 6. If necessary or advisable in order to insure ensure 12 the payment of the tax, the director may require returns and 13 payment of the tax to be made for other than quarterly monthly 14 periods, the provisions of this section or other provision to 15 the contrary notwithstanding. 16 Sec. 32. Section 423.31, subsection 2, Code 2022, is amended 17 by striking the subsection. 18 Sec. 33. Section 423.33, subsection 1, paragraph a, Code 19 2022, is amended to read as follows: 20 a. If a purchaser fails to pay sales tax to the retailer 21 required to collect the tax, then in addition to all of the 22 rights, obligations, and remedies provided, a use tax is 23 payable by the purchaser directly to the department, and 24 sections 423.31 , 423.32 , 423.37 , 423.38 , 423.39 , 423.40 , 25 423.41 , and 423.42 apply to the purchaser. 26 Sec. 34. Section 423.33, subsection 3, Code 2022, is amended 27 to read as follows: 28 3. Event sponsor’s liability for sales tax. A person 29 sponsoring a flea market or a craft, antique, coin, or stamp 30 show or similar event shall obtain from every retailer selling 31 tangible personal property, specified digital products, or 32 taxable services at the event proof that the retailer possesses 33 a valid sales or use tax permit or secure from the retailer 34 a statement, taken in good faith, that tangible personal 35 -12- LSB 5099XC (21) 89 jm/jh 12/ 117

S.F. _____ property, specified digital products, or services offered for 1 sale are not subject to sales tax. Failure to do so renders 2 a sponsor of the event liable for payment of any sales tax, 3 interest, and penalty due and owing from any retailer selling 4 property or services at the event. Sections 423.31 , 423.32 , 5 423.37 , 423.38 , 423.39 , 423.40 , 423.41 , and 423.42 apply to the 6 sponsors. For purposes of this subsection , a “person sponsoring 7 a flea market or a craft, antique, coin, or stamp show or similar 8 event” does not include a marketplace facilitator as defined in 9 section 423.14A, subsection 1, an organization which sponsors 10 an event determined to qualify as an event involving casual 11 sales pursuant to section 423.3, subsection 39 , or the state 12 fair or a fair as defined in section 174.1 . 13 Sec. 35. Section 423.34, Code 2022, is amended to read as 14 follows: 15 423.34 Liability of user. 16 Any person who uses any tangible personal property, 17 specified digital products, or services enumerated in section 18 423.2 upon which the use tax has not been paid, either to the 19 county treasurer or to a retailer or direct to the department 20 as required by this subchapter , shall be liable for the payment 21 of tax, and shall on or before the last day of the month next 22 succeeding each quarterly monthly period pay the use tax upon 23 all tangible personal property, specified digital products, 24 or services used by the person during the preceding quarterly 25 monthly period in the manner and accompanied by such returns 26 as the director shall prescribe. All of the provisions of 27 sections 423.32 423.31 and 423.33 with reference to the returns 28 and payments shall be applicable to the returns and payments 29 required by this section . 30 Sec. 36. Section 423.36, subsection 4, paragraph b, Code 31 2022, is amended to read as follows: 32 b. If an applicant is making sales outside Iowa for use in 33 this state or furnishing services outside Iowa, the product 34 or result of which will be used in this state, that applicant 35 -13- LSB 5099XC (21) 89 jm/jh 13/ 117

S.F. _____ shall be issued one sales or use tax permit by the department 1 applicable to these out-of-state sales or services. 2 Sec. 37. Section 423.36, subsection 4, Code 2022, is amended 3 by adding the following new paragraph: 4 NEW PARAGRAPH . c. If an applicant is required to collect 5 sales or use tax and is not included in the definition of a 6 retailer maintaining a place of business in this state in 7 section 423.1, subsection 48, paragraph “a” , subparagraph (1), 8 the applicant shall be issued one sales or use tax permit by 9 the department regardless of the number of locations from which 10 sales are made. 11 Sec. 38. Section 423.36, subsections 7 and 8, Code 2022, are 12 amended to read as follows: 13 7. a. Sellers who are not regularly engaged in selling 14 at retail and do not have a permanent place of business, but 15 who are temporarily engaged in selling from trucks, portable 16 roadside stands, concessionaires at state, county, district, 17 or local fairs, carnivals, or the like, shall report and remit 18 the sales tax on a temporary seasonal basis, under rules 19 the director shall provide for the efficient collection of 20 the sales tax. This subsection applies to sellers who are 21 temporarily engaged in furnishing services. 22 b. Persons engaged in selling tangible personal property, 23 specified digital products, or furnishing services shall not 24 be required to obtain or retain a sales or use tax permit for a 25 place of business at which taxable sales of tangible personal 26 property, specified digital products, or taxable performance of 27 services will not occur. 28 8. The provisions of subsection 1 , dealing with the lawful 29 right of a retailer to transact business, as applicable, apply 30 to persons having receipts from furnishing services enumerated 31 in section 423.2 , except that a person holding a permit 32 pursuant to subsection 1 shall not be required to obtain any 33 separate sales or use tax permit for the purpose of engaging in 34 business involving the services. 35 -14- LSB 5099XC (21) 89 jm/jh 14/ 117

S.F. _____ Sec. 39. Section 423.40, subsections 1, 2, 3, and 5, Code 1 2022, are amended to read as follows: 2 1. In addition to the sales or use tax or additional sales 3 or use tax, the taxpayer shall pay a penalty as provided in 4 section 421.27 . The taxpayer shall also pay interest on the 5 sales or use tax or additional sales or use tax at the rate 6 in effect under section 421.7 for each month counting each 7 fraction of a month as an entire month, computed from the date 8 the semimonthly or monthly tax deposit form or return was 9 required to be filed. The penalty and interest shall be paid 10 to the department and disposed of in the same manner as other 11 receipts under this subchapter . Unpaid penalties and interest 12 may be enforced in the same manner as the taxes imposed by this 13 chapter . 14 2. a. Any person who knowingly sells tangible personal 15 property, specified digital products, tickets or admissions 16 to places of amusement and athletic events, or gas, water, 17 electricity, or communication service at retail, or engages in 18 the furnishing of services enumerated in section 423.2 , in this 19 state without procuring a permit to collect tax, as provided 20 in section 423.36 , or who violates section 423.24 and the 21 officers of any corporation who so act are guilty of a serious 22 misdemeanor. 23 b. A person who knowingly sells tangible personal property, 24 specified digital products, tickets or admissions to places of 25 amusement and athletic events, or gas, water, electricity, or 26 communication service at retail, or engages in the furnishing 27 of services enumerated in section 423.2 , in this state after 28 the person’s sales or use tax permit has been revoked and 29 before it has been restored as provided in section 423.36, 30 subsection 6 , and the officers of any corporation who so act 31 are guilty of an aggravated misdemeanor. 32 3. A person who willfully attempts in any manner to evade 33 any tax imposed by this chapter or the payment of the tax or 34 a person who makes or causes to be made a false or fraudulent 35 -15- LSB 5099XC (21) 89 jm/jh 15/ 117

S.F. _____ semimonthly or monthly tax deposit form or return with intent 1 to evade any tax imposed by subchapter II or III or the payment 2 of the tax is guilty of a class “D” felony. 3 5. A person required to pay sales or use tax, or to make, 4 sign, or file a tax deposit form or return or supplemental 5 return, who willfully makes a false or fraudulent tax deposit 6 form or return, or willfully fails to pay at least ninety 7 percent of the tax or willfully fails to make, sign, or file 8 the tax deposit form or return, at the time required by law, is 9 guilty of a fraudulent practice. 10 Sec. 40. Section 423.45, subsection 4, paragraph b, Code 11 2022, is amended to read as follows: 12 b. The sales tax liability for all sales of tangible 13 personal property and specified digital products and all sales 14 of services is upon the seller and the purchaser unless the 15 seller takes from the purchaser a valid exemption certificate 16 stating under penalty of perjury that the purchase is for a 17 nontaxable purpose and is not a retail sale as defined in 18 section 423.1 , or the seller is not obligated to collect tax 19 due, or unless the seller takes a fuel exemption certificate 20 pursuant to subsection 5 . If the tangible personal property, 21 specified digital products, or services are purchased tax free 22 pursuant to a valid exemption certificate and the tangible 23 personal property, specified digital products, or services are 24 used or disposed of by the purchaser in a nonexempt manner, the 25 purchaser is solely liable for the taxes and shall remit the 26 taxes directly to the department and sections 423.31 , 423.32 , 27 423.37 , 423.38 , 423.39 , 423.40 , 423.41 , and 423.42 shall apply 28 to the purchaser. 29 Sec. 41. Section 423.45, subsection 5, paragraph c, Code 30 2022, is amended to read as follows: 31 c. The seller may accept a completed fuel exemption 32 certificate, as prepared by the purchaser, for three 33 years unless the purchaser files a new completed exemption 34 certificate. If the fuel is purchased tax free pursuant to a 35 -16- LSB 5099XC (21) 89 jm/jh 16/ 117

S.F. _____ fuel exemption certificate which is taken by the seller, and 1 the fuel is used or disposed of by the purchaser in a nonexempt 2 manner, the purchaser is solely liable for the taxes, and shall 3 remit the taxes directly to the department and sections 423.31 , 4 423.32 , 423.37 , 423.38 , 423.39 , 423.40 , 423.41 , and 423.42 5 shall apply to the purchaser. 6 Sec. 42. Section 423.50, subsection 1, Code 2022, is amended 7 to read as follows: 8 1. Only one remittance of tax per return is required except 9 as provided in this subsection . Sellers that collect more 10 than thirty thousand dollars in sales and use taxes for this 11 state during the preceding calendar year shall be required to 12 make additional remittances as required under rules adopted by 13 the director. The filing of a return is not required with an 14 additional remittance. 15 Sec. 43. Section 423.57, Code 2022, is amended to read as 16 follows: 17 423.57 Statutes applicable. 18 The director shall administer this subchapter as it relates 19 to the taxes imposed in this chapter in the same manner and 20 subject to all the provisions of, and all of the powers, 21 duties, authority, and restrictions contained in sections 22 423.14 , 423.14A , 423.14B , 423.15 , 423.16 , 423.17 , 423.19 , 23 423.20 , 423.21 , 423.22 , 423.23 , 423.24 , 423.25 , 423.29 , 423.31 , 24 423.32 , 423.33 , 423.34 , 423.34A , 423.35 , 423.37 , 423.38 , 25 423.39 , 423.40 , 423.41 , and 423.42 , section 423.43, subsection 26 1 , and sections 423.45 , 423.46 , and 423.47 . 27 Sec. 44. Section 423.58, Code 2022, is amended to read as 28 follows: 29 423.58 Collection, permit, and tax return exemption for 30 certain out-of-state businesses. 31 Notwithstanding sections 423.14 , 423.14A , 423.14B , 423.29 , 32 423.31 , 423.32 , and 423.36 , a person meeting the requirements 33 of section 29C.24 is not required to obtain a sales or use tax 34 permit, collect and remit sales and use tax, or make and file 35 -17- LSB 5099XC (21) 89 jm/jh 17/ 117