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House File 779 - ReprintedA 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, moneys and credits taxes, sales and use
6taxes, and automobile rental excise taxes, the assessment of
7property owned by certain long distance telephone companies,
8establishing a taxation and exemption of computers task
9force, extending the utility replacement task force,
10and providing for other properly related matters, making
11penalties applicable, and including effective date and
12retroactive applicability provisions.
13BE 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 423.1, subsection 2, paragraphs b and c,
15Code 2019, are amended to read as follows:
16b. Is directly, indirectly, or constructively controlled by
17another entity person.
18c. Is subject to the control of a common entity person. A
19common entity person is one which a person who owns directly
20or individually indirectly more than ten percent of the voting
21securities of the entity.
22 Sec. 20. Section 423.2, subsection 1, paragraph a,
23subparagraph (5), subparagraph division (a), Code 2019, is
24amended to read as follows:
25(a) If a service or warranty contract does not specify a fee
26amount for nontaxable services or taxable personal property,
27the tax imposed pursuant to this section shall be imposed upon
28an amount equal to one-half of the sales price of the contract.
29 Sec. 21. Section 423.2, subsection 6, paragraph k, Code
302019, is amended to read as follows:
31k. Carpentry repair and installation.
32 Sec. 22. Section 423.3, Code 2019, is amended by adding the
33following new subsection:
34 NEW SUBSECTION. 16A. a. The sales price from the sale of
35a grain bin, including material or replacement parts used to
-7-1construct or repair a grain bin.
2b. For purposes of this subsection, “grain bin” means
3property that is vented and covered with corrugated metal or
4similar material, and that is primarily used to hold loose
5grain for drying or storage.
6 Sec. 23. Section 423.3, subsection 47, paragraph c,
7subparagraph (3), Code 2019, is amended by striking the
8subparagraph and inserting in lieu thereof the following:
9(3) The following within the scope of section 427A.1,
10subsection 1, paragraphs “h” and “i”:
11(a) Computers.
12(b) Machinery.
13(c) Equipment, including pollution control equipment.
14(d) Replacement parts.
15(e) Supplies.
16(f) Materials used to construct or self-construct the
17following:
18(i) Computers.
19(ii) Machinery.
20(iii) Equipment, including pollution control equipment.
21(iv) Replacement parts.
22(v) Supplies.
23 Sec. 24. Section 423.3, subsection 104, paragraph a, Code
242019, is amended to read as follows:
25a. The sales price of specified digital products and of
26prewritten computer software sold, and of enumerated services
27described in section 423.2, subsection 1, paragraph “a”,
28subparagraph (5), or section 423.2, subsection 6, paragraphs
29“bq”, “br”, “bs”, and “bu” furnished, to a commercial enterprise
30for use exclusively by the commercial enterprise. The use of
31prewritten computer software, a specified digital product, or
32service fails to qualify as a use exclusively by the commercial
33enterprise if its use for noncommercial purposes is more than
34de minimis.
35 Sec. 25. Section 423.14A, subsection 3, paragraph b, Code
-8-12019, is amended by striking the paragraph.
2 Sec. 26. Section 423.14A, subsection 3, paragraph d,
3subparagraph (1), Code 2019, is amended to read as follows:
4(1) A marketplace facilitator that makes or facilitates
5Iowa sales on its own behalf or for one or more marketplace
6sellers equal to or exceeding one hundred thousand dollars,
7or in two hundred or more separate transactions, for an
8immediately preceding calendar year or a current calendar year.
9 Sec. 27. Section 423.14A, subsection 3, paragraph e,
10subparagraph (1), unnumbered paragraph 1, Code 2019, is amended
11to read as follows:
12A referrer if, for any immediately preceding calendar year
13or a current calendar year, one hundred thousand dollars or
14more in Iowa sales or two hundred or more separate Iowa sales
15transactions result from referrals from a platform of the
16referrer. A referrer is not required to collect and remit
17sales and use tax pursuant to this paragraph if the referrer
18does all of the following:
19 Sec. 28. Section 423.14A, subsection 3, paragraph e,
20subparagraph (1), subparagraph division (c), unnumbered
21paragraph 1, Code 2019, is amended to read as follows:
22The referrer provides the department with monthly annual
23 reports in an electronic format and in the manner prescribed
24by the department, which monthly annual reports contain all of
25the following:
26 Sec. 29. Section 423.14A, subsection 3, paragraph e, Code
272019, is amended by adding the following new subparagraph:
28 NEW SUBPARAGRAPH. (5) This paragraph is subject to
29implementation by the department by rule and shall not require
30a referrer to collect tax or comply with the notice and
31reporting requirements and other provisions of this paragraph
32unless and until such administrative rules take effect.
33 Sec. 30. Section 423.48, subsection 2, paragraph c, Code
342019, is amended by striking the paragraph.
35 Sec. 31. TAXATION AND EXEMPTION OF COMPUTERS TASK FORCE. A
-9-1taxation and exemption of computers task force is created. The
2department of revenue shall initiate and coordinate the task
3force and provide staff assistance. It is the intent of the
4general assembly that the task force include representatives of
5the department of revenue; a commercial enterprise that claims
6an exemption for computers under section 423.3, subsection
747; an association that represents manufacturers and other
8industrial producers; and an association that represents
9business tax issues. The director of revenue or the director’s
10designee shall serve as chairperson of the task force.
11The task force shall be charged with reviewing the
12definition of “computer” as used throughout the portions of the
13Iowa Code and the Iowa Administrative Code administered by the
14department of revenue including the exemption for computers
15provided in section 423.3, subsection 47, paragraph “a”,
16subparagraph (4). If the task force recommends modifications
17to the current definition of “computer” including the exemption
18for computers provided in section 423.3, subsection 47,
19paragraph “a”, subparagraph (4), the department of revenue
20shall provide any recommendations to the general assembly by
21January 1, 2020.
22 Sec. 32. EFFECTIVE DATE. The following, being deemed of
23immediate importance, take effect upon enactment:
241. The section of this division of this Act amending section
25423.1, subsection 2, paragraphs “b” and “c”.
262. The section of this division of this Act amending section
27423.3, subsection 47, paragraph “c”, subparagraph (3).
28 Sec. 33. RETROACTIVE APPLICABILITY. The following applies
29retroactively to January 1, 2019, for tax years beginning on
30or after that date:
31The section of this division of this Act amending section
32423.1, subsection 2, paragraphs “b” and “c”.
33 Sec. 34. RETROACTIVE APPLICABILITY. The following applies
34retroactively to January 1, 2016, for tax years beginning on
35or after that date:
-10- 1The section of this division of this Act amending section
2423.3, subsection 47, paragraph “c”, subparagraph (3).
3DIVISION IV
4AUTOMOBILE RENTAL EXCISE TAX
5 Sec. 35. Section 423.14A, subsection 1, paragraph b,
6subparagraph (3), Code 2019, is amended to read as follows:
7(3) A “rental platform”, as defined in section 423C.2, that
8meets the requirements described in person who is not required
9to collect and remit automobile rental excise tax pursuant to
10 section 423C.3, subsection 3, paragraph “c”, subparagraph (2),
11 shall not be considered a “marketplace facilitator” with respect
12to any sale of a transportation service under section 423.2,
13subsection 6, paragraph “bf”, or section 423.5, subsection 1,
14paragraph “e”, consisting of the rental of vehicles subject
15to registration which are registered for a gross weight of
16thirteen tons or less for a period of sixty days or less.
17 Sec. 36. Section 423C.2, subsection 3, paragraphs a and b,
18Code 2019, are amended to read as follows:
19a. A person or any affiliate of a person that owns or
20controls an automobile and makes the automobile available for
21rent through the person or any affiliate, or through a rental
22platform or rental facilitator any other person.
23b. A person or any affiliate of a person who possesses or
24acquires a right or interest in any automobile with an intent
25to rent the automobile to another person, or through the person
26or any affiliate, or through a rental platform or a rental
27facilitator any other person.
28 Sec. 37. Section 423C.2, subsection 6, Code 2019, is amended
29to read as follows:
306. “Facilitation fee” means any consideration, by whatever
31name called, that a rental facilitator or a rental platform
32 person charges to a user for facilitating the user’s rental
33of an automobile. “Facilitation fee” does not include any
34commission an automobile provider pays to a rental facilitator
35or a rental platform person for facilitating the rental of an
-11-1automobile.
2 Sec. 38. Section 423C.2, Code 2019, is amended by adding the
3following new subsection:
4 NEW SUBSECTION. 6A. “Host” means the registered owner of an
5automobile made available for sharing through a peer-to-peer
6automobile sharing marketplace.
7 Sec. 39. Section 423C.2, subsections 9 and 10, Code 2019,
8are amended by striking the subsections.
9 Sec. 40. Section 423C.2, subsection 11, Code 2019, is
10amended to read as follows:
1111. “Rental price” means all consideration charged for
12the renting and facilitation of renting of an automobile
13before taxes, including but not limited to facilitation fees,
14reservation fees, services fees, nonrefundable deposits, and
15any other direct or indirect charge made or consideration
16provided in connection with the renting or facilitation of
17renting of an automobile the same as “sales price” as defined
18in section 423.1, which term includes but is not limited
19to facilitation fees, reservation fees, services fees,
20nonrefundable deposits, and any other direct or indirect charge
21made or consideration provided in connection with the renting
22or facilitation of renting an automobile.
23 Sec. 41. Section 423C.3, Code 2019, is amended to read as
24follows:
25423C.3 Tax on rental of automobiles — collection and
26remittance of tax.
271. For purposes of this section:
28a. “Discount rental charge” means the amount an automobile
29provider charges to a rental facilitator for the rental of an
30automobile, excluding any applicable tax.
31b. “Travel package” means an automobile rental bundled
32with one or more separate components such as lodging, air
33transportation, or similar items and charged for a single
34retail price.
352. 1. A tax of five percent is imposed upon the rental
-12-1price of an automobile if the rental transaction is subject to
2the sales and services tax under chapter 423, subchapter II, or
3the use tax under chapter 423, subchapter III. The tax shall
4not be imposed on any rental transaction not taxable under the
5state sales and services tax, as provided in section 423.3, or
6the state use tax, as provided in section 423.6, on automobile
7rental receipts.
83. 2. This subsection shall govern the collection and
9remittance of the tax imposed under subsection 2 The tax
10imposed under subsection 1 shall be collected and remitted to
11the department by all persons required to collect state sales
12and use tax on the rental transaction under chapter 423.
13a. Unless otherwise provided in this subsection, the
14automobile provider shall collect the tax by adding the tax to
15the rental price of the automobile and the tax, when collected,
16shall be stated as a distinct item separate and apart from
17the rental price of the automobile and the sales and services
18tax imposed under chapter 423, subchapter II, or the use tax
19imposed under chapter 423, subchapter III.
20b. If a transaction for the rental of an automobile involves
21a rental facilitator, all of the following shall occur in the
22order prescribed:
23(1) The rental facilitator shall collect the tax on any
24rental price that the user pays to the rental facilitator in
25the same manner as an automobile provider under paragraph “a”.
26(2) (a) Unless otherwise required by rule or order of
27the department, the rental facilitator shall remit to the
28automobile provider that portion of the tax collected on the
29rental price that represents the discount rental charge.
30(b) No assessment shall be made against a rental facilitator
31for tax due on a discount rental charge if the rental
32facilitator collected the tax and remitted it to an automobile
33provider that has a valid tax permit required under this
34chapter or under chapter 423. This subparagraph division shall
35not apply if the rental facilitator and automobile provider
-13-1are affiliates, or if the department requires the rental
2facilitator to remit taxes collected on that portion of the
3sales price that represents the discount rental charge directly
4to the department.
5(3) The rental facilitator shall remit any remaining tax it
6collected to the department.
7(4) (a) The automobile provider shall collect and remit
8to the department any taxes the rental facilitator remitted to
9the automobile provider, and shall collect and remit to the
10department any taxes due on any amount of rental price the user
11paid to the automobile provider.
12(b) No assessment shall be made against an automobile
13provider for any tax due on a discount rental charge that
14was not remitted to the automobile provider by a rental
15facilitator. This subparagraph division shall not apply if the
16automobile provider and the rental facilitator are affiliates.
17(5) Notwithstanding any other provision of this paragraph
18to the contrary, if a rental facilitator and its affiliates
19facilitate total rentals under this chapter and chapter
20423A that are equal to or less than an aggregate amount of
21rental price and sales price of ten thousand dollars for an
22immediately preceding calendar year or a current calendar year,
23or in ten or fewer separate transactions for an immediately
24preceding calendar year or a current calendar year, the
25rental facilitator shall not be required to collect tax on the
26amount of sales price that represents the rental facilitator’s
27facilitation fee.
28c. (1) If a transaction for the rental of an automobile
29involves a rental platform, other than a rental platform
30described in subparagraph (2), the rental platform shall
31collect and remit the tax imposed under this chapter in the
32same manner as an automobile provider under paragraph “a”.
33(2) 3. A rental platform person is not required to collect
34and remit the tax imposed under this chapter in the same manner
35as an automobile provider under paragraph “a” if the rental
-14-1platform person meets all of the following requirements:
2a. The person or any affiliate of the person is not an
3automobile provider.
4b. The person or any affiliate of the person facilitates
5the renting or sharing of an automobile by doing all of the
6following:
7(1) The person owns, operates, or controls a peer-to-peer
8automobile sharing marketplace that allows a host or an
9automobile provider who is not an affiliate of the person
10to offer or list an automobile for sharing or rent on the
11marketplace. For purposes of this paragraph, it is immaterial
12whether or not the automobile provider has a tax permit under
13this chapter or chapter 423 or whether the automobile is owned
14by a natural person or by a business entity.
15(2) The person or affiliate of the person collects or
16processes the rental price charged to the user.
17(a) c. The only sales the rental platform person and
18its affiliates of the person facilitate that are subject to
19tax under chapter 423 are sales of a transportation service
20under section 423.2, subsection 6, paragraph “bf”, or section
21423.5, subsection 1, paragraph “e”, consisting of the rental
22of vehicles subject to registration which are registered for
23a gross weight of thirteen tons or less for a period of sixty
24days or less.
25(b) The rental platform operates a peer-to-peer automobile
26sharing marketplace.
27(3) 4. For any rental transaction for which the rental
28platform a person is required to or elects to collect and
29remit the tax under this chapter, the rental platform person
30 shall also be liable for the collection and remittance of any
31sales or use tax due on that transaction under section 423.2,
32subsection 6, paragraph “bf”, or section 423.5, subsection
331, paragraph “e”, notwithstanding any other provision to the
34contrary in chapter 423.
35(4) 5. For any rental transaction for which the rental
-15-1platform person is not required to collect and remit the
2tax under this chapter as provided under subparagraph (2)
3 subsection 3, the automobile provider shall be solely liable
4for any amount of uncollected or unremitted tax under this
5chapter and chapter 423.
6DIVISION V
7TELEPHONE COMPANY PROPERTY
8 Sec. 42. NEW SECTION. 433.4A Competitive long distance
9telephone company property.
10For assessment years beginning before January 1, 2022,
11the director of revenue shall assess the property of a long
12distance telephone company, as defined in section 476.1D,
13subsection 10, Code 2018, previously classified by the
14utilities board as a competitive long distance telephone
15company under section 476.1D, subsection 10, Code 2018, which
16property is first assessed for taxation in this state on or
17after January 1, 1996, in the same manner as all other property
18assessed as commercial property by the local assessor under
19chapters 427, 427A, 427B, 428, and 441.
20 Sec. 43. EFFECTIVE DATE. This division of this Act, being
21deemed of immediate importance, takes effect upon enactment.
22 Sec. 44. RETROACTIVE APPLICABILITY. This division of this
23Act applies retroactively to July 1, 2018.
24DIVISION VI
25TARGETED JOBS WITHHOLDING CREDIT
26 Sec. 45. Section 403.19A, subsection 3, paragraph c,
27subparagraph (2), Code 2019, is amended to read as follows:
28(2) The pilot project city and the economic development
29authority shall not enter into a withholding agreement after
30June 30, 2019 2021.
31DIVISION VII
32SCHOOL TUITION ORGANIZATION TAX CREDITS
33 Sec. 46. Section 422.11S, subsection 8, paragraph a,
34subparagraph (2), Code 2019, is amended to read as follows:
35(2) “Total approved tax credits” means for the tax year
-16-1beginning in the 2006 calendar year, two million five hundred
2thousand dollars, for the tax year beginning in the 2007
3calendar year, five million dollars, for tax years beginning
4on or after January 1, 2008, but before January 1, 2012, seven
5million five hundred thousand dollars, for tax years beginning
6on or after January 1, 2012, but before January 1, 2014, eight
7million seven hundred fifty thousand dollars, and for tax years
8beginning on or after January 1, 2014, but before January 1,
92019, twelve million dollars, and for tax years beginning on
10or after January 1, 2019, but before January 1, 2020, thirteen
11million dollars, and for tax years beginning on or after
12January 1, 2020, fifteen million dollars.
13 Sec. 47. CONTINGENT CODE EDITOR DIRECTIVE. The Code editor
14is directed to harmonize the section of this division of this
15Act amending section 422.11S with the other division of this
16Act amending section 422.11S, if enacted, by changing tax year
17to calendar year where appropriate and to make other related
18changes, if necessary, to effectuate such changes.
19DIVISION VIII
20INCOME TAX CHECKOFFS
21 Sec. 48. Section 173.22, subsection 2, Code 2019, is amended
22to read as follows:
232. A foundation fund is created within the state treasury
24composed of moneys appropriated or available to and obtained or
25accepted by the foundation. The foundation fund shall include
26moneys credited to the fund as provided in section 422.12D
27 422.12I.
28 Sec. 49. Section 422.12E, Code 2019, is amended to read as
29follows:
30422.12E Income tax return checkoffs limited.
311. For tax years beginning on or after January 1, 2019,
32there There shall be allowed no more than four income tax
33return checkoffs on each income tax return. For tax years
34beginning on or after January 1, 2017, when the same four
35income tax return checkoffs have been provided on the income
-17-1tax return for two consecutive tax years, the two checkoffs for
2which the least amount has been contributed, in the aggregate
3for the first tax year and through March 15 after the end of the
4second tax year, are repealed on December 31 after the end of
5the second tax year and shall be removed from the return form.
62. If more checkoffs are enacted in the same session of
7the general assembly than there is space for inclusion on the
8individual tax return form, the checkoffs with the earliest
9enacted checkoffs date of enactment as determined pursuant
10to section 3.7 for which there is space for inclusion on the
11return form shall be included on the return form, and all other
12checkoffs enacted during that session of the general assembly
13are repealed on December 31 of the year of enactment. If
14more checkoffs are enacted in the same session of the general
15assembly than there is space for inclusion on the individual
16income tax form and the additional checkoffs are enacted on
17the same day and it is indeterminable which checkoffs have
18the earliest date of enactment pursuant to section 3.7, the
19director shall determine which checkoffs shall be included on
20the return form, and all other checkoffs not included on the
21return form shall be repealed on December 31 of the year of
22enactment and shall not be included on the return form.
233. a. By July 1 of the year in which two checkoffs are
24repealed pursuant to subsection 1, the department shall notify
25the Iowa Code editor which two checkoffs received the least
26amount of contributions and are repealed.
27b. By September 1 of any applicable year, the department
28shall notify the Iowa Code editor of any repeal pursuant to
29subsection 2.
30 Sec. 50. NEW SECTION. 422.12G Joint income tax checkoff for
31veterans trust fund and volunteer fire fighter preparedness fund.
321. A person who files an individual or a joint income tax
33return with the department of revenue under section 422.13 may
34designate one dollar or more to be paid jointly to the veterans
35trust fund created in section 35A.13 and to the volunteer fire
-18-1fighter preparedness fund created in section 100B.13. If the
2refund due on the return or the payment remitted with the
3return is insufficient to pay the additional amount designated
4by the taxpayer, the amount designated shall be reduced to the
5remaining amount of refund or the remaining amount remitted
6with the return. The designation of a contribution under this
7section is irrevocable.
82. The director of revenue shall draft the income tax form
9to allow the designation of contributions to the veterans trust
10fund and to the volunteer fire fighter preparedness fund as
11one checkoff on the tax return. The department of revenue,
12on or before January 31, shall transfer one-half of the total
13amount designated on the tax return forms due in the preceding
14calendar year to the veterans trust fund and the remaining
15one-half to the volunteer fire fighter preparedness fund.
16However, before a checkoff pursuant to this section shall be
17permitted, all liabilities on the books of the department of
18administrative services and accounts identified as owing under
19section 8A.504 shall be satisfied.
203. The department of revenue shall adopt rules to administer
21this section.
224. This section is subject to repeal under section 422.12E.
23 Sec. 51. Section 422.12H, Code 2019, is amended to read as
24follows:
25422.12H Income tax checkoff for fish and game protection
26fund.
271. A person who files an individual or a joint income tax
28return with the department of revenue under section 422.13 may
29designate a contribution to the state fish and game protection
30fund authorized pursuant to section 456A.16.
312. This section is subject to repeal under section 422.12E.
32 Sec. 52. NEW SECTION. 422.12I Income tax checkoff for the
33Iowa state fair foundation fund.
341. A person who files an individual or a joint income tax
35return with the department of revenue under section 422.13
-19-1may designate one dollar or more to be paid to the foundation
2fund of the Iowa state fair foundation as established in
3section 173.22. If the refund due on the return or the payment
4remitted with the return is insufficient to pay the amount
5designated by the taxpayer to the foundation fund, the amount
6designated shall be reduced to the remaining amount of the
7refund or the remaining amount remitted with the return. The
8designation of a contribution to the foundation fund under this
9section is irrevocable.
102. The director of revenue shall draft the income tax form
11to allow the designation of contributions to the foundation
12fund on the tax return. The department, on or before January
1331, shall transfer the total amount designated on the tax
14form due in the preceding year to the foundation fund.
15However, before a checkoff pursuant to this section shall be
16permitted, all liabilities on the books of the department of
17administrative services and accounts identified as owing under
18section 8A.504 shall be satisfied.
193. The Iowa state fair board may authorize payment from
20the foundation fund for purposes of supporting foundation
21activities.
224. The department of revenue shall adopt rules to implement
23this section.
245. This section is subject to repeal under section 422.12E.
25DIVISION IX
26POWERS AND DUTIES OF DIRECTOR OF REVENUE
27 Sec. 53. Section 421.17, Code 2019, is amended by adding the
28following new subsection:
29 NEW SUBSECTION. 35. To audit and examine all taxes
30collected or administered by the department.
31DIVISION X
32SALES AND USE TAX EXEMPTIONS RELATED TO MANUFACTURERS
33 Sec. 54. Section 423.3, subsection 47, paragraph d,
34subparagraph (4), subparagraph division (c), unnumbered
35paragraph 1, Code 2019, is amended to read as follows:
-20- 1“Manufacturer” does not include persons who are not commonly
2understood as manufacturers, including but not limited to
3persons primarily engaged in any of the following activities:
4 Sec. 55. EFFECTIVE DATE. This division of this Act, being
5deemed of immediate importance, takes effect upon enactment.
6 Sec. 56. RETROACTIVE APPLICABILITY. This division of this
7Act applies retroactively to May 30, 2018.
8DIVISION XI
9RESEARCH ACTIVITIES TAX CREDIT
10 Sec. 57. Section 422.10, subsection 1, paragraph a,
11subparagraph (1), subparagraph division (a), Code 2019, is
12amended to read as follows:
13(a) The business is engaged in the manufacturing, life
14sciences, agriscience, software engineering, or aviation and
15aerospace industry.
16 Sec. 58. Section 422.10, subsection 1, paragraph a,
17subparagraph (1), subparagraph division (b), unnumbered
18paragraph 1, Code 2019, is amended to read as follows:
19Persons that shall not be considered to be engaged in
20the manufacturing, life sciences, agriscience, software
21engineering, or aviation and aerospace industry, and thus are
22not eligible for the credit, include but are not limited to all
23of the following:
24 Sec. 59. Section 422.33, subsection 5, paragraph e,
25subparagraph (1), subparagraph division (a), Code 2019, is
26amended to read as follows:
27(a) The business is engaged in the manufacturing, life
28sciences, agriscience, software engineering, or aviation and
29aerospace industry.
30 Sec. 60. Section 422.33, subsection 5, paragraph e,
31subparagraph (1), subparagraph division (b), unnumbered
32paragraph 1, Code 2019, is amended to read as follows:
33Persons that shall not be considered to be engaged in
34the manufacturing, life sciences, agriscience, software
35engineering, or aviation and aerospace industry, and thus are
-21-1not eligible for the credit, include but are not limited to all
2of the following:
3DIVISION XII
4ADOPTION TAX CREDIT
5 Sec. 61. Section 422.12A, subsection 2, Code 2019, is
6amended to read as follows:
72. The taxes imposed under this division, less the credits
8allowed under section 422.12, shall be reduced by an adoption
9tax credit equal to the amount of qualified adoption expenses
10paid or incurred by the taxpayer during the tax year in
11connection with the adoption of a child by the taxpayer, not to
12exceed five thousand dollars per adoption.
13 Sec. 62. Section 422.12A, Code 2019, is amended by adding
14the following new subsection:
15 NEW SUBSECTION. 3A. The credit under this section with
16respect to any qualified adoption expense shall be allowed
17during a tax year as follows:
18a. For any qualified adoption expense paid or incurred prior
19to or during the tax year in which the adoption becomes final,
20the tax year in which the adoption becomes final.
21b. For any qualified adoption expense paid or incurred after
22the tax year in which the adoption becomes final, the tax year
23in which an adoption expense is paid or incurred.
24 Sec. 63. RETROACTIVE APPLICABILITY. This division of this
25Act applies retroactively to January 1, 2019, for tax years
26beginning on or after that date.
27DIVISION XIII
28UTILITY REPLACEMENT TASK FORCE
29 Sec. 64. Section 437A.15, subsection 7, paragraph b, Code
302019, is amended to read as follows:
31b. The task force shall study the effects of the replacement
32taxes under this chapter and chapter 437B on local taxing
33authorities, local taxing districts, consumers, and taxpayers
34through January 1, 2019 2024. If the task force recommends
35modifications to the replacement tax that will further the
-22-1purposes of tax neutrality for local taxing authorities, local
2taxing districts, taxpayers, and consumers, consistent with the
3stated purposes of this chapter, the department of management
4shall transmit those recommendations to the general assembly.
5DIVISION XIV
6FRANCHISE TAX — ALTERNATIVE MINIMUM TAX (amt) REPEAL
7 Sec. 65. Section 422.60, subsection 2, Code 2019, is amended
8by adding the following new paragraph:
9 NEW PARAGRAPH. c. This subsection is repealed January 1,
102021, for tax years beginning on or after that date.
11 Sec. 66. Section 422.60, subsection 3, Code 2019, is amended
12to read as follows:
133. a. (1) There For tax years beginning before January 1,
142022, there is allowed as a credit against the tax determined
15in section 422.63 for a tax year an amount equal to the minimum
16tax credit for that tax year.
17(2) The minimum tax credit for a tax year is the excess,
18if any, of the net minimum tax imposed for all prior tax years
19beginning on or after January 1, 1987, but before January
201, 2021, over the amount allowable as a credit under this
21subsection for those prior tax years.
22b. (1) The allowable credit under paragraph “a” for a tax
23year beginning before January 1, 2021, shall not exceed the
24excess, if any, of the tax determined in section 422.63 over
25the state alternative minimum tax as determined in subsection
262. The allowable credit under paragraph “a” for a tax year
27beginning in the 2021 calendar year shall not exceed the tax
28determined in section 422.63.
29(2) The net minimum tax for a tax year is the excess, if
30any, of the tax determined in subsection 2 for the tax year
31over the tax determined in section 422.63 for the tax year.
32c. This subsection is repealed January 1, 2022, for tax
33years beginning on or after that date.
34DIVISION XV
35Geothermal heat pump tax credit
-23-1 Sec. 67. NEW SECTION. 422.12N Geothermal heat pump tax
2credit.
31. The taxes imposed under this division, less the credits
4allowed under section 422.12, shall be reduced by a geothermal
5heat pump tax credit equal to twenty percent of the federal
6residential energy efficient property tax credit allowed for
7geothermal heat pumps provided in section 25D(a)(5) of the
8Internal Revenue Code for residential property located in Iowa.
92. Any credit in excess of the tax liability is not
10refundable but the excess for the tax year may be credited
11to the tax liability for the following ten years or until
12depleted, whichever is earlier.
133. The department shall accept and approve applications
14on a first-come, first-served basis until the maximum amount
15of tax credits that may be claimed pursuant to subsection 4
16is reached. If for a tax year the aggregate amount of tax
17credits applied for exceeds the amount specified in subsection
184, the department shall establish a wait list for tax credits.
19Valid applications filed by the taxpayer by May 1 following the
20year of the installation but not approved by the department
21shall be placed on a wait list in the order the applications
22were received and those applicants shall be given priority
23for having their applications approved in succeeding years.
24Placement on a wait list pursuant to this subsection shall not
25constitute a promise binding the state. The availability of a
26tax credit and approval of a tax credit application pursuant
27to this section in a future year is contingent upon the
28availability of tax credits in that particular year.
294. a. The cumulative value of tax credits claimed annually
30by applicants pursuant to this section shall not exceed one
31million dollars.
32b. If an amount of tax credits available for a tax year
33pursuant to paragraph “a” goes unclaimed, the amount of the
34unclaimed tax credits shall be made available for the following
35tax year in addition to, and cumulated with, the amount
-24-1available pursuant to paragraph “a” for the following tax year.
25. The director of revenue shall adopt rules to implement
3this section.
4 Sec. 68. EFFECTIVE DATE. This division of this Act, being
5deemed of immediate importance, takes effect upon enactment.
6 Sec. 69. RETROACTIVE APPLICABILITY. This division of this
7Act applies retroactively to January 1, 2019, for tax years
8beginning on or after that date.
9DIVISION XVI
10MONEYS AND CREDITS TAX ON STATE CREDIT UNIONS
11 Sec. 70. Section 533.329, subsection 2, paragraph a, Code
122019, is amended to read as follows:
13a. The moneys and credits tax on state credit unions is
14imposed at a rate of one-half cent on each dollar of the legal
15and special reserves that are required to be maintained by the
16state credit union under section 533.303, and shall be levied
17by the board of supervisors and placed upon the tax list and
18collected by the county treasurer. However, an exemption shall
19be given to each state credit union in the amount of forty
20thousand dollars.
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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, moneys and credits taxes, sales and use
6taxes, and automobile rental excise taxes, the assessment of
7property owned by certain long distance telephone companies,
8establishing a taxation and exemption of computers task
9force, extending the utility replacement task force,
10and providing for other properly related matters, making
11penalties applicable, and including effective date and
12retroactive applicability provisions.
13BE 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 423.1, subsection 2, paragraphs b and c,
15Code 2019, are amended to read as follows:
16b. Is directly, indirectly, or constructively controlled by
17another entity person.
18c. Is subject to the control of a common entity person. A
19common entity person is one which a person who owns directly
20or individually indirectly more than ten percent of the voting
21securities of the entity.
22 Sec. 20. Section 423.2, subsection 1, paragraph a,
23subparagraph (5), subparagraph division (a), Code 2019, is
24amended to read as follows:
25(a) If a service or warranty contract does not specify a fee
26amount for nontaxable services or taxable personal property,
27the tax imposed pursuant to this section shall be imposed upon
28an amount equal to one-half of the sales price of the contract.
29 Sec. 21. Section 423.2, subsection 6, paragraph k, Code
302019, is amended to read as follows:
31k. Carpentry repair and installation.
32 Sec. 22. Section 423.3, Code 2019, is amended by adding the
33following new subsection:
34 NEW SUBSECTION. 16A. a. The sales price from the sale of
35a grain bin, including material or replacement parts used to
-7-1construct or repair a grain bin.
2b. For purposes of this subsection, “grain bin” means
3property that is vented and covered with corrugated metal or
4similar material, and that is primarily used to hold loose
5grain for drying or storage.
6 Sec. 23. Section 423.3, subsection 47, paragraph c,
7subparagraph (3), Code 2019, is amended by striking the
8subparagraph and inserting in lieu thereof the following:
9(3) The following within the scope of section 427A.1,
10subsection 1, paragraphs “h” and “i”:
11(a) Computers.
12(b) Machinery.
13(c) Equipment, including pollution control equipment.
14(d) Replacement parts.
15(e) Supplies.
16(f) Materials used to construct or self-construct the
17following:
18(i) Computers.
19(ii) Machinery.
20(iii) Equipment, including pollution control equipment.
21(iv) Replacement parts.
22(v) Supplies.
23 Sec. 24. Section 423.3, subsection 104, paragraph a, Code
242019, is amended to read as follows:
25a. The sales price of specified digital products and of
26prewritten computer software sold, and of enumerated services
27described in section 423.2, subsection 1, paragraph “a”,
28subparagraph (5), or section 423.2, subsection 6, paragraphs
29“bq”, “br”, “bs”, and “bu” furnished, to a commercial enterprise
30for use exclusively by the commercial enterprise. The use of
31prewritten computer software, a specified digital product, or
32service fails to qualify as a use exclusively by the commercial
33enterprise if its use for noncommercial purposes is more than
34de minimis.
35 Sec. 25. Section 423.14A, subsection 3, paragraph b, Code
-8-12019, is amended by striking the paragraph.
2 Sec. 26. Section 423.14A, subsection 3, paragraph d,
3subparagraph (1), Code 2019, is amended to read as follows:
4(1) A marketplace facilitator that makes or facilitates
5Iowa sales on its own behalf or for one or more marketplace
6sellers equal to or exceeding one hundred thousand dollars,
7or in two hundred or more separate transactions, for an
8immediately preceding calendar year or a current calendar year.
9 Sec. 27. Section 423.14A, subsection 3, paragraph e,
10subparagraph (1), unnumbered paragraph 1, Code 2019, is amended
11to read as follows:
12A referrer if, for any immediately preceding calendar year
13or a current calendar year, one hundred thousand dollars or
14more in Iowa sales or two hundred or more separate Iowa sales
15transactions result from referrals from a platform of the
16referrer. A referrer is not required to collect and remit
17sales and use tax pursuant to this paragraph if the referrer
18does all of the following:
19 Sec. 28. Section 423.14A, subsection 3, paragraph e,
20subparagraph (1), subparagraph division (c), unnumbered
21paragraph 1, Code 2019, is amended to read as follows:
22The referrer provides the department with monthly annual
23 reports in an electronic format and in the manner prescribed
24by the department, which monthly annual reports contain all of
25the following:
26 Sec. 29. Section 423.14A, subsection 3, paragraph e, Code
272019, is amended by adding the following new subparagraph:
28 NEW SUBPARAGRAPH. (5) This paragraph is subject to
29implementation by the department by rule and shall not require
30a referrer to collect tax or comply with the notice and
31reporting requirements and other provisions of this paragraph
32unless and until such administrative rules take effect.
33 Sec. 30. Section 423.48, subsection 2, paragraph c, Code
342019, is amended by striking the paragraph.
35 Sec. 31. TAXATION AND EXEMPTION OF COMPUTERS TASK FORCE. A
-9-1taxation and exemption of computers task force is created. The
2department of revenue shall initiate and coordinate the task
3force and provide staff assistance. It is the intent of the
4general assembly that the task force include representatives of
5the department of revenue; a commercial enterprise that claims
6an exemption for computers under section 423.3, subsection
747; an association that represents manufacturers and other
8industrial producers; and an association that represents
9business tax issues. The director of revenue or the director’s
10designee shall serve as chairperson of the task force.
11The task force shall be charged with reviewing the
12definition of “computer” as used throughout the portions of the
13Iowa Code and the Iowa Administrative Code administered by the
14department of revenue including the exemption for computers
15provided in section 423.3, subsection 47, paragraph “a”,
16subparagraph (4). If the task force recommends modifications
17to the current definition of “computer” including the exemption
18for computers provided in section 423.3, subsection 47,
19paragraph “a”, subparagraph (4), the department of revenue
20shall provide any recommendations to the general assembly by
21January 1, 2020.
22 Sec. 32. EFFECTIVE DATE. The following, being deemed of
23immediate importance, take effect upon enactment:
241. The section of this division of this Act amending section
25423.1, subsection 2, paragraphs “b” and “c”.
262. The section of this division of this Act amending section
27423.3, subsection 47, paragraph “c”, subparagraph (3).
28 Sec. 33. RETROACTIVE APPLICABILITY. The following applies
29retroactively to January 1, 2019, for tax years beginning on
30or after that date:
31The section of this division of this Act amending section
32423.1, subsection 2, paragraphs “b” and “c”.
33 Sec. 34. RETROACTIVE APPLICABILITY. The following applies
34retroactively to January 1, 2016, for tax years beginning on
35or after that date:
-10- 1The section of this division of this Act amending section
2423.3, subsection 47, paragraph “c”, subparagraph (3).
3DIVISION IV
4AUTOMOBILE RENTAL EXCISE TAX
5 Sec. 35. Section 423.14A, subsection 1, paragraph b,
6subparagraph (3), Code 2019, is amended to read as follows:
7(3) A “rental platform”, as defined in section 423C.2, that
8meets the requirements described in person who is not required
9to collect and remit automobile rental excise tax pursuant to
10 section 423C.3, subsection 3, paragraph “c”, subparagraph (2),
11 shall not be considered a “marketplace facilitator” with respect
12to any sale of a transportation service under section 423.2,
13subsection 6, paragraph “bf”, or section 423.5, subsection 1,
14paragraph “e”, consisting of the rental of vehicles subject
15to registration which are registered for a gross weight of
16thirteen tons or less for a period of sixty days or less.
17 Sec. 36. Section 423C.2, subsection 3, paragraphs a and b,
18Code 2019, are amended to read as follows:
19a. A person or any affiliate of a person that owns or
20controls an automobile and makes the automobile available for
21rent through the person or any affiliate, or through a rental
22platform or rental facilitator any other person.
23b. A person or any affiliate of a person who possesses or
24acquires a right or interest in any automobile with an intent
25to rent the automobile to another person, or through the person
26or any affiliate, or through a rental platform or a rental
27facilitator any other person.
28 Sec. 37. Section 423C.2, subsection 6, Code 2019, is amended
29to read as follows:
306. “Facilitation fee” means any consideration, by whatever
31name called, that a rental facilitator or a rental platform
32 person charges to a user for facilitating the user’s rental
33of an automobile. “Facilitation fee” does not include any
34commission an automobile provider pays to a rental facilitator
35or a rental platform person for facilitating the rental of an
-11-1automobile.
2 Sec. 38. Section 423C.2, Code 2019, is amended by adding the
3following new subsection:
4 NEW SUBSECTION. 6A. “Host” means the registered owner of an
5automobile made available for sharing through a peer-to-peer
6automobile sharing marketplace.
7 Sec. 39. Section 423C.2, subsections 9 and 10, Code 2019,
8are amended by striking the subsections.
9 Sec. 40. Section 423C.2, subsection 11, Code 2019, is
10amended to read as follows:
1111. “Rental price” means all consideration charged for
12the renting and facilitation of renting of an automobile
13before taxes, including but not limited to facilitation fees,
14reservation fees, services fees, nonrefundable deposits, and
15any other direct or indirect charge made or consideration
16provided in connection with the renting or facilitation of
17renting of an automobile the same as “sales price” as defined
18in section 423.1, which term includes but is not limited
19to facilitation fees, reservation fees, services fees,
20nonrefundable deposits, and any other direct or indirect charge
21made or consideration provided in connection with the renting
22or facilitation of renting an automobile.
23 Sec. 41. Section 423C.3, Code 2019, is amended to read as
24follows:
25423C.3 Tax on rental of automobiles — collection and
26remittance of tax.
271. For purposes of this section:
28a. “Discount rental charge” means the amount an automobile
29provider charges to a rental facilitator for the rental of an
30automobile, excluding any applicable tax.
31b. “Travel package” means an automobile rental bundled
32with one or more separate components such as lodging, air
33transportation, or similar items and charged for a single
34retail price.
352. 1. A tax of five percent is imposed upon the rental
-12-1price of an automobile if the rental transaction is subject to
2the sales and services tax under chapter 423, subchapter II, or
3the use tax under chapter 423, subchapter III. The tax shall
4not be imposed on any rental transaction not taxable under the
5state sales and services tax, as provided in section 423.3, or
6the state use tax, as provided in section 423.6, on automobile
7rental receipts.
83. 2. This subsection shall govern the collection and
9remittance of the tax imposed under subsection 2 The tax
10imposed under subsection 1 shall be collected and remitted to
11the department by all persons required to collect state sales
12and use tax on the rental transaction under chapter 423.
13a. Unless otherwise provided in this subsection, the
14automobile provider shall collect the tax by adding the tax to
15the rental price of the automobile and the tax, when collected,
16shall be stated as a distinct item separate and apart from
17the rental price of the automobile and the sales and services
18tax imposed under chapter 423, subchapter II, or the use tax
19imposed under chapter 423, subchapter III.
20b. If a transaction for the rental of an automobile involves
21a rental facilitator, all of the following shall occur in the
22order prescribed:
23(1) The rental facilitator shall collect the tax on any
24rental price that the user pays to the rental facilitator in
25the same manner as an automobile provider under paragraph “a”.
26(2) (a) Unless otherwise required by rule or order of
27the department, the rental facilitator shall remit to the
28automobile provider that portion of the tax collected on the
29rental price that represents the discount rental charge.
30(b) No assessment shall be made against a rental facilitator
31for tax due on a discount rental charge if the rental
32facilitator collected the tax and remitted it to an automobile
33provider that has a valid tax permit required under this
34chapter or under chapter 423. This subparagraph division shall
35not apply if the rental facilitator and automobile provider
-13-1are affiliates, or if the department requires the rental
2facilitator to remit taxes collected on that portion of the
3sales price that represents the discount rental charge directly
4to the department.
5(3) The rental facilitator shall remit any remaining tax it
6collected to the department.
7(4) (a) The automobile provider shall collect and remit
8to the department any taxes the rental facilitator remitted to
9the automobile provider, and shall collect and remit to the
10department any taxes due on any amount of rental price the user
11paid to the automobile provider.
12(b) No assessment shall be made against an automobile
13provider for any tax due on a discount rental charge that
14was not remitted to the automobile provider by a rental
15facilitator. This subparagraph division shall not apply if the
16automobile provider and the rental facilitator are affiliates.
17(5) Notwithstanding any other provision of this paragraph
18to the contrary, if a rental facilitator and its affiliates
19facilitate total rentals under this chapter and chapter
20423A that are equal to or less than an aggregate amount of
21rental price and sales price of ten thousand dollars for an
22immediately preceding calendar year or a current calendar year,
23or in ten or fewer separate transactions for an immediately
24preceding calendar year or a current calendar year, the
25rental facilitator shall not be required to collect tax on the
26amount of sales price that represents the rental facilitator’s
27facilitation fee.
28c. (1) If a transaction for the rental of an automobile
29involves a rental platform, other than a rental platform
30described in subparagraph (2), the rental platform shall
31collect and remit the tax imposed under this chapter in the
32same manner as an automobile provider under paragraph “a”.
33(2) 3. A rental platform person is not required to collect
34and remit the tax imposed under this chapter in the same manner
35as an automobile provider under paragraph “a” if the rental
-14-1platform person meets all of the following requirements:
2a. The person or any affiliate of the person is not an
3automobile provider.
4b. The person or any affiliate of the person facilitates
5the renting or sharing of an automobile by doing all of the
6following:
7(1) The person owns, operates, or controls a peer-to-peer
8automobile sharing marketplace that allows a host or an
9automobile provider who is not an affiliate of the person
10to offer or list an automobile for sharing or rent on the
11marketplace. For purposes of this paragraph, it is immaterial
12whether or not the automobile provider has a tax permit under
13this chapter or chapter 423 or whether the automobile is owned
14by a natural person or by a business entity.
15(2) The person or affiliate of the person collects or
16processes the rental price charged to the user.
17(a) c. The only sales the rental platform person and
18its affiliates of the person facilitate that are subject to
19tax under chapter 423 are sales of a transportation service
20under section 423.2, subsection 6, paragraph “bf”, or section
21423.5, subsection 1, paragraph “e”, consisting of the rental
22of vehicles subject to registration which are registered for
23a gross weight of thirteen tons or less for a period of sixty
24days or less.
25(b) The rental platform operates a peer-to-peer automobile
26sharing marketplace.
27(3) 4. For any rental transaction for which the rental
28platform a person is required to or elects to collect and
29remit the tax under this chapter, the rental platform person
30 shall also be liable for the collection and remittance of any
31sales or use tax due on that transaction under section 423.2,
32subsection 6, paragraph “bf”, or section 423.5, subsection
331, paragraph “e”, notwithstanding any other provision to the
34contrary in chapter 423.
35(4) 5. For any rental transaction for which the rental
-15-1platform person is not required to collect and remit the
2tax under this chapter as provided under subparagraph (2)
3 subsection 3, the automobile provider shall be solely liable
4for any amount of uncollected or unremitted tax under this
5chapter and chapter 423.
6DIVISION V
7TELEPHONE COMPANY PROPERTY
8 Sec. 42. NEW SECTION. 433.4A Competitive long distance
9telephone company property.
10For assessment years beginning before January 1, 2022,
11the director of revenue shall assess the property of a long
12distance telephone company, as defined in section 476.1D,
13subsection 10, Code 2018, previously classified by the
14utilities board as a competitive long distance telephone
15company under section 476.1D, subsection 10, Code 2018, which
16property is first assessed for taxation in this state on or
17after January 1, 1996, in the same manner as all other property
18assessed as commercial property by the local assessor under
19chapters 427, 427A, 427B, 428, and 441.
20 Sec. 43. EFFECTIVE DATE. This division of this Act, being
21deemed of immediate importance, takes effect upon enactment.
22 Sec. 44. RETROACTIVE APPLICABILITY. This division of this
23Act applies retroactively to July 1, 2018.
24DIVISION VI
25TARGETED JOBS WITHHOLDING CREDIT
26 Sec. 45. Section 403.19A, subsection 3, paragraph c,
27subparagraph (2), Code 2019, is amended to read as follows:
28(2) The pilot project city and the economic development
29authority shall not enter into a withholding agreement after
30June 30, 2019 2021.
31DIVISION VII
32SCHOOL TUITION ORGANIZATION TAX CREDITS
33 Sec. 46. Section 422.11S, subsection 8, paragraph a,
34subparagraph (2), Code 2019, is amended to read as follows:
35(2) “Total approved tax credits” means for the tax year
-16-1beginning in the 2006 calendar year, two million five hundred
2thousand dollars, for the tax year beginning in the 2007
3calendar year, five million dollars, for tax years beginning
4on or after January 1, 2008, but before January 1, 2012, seven
5million five hundred thousand dollars, for tax years beginning
6on or after January 1, 2012, but before January 1, 2014, eight
7million seven hundred fifty thousand dollars, and for tax years
8beginning on or after January 1, 2014, but before January 1,
92019, twelve million dollars, and for tax years beginning on
10or after January 1, 2019, but before January 1, 2020, thirteen
11million dollars, and for tax years beginning on or after
12January 1, 2020, fifteen million dollars.
13 Sec. 47. CONTINGENT CODE EDITOR DIRECTIVE. The Code editor
14is directed to harmonize the section of this division of this
15Act amending section 422.11S with the other division of this
16Act amending section 422.11S, if enacted, by changing tax year
17to calendar year where appropriate and to make other related
18changes, if necessary, to effectuate such changes.
19DIVISION VIII
20INCOME TAX CHECKOFFS
21 Sec. 48. Section 173.22, subsection 2, Code 2019, is amended
22to read as follows:
232. A foundation fund is created within the state treasury
24composed of moneys appropriated or available to and obtained or
25accepted by the foundation. The foundation fund shall include
26moneys credited to the fund as provided in section 422.12D
27 422.12I.
28 Sec. 49. Section 422.12E, Code 2019, is amended to read as
29follows:
30422.12E Income tax return checkoffs limited.
311. For tax years beginning on or after January 1, 2019,
32there There shall be allowed no more than four income tax
33return checkoffs on each income tax return. For tax years
34beginning on or after January 1, 2017, when the same four
35income tax return checkoffs have been provided on the income
-17-1tax return for two consecutive tax years, the two checkoffs for
2which the least amount has been contributed, in the aggregate
3for the first tax year and through March 15 after the end of the
4second tax year, are repealed on December 31 after the end of
5the second tax year and shall be removed from the return form.
62. If more checkoffs are enacted in the same session of
7the general assembly than there is space for inclusion on the
8individual tax return form, the checkoffs with the earliest
9enacted checkoffs date of enactment as determined pursuant
10to section 3.7 for which there is space for inclusion on the
11return form shall be included on the return form, and all other
12checkoffs enacted during that session of the general assembly
13are repealed on December 31 of the year of enactment. If
14more checkoffs are enacted in the same session of the general
15assembly than there is space for inclusion on the individual
16income tax form and the additional checkoffs are enacted on
17the same day and it is indeterminable which checkoffs have
18the earliest date of enactment pursuant to section 3.7, the
19director shall determine which checkoffs shall be included on
20the return form, and all other checkoffs not included on the
21return form shall be repealed on December 31 of the year of
22enactment and shall not be included on the return form.
233. a. By July 1 of the year in which two checkoffs are
24repealed pursuant to subsection 1, the department shall notify
25the Iowa Code editor which two checkoffs received the least
26amount of contributions and are repealed.
27b. By September 1 of any applicable year, the department
28shall notify the Iowa Code editor of any repeal pursuant to
29subsection 2.
30 Sec. 50. NEW SECTION. 422.12G Joint income tax checkoff for
31veterans trust fund and volunteer fire fighter preparedness fund.
321. A person who files an individual or a joint income tax
33return with the department of revenue under section 422.13 may
34designate one dollar or more to be paid jointly to the veterans
35trust fund created in section 35A.13 and to the volunteer fire
-18-1fighter preparedness fund created in section 100B.13. If the
2refund due on the return or the payment remitted with the
3return is insufficient to pay the additional amount designated
4by the taxpayer, the amount designated shall be reduced to the
5remaining amount of refund or the remaining amount remitted
6with the return. The designation of a contribution under this
7section is irrevocable.
82. The director of revenue shall draft the income tax form
9to allow the designation of contributions to the veterans trust
10fund and to the volunteer fire fighter preparedness fund as
11one checkoff on the tax return. The department of revenue,
12on or before January 31, shall transfer one-half of the total
13amount designated on the tax return forms due in the preceding
14calendar year to the veterans trust fund and the remaining
15one-half to the volunteer fire fighter preparedness fund.
16However, before a checkoff pursuant to this section shall be
17permitted, all liabilities on the books of the department of
18administrative services and accounts identified as owing under
19section 8A.504 shall be satisfied.
203. The department of revenue shall adopt rules to administer
21this section.
224. This section is subject to repeal under section 422.12E.
23 Sec. 51. Section 422.12H, Code 2019, is amended to read as
24follows:
25422.12H Income tax checkoff for fish and game protection
26fund.
271. A person who files an individual or a joint income tax
28return with the department of revenue under section 422.13 may
29designate a contribution to the state fish and game protection
30fund authorized pursuant to section 456A.16.
312. This section is subject to repeal under section 422.12E.
32 Sec. 52. NEW SECTION. 422.12I Income tax checkoff for the
33Iowa state fair foundation fund.
341. A person who files an individual or a joint income tax
35return with the department of revenue under section 422.13
-19-1may designate one dollar or more to be paid to the foundation
2fund of the Iowa state fair foundation as established in
3section 173.22. If the refund due on the return or the payment
4remitted with the return is insufficient to pay the amount
5designated by the taxpayer to the foundation fund, the amount
6designated shall be reduced to the remaining amount of the
7refund or the remaining amount remitted with the return. The
8designation of a contribution to the foundation fund under this
9section is irrevocable.
102. The director of revenue shall draft the income tax form
11to allow the designation of contributions to the foundation
12fund on the tax return. The department, on or before January
1331, shall transfer the total amount designated on the tax
14form due in the preceding year to the foundation fund.
15However, before a checkoff pursuant to this section shall be
16permitted, all liabilities on the books of the department of
17administrative services and accounts identified as owing under
18section 8A.504 shall be satisfied.
193. The Iowa state fair board may authorize payment from
20the foundation fund for purposes of supporting foundation
21activities.
224. The department of revenue shall adopt rules to implement
23this section.
245. This section is subject to repeal under section 422.12E.
25DIVISION IX
26POWERS AND DUTIES OF DIRECTOR OF REVENUE
27 Sec. 53. Section 421.17, Code 2019, is amended by adding the
28following new subsection:
29 NEW SUBSECTION. 35. To audit and examine all taxes
30collected or administered by the department.
31DIVISION X
32SALES AND USE TAX EXEMPTIONS RELATED TO MANUFACTURERS
33 Sec. 54. Section 423.3, subsection 47, paragraph d,
34subparagraph (4), subparagraph division (c), unnumbered
35paragraph 1, Code 2019, is amended to read as follows:
-20- 1“Manufacturer” does not include persons who are not commonly
2understood as manufacturers, including but not limited to
3persons primarily engaged in any of the following activities:
4 Sec. 55. EFFECTIVE DATE. This division of this Act, being
5deemed of immediate importance, takes effect upon enactment.
6 Sec. 56. RETROACTIVE APPLICABILITY. This division of this
7Act applies retroactively to May 30, 2018.
8DIVISION XI
9RESEARCH ACTIVITIES TAX CREDIT
10 Sec. 57. Section 422.10, subsection 1, paragraph a,
11subparagraph (1), subparagraph division (a), Code 2019, is
12amended to read as follows:
13(a) The business is engaged in the manufacturing, life
14sciences, agriscience, software engineering, or aviation and
15aerospace industry.
16 Sec. 58. Section 422.10, subsection 1, paragraph a,
17subparagraph (1), subparagraph division (b), unnumbered
18paragraph 1, Code 2019, is amended to read as follows:
19Persons that shall not be considered to be engaged in
20the manufacturing, life sciences, agriscience, software
21engineering, or aviation and aerospace industry, and thus are
22not eligible for the credit, include but are not limited to all
23of the following:
24 Sec. 59. Section 422.33, subsection 5, paragraph e,
25subparagraph (1), subparagraph division (a), Code 2019, is
26amended to read as follows:
27(a) The business is engaged in the manufacturing, life
28sciences, agriscience, software engineering, or aviation and
29aerospace industry.
30 Sec. 60. Section 422.33, subsection 5, paragraph e,
31subparagraph (1), subparagraph division (b), unnumbered
32paragraph 1, Code 2019, is amended to read as follows:
33Persons that shall not be considered to be engaged in
34the manufacturing, life sciences, agriscience, software
35engineering, or aviation and aerospace industry, and thus are
-21-1not eligible for the credit, include but are not limited to all
2of the following:
3DIVISION XII
4ADOPTION TAX CREDIT
5 Sec. 61. Section 422.12A, subsection 2, Code 2019, is
6amended to read as follows:
72. The taxes imposed under this division, less the credits
8allowed under section 422.12, shall be reduced by an adoption
9tax credit equal to the amount of qualified adoption expenses
10paid or incurred by the taxpayer during the tax year in
11connection with the adoption of a child by the taxpayer, not to
12exceed five thousand dollars per adoption.
13 Sec. 62. Section 422.12A, Code 2019, is amended by adding
14the following new subsection:
15 NEW SUBSECTION. 3A. The credit under this section with
16respect to any qualified adoption expense shall be allowed
17during a tax year as follows:
18a. For any qualified adoption expense paid or incurred prior
19to or during the tax year in which the adoption becomes final,
20the tax year in which the adoption becomes final.
21b. For any qualified adoption expense paid or incurred after
22the tax year in which the adoption becomes final, the tax year
23in which an adoption expense is paid or incurred.
24 Sec. 63. RETROACTIVE APPLICABILITY. This division of this
25Act applies retroactively to January 1, 2019, for tax years
26beginning on or after that date.
27DIVISION XIII
28UTILITY REPLACEMENT TASK FORCE
29 Sec. 64. Section 437A.15, subsection 7, paragraph b, Code
302019, is amended to read as follows:
31b. The task force shall study the effects of the replacement
32taxes under this chapter and chapter 437B on local taxing
33authorities, local taxing districts, consumers, and taxpayers
34through January 1, 2019 2024. If the task force recommends
35modifications to the replacement tax that will further the
-22-1purposes of tax neutrality for local taxing authorities, local
2taxing districts, taxpayers, and consumers, consistent with the
3stated purposes of this chapter, the department of management
4shall transmit those recommendations to the general assembly.
5DIVISION XIV
6FRANCHISE TAX — ALTERNATIVE MINIMUM TAX (amt) REPEAL
7 Sec. 65. Section 422.60, subsection 2, Code 2019, is amended
8by adding the following new paragraph:
9 NEW PARAGRAPH. c. This subsection is repealed January 1,
102021, for tax years beginning on or after that date.
11 Sec. 66. Section 422.60, subsection 3, Code 2019, is amended
12to read as follows:
133. a. (1) There For tax years beginning before January 1,
142022, there is allowed as a credit against the tax determined
15in section 422.63 for a tax year an amount equal to the minimum
16tax credit for that tax year.
17(2) The minimum tax credit for a tax year is the excess,
18if any, of the net minimum tax imposed for all prior tax years
19beginning on or after January 1, 1987, but before January
201, 2021, over the amount allowable as a credit under this
21subsection for those prior tax years.
22b. (1) The allowable credit under paragraph “a” for a tax
23year beginning before January 1, 2021, shall not exceed the
24excess, if any, of the tax determined in section 422.63 over
25the state alternative minimum tax as determined in subsection
262. The allowable credit under paragraph “a” for a tax year
27beginning in the 2021 calendar year shall not exceed the tax
28determined in section 422.63.
29(2) The net minimum tax for a tax year is the excess, if
30any, of the tax determined in subsection 2 for the tax year
31over the tax determined in section 422.63 for the tax year.
32c. This subsection is repealed January 1, 2022, for tax
33years beginning on or after that date.
34DIVISION XV
35Geothermal heat pump tax credit
-23-1 Sec. 67. NEW SECTION. 422.12N Geothermal heat pump tax
2credit.
31. The taxes imposed under this division, less the credits
4allowed under section 422.12, shall be reduced by a geothermal
5heat pump tax credit equal to twenty percent of the federal
6residential energy efficient property tax credit allowed for
7geothermal heat pumps provided in section 25D(a)(5) of the
8Internal Revenue Code for residential property located in Iowa.
92. Any credit in excess of the tax liability is not
10refundable but the excess for the tax year may be credited
11to the tax liability for the following ten years or until
12depleted, whichever is earlier.
133. The department shall accept and approve applications
14on a first-come, first-served basis until the maximum amount
15of tax credits that may be claimed pursuant to subsection 4
16is reached. If for a tax year the aggregate amount of tax
17credits applied for exceeds the amount specified in subsection
184, the department shall establish a wait list for tax credits.
19Valid applications filed by the taxpayer by May 1 following the
20year of the installation but not approved by the department
21shall be placed on a wait list in the order the applications
22were received and those applicants shall be given priority
23for having their applications approved in succeeding years.
24Placement on a wait list pursuant to this subsection shall not
25constitute a promise binding the state. The availability of a
26tax credit and approval of a tax credit application pursuant
27to this section in a future year is contingent upon the
28availability of tax credits in that particular year.
294. a. The cumulative value of tax credits claimed annually
30by applicants pursuant to this section shall not exceed one
31million dollars.
32b. If an amount of tax credits available for a tax year
33pursuant to paragraph “a” goes unclaimed, the amount of the
34unclaimed tax credits shall be made available for the following
35tax year in addition to, and cumulated with, the amount
-24-1available pursuant to paragraph “a” for the following tax year.
25. The director of revenue shall adopt rules to implement
3this section.
4 Sec. 68. EFFECTIVE DATE. This division of this Act, being
5deemed of immediate importance, takes effect upon enactment.
6 Sec. 69. RETROACTIVE APPLICABILITY. This division of this
7Act applies retroactively to January 1, 2019, for tax years
8beginning on or after that date.
9DIVISION XVI
10MONEYS AND CREDITS TAX ON STATE CREDIT UNIONS
11 Sec. 70. Section 533.329, subsection 2, paragraph a, Code
122019, is amended to read as follows:
13a. The moneys and credits tax on state credit unions is
14imposed at a rate of one-half cent on each dollar of the legal
15and special reserves that are required to be maintained by the
16state credit union under section 533.303, and shall be levied
17by the board of supervisors and placed upon the tax list and
18collected by the county treasurer. However, an exemption shall
19be given to each state credit union in the amount of forty
20thousand dollars.
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