House File 2168 - Introduced HOUSE FILE 2168 BY DIEKEN A BILL FOR An Act creating a state remittance tax and including 1 applicability provisions. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5831YH (4) 91 jm/jh

H.F. 2168 Section 1. NEW SECTION . 423H.1 Definitions. 1 As used in this chapter: 2 1. “Department” means the department of revenue. 3 2. “Director” means the director of revenue. 4 3. “Financial institution” means the same as defined in 5 section 422.61. 6 4. “Remittance transfer” means the same as defined in 15 7 U.S.C. §1693o-1(g). 8 5. “Remittance transfer provider” means any person or 9 financial institution that provides remittance transfers for 10 a consumer in the normal course of business, whether or not 11 the consumer holds an account with such a person or financial 12 institution. 13 6. “Sender” means the consumer who requests a remittance 14 provider to send a remittance transfer for the consumer to a 15 designated recipient. 16 Sec. 2. NEW SECTION . 423H.2 Imposition of remittance 17 transfer tax. 18 1. A tax shall be imposed equal to fifty percent of any 19 gross remittance transfer amount made by a sender in this 20 state. 21 2. The tax imposed under this chapter applies only to any 22 remittance transfer for which the sender provides cash, a 23 money order, a cashier’s check, or any other similar physical 24 instrument to the remittance transfer provider. The tax shall 25 not be imposed on any remittance transfer for which the funds 26 being transferred are withdrawn from an account held in or by a 27 financial institution. 28 3. The tax imposed by this section shall be in addition to 29 any other taxes imposed and shall be paid by the sender. 30 4. The remittance transfer provider shall collect the tax 31 and transfer the tax on a monthly basis as specified by the 32 department pursuant to section 423H.3. 33 5. Where any tax imposed by subsection 1 is not paid at 34 the time the remittance transfer is made, then to the extent 35 -1- LSB 5831YH (4) 91 jm/jh 1/ 4

H.F. 2168 that such tax is not collected, the tax shall be paid by the 1 remittance transfer provider. 2 Sec. 3. NEW SECTION . 423H.3 Administration by director. 3 1. The director of revenue shall administer the remittance 4 transfer tax as nearly as possible in conjunction with the 5 administration of the state sales and use tax law, except 6 that portion of the law that implements the streamlined 7 sales and use tax agreement. The director shall provide 8 appropriate forms, or provide on the regular state tax forms, 9 for reporting remittance transfer tax liability, and for ease 10 of administration may require remittance transfer tax liability 11 to be identified, reported, and remitted to the department 12 as sales and use tax liability, provided the department has 13 the ability to properly identify such amounts as remittance 14 transfer tax revenues upon receipt. 15 2. The director may require all remittance transfer 16 providers to register with the department. The director may 17 also require a tax permit applicable only to this chapter for 18 any remittance tax provider not collecting taxes under chapter 19 423. 20 3. 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 1, and sections 423.23, 423.24, 423.25, 423.31 through 24 423.35, 423.37 through 423.42, and 423.47, consistent with the 25 provisions of this chapter, shall apply with respect to the 26 tax authorized under this chapter, in the same manner and with 27 the same effect as if the taxes on the remittance transfers 28 were retail sales taxes within the meaning of those statutes. 29 Notwithstanding this subsection, the director shall provide for 30 monthly filing of returns and for other than monthly filing 31 of returns both as prescribed in section 423.31. All taxes 32 collected under this chapter by a remittance transfer provider 33 are deemed to be held in trust for the state of Iowa. 34 Sec. 4. NEW SECTION . 423H.4 Revenues. 35 -2- LSB 5831YH (4) 91 jm/jh 2/ 4

H.F. 2168 All revenues derived from the tax shall be deposited into the 1 general fund of the state. 2 Sec. 5. APPLICABILITY. This Act applies to remittance 3 transfers occurring on or after July 1, 2026. 4 EXPLANATION 5 The inclusion of this explanation does not constitute agreement with 6 the explanation’s substance by the members of the general assembly. 7 This bill creates a remittance transfer tax at a rate of 8 50 percent on the gross remittance transfer amount made by a 9 sender in this state. 10 The bill defines “remittance transfer” based upon the 11 federal definition in 15 U.S.C. §1693o-1(g), which generally 12 defines remittance transfer to mean an electronic transfer of 13 funds by a sender to a recipient, whether or not the sender 14 holds an account with the remittance transfer provider. 15 The bill defines “remittance provider” to mean any person or 16 financial institution that provides remittance transfers for 17 a consumer in the normal course of business, whether or not 18 the consumer holds an account with such a person or financial 19 institution. 20 The tax imposed under the bill only applies to remittance 21 transfers where the sender provides cash, a money order, a 22 cashier’s check, or any other similar physical instrument to 23 the remittance transfer provider to initiate the transfer to 24 the recipient. The tax shall not be imposed on any remittance 25 transfer for which the funds being transferred are withdrawn 26 from an account held in or by a financial institution. 27 The bill specifies the tax shall be paid by the sender of 28 the remittance transfer. The remittance transfer provider is 29 required to collect the tax and to transfer the tax to the 30 department of revenue on a monthly basis. If the remittance 31 tax is not collected at the time of the remittance transfer, 32 the bill requires the remittance provider to pay the tax. 33 The bill requires the director of revenue to administer the 34 remittance transfer tax as nearly as possible in conjunction 35 -3- LSB 5831YH (4) 91 jm/jh 3/ 4

H.F. 2168 with the administration of the state sales and use tax law, 1 except that portion of the law that implements the streamlined 2 sales and use tax agreement. 3 The bill directs all revenues derived from the remittance 4 transfer tax to be deposited into the general fund of the 5 state. 6 The tax applies to remittance transfers occurring on or 7 after July 1, 2026. 8 -4- LSB 5831YH (4) 91 jm/jh 4/ 4