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House File 779 - IntroducedA Bill ForAn Act 1relating to the administration of the tax and
2related laws by the department of revenue, including the
3administration and modification of certain tax credits
4and refunds, the individual and corporate income taxes,
5franchise taxes, sales and use taxes, and automobile rental
6excise taxes, the assessment of property owned by certain
7long distance telephone companies, establishing a taxation
8and exemption of computers task force, and providing for
9other properly related matters, making penalties applicable,
10and including effective date and retroactive applicability
11provisions.
12BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2INCOME TAX
3 Section 1. Section 422.4, subsection 16, paragraph e,
4unnumbered paragraph 1, Code 2019, is amended to read as
5follows:
6Add back the following percentage of the qualified business
7income deduction deductions under section 199A sections 199A(a)
8and 199A(g) of the Internal Revenue Code taken and allowable in
9calculating federal taxable income for the applicable tax year:
10 Sec. 2. Section 422.9, subsection 2A, paragraph a,
11unnumbered paragraph 1, Code 2019, is amended to read as
12follows:
13The following percentage of the qualified business income
14deduction deductions under section 199A sections 199A(a) and
15199A(g) of the Internal Revenue Code taken and allowable in
16calculating federal taxable income for the applicable tax year:
17 Sec. 3. Section 422.9, subsection 2A, paragraph b, Code
182019, is amended to read as follows:
19b. Notwithstanding paragraph “a”, and section 422.4,
20subsection 16, paragraph “e”, for an entity electing or
21required to file a composite return under section 422.13,
22subsection 5, the deduction allowed under this subsection for
23purposes of the composite return shall be an amount equal to
24the applicable percentage described in paragraph “a” of the
25deduction deductions that would be allowable for federal income
26tax purposes under section 199A sections 199A(a) and 199A(g) of
27the Internal Revenue Code by an individual taxpayer reporting
28the same items of income and loss that are included in the
29composite return.
30 Sec. 4. Section 422.11S, subsection 7, paragraph b, Code
312019, is amended to read as follows:
32b. The department shall authorize a school tuition
33organization to issue tax credit certificates for contributions
34made to the school tuition organization. The aggregate amount
35of tax credit certificates that the department shall authorize
-1-1for a school tuition organization for a tax calendar year shall
2be determined for that organization pursuant to subsection 8.
3However, a school tuition organization shall not be authorized
4to issue tax credit certificates unless the organization is
5controlled by a board of directors consisting of at least
6 seven members. The names and addresses of the members shall
7be provided to the department and shall be made available
8by the department to the public, notwithstanding any state
9confidentiality restrictions.
10 Sec. 5. Section 422.11S, subsection 8, paragraph a,
11subparagraph (2), Code 2019, is amended to read as follows:
12(2) “Total approved tax credits” means for the tax year
13beginning in the 2006 calendar year, two million five hundred
14thousand dollars, for the tax year beginning in the 2007
15calendar year, five million dollars, for tax calendar years
16beginning on or after January 1, 2008, but before January 1,
172012, seven million five hundred thousand dollars, for tax
18 calendar years beginning on or after January 1, 2012, but
19before January 1, 2014, eight million seven hundred fifty
20thousand dollars, and for tax calendar years beginning on or
21after January 1, 2014, but before January 1, 2019, twelve
22million dollars, and for tax calendar years beginning on or
23after January 1, 2019, thirteen million dollars.
24 Sec. 6. Section 422.11S, subsection 8, paragraph b,
25unnumbered paragraph 1, Code 2019, is amended to read as
26follows:
27Each year by December 1, the department shall authorize
28school tuition organizations to issue tax credit certificates
29for the following tax calendar year. However, for the tax year
30beginning in the 2006 calendar year only, the department, by
31September 1, 2006, shall authorize school tuition organizations
32to issue tax credit certificates for the 2006 calendar tax
33 year. For the tax year beginning in the 2006 calendar year
34only, each school served by a school tuition organization shall
35submit a participation form to the department by August 1,
-2-12006, providing the certified enrollment as of the third Friday
2of September 2005, along with the school tuition organization
3that represents the school. Tax credit certificates available
4for issue by each school tuition organization shall be
5determined in the following manner:
6 Sec. 7. Section 422.11S, subsection 9, unnumbered paragraph
71, Code 2019, is amended to read as follows:
8A school tuition organization that receives a voluntary cash
9or noncash contribution pursuant to this section shall report
10to the department, on a form prescribed by the department,
11by January 12 of each tax calendar year all of the following
12information:
13 Sec. 8. Section 422.11S, subsection 9, paragraphs b and c,
14Code 2019, are amended to read as follows:
15b. The total number and dollar value of contributions
16received and the total number and dollar value of the tax
17credits approved during the previous tax calendar year.
18c. A list of the individual donors for the previous tax
19 calendar year that includes the dollar value of each donation
20and the dollar value of each approved tax credit.
21 Sec. 9. Section 422.12C, subsection 4, Code 2019, is amended
22to read as follows:
234. Married taxpayers who have filed joint federal returns
24electing to file separate returns or to file separately on a
25combined return form must determine the child and dependent
26care credit under subsection 1 or the early childhood
27development tax credit under subsection 2 based upon their
28combined net income and allocate the total credit amount to
29each spouse in the proportion that each spouse’s respective net
30income bears to the total combined net income. Nonresidents or
31part-year residents of Iowa must determine their Iowa child and
32dependent care credit under subsection 1 or the early childhood
33development tax credit under subsection 2 in the ratio of
34their Iowa source net income to their all source net income.
35Nonresidents or part-year residents who are married and elect
-3-1to file separate returns or to file separately on a combined
2return form must allocate the Iowa child and dependent care
3credit under subsection 1 or the early childhood development
4tax credit under subsection 2 between the spouses in the ratio
5of each spouse’s Iowa source net income to the combined Iowa
6source net income of the taxpayers.
7 Sec. 10. Section 422.60, subsection 2, paragraph b, Code
82019, is amended by adding the following new subparagraph:
9 NEW SUBPARAGRAPH. (6) For purposes of this paragraph,
10“Internal Revenue Code” means the Internal Revenue Code of
111954, prior to the date of its redesignation as the Internal
12Revenue Code of 1986 by the Tax Reform Act of 1986, or means
13the Internal Revenue Code of 1986 as amended and in effect on
14December 21, 2017. This definition shall not be construed to
15include any amendment to the Internal Revenue Code enacted
16after the date specified in the preceding sentence, including
17any amendment with retroactive applicability or effectiveness.
18 Sec. 11. LIKE-KIND EXCHANGES OF PERSONAL PROPERTY
19UNDER CORPORATE INCOME TAX AND FRANCHISE TAX FOR TAX YEAR
202019. Notwithstanding any other provision of law to the
21contrary, all of the following shall apply when computing net
22income for purposes of the corporation income tax or franchise
23tax under section 422.35 for tax years beginning during the
242019 calendar year:
251. The rules for nonrecognition of gain or loss from
26exchanges of real property held for productive use or
27investment and not held primarily for sale, as provided in
28section 1031 of the Internal Revenue Code, as amended up to and
29including March 24, 2018, apply for state income tax purposes
30with regard to exchanges of real property.
312. The rules for nonrecognition of gain or loss from
32exchanges of property other than real property held for
33productive use or investment as provided in section 1031 of the
34Internal Revenue Code, as amended up to and including December
3521, 2017, apply for state income tax purposes, notwithstanding
-4-1any other provision of law to the contrary. If the taxpayer’s
2federal taxable income includes gain or loss from property,
3other than real property described in subsection 1, and the
4taxpayer elects to have this subsection apply, the following
5adjustments shall be made:
6a. (1) Subtract the total amount of gain related to the
7sale or exchange of the property as properly reported for
8federal tax purposes under the Internal Revenue Code.
9(2) Add back any gain related to the sale or exchange of the
10property to the extent such gain does not qualify for deferral
11under section 1031 of the Internal Revenue Code, as amended
12up to and including December 21, 2017, which gain shall be
13calculated using the taxpayer’s adjusted basis in the property
14for state tax purposes.
15b. (1) Add the total amount of loss related to the sale or
16exchange of the property as properly reported for federal tax
17purposes under the Internal Revenue Code.
18(2) Subtract any loss related to the sale or exchange of the
19property to the extent such loss does not qualify for deferral
20under section 1031 of the Internal Revenue Code, as amended
21up to and including December 21, 2017, which loss shall be
22calculated using the taxpayer’s adjusted basis in the property
23for state tax purposes.
24c. Any other adjustments to gains, losses, deductions, or
25tax basis for the property given up or received in the sale or
26exchange pursuant to rules adopted by the director.
27 Sec. 12. REFUNDS — EARLY CHILDHOOD DEVELOPMENT TAX
28CREDIT. Notwithstanding any provision of law to the contrary,
29for tax years beginning prior to January 1, 2019, refunds of
30the early childhood development tax credit provided in section
31422.12C, subsection 2, requested on or after the effective
32date of the provision of this division of this Act amending
33section 422.12C, subsection 4, shall not exceed the amount
34allowed under section 422.12C, subsection 4, as amended by this
35division of this Act.
-5-1 Sec. 13. LEGISLATIVE INTENT. It is the intent of the
2general assembly that the provisions of this division of
3this Act amending section 422.11S are conforming amendments
4consistent with current state law, and that the amendments do
5not change the application of current law but instead reflect
6current law both before and after the enactment of this Act.
7 Sec. 14. EFFECTIVE DATE. The following, being deemed of
8immediate importance, take effect upon enactment:
91. The section of this division of this Act amending section
10422.12C, subsection 4.
112. The section of this division of this Act relating to
12refunds for the early childhood development tax credit.
133. The section of this division of this Act relating to
14like-kind exchanges of personal property under corporate income
15tax and franchise tax.
16 Sec. 15. RETROACTIVE APPLICABILITY. The following apply
17retroactively to January 1, 2019, for tax years beginning on
18or after that date:
191. The section of this division of this Act amending section
20422.4, subsection 16, paragraph “e”, unnumbered paragraph 1.
212. The sections of this division of this Act amending
22section 422.9, subsection 2A.
233. The section of this division of this Act amending section
24422.12C, subsection 4.
254. The section of this division of this Act amending section
26422.60, subsection 2, paragraph “b”.
27 Sec. 16. RETROACTIVE APPLICABILITY — LIKE-KIND EXCHANGES
28OF PERSONAL PROPERTY. The section of this division of this
29Act relating to like-kind exchanges of personal property under
30corporate income tax and franchise tax applies retroactively to
31January 1, 2019, for tax years beginning on or after that date,
32but before January 1, 2020.
33DIVISION II
34ADMINISTRATIVE PROVISIONS
35 Sec. 17. Section 422.20, Code 2019, is amended by adding the
-6-1following new subsection:
2 NEW SUBSECTION. 5. The department may permit, by rule, the
3disclosure of state tax information to a person a taxpayer has
4authorized to receive such state tax information, in the manner
5prescribed by the department.
6 Sec. 18. Section 422.72, Code 2019, is amended by adding the
7following new subsection:
8 NEW SUBSECTION. 8. The department may permit, by rule, the
9disclosure of state tax information to a person a taxpayer has
10authorized to receive such state tax information, in the manner
11prescribed by the department.
12DIVISION III
13SALES AND USE TAX
14 Sec. 19. Section 423.2, subsection 1, paragraph a,
15subparagraph (5), subparagraph division (a), Code 2019, is
16amended to read as follows:
17(a) If a service or warranty contract does not specify a fee
18amount for nontaxable services or taxable personal property,
19the tax imposed pursuant to this section shall be imposed upon
20an amount equal to one-half of the sales price of the contract.
21 Sec. 20. Section 423.2, subsection 6, paragraph k, Code
222019, is amended to read as follows:
23k. Carpentry repair and installation.
24 Sec. 21. Section 423.3, Code 2019, is amended by adding the
25following new subsection:
26 NEW SUBSECTION. 16A. a. The sales price from the sale of
27a grain bin, including material or replacement parts used to
28construct or repair a grain bin.
29b. For purposes of this subsection, “grain bin” means
30property that is vented and covered with corrugated metal or
31similar material, and that is primarily used to hold loose
32grain for drying or storage.
33 Sec. 22. Section 423.3, subsection 47, paragraph c,
34subparagraph (3), Code 2019, is amended by striking the
35subparagraph and inserting in lieu thereof the following:
-7- 1(3) The following within the scope of section 427A.1,
2subsection 1, paragraphs “h” and “i”:
3(a) Computers.
4(b) Machinery.
5(c) Equipment, including pollution control equipment.
6(d) Replacement parts.
7(e) Supplies.
8(f) Materials used to construct or self-construct the
9following:
10(i) Computers.
11(ii) Machinery.
12(iii) Equipment, including pollution control equipment.
13(iv) Replacement parts.
14(v) Supplies.
15 Sec. 23. Section 423.3, subsection 104, paragraph a, Code
162019, is amended to read as follows:
17a. The sales price of specified digital products and of
18prewritten computer software sold, and of enumerated services
19described in section 423.2, subsection 1, paragraph “a”,
20subparagraph (5), or section 423.2, subsection 6, paragraphs
21“bq”, “br”, “bs”, and “bu” furnished, to a commercial enterprise
22for use exclusively by the commercial enterprise. The use of
23prewritten computer software, a specified digital product, or
24service fails to qualify as a use exclusively by the commercial
25enterprise if its use for noncommercial purposes is more than
26de minimis.
27 Sec. 24. Section 423.14A, subsection 3, paragraph b, Code
282019, is amended by striking the paragraph.
29 Sec. 25. Section 423.14A, subsection 3, paragraph d,
30subparagraph (1), Code 2019, is amended to read as follows:
31(1) A marketplace facilitator that makes or facilitates
32Iowa sales on its own behalf or for one or more marketplace
33sellers equal to or exceeding one hundred thousand dollars,
34or in two hundred or more separate transactions, for an
35immediately preceding calendar year or a current calendar year.
-8-1 Sec. 26. Section 423.14A, subsection 3, paragraph e,
2subparagraph (1), unnumbered paragraph 1, Code 2019, is amended
3to read as follows:
4A referrer if, for any immediately preceding calendar year
5or a current calendar year, one hundred thousand dollars or
6more in Iowa sales or two hundred or more separate Iowa sales
7transactions result from referrals from a platform of the
8referrer. A referrer is not required to collect and remit
9sales and use tax pursuant to this paragraph if the referrer
10does all of the following:
11 Sec. 27. Section 423.14A, subsection 3, paragraph e,
12subparagraph (1), subparagraph division (c), unnumbered
13paragraph 1, Code 2019, is amended to read as follows:
14The referrer provides the department with monthly annual
15 reports in an electronic format and in the manner prescribed
16by the department, which monthly annual reports contain all of
17the following:
18 Sec. 28. Section 423.14A, subsection 3, paragraph e, Code
192019, is amended by adding the following new subparagraph:
20 NEW SUBPARAGRAPH. (5) This paragraph is subject to
21implementation by the department by rule and shall not require
22a referrer to collect tax or comply with the notice and
23reporting requirements and other provisions of this paragraph
24unless and until such administrative rules take effect.
25 Sec. 29. Section 423.48, subsection 2, paragraph c, Code
262019, is amended by striking the paragraph.
27 Sec. 30. TAXATION AND EXEMPTION OF COMPUTERS TASK FORCE. A
28taxation and exemption of computers task force is created. The
29department of revenue shall initiate and coordinate the task
30force and provide staff assistance. It is the intent of the
31general assembly that the task force include representatives of
32the department of revenue; a commercial enterprise that claims
33an exemption for computers under section 423.3, subsection
3447; an association that represents manufacturers and other
35industrial producers; and an association that represents
-9-1business tax issues. The director of revenue or the director’s
2designee shall serve as chairperson of the task force.
3The task force shall be charged with reviewing the
4definition of “computer” as used throughout the portions of the
5Iowa Code and the Iowa Administrative Code administered by the
6department of revenue including the exemption for computers
7provided in section 423.3, subsection 47, paragraph “a”,
8subparagraph (4). If the task force recommends modifications
9to the current definition of “computer” including the exemption
10for computers provided in section 423.3, subsection 47,
11paragraph “a”, subparagraph (4), the department of revenue
12shall provide any recommendations to the general assembly by
13January 1, 2020.
14 Sec. 31. EFFECTIVE DATE. The following, being deemed of
15immediate importance, take effect upon enactment:
16The section of this division of this Act amending section
17423.3, subsection 47, paragraph “c”, subparagraph (3).
18 Sec. 32. RETROACTIVE APPLICABILITY. The following applies
19retroactively to January 1, 2016, for tax years beginning on
20or after that date:
21The section of this division of this Act amending section
22423.3, subsection 47, paragraph “c”, subparagraph (3).
23DIVISION IV
24AUTOMOBILE RENTAL EXCISE TAX
25 Sec. 33. Section 423.14A, subsection 1, paragraph b,
26subparagraph (3), Code 2019, is amended to read as follows:
27(3) A “rental platform”, as defined in section 423C.2, that
28meets the requirements described in person who is not required
29to collect and remit automobile rental excise tax pursuant to
30 section 423C.3, subsection 3, paragraph “c”, subparagraph (2),
31 shall not be considered a “marketplace facilitator” with respect
32to any sale of a transportation service under section 423.2,
33subsection 6, paragraph “bf”, or section 423.5, subsection 1,
34paragraph “e”, consisting of the rental of vehicles subject
35to registration which are registered for a gross weight of
-10-1thirteen tons or less for a period of sixty days or less.
2 Sec. 34. Section 423C.2, subsection 3, paragraphs a and b,
3Code 2019, are amended to read as follows:
4a. A person or any affiliate of a person that owns or
5controls an automobile and makes the automobile available for
6rent through the person or any affiliate, or through a rental
7platform or rental facilitator any other person required to
8collect sales or use tax under chapter 423.
9b. A person or any affiliate of a person who possesses or
10acquires a right or interest in any automobile with an intent
11to rent the automobile to another person, or through the person
12or any affiliate, or through a rental platform or a rental
13facilitator any other person required to collect sales or use
14tax under chapter 423.
15 Sec. 35. Section 423C.2, subsection 6, Code 2019, is amended
16to read as follows:
176. “Facilitation fee” means any consideration, by whatever
18name called, that a rental facilitator or a rental platform
19 person charges to a user for facilitating the user’s rental
20of an automobile. “Facilitation fee” does not include any
21commission an automobile provider pays to a rental facilitator
22or a rental platform person for facilitating the rental of an
23automobile.
24 Sec. 36. Section 423C.2, Code 2019, is amended by adding the
25following new subsection:
26 NEW SUBSECTION. 6A. “Host” means the registered owner of an
27automobile made available for sharing through a peer-to-peer
28automobile sharing marketplace.
29 Sec. 37. Section 423C.2, subsections 9 and 10, Code 2019,
30are amended by striking the subsections.
31 Sec. 38. Section 423C.2, subsection 11, Code 2019, is
32amended to read as follows:
3311. “Rental price” means all consideration charged for
34the renting and facilitation of renting of an automobile
35before taxes, including but not limited to facilitation fees,
-11-1reservation fees, services fees, nonrefundable deposits, and
2any other direct or indirect charge made or consideration
3provided in connection with the renting or facilitation of
4renting of an automobile the same as “sales price” as defined
5in section 423.1, which term includes but is not limited
6to facilitation fees, reservation fees, services fees,
7nonrefundable deposits, and any other direct or indirect charge
8made or consideration provided in connection with the renting
9or facilitation of renting an automobile.
10 Sec. 39. Section 423C.3, Code 2019, is amended to read as
11follows:
12423C.3 Tax on rental of automobiles — collection and
13remittance of tax.
141. For purposes of this section:
15a. “Discount rental charge” means the amount an automobile
16provider charges to a rental facilitator for the rental of an
17automobile, excluding any applicable tax.
18b. “Travel package” means an automobile rental bundled
19with one or more separate components such as lodging, air
20transportation, or similar items and charged for a single
21retail price.
222. 1. A tax of five percent is imposed upon the rental
23price of an automobile if the rental transaction is subject to
24the sales and services tax under chapter 423, subchapter II, or
25the use tax under chapter 423, subchapter III. The tax shall
26not be imposed on any rental transaction not taxable under the
27state sales and services tax, as provided in section 423.3, or
28the state use tax, as provided in section 423.6, on automobile
29rental receipts.
303. 2. This subsection shall govern the collection and
31remittance of the tax imposed under subsection 2 The tax
32imposed under subsection 1 shall be collected and remitted to
33the department by all persons required to collect state sales
34and use tax on the rental transaction under chapter 423.
35a. Unless otherwise provided in this subsection, the
-12-1automobile provider shall collect the tax by adding the tax to
2the rental price of the automobile and the tax, when collected,
3shall be stated as a distinct item separate and apart from
4the rental price of the automobile and the sales and services
5tax imposed under chapter 423, subchapter II, or the use tax
6imposed under chapter 423, subchapter III.
7b. If a transaction for the rental of an automobile involves
8a rental facilitator, all of the following shall occur in the
9order prescribed:
10(1) The rental facilitator shall collect the tax on any
11rental price that the user pays to the rental facilitator in
12the same manner as an automobile provider under paragraph “a”.
13(2) (a) Unless otherwise required by rule or order of
14the department, the rental facilitator shall remit to the
15automobile provider that portion of the tax collected on the
16rental price that represents the discount rental charge.
17(b) No assessment shall be made against a rental facilitator
18for tax due on a discount rental charge if the rental
19facilitator collected the tax and remitted it to an automobile
20provider that has a valid tax permit required under this
21chapter or under chapter 423. This subparagraph division shall
22not apply if the rental facilitator and automobile provider
23are affiliates, or if the department requires the rental
24facilitator to remit taxes collected on that portion of the
25sales price that represents the discount rental charge directly
26to the department.
27(3) The rental facilitator shall remit any remaining tax it
28collected to the department.
29(4) (a) The automobile provider shall collect and remit
30to the department any taxes the rental facilitator remitted to
31the automobile provider, and shall collect and remit to the
32department any taxes due on any amount of rental price the user
33paid to the automobile provider.
34(b) No assessment shall be made against an automobile
35provider for any tax due on a discount rental charge that
-13-1was not remitted to the automobile provider by a rental
2facilitator. This subparagraph division shall not apply if the
3automobile provider and the rental facilitator are affiliates.
4(5) Notwithstanding any other provision of this paragraph
5to the contrary, if a rental facilitator and its affiliates
6facilitate total rentals under this chapter and chapter
7423A that are equal to or less than an aggregate amount of
8rental price and sales price of ten thousand dollars for an
9immediately preceding calendar year or a current calendar year,
10or in ten or fewer separate transactions for an immediately
11preceding calendar year or a current calendar year, the
12rental facilitator shall not be required to collect tax on the
13amount of sales price that represents the rental facilitator’s
14facilitation fee.
15c. (1) If a transaction for the rental of an automobile
16involves a rental platform, other than a rental platform
17described in subparagraph (2), the rental platform shall
18collect and remit the tax imposed under this chapter in the
19same manner as an automobile provider under paragraph “a”.
20(2) 3. A rental platform person is not required to collect
21and remit the tax imposed under this chapter in the same manner
22as an automobile provider under paragraph “a” if the rental
23platform person meets all of the following requirements:
24a. The person or any affiliate of the person is not an
25automobile provider.
26b. The person or any affiliate of the person facilitates
27the renting or sharing of an automobile by doing all of the
28following:
29(1) The person owns, operates, or controls a peer-to-peer
30automobile sharing marketplace that allows a host or an
31automobile provider who is not an affiliate of the person
32to offer or list an automobile for sharing or rent on the
33marketplace. For purposes of this paragraph, it is immaterial
34whether or not the automobile provider has a tax permit under
35this chapter or chapter 423 or whether the automobile is owned
-14-1by a natural person or by a business entity.
2(2) The person or affiliate of the person collects or
3processes the rental price charged to the user.
4(a) c. The only sales the rental platform person and
5its affiliates of the person facilitate that are subject to
6tax under chapter 423 are sales of a transportation service
7under section 423.2, subsection 6, paragraph “bf”, or section
8423.5, subsection 1, paragraph “e”, consisting of the rental
9of vehicles subject to registration which are registered for
10a gross weight of thirteen tons or less for a period of sixty
11days or less.
12(b) The rental platform operates a peer-to-peer automobile
13sharing marketplace.
14(3) 4. For any rental transaction for which the rental
15platform a person is required to or elects to collect and
16remit the tax under this chapter, the rental platform person
17 shall also be liable for the collection and remittance of any
18sales or use tax due on that transaction under section 423.2,
19subsection 6, paragraph “bf”, or section 423.5, subsection
201, paragraph “e”, notwithstanding any other provision to the
21contrary in chapter 423.
22(4) 5. For any rental transaction for which the rental
23platform person is not required to collect and remit the
24tax under this chapter as provided under subparagraph (2)
25 subsection 3, the automobile provider shall be solely liable
26for any amount of uncollected or unremitted tax under this
27chapter and chapter 423.
28DIVISION V
29TELEPHONE COMPANY PROPERTY
30 Sec. 40. Section 476.1D, Code 2019, is amended by adding the
31following new subsection:
32 NEW SUBSECTION. 10. a. The board, at the request of a
33long distance telephone company, shall classify such company
34as a competitive long distance telephone company if more
35than half of the company’s revenues from its Iowa intrastate
-15-1telecommunications services and facilities are received
2from services and facilities that the board has determined
3to be subject to effective competition, or if more than
4half of the company’s revenues from its Iowa intrastate
5telecommunications services and facilities are received from
6intralata interexchange services and facilities. For purposes
7of this subsection, “intralata interexchange services” means
8those interexchange services that originate and terminate
9within the same local access transport area.
10b. The board shall promptly notify the director of revenue
11that a long distance telephone company has been classified
12as a competitive long distance telephone company. Upon such
13notification by the board, the director of revenue shall assess
14the property of such competitive long distance telephone
15company, which property is first assessed for taxation in this
16state on or after January 1, 1996, in the same manner as all
17other property assessed as commercial property by the local
18assessor under chapters 427, 427A, 427B, 428, and 441. As used
19in this section, “long distance telephone company” means an
20entity that provides telephone service and facilities between
21local exchanges, but does not include a cellular service
22provider or a local exchange utility holding a certificate
23issued under section 476.29, subsection 12.
24 Sec. 41. Section 476.1D, subsection 10, as enacted in this
25division of this Act, is amended by striking the subsection.
26 Sec. 42. EFFECTIVE DATE. The following, being deemed of
27immediate importance, takes effect upon enactment:
28The section of this division of this Act enacting section
29476.1D, subsection 10.
30 Sec. 43. RETROACTIVE APPLICABILITY. The following applies
31retroactively to July 1, 2018, for assessment years beginning
32on or after that date:
33The section of this division of this Act enacting section
34476.1D, subsection 10.
35 Sec. 44. EFFECTIVE DATE. The following takes effect July
-16-11, 2021:
2The section of this division of this Act striking section
3476.1D, subsection 10.
4 Sec. 45. APPLICABILITY. The following applies to
5assessment years beginning on or after January 1, 2022:
6The section of this division of this Act striking section
7476.1D, subsection 10.
8DIVISION VI
9TARGETED JOBS WITHHOLDING CREDIT
10 Sec. 46. Section 403.19A, subsection 3, paragraph c,
11subparagraph (2), Code 2019, is amended to read as follows:
12(2) The pilot project city and the economic development
13authority shall not enter into a withholding agreement after
14June 30, 2019 2020.
15DIVISION VII
16SCHOOL TUITION ORGANIZATION TAX CREDITS
17 Sec. 47. Section 422.11S, subsection 8, paragraph a,
18subparagraph (2), Code 2019, is amended to read as follows:
19(2) “Total approved tax credits” means for the tax year
20beginning in the 2006 calendar year, two million five hundred
21thousand dollars, for the tax year beginning in the 2007
22calendar year, five million dollars, for tax years beginning
23on or after January 1, 2008, but before January 1, 2012, seven
24million five hundred thousand dollars, for tax years beginning
25on or after January 1, 2012, but before January 1, 2014, eight
26million seven hundred fifty thousand dollars, and for tax years
27beginning on or after January 1, 2014, but before January 1,
282019, twelve million dollars, and for tax years beginning on
29or after January 1, 2019, but before January 1, 2020, thirteen
30million dollars, and for tax years beginning on or after
31January 1, 2020, fourteen million dollars.
32 Sec. 48. CONTINGENT CODE EDITOR DIRECTIVE. The Code editor
33is directed to harmonize the section of this division of this
34Act amending section 422.11S with the other division of this
35Act amending section 422.11S, if enacted, by changing tax year
-17-1to calendar year where appropriate and to make other related
2changes, if necessary, to effectuate such changes.
3DIVISION VIII
4INCOME TAX CHECKOFFS
5 Sec. 49. Section 173.22, subsection 2, Code 2019, is amended
6to read as follows:
72. A foundation fund is created within the state treasury
8composed of moneys appropriated or available to and obtained or
9accepted by the foundation. The foundation fund shall include
10moneys credited to the fund as provided in section 422.12D
11 422.12I.
12 Sec. 50. Section 422.12E, Code 2019, is amended to read as
13follows:
14422.12E Income tax return checkoffs limited.
151. For tax years beginning on or after January 1, 2019,
16there There shall be allowed no more than four income tax
17return checkoffs on each income tax return. For tax years
18beginning on or after January 1, 2017, when the same four
19income tax return checkoffs have been provided on the income
20tax return for two consecutive tax years, the two checkoffs for
21which the least amount has been contributed, in the aggregate
22for the first tax year and through March 15 after the end of the
23second tax year, are repealed on December 31 after the end of
24the second tax year and shall be removed from the return form.
252. If more checkoffs are enacted in the same session of
26the general assembly than there is space for inclusion on the
27individual tax return form, the checkoffs with the earliest
28enacted checkoffs date of enactment as determined pursuant
29to section 3.7 for which there is space for inclusion on the
30return form shall be included on the return form, and all other
31checkoffs enacted during that session of the general assembly
32are repealed on December 31 of the year of enactment. If
33more checkoffs are enacted in the same session of the general
34assembly than there is space for inclusion on the individual
35income tax form and the additional checkoffs are enacted on
-18-1the same day and it is indeterminable which checkoffs have
2the earliest date of enactment pursuant to section 3.7, the
3director shall determine which checkoffs shall be included on
4the return form, and all other checkoffs not included on the
5return form shall be repealed on December 31 of the year of
6enactment and shall not be included on the return form.
73. a. By July 1 of the year in which two checkoffs are
8repealed pursuant to subsection 1, the department shall notify
9the Iowa Code editor which two checkoffs received the least
10amount of contributions and are repealed.
11b. By September 1 of any applicable year, the department
12shall notify the Iowa Code editor of any repeal pursuant to
13subsection 2.
14 Sec. 51. NEW SECTION. 422.12G Joint income tax checkoff for
15veterans trust fund and volunteer fire fighter preparedness fund.
161. A person who files an individual or a joint income tax
17return with the department of revenue under section 422.13 may
18designate one dollar or more to be paid jointly to the veterans
19trust fund created in section 35A.13 and to the volunteer fire
20fighter preparedness fund created in section 100B.13. If the
21refund due on the return or the payment remitted with the
22return is insufficient to pay the additional amount designated
23by the taxpayer, the amount designated shall be reduced to the
24remaining amount of refund or the remaining amount remitted
25with the return. The designation of a contribution under this
26section is irrevocable.
272. The director of revenue shall draft the income tax form
28to allow the designation of contributions to the veterans trust
29fund and to the volunteer fire fighter preparedness fund as
30one checkoff on the tax return. The department of revenue,
31on or before January 31, shall transfer one-half of the total
32amount designated on the tax return forms due in the preceding
33calendar year to the veterans trust fund and the remaining
34one-half to the volunteer fire fighter preparedness fund.
35However, before a checkoff pursuant to this section shall be
-19-1permitted, all liabilities on the books of the department of
2administrative services and accounts identified as owing under
3section 8A.504 shall be satisfied.
43. The department of revenue shall adopt rules to administer
5this section.
64. This section is subject to repeal under section 422.12E.
7 Sec. 52. Section 422.12H, Code 2019, is amended to read as
8follows:
9422.12H Income tax checkoff for fish and game protection
10fund.
111. A person who files an individual or a joint income tax
12return with the department of revenue under section 422.13 may
13designate a contribution to the state fish and game protection
14fund authorized pursuant to section 456A.16.
152. This section is subject to repeal under section 422.12E.
16 Sec. 53. NEW SECTION. 422.12I Income tax checkoff for the
17Iowa state fair foundation fund.
181. A person who files an individual or a joint income tax
19return with the department of revenue under section 422.13
20may designate one dollar or more to be paid to the foundation
21fund of the Iowa state fair foundation as established in
22section 173.22. If the refund due on the return or the payment
23remitted with the return is insufficient to pay the amount
24designated by the taxpayer to the foundation fund, the amount
25designated shall be reduced to the remaining amount of the
26refund or the remaining amount remitted with the return. The
27designation of a contribution to the foundation fund under this
28section is irrevocable.
292. The director of revenue shall draft the income tax form
30to allow the designation of contributions to the foundation
31fund on the tax return. The department, on or before January
3231, shall transfer the total amount designated on the tax
33form due in the preceding year to the foundation fund.
34However, before a checkoff pursuant to this section shall be
35permitted, all liabilities on the books of the department of
-20-1administrative services and accounts identified as owing under
2section 8A.504 shall be satisfied.
33. The Iowa state fair board may authorize payment from
4the foundation fund for purposes of supporting foundation
5activities.
64. The department of revenue shall adopt rules to implement
7this section.
85. This section is subject to repeal under section 422.12E.
9DIVISION IX
10POWERS AND DUTIES OF DIRECTOR OF REVENUE
11 Sec. 54. Section 421.17, Code 2019, is amended by adding the
12following new subsection:
13 NEW SUBSECTION. 35. To audit and examine all taxes
14collected or administered by the department.
15DIVISION X
16SALES AND USE TAX EXEMPTIONS RELATED TO MANUFACTURERS
17 Sec. 55. Section 423.3, subsection 47, paragraph d,
18subparagraph (4), subparagraph division (c), unnumbered
19paragraph 1, Code 2019, is amended to read as follows:
20“Manufacturer” does not include persons who are not commonly
21understood as manufacturers, including but not limited to
22persons primarily engaged in any of the following activities:
23DIVISION XI
24RESEARCH ACTIVITIES TAX CREDIT
25 Sec. 56. Section 422.10, subsection 1, paragraph a,
26subparagraph (1), subparagraph division (a), Code 2019, is
27amended to read as follows:
28(a) The business is engaged in the manufacturing, life
29sciences, agriscience, software engineering, or aviation and
30aerospace industry.
31 Sec. 57. Section 422.10, subsection 1, paragraph a,
32subparagraph (1), subparagraph division (b), unnumbered
33paragraph 1, Code 2019, is amended to read as follows:
34Persons that shall not be considered to be engaged in
35the manufacturing, life sciences, agriscience, software
-21-1engineering, or aviation and aerospace industry, and thus are
2not eligible for the credit, include but are not limited to all
3of the following:
4 Sec. 58. Section 422.33, subsection 5, paragraph e,
5subparagraph (1), subparagraph division (a), Code 2019, is
6amended to read as follows:
7(a) The business is engaged in the manufacturing, life
8sciences, agriscience, software engineering, or aviation and
9aerospace industry.
10 Sec. 59. Section 422.33, subsection 5, paragraph e,
11subparagraph (1), subparagraph division (b), unnumbered
12paragraph 1, Code 2019, is amended to read as follows:
13Persons that shall not be considered to be engaged in
14the manufacturing, life sciences, agriscience, software
15engineering, or aviation and aerospace industry, and thus are
16not eligible for the credit, include but are not limited to all
17of the following:
18DIVISION XII
19Broadcasters — Apportionment of gross receipts
20 Sec. 60. 2015 Iowa Acts, chapter 86, section 3, is amended
21to read as follows:
22SEC. 3. RETROACTIVE APPLICABILITY. This Act applies
23retroactively to January 1, 2015 2013, for tax years beginning
24on or after that date.
25EXPLANATION
26The inclusion of this explanation does not constitute agreement with
27the explanation’s substance by the members of the general assembly.
28This bill relates to the administration of the tax and
29related laws by the department of revenue, including the
30administration and modification of certain taxes, tax credits,
31and refunds.
32DIVISION I — INCOME TAX. The amendments to Code sections
33422.4(16) and 422.9 modify Internal Revenue Code references
34relating to the qualified business income deduction. The
35amendments to Code sections 422.4(16) and 422.9 apply
-22-1retroactively for tax years beginning on or after January 1,
22019.
3The amendments to Code section 422.11S specify that school
4tuition organization tax credits shall be authorized by the
5department of revenue on a calendar year basis rather than
6a tax year basis. The amendments to Code section 422.11S
7also specify that a school tuition organization shall be
8controlled by a board of directors consisting of at least seven
9members. Under current law, the board of directors shall be
10seven members. The bill provides that it is the intent of the
11general assembly that the amendments to Code section 422.11S
12are conforming amendments consistent with current law, and that
13the amendments do not change the application of current law.
14The bill also amends Code section 422.11S in division VII of
15the bill.
16The amendment to Code section 422.12C specifies that a
17nonresident or part-year resident shall determine their early
18childhood development tax credit in the ratio of the taxpayer’s
19Iowa source net income to their all source net income. The
20amendment to Code section 422.12C takes effect upon enactment
21and applies retroactively for tax years beginning on or
22after January 1, 2019. The bill specifies that for tax years
23beginning prior to January 1, 2019, refunds of the early
24childhood development tax credit requested on or after July 1,
252019, shall not exceed the amount allowed under Code section
26422.12C(4), as amended by the bill.
27The amendment to Code section 422.60 aligns the definition
28of “Internal Revenue Code” for franchise alternative minimum
29tax purposes with the definition of “Internal Revenue Code”
30for corporate alternative minimum tax purposes. The amendment
31to Code section 422.60 applies retroactively for tax years
32beginning on or after January 1, 2019.
33The bill provides for a deferral of a gain or loss resulting
34from exchanging of property (1031 exchange) that meet certain
35conditions. The federal Tax Cuts and Jobs Act of 2017 repealed
-23-11031 exchanges with respect to exchanges of personal property.
2The Iowa tax bill enacted last year (2018 Iowa Acts, chapter
31161) decouples, for Iowa individual tax purposes, from the
4federal repeal of 1031 exchanges relating to personal property,
5and permits individuals to defer gain or loss on qualifying
6personal property for tax year 2019 to the extent such deferral
7would have been permitted under federal law prior to its
8amendment by the federal Tax Cuts and Jobs Act of 2017. The
9bill permits a corporation or financial institution, for Iowa
10corporate income tax or franchise income tax purposes, the same
11deferral of gain or loss as individuals on qualifying personal
12property for tax year 2019 to the extent such deferral would
13have been permitted under federal law prior to its amendment
14by the federal Tax Cuts and Jobs Act of 2017. The 1031
15exchange provision takes effect upon enactment, and applies
16retroactively for tax years beginning January 1, 2019, but
17before January 1, 2020.
18DIVISION II — ADMINISTRATIVE PROVISIONS. The amendments
19to Code sections 422.20 and 422.72 permit the department of
20revenue, by rule, to disclose state tax information to a person
21a taxpayer has identified to receive such information in the
22manner prescribed by the department of revenue.
23DIVISION III — SALES AND USE TAX. The amendment to Code
24section 423.2(1) provides that if a service or warranty
25contract does not specify a fee amount for nontaxable services
26or taxable personal property, the sales tax shall be imposed
27upon an amount equal to the sales price of the contract.
28Currently, the sales tax is imposed upon an amount equal to
29one-half of the sales price of such a contract.
30The amendment to Code section 432.2(6) specifies that
31the sales price from the furnishing of carpentry repair and
32installation services are subject to the sales tax. Currently,
33carpentry services are subject to sales tax.
34The bill enacts new Code section 423.3(16A), exempting from
35the state sales and use tax the purchase price of a grain bin,
-24-1including material or replacement parts used to construct or
2repair a grain bin. “Grain bin” is defined to mean property
3that is vented and covered with corrugated metal or similar
4material, and that is primarily used to hold loose grain for
5drying or storage.
6The amendment to Code section 423.3(47) changes the
7exclusions from the sales tax exemptions in that subsection by
8aligning the exclusions with the changes made to the exemptions
9enacted in 2016 Iowa Acts, chapter 1007. This provision takes
10effect upon enactment and applies retroactively to tax years
11beginning January 1, 2016, for tax years beginning on or after
12that date.
13The amendment to Code section 423.3(104) exempts from the
14sales tax the sales of optional service or warranty contracts
15for computer software maintenance or support services furnished
16to a commercial enterprise used exclusively by the commercial
17enterprise. “Commercial enterprise” is defined in 423.3(104).
18Currently, a retailer making Iowa sales, as defined in Code
19section 423.14A(1)(a), shall collect and remit sales, use, and
20local option taxes, if the retailer has gross revenue from
21Iowa sales equal to or exceeding $100,000 for an immediately
22preceding calendar year or a current calendar year, or has 200
23or more separate transactions for an immediately preceding
24calendar year or a current calendar year. The bill amends
25Code section 423.14A(3)(b) by striking the requirement that
26retailers making Iowa sales collect such taxes if the retailer
27has 200 or more separate transactions for an immediately
28preceding calendar year or a current calendar year.
29The bill amends Code section 423.14A(3)(d) by striking
30the requirement that a marketplace facilitator, as defined
31in Code section 423.14A(1)(b), making Iowa sales, as defined
32in Code section 423.14A(1)(a), collect sales, use, and local
33option taxes if the marketplace facilitator has 200 or more
34separate transactions for an immediately preceding calendar
35year or a current calendar year. The bill does not strike the
-25-1requirement that a marketplace facilitator collect such taxes
2if the marketplace facilitator makes or facilitates Iowa sales
3on its own behalf or for one or more marketplace sellers equal
4to or exceeding $100,000.
5The bill amends Code section 423.14A(3)(e) by striking
6the requirement that a referrer, as defined in Code section
7423.14A(3)(e)(3), making Iowa sales, as defined in Code section
8423.14A(1)(a), collect sales, use, and local option taxes if
9the referrer has 200 or more separate transactions for an
10immediately preceding calendar year or a current calendar
11year. The bill does not strike the requirement that a referrer
12collect such taxes if the referrer has Iowa sales equal to or
13exceeding $100,000.
14Currently, a referrer is required to provide the department
15of revenue, on a monthly basis, a list of marketplace sellers
16who collect and remit Iowa sales and use tax on the platform
17of the referrer. Otherwise, the referrer is required to
18collect and remit Iowa sales and use tax. The amendment to
19Code section 423A.14A(3)(e)(1)(c) provides that a referrer may
20provide the department of revenue such a report on an annual
21basis, and avoid collecting the sales and use tax if other
22conditions in Code section 423.14(3)(e)(1) are met.
23The bill enacts new Code section 423.14A(3)(e)(5) specifying
24that the paragraph relating to “referrers” is subject to
25implementation by the department of revenue by rule, and shall
26not require a referrer to collect tax or comply with the notice
27and reporting requirements unless such administrative rules
28take effect.
29The bill amends Code section 423.48(2)(c) by striking the
30paragraph specifying that registering under the streamlined
31sales and use tax agreement in another member state shall be
32considered to be registered in this state for purposes of the
33streamlined sales and use tax agreement.
34The bill establishes a taxation and exemption computers
35task force to be initiated, coordinated, and staffed by
-26-1the department of revenue. The task force shall review the
2definition of “computer” as used throughout the portions of
3the Iowa Code and the Iowa Administrative Code administered
4by the department of revenue including the exemption for
5computers provided in Code section 423.3(47)(a)(4). If the
6task force recommends modifications to the current definition
7of “computer” including the exemption for computers provided in
8Code section 423.3(47)(a)(4), the department of revenue shall
9provide any recommendations to the general assembly by January
101, 2020.
11DIVISION IV — AUTOMOBILE RENTAL EXCISE TAX. The amendment
12to Code section 423.14A provides that a person who is not
13required to collect and remit automobile rental excise tax
14shall not be considered a “marketplace facilitator” with
15respect to the sale of certain transportation services.
16The amendment to Code section 423C.2 substitutes a person
17required to collect sales or use tax under Code chapter 423
18for “rental facilitator” and “rental platform” and strikes the
19definitions of “rental facilitator” and “rental platform” from
20Code section 423C.2.
21The amendment to Code section 423C.2(3) specifies that
22a person who owns, operates, or controls a peer-to-peer
23automobile sharing marketplace that allows a host or an
24automobile provider who is not an affiliate to offer or list
25an automobile on the marketplace is not required to collect
26or remit the automobile rental excise tax if certain other
27conditions are met.
28The amendment to Code section 423C.2(11) modifies the
29definition of “rental price” to mean the same as “sales price”
30defined in Code section 423.1, which includes facilitation
31fees, reservation fees, service fees, nonrefundable deposits,
32and any other direct or indirect charge made or consideration
33provided in connection with the renting or facilitation of
34renting automobiles.
35The amendment to Code section 423C.3 strikes the definitions
-27-1of “discount rental charge” and “travel package”.
2The amendment to Code section 423C.3 specifies that the
3automobile rental excise tax shall be imposed upon the rental
4price of an automobile if the rental is subject to the state
5sales or use tax.
6The bill strikes numerous provisions in Code section 423C.3
7relating to the collection of the automobile rental excise tax
8by a “rental facilitator” and “rental platform” due to these
9definitions being stricken by another part of this division of
10the bill.
11The amendment to Code section 423C.3 requires that any
12person required to collect state sales and use tax on the
13rental transaction under Code chapter 423 shall collect the
14automobile rental excise tax as applicable. For any rental
15transaction for which the person is not required to collect and
16remit the automobile rental excise tax, the amendment to Code
17section 423C.3 requires an automobile provider to be solely
18liable for any amount of uncollected or unremitted automobile
19rental excise tax and sales and use tax under Code chapter 423.
20DIVISION V — TELEPHONE COMPANY PROPERTY. Division V of
21the bill authorizes the Iowa utilities board to classify a
22long distance telephone company as a competitive long distance
23telephone company if certain revenue source criteria are
24met. In the event of such a classification, the board is
25required to promptly notify the director of revenue. Upon
26such notification by the board, the director of revenue is
27required to assess the property of such competitive long
28distance telephone company, which property is first assessed
29for taxation in this state on or after January 1, 1996, in
30the same manner as all other property assessed as commercial
31property by the local assessor. The provisions established in
32the bill are the same as provisions repealed on July 1, 2018,
33by 2018 Iowa Acts, chapter 1160.
34The section of division V of the bill enacting Code section
35476.1D, subsection 10, takes effect upon enactment and applies
-28-1retroactively to July 1, 2018, for assessment years beginning
2on or after that date.
3Division V also strikes Code section 476.1D, subsection 10,
4as enacted in the bill, effective July 1, 2021. The future
5strike of Code section 476.1D, subsection 10, applies to
6assessment years beginning on or after January 1, 2022.
7DIVISION VI — TARGETED JOBS WITHHOLDING CREDIT. The
8amendment to Code section 403.19A extends by one year the
9deadline for entering into withholding agreements under the
10targeted jobs withholding credit pilot project from June 30,
112019, to June 30, 2020.
12DIVISION VII — SCHOOL TUITION ORGANIZATION TAX CREDITS.
13 The amendment to Code section 422.11S increases the total
14amount of school tuition organization tax credits that may be
15issued per tax year to $14 million from $13 million for tax
16years beginning on or after January 1, 2020.
17The bill also directs the Code editor to harmonize the
18amendments to Code section 422.11S in division I with the
19amendment to Code section 422.11S in division VII, if enacted.
20DIVISION VIII — INCOME TAX CHECKOFFS. The amendments to
21Code sections 422.12G and 422.12I reestablish the individual
22income tax checkoff for the Iowa state fair foundation fund and
23the joint income tax checkoff for the veterans trust fund and
24the volunteer fire fighter preparedness fund, respectively.
25A checkoff allows a taxpayer who files an individual or
26a joint income tax return with the department of revenue
27to designate a dollar amount to be paid to a specific fund
28included on the individual income tax form.
29Currently, the following four checkoffs are included on
30the individual income tax return form: the Iowa state fair
31foundation fund, the fish and game protection fund, the
32child abuse prevention program fund, and the joint income tax
33checkoff for the veterans trust fund and the volunteer fire
34fighter preparedness fund.
35Under Code section 422.12E(1), for tax years beginning on
-29-1or after January 1, 2017, when the same four income tax return
2checkoffs have been provided on the individual income tax
3return for two consecutive years, the two checkoffs for which
4the least amount has been contributed, in the aggregate for the
5first tax year and through March 15 of the second tax year, are
6repealed. The Iowa state fair foundation fund checkoff and the
7joint income tax checkoff for the veterans trust fund and the
8volunteer fire fighter preparedness fund received the least
9amount contributed in the aggregate for the previous tax year
10and through March 15 of this tax year, and therefore have been
11repealed by operation of law.
12The bill reestablishes the Iowa state fair foundation
13checkoff and the joint income tax checkoff for the veterans
14trust fund and the volunteer fire fighter preparedness fund for
15inclusion on the 2019 and 2020 individual income tax return
16forms, after which the checkoffs will again be subject to
17repeal pursuant to Code section 422.12E(1), if the checkoffs
18have the least amount of contributions in comparison to the
19other two checkoffs.
20The bill specifies that if a checkoff is repealed by
21operation of law pursuant to Code section 422.12E, the date of
22the repeal is December 31 after the end of the second tax year.
23For purposes of publishing the Code, the bill requires the
24department of revenue to notify the Iowa Code editor which two
25checkoffs received the least amount of contributions during the
26two-year period, and thereby are repealed by operation of law.
27The bill also requires the department of revenue to notify the
28Iowa Code editor when more checkoffs are enacted than there is
29space for inclusion on the individual income tax return form,
30and thereby are repealed by operation of law as well.
31The amendment to Code section 422.12H relating to the fish
32and game protection gaming fund specifies that the income tax
33checkoff for the fish and game protection fund is subject to
34repeal under Code section 422.12E just as the other checkoffs
35are subject to repeal, if the fund is one of two checkoffs
-30-1receiving the least amount of contributions over a two-year
2period.
3DIVISION IX — POWERS AND DUTIES OF DIRECTOR OF REVENUE. The
4amendment to Code section 421.17 allows the director of revenue
5to audit and examine all taxes collected or administered by the
6department of revenue.
7DIVISION X — SALES AND USE TAX EXEMPTIONS RELATED
8TO MANUFACTURERS. The amendment to Code section
9423.3(47)(d)(4)(c) modifies the definition of “manufacturer”
10relating to the sales and use tax exemption for machinery,
11equipment, and other items used directly and primarily in
12processing by a manufacturer. The bill expands the definition
13of “manufacturer” by adding the word “primarily” to the
14exclusions of the definition of “manufacturer”, thereby
15allowing persons who do not primarily engage in certain
16activities to qualify as “manufacturers”.
17DIVISION XI — RESEARCH ACTIVITIES TAX CREDIT. The
18amendments to Code section 422.10(1)(a) specify that the
19research and activities tax credit is available against
20the individual income tax if an individual is engaged in
21agriscience, and if certain conditions are met. The amendments
22to Code section 422.33(5)(e)(1) specify that a corporation
23engaged in agriscience shall be eligible for the research
24activities tax credit if certain conditions are met.
25DIVISION XII — BROADCASTERS — APPORTIONMENT OF GROSS
26RECEIPTS. The amendment to 2015 Iowa Acts, chapter 86, section
273, extends the retroactive applicability of the apportionment
28of the gross receipts of a broadcaster enacted during the 2015
29legislative session in Senate File 479, from January 1, 2015,
30to January 1, 2013.
-31-jm/jh
2related laws by the department of revenue, including the
3administration and modification of certain tax credits
4and refunds, the individual and corporate income taxes,
5franchise taxes, sales and use taxes, and automobile rental
6excise taxes, the assessment of property owned by certain
7long distance telephone companies, establishing a taxation
8and exemption of computers task force, and providing for
9other properly related matters, making penalties applicable,
10and including effective date and retroactive applicability
11provisions.
12BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2INCOME TAX
3 Section 1. Section 422.4, subsection 16, paragraph e,
4unnumbered paragraph 1, Code 2019, is amended to read as
5follows:
6Add back the following percentage of the qualified business
7income deduction deductions under section 199A sections 199A(a)
8and 199A(g) of the Internal Revenue Code taken and allowable in
9calculating federal taxable income for the applicable tax year:
10 Sec. 2. Section 422.9, subsection 2A, paragraph a,
11unnumbered paragraph 1, Code 2019, is amended to read as
12follows:
13The following percentage of the qualified business income
14deduction deductions under section 199A sections 199A(a) and
15199A(g) of the Internal Revenue Code taken and allowable in
16calculating federal taxable income for the applicable tax year:
17 Sec. 3. Section 422.9, subsection 2A, paragraph b, Code
182019, is amended to read as follows:
19b. Notwithstanding paragraph “a”, and section 422.4,
20subsection 16, paragraph “e”, for an entity electing or
21required to file a composite return under section 422.13,
22subsection 5, the deduction allowed under this subsection for
23purposes of the composite return shall be an amount equal to
24the applicable percentage described in paragraph “a” of the
25deduction deductions that would be allowable for federal income
26tax purposes under section 199A sections 199A(a) and 199A(g) of
27the Internal Revenue Code by an individual taxpayer reporting
28the same items of income and loss that are included in the
29composite return.
30 Sec. 4. Section 422.11S, subsection 7, paragraph b, Code
312019, is amended to read as follows:
32b. The department shall authorize a school tuition
33organization to issue tax credit certificates for contributions
34made to the school tuition organization. The aggregate amount
35of tax credit certificates that the department shall authorize
-1-1for a school tuition organization for a tax calendar year shall
2be determined for that organization pursuant to subsection 8.
3However, a school tuition organization shall not be authorized
4to issue tax credit certificates unless the organization is
5controlled by a board of directors consisting of at least
6 seven members. The names and addresses of the members shall
7be provided to the department and shall be made available
8by the department to the public, notwithstanding any state
9confidentiality restrictions.
10 Sec. 5. Section 422.11S, subsection 8, paragraph a,
11subparagraph (2), Code 2019, is amended to read as follows:
12(2) “Total approved tax credits” means for the tax year
13beginning in the 2006 calendar year, two million five hundred
14thousand dollars, for the tax year beginning in the 2007
15calendar year, five million dollars, for tax calendar years
16beginning on or after January 1, 2008, but before January 1,
172012, seven million five hundred thousand dollars, for tax
18 calendar years beginning on or after January 1, 2012, but
19before January 1, 2014, eight million seven hundred fifty
20thousand dollars, and for tax calendar years beginning on or
21after January 1, 2014, but before January 1, 2019, twelve
22million dollars, and for tax calendar years beginning on or
23after January 1, 2019, thirteen million dollars.
24 Sec. 6. Section 422.11S, subsection 8, paragraph b,
25unnumbered paragraph 1, Code 2019, is amended to read as
26follows:
27Each year by December 1, the department shall authorize
28school tuition organizations to issue tax credit certificates
29for the following tax calendar year. However, for the tax year
30beginning in the 2006 calendar year only, the department, by
31September 1, 2006, shall authorize school tuition organizations
32to issue tax credit certificates for the 2006 calendar tax
33 year. For the tax year beginning in the 2006 calendar year
34only, each school served by a school tuition organization shall
35submit a participation form to the department by August 1,
-2-12006, providing the certified enrollment as of the third Friday
2of September 2005, along with the school tuition organization
3that represents the school. Tax credit certificates available
4for issue by each school tuition organization shall be
5determined in the following manner:
6 Sec. 7. Section 422.11S, subsection 9, unnumbered paragraph
71, Code 2019, is amended to read as follows:
8A school tuition organization that receives a voluntary cash
9or noncash contribution pursuant to this section shall report
10to the department, on a form prescribed by the department,
11by January 12 of each tax calendar year all of the following
12information:
13 Sec. 8. Section 422.11S, subsection 9, paragraphs b and c,
14Code 2019, are amended to read as follows:
15b. The total number and dollar value of contributions
16received and the total number and dollar value of the tax
17credits approved during the previous tax calendar year.
18c. A list of the individual donors for the previous tax
19 calendar year that includes the dollar value of each donation
20and the dollar value of each approved tax credit.
21 Sec. 9. Section 422.12C, subsection 4, Code 2019, is amended
22to read as follows:
234. Married taxpayers who have filed joint federal returns
24electing to file separate returns or to file separately on a
25combined return form must determine the child and dependent
26care credit under subsection 1 or the early childhood
27development tax credit under subsection 2 based upon their
28combined net income and allocate the total credit amount to
29each spouse in the proportion that each spouse’s respective net
30income bears to the total combined net income. Nonresidents or
31part-year residents of Iowa must determine their Iowa child and
32dependent care credit under subsection 1 or the early childhood
33development tax credit under subsection 2 in the ratio of
34their Iowa source net income to their all source net income.
35Nonresidents or part-year residents who are married and elect
-3-1to file separate returns or to file separately on a combined
2return form must allocate the Iowa child and dependent care
3credit under subsection 1 or the early childhood development
4tax credit under subsection 2 between the spouses in the ratio
5of each spouse’s Iowa source net income to the combined Iowa
6source net income of the taxpayers.
7 Sec. 10. Section 422.60, subsection 2, paragraph b, Code
82019, is amended by adding the following new subparagraph:
9 NEW SUBPARAGRAPH. (6) For purposes of this paragraph,
10“Internal Revenue Code” means the Internal Revenue Code of
111954, prior to the date of its redesignation as the Internal
12Revenue Code of 1986 by the Tax Reform Act of 1986, or means
13the Internal Revenue Code of 1986 as amended and in effect on
14December 21, 2017. This definition shall not be construed to
15include any amendment to the Internal Revenue Code enacted
16after the date specified in the preceding sentence, including
17any amendment with retroactive applicability or effectiveness.
18 Sec. 11. LIKE-KIND EXCHANGES OF PERSONAL PROPERTY
19UNDER CORPORATE INCOME TAX AND FRANCHISE TAX FOR TAX YEAR
202019. Notwithstanding any other provision of law to the
21contrary, all of the following shall apply when computing net
22income for purposes of the corporation income tax or franchise
23tax under section 422.35 for tax years beginning during the
242019 calendar year:
251. The rules for nonrecognition of gain or loss from
26exchanges of real property held for productive use or
27investment and not held primarily for sale, as provided in
28section 1031 of the Internal Revenue Code, as amended up to and
29including March 24, 2018, apply for state income tax purposes
30with regard to exchanges of real property.
312. The rules for nonrecognition of gain or loss from
32exchanges of property other than real property held for
33productive use or investment as provided in section 1031 of the
34Internal Revenue Code, as amended up to and including December
3521, 2017, apply for state income tax purposes, notwithstanding
-4-1any other provision of law to the contrary. If the taxpayer’s
2federal taxable income includes gain or loss from property,
3other than real property described in subsection 1, and the
4taxpayer elects to have this subsection apply, the following
5adjustments shall be made:
6a. (1) Subtract the total amount of gain related to the
7sale or exchange of the property as properly reported for
8federal tax purposes under the Internal Revenue Code.
9(2) Add back any gain related to the sale or exchange of the
10property to the extent such gain does not qualify for deferral
11under section 1031 of the Internal Revenue Code, as amended
12up to and including December 21, 2017, which gain shall be
13calculated using the taxpayer’s adjusted basis in the property
14for state tax purposes.
15b. (1) Add the total amount of loss related to the sale or
16exchange of the property as properly reported for federal tax
17purposes under the Internal Revenue Code.
18(2) Subtract any loss related to the sale or exchange of the
19property to the extent such loss does not qualify for deferral
20under section 1031 of the Internal Revenue Code, as amended
21up to and including December 21, 2017, which loss shall be
22calculated using the taxpayer’s adjusted basis in the property
23for state tax purposes.
24c. Any other adjustments to gains, losses, deductions, or
25tax basis for the property given up or received in the sale or
26exchange pursuant to rules adopted by the director.
27 Sec. 12. REFUNDS — EARLY CHILDHOOD DEVELOPMENT TAX
28CREDIT. Notwithstanding any provision of law to the contrary,
29for tax years beginning prior to January 1, 2019, refunds of
30the early childhood development tax credit provided in section
31422.12C, subsection 2, requested on or after the effective
32date of the provision of this division of this Act amending
33section 422.12C, subsection 4, shall not exceed the amount
34allowed under section 422.12C, subsection 4, as amended by this
35division of this Act.
-5-1 Sec. 13. LEGISLATIVE INTENT. It is the intent of the
2general assembly that the provisions of this division of
3this Act amending section 422.11S are conforming amendments
4consistent with current state law, and that the amendments do
5not change the application of current law but instead reflect
6current law both before and after the enactment of this Act.
7 Sec. 14. EFFECTIVE DATE. The following, being deemed of
8immediate importance, take effect upon enactment:
91. The section of this division of this Act amending section
10422.12C, subsection 4.
112. The section of this division of this Act relating to
12refunds for the early childhood development tax credit.
133. The section of this division of this Act relating to
14like-kind exchanges of personal property under corporate income
15tax and franchise tax.
16 Sec. 15. RETROACTIVE APPLICABILITY. The following apply
17retroactively to January 1, 2019, for tax years beginning on
18or after that date:
191. The section of this division of this Act amending section
20422.4, subsection 16, paragraph “e”, unnumbered paragraph 1.
212. The sections of this division of this Act amending
22section 422.9, subsection 2A.
233. The section of this division of this Act amending section
24422.12C, subsection 4.
254. The section of this division of this Act amending section
26422.60, subsection 2, paragraph “b”.
27 Sec. 16. RETROACTIVE APPLICABILITY — LIKE-KIND EXCHANGES
28OF PERSONAL PROPERTY. The section of this division of this
29Act relating to like-kind exchanges of personal property under
30corporate income tax and franchise tax applies retroactively to
31January 1, 2019, for tax years beginning on or after that date,
32but before January 1, 2020.
33DIVISION II
34ADMINISTRATIVE PROVISIONS
35 Sec. 17. Section 422.20, Code 2019, is amended by adding the
-6-1following new subsection:
2 NEW SUBSECTION. 5. The department may permit, by rule, the
3disclosure of state tax information to a person a taxpayer has
4authorized to receive such state tax information, in the manner
5prescribed by the department.
6 Sec. 18. Section 422.72, Code 2019, is amended by adding the
7following new subsection:
8 NEW SUBSECTION. 8. The department may permit, by rule, the
9disclosure of state tax information to a person a taxpayer has
10authorized to receive such state tax information, in the manner
11prescribed by the department.
12DIVISION III
13SALES AND USE TAX
14 Sec. 19. Section 423.2, subsection 1, paragraph a,
15subparagraph (5), subparagraph division (a), Code 2019, is
16amended to read as follows:
17(a) If a service or warranty contract does not specify a fee
18amount for nontaxable services or taxable personal property,
19the tax imposed pursuant to this section shall be imposed upon
20an amount equal to one-half of the sales price of the contract.
21 Sec. 20. Section 423.2, subsection 6, paragraph k, Code
222019, is amended to read as follows:
23k. Carpentry repair and installation.
24 Sec. 21. Section 423.3, Code 2019, is amended by adding the
25following new subsection:
26 NEW SUBSECTION. 16A. a. The sales price from the sale of
27a grain bin, including material or replacement parts used to
28construct or repair a grain bin.
29b. For purposes of this subsection, “grain bin” means
30property that is vented and covered with corrugated metal or
31similar material, and that is primarily used to hold loose
32grain for drying or storage.
33 Sec. 22. Section 423.3, subsection 47, paragraph c,
34subparagraph (3), Code 2019, is amended by striking the
35subparagraph and inserting in lieu thereof the following:
-7- 1(3) The following within the scope of section 427A.1,
2subsection 1, paragraphs “h” and “i”:
3(a) Computers.
4(b) Machinery.
5(c) Equipment, including pollution control equipment.
6(d) Replacement parts.
7(e) Supplies.
8(f) Materials used to construct or self-construct the
9following:
10(i) Computers.
11(ii) Machinery.
12(iii) Equipment, including pollution control equipment.
13(iv) Replacement parts.
14(v) Supplies.
15 Sec. 23. Section 423.3, subsection 104, paragraph a, Code
162019, is amended to read as follows:
17a. The sales price of specified digital products and of
18prewritten computer software sold, and of enumerated services
19described in section 423.2, subsection 1, paragraph “a”,
20subparagraph (5), or section 423.2, subsection 6, paragraphs
21“bq”, “br”, “bs”, and “bu” furnished, to a commercial enterprise
22for use exclusively by the commercial enterprise. The use of
23prewritten computer software, a specified digital product, or
24service fails to qualify as a use exclusively by the commercial
25enterprise if its use for noncommercial purposes is more than
26de minimis.
27 Sec. 24. Section 423.14A, subsection 3, paragraph b, Code
282019, is amended by striking the paragraph.
29 Sec. 25. Section 423.14A, subsection 3, paragraph d,
30subparagraph (1), Code 2019, is amended to read as follows:
31(1) A marketplace facilitator that makes or facilitates
32Iowa sales on its own behalf or for one or more marketplace
33sellers equal to or exceeding one hundred thousand dollars,
34or in two hundred or more separate transactions, for an
35immediately preceding calendar year or a current calendar year.
-8-1 Sec. 26. Section 423.14A, subsection 3, paragraph e,
2subparagraph (1), unnumbered paragraph 1, Code 2019, is amended
3to read as follows:
4A referrer if, for any immediately preceding calendar year
5or a current calendar year, one hundred thousand dollars or
6more in Iowa sales or two hundred or more separate Iowa sales
7transactions result from referrals from a platform of the
8referrer. A referrer is not required to collect and remit
9sales and use tax pursuant to this paragraph if the referrer
10does all of the following:
11 Sec. 27. Section 423.14A, subsection 3, paragraph e,
12subparagraph (1), subparagraph division (c), unnumbered
13paragraph 1, Code 2019, is amended to read as follows:
14The referrer provides the department with monthly annual
15 reports in an electronic format and in the manner prescribed
16by the department, which monthly annual reports contain all of
17the following:
18 Sec. 28. Section 423.14A, subsection 3, paragraph e, Code
192019, is amended by adding the following new subparagraph:
20 NEW SUBPARAGRAPH. (5) This paragraph is subject to
21implementation by the department by rule and shall not require
22a referrer to collect tax or comply with the notice and
23reporting requirements and other provisions of this paragraph
24unless and until such administrative rules take effect.
25 Sec. 29. Section 423.48, subsection 2, paragraph c, Code
262019, is amended by striking the paragraph.
27 Sec. 30. TAXATION AND EXEMPTION OF COMPUTERS TASK FORCE. A
28taxation and exemption of computers task force is created. The
29department of revenue shall initiate and coordinate the task
30force and provide staff assistance. It is the intent of the
31general assembly that the task force include representatives of
32the department of revenue; a commercial enterprise that claims
33an exemption for computers under section 423.3, subsection
3447; an association that represents manufacturers and other
35industrial producers; and an association that represents
-9-1business tax issues. The director of revenue or the director’s
2designee shall serve as chairperson of the task force.
3The task force shall be charged with reviewing the
4definition of “computer” as used throughout the portions of the
5Iowa Code and the Iowa Administrative Code administered by the
6department of revenue including the exemption for computers
7provided in section 423.3, subsection 47, paragraph “a”,
8subparagraph (4). If the task force recommends modifications
9to the current definition of “computer” including the exemption
10for computers provided in section 423.3, subsection 47,
11paragraph “a”, subparagraph (4), the department of revenue
12shall provide any recommendations to the general assembly by
13January 1, 2020.
14 Sec. 31. EFFECTIVE DATE. The following, being deemed of
15immediate importance, take effect upon enactment:
16The section of this division of this Act amending section
17423.3, subsection 47, paragraph “c”, subparagraph (3).
18 Sec. 32. RETROACTIVE APPLICABILITY. The following applies
19retroactively to January 1, 2016, for tax years beginning on
20or after that date:
21The section of this division of this Act amending section
22423.3, subsection 47, paragraph “c”, subparagraph (3).
23DIVISION IV
24AUTOMOBILE RENTAL EXCISE TAX
25 Sec. 33. Section 423.14A, subsection 1, paragraph b,
26subparagraph (3), Code 2019, is amended to read as follows:
27(3) A “rental platform”, as defined in section 423C.2, that
28meets the requirements described in person who is not required
29to collect and remit automobile rental excise tax pursuant to
30 section 423C.3, subsection 3, paragraph “c”, subparagraph (2),
31 shall not be considered a “marketplace facilitator” with respect
32to any sale of a transportation service under section 423.2,
33subsection 6, paragraph “bf”, or section 423.5, subsection 1,
34paragraph “e”, consisting of the rental of vehicles subject
35to registration which are registered for a gross weight of
-10-1thirteen tons or less for a period of sixty days or less.
2 Sec. 34. Section 423C.2, subsection 3, paragraphs a and b,
3Code 2019, are amended to read as follows:
4a. A person or any affiliate of a person that owns or
5controls an automobile and makes the automobile available for
6rent through the person or any affiliate, or through a rental
7platform or rental facilitator any other person required to
8collect sales or use tax under chapter 423.
9b. A person or any affiliate of a person who possesses or
10acquires a right or interest in any automobile with an intent
11to rent the automobile to another person, or through the person
12or any affiliate, or through a rental platform or a rental
13facilitator any other person required to collect sales or use
14tax under chapter 423.
15 Sec. 35. Section 423C.2, subsection 6, Code 2019, is amended
16to read as follows:
176. “Facilitation fee” means any consideration, by whatever
18name called, that a rental facilitator or a rental platform
19 person charges to a user for facilitating the user’s rental
20of an automobile. “Facilitation fee” does not include any
21commission an automobile provider pays to a rental facilitator
22or a rental platform person for facilitating the rental of an
23automobile.
24 Sec. 36. Section 423C.2, Code 2019, is amended by adding the
25following new subsection:
26 NEW SUBSECTION. 6A. “Host” means the registered owner of an
27automobile made available for sharing through a peer-to-peer
28automobile sharing marketplace.
29 Sec. 37. Section 423C.2, subsections 9 and 10, Code 2019,
30are amended by striking the subsections.
31 Sec. 38. Section 423C.2, subsection 11, Code 2019, is
32amended to read as follows:
3311. “Rental price” means all consideration charged for
34the renting and facilitation of renting of an automobile
35before taxes, including but not limited to facilitation fees,
-11-1reservation fees, services fees, nonrefundable deposits, and
2any other direct or indirect charge made or consideration
3provided in connection with the renting or facilitation of
4renting of an automobile the same as “sales price” as defined
5in section 423.1, which term includes but is not limited
6to facilitation fees, reservation fees, services fees,
7nonrefundable deposits, and any other direct or indirect charge
8made or consideration provided in connection with the renting
9or facilitation of renting an automobile.
10 Sec. 39. Section 423C.3, Code 2019, is amended to read as
11follows:
12423C.3 Tax on rental of automobiles — collection and
13remittance of tax.
141. For purposes of this section:
15a. “Discount rental charge” means the amount an automobile
16provider charges to a rental facilitator for the rental of an
17automobile, excluding any applicable tax.
18b. “Travel package” means an automobile rental bundled
19with one or more separate components such as lodging, air
20transportation, or similar items and charged for a single
21retail price.
222. 1. A tax of five percent is imposed upon the rental
23price of an automobile if the rental transaction is subject to
24the sales and services tax under chapter 423, subchapter II, or
25the use tax under chapter 423, subchapter III. The tax shall
26not be imposed on any rental transaction not taxable under the
27state sales and services tax, as provided in section 423.3, or
28the state use tax, as provided in section 423.6, on automobile
29rental receipts.
303. 2. This subsection shall govern the collection and
31remittance of the tax imposed under subsection 2 The tax
32imposed under subsection 1 shall be collected and remitted to
33the department by all persons required to collect state sales
34and use tax on the rental transaction under chapter 423.
35a. Unless otherwise provided in this subsection, the
-12-1automobile provider shall collect the tax by adding the tax to
2the rental price of the automobile and the tax, when collected,
3shall be stated as a distinct item separate and apart from
4the rental price of the automobile and the sales and services
5tax imposed under chapter 423, subchapter II, or the use tax
6imposed under chapter 423, subchapter III.
7b. If a transaction for the rental of an automobile involves
8a rental facilitator, all of the following shall occur in the
9order prescribed:
10(1) The rental facilitator shall collect the tax on any
11rental price that the user pays to the rental facilitator in
12the same manner as an automobile provider under paragraph “a”.
13(2) (a) Unless otherwise required by rule or order of
14the department, the rental facilitator shall remit to the
15automobile provider that portion of the tax collected on the
16rental price that represents the discount rental charge.
17(b) No assessment shall be made against a rental facilitator
18for tax due on a discount rental charge if the rental
19facilitator collected the tax and remitted it to an automobile
20provider that has a valid tax permit required under this
21chapter or under chapter 423. This subparagraph division shall
22not apply if the rental facilitator and automobile provider
23are affiliates, or if the department requires the rental
24facilitator to remit taxes collected on that portion of the
25sales price that represents the discount rental charge directly
26to the department.
27(3) The rental facilitator shall remit any remaining tax it
28collected to the department.
29(4) (a) The automobile provider shall collect and remit
30to the department any taxes the rental facilitator remitted to
31the automobile provider, and shall collect and remit to the
32department any taxes due on any amount of rental price the user
33paid to the automobile provider.
34(b) No assessment shall be made against an automobile
35provider for any tax due on a discount rental charge that
-13-1was not remitted to the automobile provider by a rental
2facilitator. This subparagraph division shall not apply if the
3automobile provider and the rental facilitator are affiliates.
4(5) Notwithstanding any other provision of this paragraph
5to the contrary, if a rental facilitator and its affiliates
6facilitate total rentals under this chapter and chapter
7423A that are equal to or less than an aggregate amount of
8rental price and sales price of ten thousand dollars for an
9immediately preceding calendar year or a current calendar year,
10or in ten or fewer separate transactions for an immediately
11preceding calendar year or a current calendar year, the
12rental facilitator shall not be required to collect tax on the
13amount of sales price that represents the rental facilitator’s
14facilitation fee.
15c. (1) If a transaction for the rental of an automobile
16involves a rental platform, other than a rental platform
17described in subparagraph (2), the rental platform shall
18collect and remit the tax imposed under this chapter in the
19same manner as an automobile provider under paragraph “a”.
20(2) 3. A rental platform person is not required to collect
21and remit the tax imposed under this chapter in the same manner
22as an automobile provider under paragraph “a” if the rental
23platform person meets all of the following requirements:
24a. The person or any affiliate of the person is not an
25automobile provider.
26b. The person or any affiliate of the person facilitates
27the renting or sharing of an automobile by doing all of the
28following:
29(1) The person owns, operates, or controls a peer-to-peer
30automobile sharing marketplace that allows a host or an
31automobile provider who is not an affiliate of the person
32to offer or list an automobile for sharing or rent on the
33marketplace. For purposes of this paragraph, it is immaterial
34whether or not the automobile provider has a tax permit under
35this chapter or chapter 423 or whether the automobile is owned
-14-1by a natural person or by a business entity.
2(2) The person or affiliate of the person collects or
3processes the rental price charged to the user.
4(a) c. The only sales the rental platform person and
5its affiliates of the person facilitate that are subject to
6tax under chapter 423 are sales of a transportation service
7under section 423.2, subsection 6, paragraph “bf”, or section
8423.5, subsection 1, paragraph “e”, consisting of the rental
9of vehicles subject to registration which are registered for
10a gross weight of thirteen tons or less for a period of sixty
11days or less.
12(b) The rental platform operates a peer-to-peer automobile
13sharing marketplace.
14(3) 4. For any rental transaction for which the rental
15platform a person is required to or elects to collect and
16remit the tax under this chapter, the rental platform person
17 shall also be liable for the collection and remittance of any
18sales or use tax due on that transaction under section 423.2,
19subsection 6, paragraph “bf”, or section 423.5, subsection
201, paragraph “e”, notwithstanding any other provision to the
21contrary in chapter 423.
22(4) 5. For any rental transaction for which the rental
23platform person is not required to collect and remit the
24tax under this chapter as provided under subparagraph (2)
25 subsection 3, the automobile provider shall be solely liable
26for any amount of uncollected or unremitted tax under this
27chapter and chapter 423.
28DIVISION V
29TELEPHONE COMPANY PROPERTY
30 Sec. 40. Section 476.1D, Code 2019, is amended by adding the
31following new subsection:
32 NEW SUBSECTION. 10. a. The board, at the request of a
33long distance telephone company, shall classify such company
34as a competitive long distance telephone company if more
35than half of the company’s revenues from its Iowa intrastate
-15-1telecommunications services and facilities are received
2from services and facilities that the board has determined
3to be subject to effective competition, or if more than
4half of the company’s revenues from its Iowa intrastate
5telecommunications services and facilities are received from
6intralata interexchange services and facilities. For purposes
7of this subsection, “intralata interexchange services” means
8those interexchange services that originate and terminate
9within the same local access transport area.
10b. The board shall promptly notify the director of revenue
11that a long distance telephone company has been classified
12as a competitive long distance telephone company. Upon such
13notification by the board, the director of revenue shall assess
14the property of such competitive long distance telephone
15company, which property is first assessed for taxation in this
16state on or after January 1, 1996, in the same manner as all
17other property assessed as commercial property by the local
18assessor under chapters 427, 427A, 427B, 428, and 441. As used
19in this section, “long distance telephone company” means an
20entity that provides telephone service and facilities between
21local exchanges, but does not include a cellular service
22provider or a local exchange utility holding a certificate
23issued under section 476.29, subsection 12.
24 Sec. 41. Section 476.1D, subsection 10, as enacted in this
25division of this Act, is amended by striking the subsection.
26 Sec. 42. EFFECTIVE DATE. The following, being deemed of
27immediate importance, takes effect upon enactment:
28The section of this division of this Act enacting section
29476.1D, subsection 10.
30 Sec. 43. RETROACTIVE APPLICABILITY. The following applies
31retroactively to July 1, 2018, for assessment years beginning
32on or after that date:
33The section of this division of this Act enacting section
34476.1D, subsection 10.
35 Sec. 44. EFFECTIVE DATE. The following takes effect July
-16-11, 2021:
2The section of this division of this Act striking section
3476.1D, subsection 10.
4 Sec. 45. APPLICABILITY. The following applies to
5assessment years beginning on or after January 1, 2022:
6The section of this division of this Act striking section
7476.1D, subsection 10.
8DIVISION VI
9TARGETED JOBS WITHHOLDING CREDIT
10 Sec. 46. Section 403.19A, subsection 3, paragraph c,
11subparagraph (2), Code 2019, is amended to read as follows:
12(2) The pilot project city and the economic development
13authority shall not enter into a withholding agreement after
14June 30, 2019 2020.
15DIVISION VII
16SCHOOL TUITION ORGANIZATION TAX CREDITS
17 Sec. 47. Section 422.11S, subsection 8, paragraph a,
18subparagraph (2), Code 2019, is amended to read as follows:
19(2) “Total approved tax credits” means for the tax year
20beginning in the 2006 calendar year, two million five hundred
21thousand dollars, for the tax year beginning in the 2007
22calendar year, five million dollars, for tax years beginning
23on or after January 1, 2008, but before January 1, 2012, seven
24million five hundred thousand dollars, for tax years beginning
25on or after January 1, 2012, but before January 1, 2014, eight
26million seven hundred fifty thousand dollars, and for tax years
27beginning on or after January 1, 2014, but before January 1,
282019, twelve million dollars, and for tax years beginning on
29or after January 1, 2019, but before January 1, 2020, thirteen
30million dollars, and for tax years beginning on or after
31January 1, 2020, fourteen million dollars.
32 Sec. 48. CONTINGENT CODE EDITOR DIRECTIVE. The Code editor
33is directed to harmonize the section of this division of this
34Act amending section 422.11S with the other division of this
35Act amending section 422.11S, if enacted, by changing tax year
-17-1to calendar year where appropriate and to make other related
2changes, if necessary, to effectuate such changes.
3DIVISION VIII
4INCOME TAX CHECKOFFS
5 Sec. 49. Section 173.22, subsection 2, Code 2019, is amended
6to read as follows:
72. A foundation fund is created within the state treasury
8composed of moneys appropriated or available to and obtained or
9accepted by the foundation. The foundation fund shall include
10moneys credited to the fund as provided in section 422.12D
11 422.12I.
12 Sec. 50. Section 422.12E, Code 2019, is amended to read as
13follows:
14422.12E Income tax return checkoffs limited.
151. For tax years beginning on or after January 1, 2019,
16there There shall be allowed no more than four income tax
17return checkoffs on each income tax return. For tax years
18beginning on or after January 1, 2017, when the same four
19income tax return checkoffs have been provided on the income
20tax return for two consecutive tax years, the two checkoffs for
21which the least amount has been contributed, in the aggregate
22for the first tax year and through March 15 after the end of the
23second tax year, are repealed on December 31 after the end of
24the second tax year and shall be removed from the return form.
252. If more checkoffs are enacted in the same session of
26the general assembly than there is space for inclusion on the
27individual tax return form, the checkoffs with the earliest
28enacted checkoffs date of enactment as determined pursuant
29to section 3.7 for which there is space for inclusion on the
30return form shall be included on the return form, and all other
31checkoffs enacted during that session of the general assembly
32are repealed on December 31 of the year of enactment. If
33more checkoffs are enacted in the same session of the general
34assembly than there is space for inclusion on the individual
35income tax form and the additional checkoffs are enacted on
-18-1the same day and it is indeterminable which checkoffs have
2the earliest date of enactment pursuant to section 3.7, the
3director shall determine which checkoffs shall be included on
4the return form, and all other checkoffs not included on the
5return form shall be repealed on December 31 of the year of
6enactment and shall not be included on the return form.
73. a. By July 1 of the year in which two checkoffs are
8repealed pursuant to subsection 1, the department shall notify
9the Iowa Code editor which two checkoffs received the least
10amount of contributions and are repealed.
11b. By September 1 of any applicable year, the department
12shall notify the Iowa Code editor of any repeal pursuant to
13subsection 2.
14 Sec. 51. NEW SECTION. 422.12G Joint income tax checkoff for
15veterans trust fund and volunteer fire fighter preparedness fund.
161. A person who files an individual or a joint income tax
17return with the department of revenue under section 422.13 may
18designate one dollar or more to be paid jointly to the veterans
19trust fund created in section 35A.13 and to the volunteer fire
20fighter preparedness fund created in section 100B.13. If the
21refund due on the return or the payment remitted with the
22return is insufficient to pay the additional amount designated
23by the taxpayer, the amount designated shall be reduced to the
24remaining amount of refund or the remaining amount remitted
25with the return. The designation of a contribution under this
26section is irrevocable.
272. The director of revenue shall draft the income tax form
28to allow the designation of contributions to the veterans trust
29fund and to the volunteer fire fighter preparedness fund as
30one checkoff on the tax return. The department of revenue,
31on or before January 31, shall transfer one-half of the total
32amount designated on the tax return forms due in the preceding
33calendar year to the veterans trust fund and the remaining
34one-half to the volunteer fire fighter preparedness fund.
35However, before a checkoff pursuant to this section shall be
-19-1permitted, all liabilities on the books of the department of
2administrative services and accounts identified as owing under
3section 8A.504 shall be satisfied.
43. The department of revenue shall adopt rules to administer
5this section.
64. This section is subject to repeal under section 422.12E.
7 Sec. 52. Section 422.12H, Code 2019, is amended to read as
8follows:
9422.12H Income tax checkoff for fish and game protection
10fund.
111. A person who files an individual or a joint income tax
12return with the department of revenue under section 422.13 may
13designate a contribution to the state fish and game protection
14fund authorized pursuant to section 456A.16.
152. This section is subject to repeal under section 422.12E.
16 Sec. 53. NEW SECTION. 422.12I Income tax checkoff for the
17Iowa state fair foundation fund.
181. A person who files an individual or a joint income tax
19return with the department of revenue under section 422.13
20may designate one dollar or more to be paid to the foundation
21fund of the Iowa state fair foundation as established in
22section 173.22. If the refund due on the return or the payment
23remitted with the return is insufficient to pay the amount
24designated by the taxpayer to the foundation fund, the amount
25designated shall be reduced to the remaining amount of the
26refund or the remaining amount remitted with the return. The
27designation of a contribution to the foundation fund under this
28section is irrevocable.
292. The director of revenue shall draft the income tax form
30to allow the designation of contributions to the foundation
31fund on the tax return. The department, on or before January
3231, shall transfer the total amount designated on the tax
33form due in the preceding year to the foundation fund.
34However, before a checkoff pursuant to this section shall be
35permitted, all liabilities on the books of the department of
-20-1administrative services and accounts identified as owing under
2section 8A.504 shall be satisfied.
33. The Iowa state fair board may authorize payment from
4the foundation fund for purposes of supporting foundation
5activities.
64. The department of revenue shall adopt rules to implement
7this section.
85. This section is subject to repeal under section 422.12E.
9DIVISION IX
10POWERS AND DUTIES OF DIRECTOR OF REVENUE
11 Sec. 54. Section 421.17, Code 2019, is amended by adding the
12following new subsection:
13 NEW SUBSECTION. 35. To audit and examine all taxes
14collected or administered by the department.
15DIVISION X
16SALES AND USE TAX EXEMPTIONS RELATED TO MANUFACTURERS
17 Sec. 55. Section 423.3, subsection 47, paragraph d,
18subparagraph (4), subparagraph division (c), unnumbered
19paragraph 1, Code 2019, is amended to read as follows:
20“Manufacturer” does not include persons who are not commonly
21understood as manufacturers, including but not limited to
22persons primarily engaged in any of the following activities:
23DIVISION XI
24RESEARCH ACTIVITIES TAX CREDIT
25 Sec. 56. Section 422.10, subsection 1, paragraph a,
26subparagraph (1), subparagraph division (a), Code 2019, is
27amended to read as follows:
28(a) The business is engaged in the manufacturing, life
29sciences, agriscience, software engineering, or aviation and
30aerospace industry.
31 Sec. 57. Section 422.10, subsection 1, paragraph a,
32subparagraph (1), subparagraph division (b), unnumbered
33paragraph 1, Code 2019, is amended to read as follows:
34Persons that shall not be considered to be engaged in
35the manufacturing, life sciences, agriscience, software
-21-1engineering, or aviation and aerospace industry, and thus are
2not eligible for the credit, include but are not limited to all
3of the following:
4 Sec. 58. Section 422.33, subsection 5, paragraph e,
5subparagraph (1), subparagraph division (a), Code 2019, is
6amended to read as follows:
7(a) The business is engaged in the manufacturing, life
8sciences, agriscience, software engineering, or aviation and
9aerospace industry.
10 Sec. 59. Section 422.33, subsection 5, paragraph e,
11subparagraph (1), subparagraph division (b), unnumbered
12paragraph 1, Code 2019, is amended to read as follows:
13Persons that shall not be considered to be engaged in
14the manufacturing, life sciences, agriscience, software
15engineering, or aviation and aerospace industry, and thus are
16not eligible for the credit, include but are not limited to all
17of the following:
18DIVISION XII
19Broadcasters — Apportionment of gross receipts
20 Sec. 60. 2015 Iowa Acts, chapter 86, section 3, is amended
21to read as follows:
22SEC. 3. RETROACTIVE APPLICABILITY. This Act applies
23retroactively to January 1, 2015 2013, for tax years beginning
24on or after that date.
25EXPLANATION
26The inclusion of this explanation does not constitute agreement with
27the explanation’s substance by the members of the general assembly.
28This bill relates to the administration of the tax and
29related laws by the department of revenue, including the
30administration and modification of certain taxes, tax credits,
31and refunds.
32DIVISION I — INCOME TAX. The amendments to Code sections
33422.4(16) and 422.9 modify Internal Revenue Code references
34relating to the qualified business income deduction. The
35amendments to Code sections 422.4(16) and 422.9 apply
-22-1retroactively for tax years beginning on or after January 1,
22019.
3The amendments to Code section 422.11S specify that school
4tuition organization tax credits shall be authorized by the
5department of revenue on a calendar year basis rather than
6a tax year basis. The amendments to Code section 422.11S
7also specify that a school tuition organization shall be
8controlled by a board of directors consisting of at least seven
9members. Under current law, the board of directors shall be
10seven members. The bill provides that it is the intent of the
11general assembly that the amendments to Code section 422.11S
12are conforming amendments consistent with current law, and that
13the amendments do not change the application of current law.
14The bill also amends Code section 422.11S in division VII of
15the bill.
16The amendment to Code section 422.12C specifies that a
17nonresident or part-year resident shall determine their early
18childhood development tax credit in the ratio of the taxpayer’s
19Iowa source net income to their all source net income. The
20amendment to Code section 422.12C takes effect upon enactment
21and applies retroactively for tax years beginning on or
22after January 1, 2019. The bill specifies that for tax years
23beginning prior to January 1, 2019, refunds of the early
24childhood development tax credit requested on or after July 1,
252019, shall not exceed the amount allowed under Code section
26422.12C(4), as amended by the bill.
27The amendment to Code section 422.60 aligns the definition
28of “Internal Revenue Code” for franchise alternative minimum
29tax purposes with the definition of “Internal Revenue Code”
30for corporate alternative minimum tax purposes. The amendment
31to Code section 422.60 applies retroactively for tax years
32beginning on or after January 1, 2019.
33The bill provides for a deferral of a gain or loss resulting
34from exchanging of property (1031 exchange) that meet certain
35conditions. The federal Tax Cuts and Jobs Act of 2017 repealed
-23-11031 exchanges with respect to exchanges of personal property.
2The Iowa tax bill enacted last year (2018 Iowa Acts, chapter
31161) decouples, for Iowa individual tax purposes, from the
4federal repeal of 1031 exchanges relating to personal property,
5and permits individuals to defer gain or loss on qualifying
6personal property for tax year 2019 to the extent such deferral
7would have been permitted under federal law prior to its
8amendment by the federal Tax Cuts and Jobs Act of 2017. The
9bill permits a corporation or financial institution, for Iowa
10corporate income tax or franchise income tax purposes, the same
11deferral of gain or loss as individuals on qualifying personal
12property for tax year 2019 to the extent such deferral would
13have been permitted under federal law prior to its amendment
14by the federal Tax Cuts and Jobs Act of 2017. The 1031
15exchange provision takes effect upon enactment, and applies
16retroactively for tax years beginning January 1, 2019, but
17before January 1, 2020.
18DIVISION II — ADMINISTRATIVE PROVISIONS. The amendments
19to Code sections 422.20 and 422.72 permit the department of
20revenue, by rule, to disclose state tax information to a person
21a taxpayer has identified to receive such information in the
22manner prescribed by the department of revenue.
23DIVISION III — SALES AND USE TAX. The amendment to Code
24section 423.2(1) provides that if a service or warranty
25contract does not specify a fee amount for nontaxable services
26or taxable personal property, the sales tax shall be imposed
27upon an amount equal to the sales price of the contract.
28Currently, the sales tax is imposed upon an amount equal to
29one-half of the sales price of such a contract.
30The amendment to Code section 432.2(6) specifies that
31the sales price from the furnishing of carpentry repair and
32installation services are subject to the sales tax. Currently,
33carpentry services are subject to sales tax.
34The bill enacts new Code section 423.3(16A), exempting from
35the state sales and use tax the purchase price of a grain bin,
-24-1including material or replacement parts used to construct or
2repair a grain bin. “Grain bin” is defined to mean property
3that is vented and covered with corrugated metal or similar
4material, and that is primarily used to hold loose grain for
5drying or storage.
6The amendment to Code section 423.3(47) changes the
7exclusions from the sales tax exemptions in that subsection by
8aligning the exclusions with the changes made to the exemptions
9enacted in 2016 Iowa Acts, chapter 1007. This provision takes
10effect upon enactment and applies retroactively to tax years
11beginning January 1, 2016, for tax years beginning on or after
12that date.
13The amendment to Code section 423.3(104) exempts from the
14sales tax the sales of optional service or warranty contracts
15for computer software maintenance or support services furnished
16to a commercial enterprise used exclusively by the commercial
17enterprise. “Commercial enterprise” is defined in 423.3(104).
18Currently, a retailer making Iowa sales, as defined in Code
19section 423.14A(1)(a), shall collect and remit sales, use, and
20local option taxes, if the retailer has gross revenue from
21Iowa sales equal to or exceeding $100,000 for an immediately
22preceding calendar year or a current calendar year, or has 200
23or more separate transactions for an immediately preceding
24calendar year or a current calendar year. The bill amends
25Code section 423.14A(3)(b) by striking the requirement that
26retailers making Iowa sales collect such taxes if the retailer
27has 200 or more separate transactions for an immediately
28preceding calendar year or a current calendar year.
29The bill amends Code section 423.14A(3)(d) by striking
30the requirement that a marketplace facilitator, as defined
31in Code section 423.14A(1)(b), making Iowa sales, as defined
32in Code section 423.14A(1)(a), collect sales, use, and local
33option taxes if the marketplace facilitator has 200 or more
34separate transactions for an immediately preceding calendar
35year or a current calendar year. The bill does not strike the
-25-1requirement that a marketplace facilitator collect such taxes
2if the marketplace facilitator makes or facilitates Iowa sales
3on its own behalf or for one or more marketplace sellers equal
4to or exceeding $100,000.
5The bill amends Code section 423.14A(3)(e) by striking
6the requirement that a referrer, as defined in Code section
7423.14A(3)(e)(3), making Iowa sales, as defined in Code section
8423.14A(1)(a), collect sales, use, and local option taxes if
9the referrer has 200 or more separate transactions for an
10immediately preceding calendar year or a current calendar
11year. The bill does not strike the requirement that a referrer
12collect such taxes if the referrer has Iowa sales equal to or
13exceeding $100,000.
14Currently, a referrer is required to provide the department
15of revenue, on a monthly basis, a list of marketplace sellers
16who collect and remit Iowa sales and use tax on the platform
17of the referrer. Otherwise, the referrer is required to
18collect and remit Iowa sales and use tax. The amendment to
19Code section 423A.14A(3)(e)(1)(c) provides that a referrer may
20provide the department of revenue such a report on an annual
21basis, and avoid collecting the sales and use tax if other
22conditions in Code section 423.14(3)(e)(1) are met.
23The bill enacts new Code section 423.14A(3)(e)(5) specifying
24that the paragraph relating to “referrers” is subject to
25implementation by the department of revenue by rule, and shall
26not require a referrer to collect tax or comply with the notice
27and reporting requirements unless such administrative rules
28take effect.
29The bill amends Code section 423.48(2)(c) by striking the
30paragraph specifying that registering under the streamlined
31sales and use tax agreement in another member state shall be
32considered to be registered in this state for purposes of the
33streamlined sales and use tax agreement.
34The bill establishes a taxation and exemption computers
35task force to be initiated, coordinated, and staffed by
-26-1the department of revenue. The task force shall review the
2definition of “computer” as used throughout the portions of
3the Iowa Code and the Iowa Administrative Code administered
4by the department of revenue including the exemption for
5computers provided in Code section 423.3(47)(a)(4). If the
6task force recommends modifications to the current definition
7of “computer” including the exemption for computers provided in
8Code section 423.3(47)(a)(4), the department of revenue shall
9provide any recommendations to the general assembly by January
101, 2020.
11DIVISION IV — AUTOMOBILE RENTAL EXCISE TAX. The amendment
12to Code section 423.14A provides that a person who is not
13required to collect and remit automobile rental excise tax
14shall not be considered a “marketplace facilitator” with
15respect to the sale of certain transportation services.
16The amendment to Code section 423C.2 substitutes a person
17required to collect sales or use tax under Code chapter 423
18for “rental facilitator” and “rental platform” and strikes the
19definitions of “rental facilitator” and “rental platform” from
20Code section 423C.2.
21The amendment to Code section 423C.2(3) specifies that
22a person who owns, operates, or controls a peer-to-peer
23automobile sharing marketplace that allows a host or an
24automobile provider who is not an affiliate to offer or list
25an automobile on the marketplace is not required to collect
26or remit the automobile rental excise tax if certain other
27conditions are met.
28The amendment to Code section 423C.2(11) modifies the
29definition of “rental price” to mean the same as “sales price”
30defined in Code section 423.1, which includes facilitation
31fees, reservation fees, service fees, nonrefundable deposits,
32and any other direct or indirect charge made or consideration
33provided in connection with the renting or facilitation of
34renting automobiles.
35The amendment to Code section 423C.3 strikes the definitions
-27-1of “discount rental charge” and “travel package”.
2The amendment to Code section 423C.3 specifies that the
3automobile rental excise tax shall be imposed upon the rental
4price of an automobile if the rental is subject to the state
5sales or use tax.
6The bill strikes numerous provisions in Code section 423C.3
7relating to the collection of the automobile rental excise tax
8by a “rental facilitator” and “rental platform” due to these
9definitions being stricken by another part of this division of
10the bill.
11The amendment to Code section 423C.3 requires that any
12person required to collect state sales and use tax on the
13rental transaction under Code chapter 423 shall collect the
14automobile rental excise tax as applicable. For any rental
15transaction for which the person is not required to collect and
16remit the automobile rental excise tax, the amendment to Code
17section 423C.3 requires an automobile provider to be solely
18liable for any amount of uncollected or unremitted automobile
19rental excise tax and sales and use tax under Code chapter 423.
20DIVISION V — TELEPHONE COMPANY PROPERTY. Division V of
21the bill authorizes the Iowa utilities board to classify a
22long distance telephone company as a competitive long distance
23telephone company if certain revenue source criteria are
24met. In the event of such a classification, the board is
25required to promptly notify the director of revenue. Upon
26such notification by the board, the director of revenue is
27required to assess the property of such competitive long
28distance telephone company, which property is first assessed
29for taxation in this state on or after January 1, 1996, in
30the same manner as all other property assessed as commercial
31property by the local assessor. The provisions established in
32the bill are the same as provisions repealed on July 1, 2018,
33by 2018 Iowa Acts, chapter 1160.
34The section of division V of the bill enacting Code section
35476.1D, subsection 10, takes effect upon enactment and applies
-28-1retroactively to July 1, 2018, for assessment years beginning
2on or after that date.
3Division V also strikes Code section 476.1D, subsection 10,
4as enacted in the bill, effective July 1, 2021. The future
5strike of Code section 476.1D, subsection 10, applies to
6assessment years beginning on or after January 1, 2022.
7DIVISION VI — TARGETED JOBS WITHHOLDING CREDIT. The
8amendment to Code section 403.19A extends by one year the
9deadline for entering into withholding agreements under the
10targeted jobs withholding credit pilot project from June 30,
112019, to June 30, 2020.
12DIVISION VII — SCHOOL TUITION ORGANIZATION TAX CREDITS.
13 The amendment to Code section 422.11S increases the total
14amount of school tuition organization tax credits that may be
15issued per tax year to $14 million from $13 million for tax
16years beginning on or after January 1, 2020.
17The bill also directs the Code editor to harmonize the
18amendments to Code section 422.11S in division I with the
19amendment to Code section 422.11S in division VII, if enacted.
20DIVISION VIII — INCOME TAX CHECKOFFS. The amendments to
21Code sections 422.12G and 422.12I reestablish the individual
22income tax checkoff for the Iowa state fair foundation fund and
23the joint income tax checkoff for the veterans trust fund and
24the volunteer fire fighter preparedness fund, respectively.
25A checkoff allows a taxpayer who files an individual or
26a joint income tax return with the department of revenue
27to designate a dollar amount to be paid to a specific fund
28included on the individual income tax form.
29Currently, the following four checkoffs are included on
30the individual income tax return form: the Iowa state fair
31foundation fund, the fish and game protection fund, the
32child abuse prevention program fund, and the joint income tax
33checkoff for the veterans trust fund and the volunteer fire
34fighter preparedness fund.
35Under Code section 422.12E(1), for tax years beginning on
-29-1or after January 1, 2017, when the same four income tax return
2checkoffs have been provided on the individual income tax
3return for two consecutive years, the two checkoffs for which
4the least amount has been contributed, in the aggregate for the
5first tax year and through March 15 of the second tax year, are
6repealed. The Iowa state fair foundation fund checkoff and the
7joint income tax checkoff for the veterans trust fund and the
8volunteer fire fighter preparedness fund received the least
9amount contributed in the aggregate for the previous tax year
10and through March 15 of this tax year, and therefore have been
11repealed by operation of law.
12The bill reestablishes the Iowa state fair foundation
13checkoff and the joint income tax checkoff for the veterans
14trust fund and the volunteer fire fighter preparedness fund for
15inclusion on the 2019 and 2020 individual income tax return
16forms, after which the checkoffs will again be subject to
17repeal pursuant to Code section 422.12E(1), if the checkoffs
18have the least amount of contributions in comparison to the
19other two checkoffs.
20The bill specifies that if a checkoff is repealed by
21operation of law pursuant to Code section 422.12E, the date of
22the repeal is December 31 after the end of the second tax year.
23For purposes of publishing the Code, the bill requires the
24department of revenue to notify the Iowa Code editor which two
25checkoffs received the least amount of contributions during the
26two-year period, and thereby are repealed by operation of law.
27The bill also requires the department of revenue to notify the
28Iowa Code editor when more checkoffs are enacted than there is
29space for inclusion on the individual income tax return form,
30and thereby are repealed by operation of law as well.
31The amendment to Code section 422.12H relating to the fish
32and game protection gaming fund specifies that the income tax
33checkoff for the fish and game protection fund is subject to
34repeal under Code section 422.12E just as the other checkoffs
35are subject to repeal, if the fund is one of two checkoffs
-30-1receiving the least amount of contributions over a two-year
2period.
3DIVISION IX — POWERS AND DUTIES OF DIRECTOR OF REVENUE. The
4amendment to Code section 421.17 allows the director of revenue
5to audit and examine all taxes collected or administered by the
6department of revenue.
7DIVISION X — SALES AND USE TAX EXEMPTIONS RELATED
8TO MANUFACTURERS. The amendment to Code section
9423.3(47)(d)(4)(c) modifies the definition of “manufacturer”
10relating to the sales and use tax exemption for machinery,
11equipment, and other items used directly and primarily in
12processing by a manufacturer. The bill expands the definition
13of “manufacturer” by adding the word “primarily” to the
14exclusions of the definition of “manufacturer”, thereby
15allowing persons who do not primarily engage in certain
16activities to qualify as “manufacturers”.
17DIVISION XI — RESEARCH ACTIVITIES TAX CREDIT. The
18amendments to Code section 422.10(1)(a) specify that the
19research and activities tax credit is available against
20the individual income tax if an individual is engaged in
21agriscience, and if certain conditions are met. The amendments
22to Code section 422.33(5)(e)(1) specify that a corporation
23engaged in agriscience shall be eligible for the research
24activities tax credit if certain conditions are met.
25DIVISION XII — BROADCASTERS — APPORTIONMENT OF GROSS
26RECEIPTS. The amendment to 2015 Iowa Acts, chapter 86, section
273, extends the retroactive applicability of the apportionment
28of the gross receipts of a broadcaster enacted during the 2015
29legislative session in Senate File 479, from January 1, 2015,
30to January 1, 2013.
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