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Senate File 366 - IntroducedA Bill ForAn Act 1relating to state taxation and related laws of the state
2including the collection of tax, tax credits, the assessment
3and classification of property, taxes on electricity
4providers, fees for registration of vehicles, sales and
5use tax, and the authority of the director of revenue,
6and providing penalties, and including effective date and
7retroactive applicability provisions.
8BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2TAX CREDITS FOR CERTAIN SALES TAXES PAID BY THIRD-PARTY
3DEVELOPERS
4 Section 1. Section 15.331C, Code 2021, is amended to read
5as follows:
615.331C Corporate tax credit for certain sales taxes paid by
7third-party developer Third-party developer tax credit.
81. An eligible business may claim a corporate tax credit
9in an amount equal to the sales and use taxes paid by a
10third-party developer under chapter 423 for gas, electricity,
11water, or sewer utility services, goods, wares, or merchandise,
12or on services rendered, furnished, or performed to or for a
13contractor or subcontractor and used in the fulfillment of a
14written contract relating to the construction or equipping of
15a facility of the eligible business. Taxes attributable to
16intangible property and furniture and furnishings shall not
17be included, but taxes attributable to racks, shelving, and
18conveyor equipment to be used in a warehouse or distribution
19center shall be included. Any credit in excess of the tax
20liability for the tax year may be credited to the tax liability
21for the following seven years or until depleted, whichever
22occurs earlier. An eligible business may elect to receive a
23refund of all or a portion of an unused tax credit.
242. A third-party developer shall state under oath, on
25forms provided by the department of revenue, the amount of
26taxes paid as described in subsection 1 and shall submit such
27forms to the department of revenue. The taxes paid shall be
28itemized to allow identification of the taxes attributable
29to racks, shelving, and conveyor equipment to be used in a
30warehouse or distribution center. After receiving the form
31from the third-party developer, the department of revenue shall
32issue a tax credit certificate to the eligible business equal
33to the sales and use taxes paid by a third-party developer
34under chapter 423 for gas, electricity, water, or sewer
35utility services, goods, wares, or merchandise, or on services
-1-1rendered, furnished, or performed to or for a contractor or
2subcontractor and used in the fulfillment of a written contract
3relating to the construction or equipping of a facility.
4The department of revenue shall also issue a tax credit
5certificate to the eligible business equal to the taxes paid
6and attributable to racks, shelving, and conveyor equipment to
7be used in a warehouse or distribution center. The aggregate
8combined total amount of tax refunds under section 15.331A for
9taxes attributable to racks, shelving, and conveyor equipment
10to be used in a warehouse or distribution center and of tax
11credit certificates issued by the department of revenue for the
12taxes paid and attributable to racks, shelving, and conveyor
13equipment to be used in a warehouse or distribution center
14shall not exceed five hundred thousand dollars in a fiscal
15year. If an applicant for a tax credit certificate does not
16receive a certificate for the taxes paid and attributable
17to racks, shelving, and conveyor equipment to be used in a
18warehouse or distribution center, the application shall be
19considered in succeeding fiscal years. The eligible business
20shall not claim a tax credit under this section unless a tax
21credit certificate issued by the department of revenue is
22included with the taxpayer’s tax return for the tax year for
23which the tax credit is claimed. A tax credit certificate
24shall contain the eligible business’s name, address, tax
25identification number, the amount of the tax credit, and other
26information deemed necessary by the department of revenue.
273. An individual may claim a tax credit under this section
28of a partnership, limited liability company, S corporation,
29estate, or trust electing to have income taxed directly to
30the individual. The amount claimed by the individual shall
31be based upon the pro rata share of the individual’s earnings
32from the partnership, limited liability company, S corporation,
33estate, or trust.
34 Sec. 2. Section 15.335A, subsection 2, paragraph d, Code
352021, is amended to read as follows:
-2- 1d. “Sales tax refund” means the sales and use tax refund as
2provided under section 15.331A or the corporate tax credit for
3certain sales taxes paid by third-party developers developer
4tax credit as provided under section 15.331C.
5 Sec. 3. NEW SECTION. 422.11T Third-party developer tax
6credit.
7The taxes imposed under this subchapter, less the credits
8allowed under section 422.12, shall be reduced by the
9third-party developer tax credit authorized pursuant to
10section 15.331C for certain sales taxes paid by a third-party
11developer.
12 Sec. 4. Section 422.33, subsection 19, Code 2021, is amended
13to read as follows:
1419. The taxes imposed under this subchapter shall be reduced
15by a corporate third-party developer tax credit authorized
16pursuant to section 15.331C for certain sales taxes paid by a
17third-party developer.
18 Sec. 5. Section 422.60, subsection 8, Code 2021, is amended
19to read as follows:
208. The taxes imposed under this subchapter shall be reduced
21by a corporate third-party developer tax credit authorized
22pursuant to section 15.331C for certain sales taxes paid by a
23third-party developer.
24 Sec. 6. EFFECTIVE DATE. This division of this Act, being
25deemed of immediate importance, takes effect upon enactment.
26 Sec. 7. RETROACTIVE APPLICABILITY. This division of this
27Act applies retroactively to January 1, 2020, for tax years
28beginning on or after that date.
29DIVISION II
30GEOTHERMAL HEAT PUMP INSTALLATION TAX CREDIT
31 Sec. 8. Section 422.12N, subsection 3, Code 2021, is amended
32to read as follows:
333. a. A taxpayer must submit an application with the
34department for each geothermal heat pump installation. The
35application must be approved by the department prior to
-3-1claiming the credit, and the application must be filed by May 1
2following the year of installation of the geothermal heat pump.
3b. The department shall accept and approve applications
4on a first-come, first-served basis until the maximum amount
5of tax credits that may be claimed pursuant to subsection 4
6is reached. If for a tax year the aggregate amount of tax
7credits applied for exceeds the amount specified in subsection
84, the department shall establish a wait list for tax credits.
9Valid applications filed by the taxpayer by May 1 following the
10year of the installation but not approved by the department
11shall be placed on a wait list in the order the applications
12were received and those applicants shall be given priority
13for having their applications approved in succeeding years.
14Placement on a wait list pursuant to this subsection shall not
15constitute a promise binding the state. The availability of a
16tax credit and approval of a tax credit application pursuant
17to this section in a future year is contingent upon the
18availability of tax credits in that particular year.
19 Sec. 9. LEGISLATIVE INTENT. It is the intent of the general
20assembly that the section of this division amending section
21422.12N is a conforming amendment consistent with current state
22law, and the amendment does not change the application of the
23current law but instead reflects current law both before and
24after enactment of this division of this Act.
25 Sec. 10. EFFECTIVE DATE. This division of this Act, being
26deemed of immediate importance, takes effect upon enactment.
27 Sec. 11. RETROACTIVE APPLICABILITY. This division of this
28Act applies retroactively to January 1, 2019, for tax years
29beginning on or after that date.
30DIVISION III
31TAXES ON ELECTRICITY PROVIDERS
32 Sec. 12. Section 437A.3, subsection 18, paragraph a,
33subparagraph (2), Code 2021, is amended to read as follows:
34(2) (a) An electric power generating plant, except a solar
35energy conversion facility, where the acquisition cost of all
-4-1interests acquired exceeds ten million dollars.
2(b) A solar energy conversion facility where the
3acquisition cost of all interests exceeds one million dollars.
4(c) For purposes of this subparagraph, “electric power
5generating plant”:
6(i) “Electric power generating plant”means each nameplate
7rated electric power generating plant owned solely or jointly
8by any person or electric power facility financed under the
9provisions of chapter 28F or 476A in which electrical energy is
10produced from other forms of energy, including all equipment
11used in the production of such energy through its step-up
12transformer.
13(ii) “Solar energy conversion facility” means the same as
14defined in section 476C.1.
15DIVISION IV
16FEE FOR NEW REGISTRATION — VEHICLES
17 Sec. 13. Section 321.105A, subsection 2, paragraph a, Code
182021, is amended to read as follows:
19a. For purposes of this subsection, “purchase price”
20applies to the measure subject to the fee for new registration.
21“Purchase price” shall be determined in the same manner as
22“sales price” is determined for purposes of computing the tax
23imposed upon the sales price of tangible personal property
24under chapter 423, pursuant to the definition of sales price
25in section 423.1, subject to the following exemptions. The
26following are exempt from the fee for new registration imposed
27by this subsection:
28(1) Exempted from the purchase price of any vehicle subject
29to registration is the The amount of any cash rebate which is
30provided by a motor vehicle manufacturer to the purchaser of
31the vehicle subject to registration so long as the rebate is
32applied to the purchase price of the vehicle.
33(2) (a) In transactions, except those subject to
34subparagraph division (b), in which a vehicle subject to
35registration is traded toward the purchase price of another
-5-1vehicle subject to registration, the purchase price is only
2that portion of the purchase price which is not valued in
3money, whether received in money or not, if the following
4conditions are met:
5(i) The vehicle traded to the retailer is the type of
6vehicle normally sold in the regular course of the retailer’s
7business.
8(ii) The vehicle traded to the retailer is intended by the
9retailer to be ultimately sold at retail or is intended to be
10used by the retailer or another in the remanufacturing of a
11like vehicle.
12(b) In a transaction between persons, neither of which is
13a retailer of vehicles subject to registration, in which a
14vehicle subject to registration is traded toward the purchase
15price of another vehicle subject to registration, the amount
16of the trade-in value allowed on the vehicle subject to
17registration traded is exempted from the purchase price.
18(c) In order for the trade-in value to be excluded from
19the purchase price, the name or names The person listed on the
20title and registration of the newly acquired vehicle being
21purchased must be the same name or names person listed on the
22title and registration of the traded vehicle being traded in
23order to exclude the trade-in value from the purchase price.
24The Additionally, the following trades qualify under this
25subparagraph division (c):
26(i) A trade involving between spouses, if the traded vehicle
27and the acquired vehicle are titled in the name of one or both
28of the spouses, with no outside party named on the title.
29(ii) A trade involving a grandparent, parent, or child
30 between lineal family members, including adopted and step
31relationships, if the name of one of the family members from
32the title of the traded vehicle is also on the title of the
33newly acquired vehicle.
34(iii) A trade involving a business an entity, if one of the
35owners listed on the title of the traded vehicle is a business,
-6-1and an entity. If multiple names are on the names on the title
2are must be separated by “or”. For purposes of trades under
3this subparagraph subdivision, a sole proprietorship shall not
4be distinguished from an individual owner.
5(iv) A trade in which the vehicle being purchased is titled
6in the name of an individual other than the owner of the traded
7vehicle due to the cosigning requirements of a financial
8institution.
9(3) Exempted from the purchase price The fair market
10value of a replacement motor vehicle owned by a motor vehicle
11dealer licensed under chapter 322 which is being registered
12by that dealer and is not otherwise exempt from the fee for
13new registration, is the fair market value of a replaced motor
14vehicle if all of the following conditions are met:
15(a) The motor vehicle being registered is being placed in
16service as a replacement motor vehicle for a motor vehicle
17registered by the motor vehicle dealer.
18(b) The motor vehicle being registered is taken from the
19motor vehicle dealer’s inventory.
20(c) Use tax or the fee for new registration on the motor
21vehicle being replaced was paid by the motor vehicle dealer
22when that motor vehicle was registered.
23(d) The replaced motor vehicle is returned to the motor
24vehicle dealer’s inventory for sale.
25(e) The application for registration and title of the motor
26vehicle being registered is filed with the county treasurer
27within two weeks of the date the replaced motor vehicle is
28returned to the motor vehicle dealer’s inventory.
29(f) The motor vehicle being registered is placed in the same
30or substantially similar service as the replaced motor vehicle.
31 Sec. 14. Section 321.105A, subsection 2, paragraph c,
32subparagraph (1), Code 2021, is amended to read as follows:
33(1) Entities listed in section 423.3, subsections 17, 18,
3419, 20, 21, 22, 26, 27, 28, 31, and 79, to the extent that
35those entities are exempt from the tax imposed on the sale of
-7-1tangible personal property, consisting of goods, wares, or
2merchandise, sold at retail in the state to consumers or users.
3 Sec. 15. Section 321.105A, subsection 2, paragraph c,
4subparagraph (3), subparagraph divisions (a) and (c), Code
52021, are amended to read as follows:
6(a) Vehicles subject to registration which are transferred
7from a business or individual conducting a business within
8this state as a sole proprietorship, partnership, or limited
9liability company to a corporation formed by the sole
10proprietorship, partnership, or limited liability company for
11the purpose of continuing the business when all of the stock
12of the corporation so formed is owned by the sole proprietor
13and the sole proprietor’s spouse, by all the partners in the
14case of a partnership, or by all the members in the case of a
15limited liability company. This exemption is equally available
16where the vehicles subject to registration are transferred from
17a corporation to a sole proprietorship, partnership, or limited
18liability company formed by that corporation for the purpose of
19continuing the business when all of the incidents of ownership
20are owned by the same person or persons who were stockholders
21of the corporation. an entity doing business within this state
22to another entity doing business within this state if all of
23the following apply:
24(i) The receiving entity was formed by the transferring
25entity for the purpose of continuing the business.
26(ii) (A) All ownership remains the same and in the
27same proportions as the previous ownership with no fewer or
28additional owners or replacement owners.
29(B) In the case of a sole proprietorship, the spouse of the
30sole proprietor may stand in place of the sole proprietor.
31(c) This exemption applies to corporations that For an
32exemption under this subparagraph, a receiving entity shall
33 have been in existence for not longer than twenty-four months.
34 Sec. 16. Section 321.105A, subsection 2, paragraph c,
35subparagraphs (7), (8), (15), (18), and (19), Code 2021, are
-8-1amended to read as follows:
2(7) Vehicles subject to registration in this state for
3which the applicant for registration has paid to another state
4a state sales, use, or occupational tax, or paid the equivalent
5sales or excise tax of another country to that country.
6However, if the tax paid to another state or country is less
7than the fee for new registration calculated for the vehicle,
8the difference shall be the amount to be collected as the fee
9for new registration.
10(8) A vehicle subject to registration in this state which is
11owned by a person who has moved from another state or country
12 with the intention of changing residency to Iowa, provided that
13the vehicle was purchased for use in the state or country from
14which the applicant moved and was not, at or near the time of
15purchase, purchased for use in Iowa.
16(15) Vehicles purchased by a licensed wholesaler of new
17motor vehicles licensed under section 322.27A for resale by the
18same wholesaler.
19(18) A vehicle delivered to a resident Native American
20Indian on the a reservation.
21(19) A vehicle transferred from one individual to another
22individual as a gift in a transaction in which no consideration
23is present.
24 Sec. 17. Section 321.105A, subsection 2, paragraph c,
25subparagraph (25), unnumbered paragraph 1, Code 2021, is
26amended to read as follows:
27Vehicles subject to registration under this chapter with
28a gross vehicle weight rating of less than sixteen thousand
29pounds when purchased for lease and titled by the lessor
30licensed pursuant to chapter 321F and actually leased for a
31period of twelve six months or more if the lease of the vehicle
32is subject to the fee for new registration under subsection
333 or exempt from the fee for new registration pursuant to
34subsection 3, paragraph “f”.
35 Sec. 18. Section 321.105A, subsection 3, paragraphs a and e,
-9-1Code 2021, are amended to read as follows:
2a. A fee for new registration is imposed in an amount equal
3to five percent of the leased price for each vehicle subject to
4registration with a gross vehicle weight rating of less than
5sixteen thousand pounds which is leased by a lessor licensed
6pursuant to chapter 321F for a period of twelve six months
7or more. The fee for new registration shall be paid by the
8owner of the vehicle to the county treasurer from whom the
9registration receipt or certificate of title is obtained. A
10registration receipt for a vehicle subject to registration or
11issuance of a certificate of title shall not be issued until
12the fee for new registration is paid in the initial instance.
13e. If the lease is terminated or voided prior to the
14termination date contained in the lease agreement, no refund
15shall be allowed for a fee for new registration previously paid
16under this section, except as provided in section 322G.4.
17 Sec. 19. Section 321.105A, subsection 7, Code 2021, is
18amended to read as follows:
197. Penalty for false statement or evasion of fee Penalties.
20a. False statement. A person who willfully makes a false
21statement in regard to the purchase price of a vehicle subject
22to a fee for new registration or willfully attempts in any
23manner to evade payment of the fee required by this section
24is guilty of a fraudulent practice. A person who willfully
25makes a false statement in regard to the purchase price of
26such a vehicle with the intent to evade payment of the fee for
27new registration or willfully attempts in any manner to evade
28payment of the fee required by this section shall be assessed
29a penalty of seventy-five percent of the amount of the fee
30unpaid and required to be paid on the actual purchase price
31less trade-in allowance.
32b. Evasion fee. An Iowa resident found to be in control
33of a vehicle which is owned by a shell business and for which
34the fee for new registration has not been paid, as provided
35in section 321.55, subsection 2, is guilty of a fraudulent
-10-1practice. An Iowa resident found to be in control of a vehicle
2which is owned by a shell business and for which the fee for new
3registration has not been paid, as provided in section 321.55,
4subsection 2, shall be assessed a penalty of seventy-five
5percent of the amount of the fee unpaid and required to be paid
6on the actual purchase price less trade-in allowance.
7c. Failure to file. If a person required by this chapter to
8file an application for certificate of title or registration
9with the county treasurer fails to file such application or
10registration on or before the due date for such application or
11registration, a penalty in the amount of ten percent of the fee
12for new registration due shall be added to the fee.
13d. Underpayment. If a person required by this chapter to
14file an application for certificate of title or registration
15with the county treasurer files such application or
16registration with any inaccurate information that results in
17the person paying less than the full amount of the fee for new
18registration, penalties, or interest that was due at the time
19of application, a penalty in the amount of five percent of the
20fee for new registration due shall be added to the fee.
21DIVISION V
22PENALTIES — IMPUTED IOWA LIABILITY
23 Sec. 20. Section 421.27, subsection 9, paragraph a, Code
242021, is amended to read as follows:
25a. “Imputed Iowa liability” means any of the following:
26(1) In the case of corporations other than corporations
27described in section 422.34 or section 422.36, subsection 5,
28the corporation’s Iowa net income after the application of the
29Iowa business activity ratio, if applicable, multiplied by the
30top income tax rate imposed under section 422.33 for the tax
31year, less any Iowa tax credits available to the corporation.
32(2) In the case of financial institutions as defined in
33section 422.61, the financial institution’s Iowa net income
34after the application of the Iowa business activity ratio, if
35applicable, multiplied by the franchise tax rate imposed under
-11-1section 422.63 for the tax year, less any Iowa tax credits
2available to the financial institution.
3(3) In this case of all other entities, including
4corporations described in section 422.36, subsection 5, and all
5other entities required to file an information return under
6section 422.15, subsection 2, the entity’s Iowa net income
7after the application of the Iowa business activity ratio, if
8applicable, multiplied by the top income tax rate imposed under
9section 422.5A for the tax year, less any Iowa tax credits
10available to the entity.
11DIVISION VI
12PARTNERSHIP AND PASS-THROUGH ENTITY AUDITS AND REPORTING
13 Sec. 21. Section 422.7, subsection 59, Code 2021, is amended
14to read as follows:
1559. Any income adjustment subtracted from federal taxable
16income for an adjustment year pursuant to section 6225 of the
17Internal Revenue Code and the regulations thereunder shall be
18added back in computing net income of the partnership and the
19partners for state tax purposes for the adjustment year.
20 Sec. 22. Section 422.25A, subsection 1, paragraph k,
21subparagraph (1), Code 2021, is amended to read as follows:
22(1) In the case of a federal partnership adjustment that
23arises from a partnership level audit, the first day on which
24no federal adjustments arising from that audit remain to
25be finally determined, whether by internal revenue service
26decision with respect to which all rights of appeal have
27been waived or exhausted, by agreement, or, if appealed or
28contested, by a final decision with respect to which all rights
29of appeal have been waived or exhausted. For agreements
30required to be signed by the internal revenue service and the
31audited partnership, the final determination date is the date
32on which the last party signed the agreement.
33 Sec. 23. Section 422.25A, subsection 4, Code 2021, is
34amended to read as follows:
354. Reporting and payment requirements for audited
-12-1 partnerships and their partners subject to final federal
2partnership adjustments.
3a. Unless an audited partnership makes the election in
4subsection 5, the audited a partnership shall do all of the
5following for all final federal partnership adjustments no
6later than ninety days after the final determination date of
7the audited partnership:
8(1) File a completed federal adjustments report.
9(2) Notify each direct partner of such partner’s
10distributive share of the adjustments in the manner and form
11prescribed by the department by rule.
12(3) File an amended composite return under section 422.13
13if one was originally filed, and if applicable for withholding
14from partners, file an amended withholding report under
15section 422.16, and pay the additional amount under this title
16that would have been due had the final federal partnership
17adjustments been reported properly as required, including any
18applicable interest and penalties.
19b. Unless an audited partnership paid an amount on behalf
20of the direct partners of the audited partnership pursuant to
21subsection 5, all direct partners of the audited partnership
22shall do all of the following no later than one hundred
23eighty days after the final determination date of the audited
24partnership:
25(1) File a completed federal adjustments report reporting
26the direct partner’s distributive share of the adjustments
27required to be reported to such partners under paragraph “a”.
28(2) If the direct partner is a tiered partner, notify all
29partners that hold an interest directly in the tiered partner
30of such partner’s distributive share of the adjustments in the
31manner and form prescribed by the department by rule.
32(3) If the direct partner is a tiered partner and subject to
33section 422.13, file an amended composite return under section
34422.13 if such return was originally filed, and if applicable
35for withholding from partners file an amended withholding
-13-1report under section 422.16 if one was originally required to
2be filed.
3(4) Pay any additional amount under this title that would
4have been due had the final federal partnership adjustments
5been reported properly as required, including any applicable
6penalty and interest.
7c. Unless a partnership or tiered partner paid an amount on
8behalf of the partners pursuant to subsection 5, each indirect
9partner shall do all of the following:
10(1) Within ninety days after the time for filing and
11furnishing statements to tiered partners and their partners
12as established by section 6226 of the Internal Revenue Code
13and the regulations thereunder, file a completed federal
14adjustments report.
15(2) If the indirect partner is a tiered partner, within
16ninety days after the time for filing and furnishing statements
17to tiered partners and their partners as established by
18section 6226 of the Internal Revenue Code and the regulations
19thereunder but within sufficient time for all indirect partners
20to also complete the requirements of this subsection, notify
21all of the partners that hold an interest directly in the
22tiered partner of such partner’s distributive share of the
23adjustments in the manner and form prescribed by the department
24by rule.
25(3) Within ninety days after the time for filing and
26furnishing statements to tiered partners and their partners
27as established by section 6226 of the Internal Revenue Code
28and the regulations thereunder, if the indirect partner
29is a tiered partner and subject to section 422.13, file an
30amended composite return under section 422.13 if such return
31was originally filed, and if applicable for withholding from
32partners, file an amended withholding report under section
33422.16 if one was originally required to be filed.
34(4) Within ninety days after the time for filing and
35furnishing statements to tiered partners and the partners of
-14-1the tiered partners as established by section 6226 of the
2Internal Revenue Code and the regulations thereunder, pay any
3additional amount due under this title, including any penalty
4and interest that would have been due had the final federal
5partnership adjustments been reported properly as required.
6 Sec. 24. Section 422.25A, subsection 5, paragraph a, Code
72021, is amended to read as follows:
8a. An audited partnership, or a tiered partner of an audited
9partnership that receives a notification of a final federal
10partnership adjustment under subsection 4 of a final federal
11partnership adjustment arising from a partnership level audit,
12may make an election to pay as provided under this subsection.
13 Sec. 25. Section 422.25A, subsection 5, paragraph b,
14unnumbered paragraph 1, Code 2021, is amended to read as
15follows:
16An audited partnership or tiered partner makes shall make an
17election to pay under this subsection by filing in the manner
18and form prescribed by the department. The audited partnership
19or tiered partner making an election to pay shall file a
20completed federal adjustments report, notifying the department
21in the manner and form prescribed by the department that it is
22making the election under this subsection, notifying notify
23 each of the direct partners of such partner’s distributive
24share of the adjustments, and paying pay on behalf of its
25partners an amount calculated in paragraph “c”, including any
26applicable penalty and interest. These requirements shall all
27be fulfilled within one of the following time periods:
28 Sec. 26. Section 422.25A, subsection 5, paragraph c,
29subparagraph (6), Code 2021, is amended to read as follows:
30(6) (a) Total the amounts computed pursuant to
31subparagraphs (2) through (5) and calculate any interest and
32penalty as provided under this title. Notwithstanding any
33provision of law to the contrary, interest and penalties on the
34amount due by the audited partnership or tiered partner shall
35be computed from the day after the due date of the reviewed
-15-1year return without extension, and shall be imposed as if the
2audited partnership or tiered partner was required to pay tax
3or show tax due on the original return for the reviewed year.
4(b) The director may establish rules providing for the
5calculation of amounts due under this subsection for federal
6partnership adjustments that affect state tax owed but that do
7not fit within the calculation in subparagraphs (2) through
8(5), such as tax credit changes. The director may establish
9rules that include changes related to state-specific issues
10following a state partnership audit in the election to pay and
11calculation of amounts due under this subsection, including
12but not limited to allocation and apportionment. Interest and
13penalty shall be computed in the same manner as described in
14subparagraph division (a).
15 Sec. 27. Section 422.25A, subsection 7, paragraph d, Code
162021, is amended to read as follows:
17d. Nothing in this section shall prohibit the department
18from assessing direct partners and indirect partners for taxes
19they owe in the event that an audited a partnership or tiered
20partner fails to timely make any report or payment required by
21this section for any reason.
22 Sec. 28. Section 422.25A, subsection 8, paragraph a, Code
232021, is amended to read as follows:
24a. The department shall assess additional Iowa income
25tax, interest, and penalties arising from final federal
26partnership adjustments in the same manner as provided in
27this title unless a different treatment is provided by this
28subsection. Since final federal partnership adjustments are
29determined at the audited partnership level, any assessment
30issued to partners shall not be appealable by the partner.
31The department may assess any taxes, including on-behalf-of
32amounts, interest, and penalties arising from the final federal
33partnership adjustments if it issues a notice of assessment to
34the audited partnership, tiered partner, or other direct or
35indirect partner on or before the expiration of the applicable
-16-1limitations period specified in section 422.25.
2 Sec. 29. Section 422.25C, subsection 4, Code 2021, is
3amended to read as follows:
44. If the department, the partnership or pass-through
5entity, and owners representing a majority of the ownership
6interests in the partnership or pass-through entity owners
7 agree, the provisions of this section may be applied to tax
8years beginning before January 1, 2020.
9 Sec. 30. Section 422.35, subsection 26, Code 2021, is
10amended to read as follows:
1126. Any income adjustment subtracted from federal taxable
12income for an adjustment year pursuant to section 6225 of the
13Internal Revenue Code and the regulations thereunder shall be
14added back in computing net income of the partnership and the
15partners for state tax purposes for the adjustment year.
16 Sec. 31. EFFECTIVE DATE. This division of this Act, being
17deemed of immediate importance, takes effect upon enactment.
18 Sec. 32. RETROACTIVE APPLICABILITY. This division of this
19Act applies retroactively to July 1, 2020, and applies to
20federal adjustments and federal partnership adjustments that
21have a final determination date after July 1, 2020.
22DIVISION VII
23VEHICLE REGISTRATION RENEWALS AND COLLECTIONS BY COUNTY
24TREASURERS — CENTRALIZED COLLECTION UNIT — DEPARTMENT OF
25REVENUE
26 Sec. 33. Section 321.40, subsection 6, paragraph b, Code
272021, is amended to read as follows:
28b. The A county treasurer of the county of the person’s
29residence and in which the person’s vehicle is registered,
30in cooperation with the department of revenue, may collect
31from a person applying for renewal of a vehicle registration
32 delinquent taxes, including penalties and interest owed to
33the state from a person applying for renewal of a vehicle
34registration, and nontax liabilities being collected by
35the central collection unit of the department of revenue
-17-1pursuant to section 421.17, subsection 27. The applicant
2may remit full payment of the taxes balance owed including
3applicable penalties and interest, along with a processing
4fee of five dollars, to the county treasurer at the time of
5registration renewal. Upon full payment of the required taxes
6 balance owed including applicable penalties and interest, the
7processing fee, and the vehicle registration fee, the county
8treasurer shall issue the registration to the person. A county
9treasurer collecting on behalf of the department of revenue
10shall update the vehicle registration records through the
11distributed teleprocessing network on a daily basis for all
12persons who have paid taxes or other balances owed pursuant to
13this subsection. A county treasurer shall forward all funds
14collected for the department of revenue to the department of
15revenue.
16 Sec. 34. Section 421.17, subsection 27, paragraph k, Code
172021, is amended to read as follows:
18k. A Pursuant to section 321.40, subsection 6, and rules
19adopted pursuant to this paragraph, a county treasurer may
20collect delinquent taxes, including penalties and interest,
21administered by the department in conjunction with renewal
22of a vehicle registration as provided in section 321.40,
23subsection 6, paragraph “b”, and rules adopted pursuant to
24this paragraph and nontax liabilities being collected by
25the central collection unit of the department of revenue.
26County treasurers shall be given access to information
27required for the collection of delinquent taxes, including
28penalties and interest, as necessary to accomplish the
29purposes of section 321.40, subsection 6, paragraph “b”. The
30confidentiality provisions of sections 422.20 and 422.72 do not
31apply to information provided by the department to a county
32treasurer pursuant to this paragraph. A county treasurer
33collecting taxes, penalties, and interest administered by
34the department is subject to the requirements and penalties
35of the confidentiality laws of this state regarding tax or
-18-1indebtedness information. The director shall adopt rules to
2implement the collection of tax debt as collections authorized
3in section 321.40 and this paragraph.
4DIVISION VIII
5GARNISHMENT
6 Sec. 35. Section 626.31, Code 2021, is amended to read as
7follows:
8626.31 Return of garnishment — action docketed — distress
9action.
10Where parties have been garnished under a distress
11warrant issued by the director of revenue or the director of
12inspections and appeals, the officer shall make return thereof
13to the court in the county where the garnishee lives, if the
14garnishee lives in Iowa, otherwise in the county where the
15taxpayer resides, if the taxpayer lives in Iowa; and if neither
16the garnishee nor the taxpayer lives in Iowa, then to the
17district court in Polk county, Iowa; the officer shall make
18return in the same manner as a return is made on a garnishment
19made under a writ of execution so far as they relate to
20garnishments, and the clerk of the district court shall docket
21an action thereon without fee the same as if a judgment had
22been recovered against the taxpayer in the county where the
23return is made, an execution issued thereon, and garnishment
24made thereunder, and thereafter the proceedings shall conform
25to proceedings in garnishment under attachments as nearly as
26may be. The warrant shall be considered in all respects as a
27final judgment.
28DIVISION IX
29SNOWMOBILES, ALL-TERRAIN VEHICLES, AND VESSELS — PURCHASES —
30PAYMENT OF SALES OR USE TAX
31 Sec. 36. Section 321G.4, subsection 2, paragraph b, Code
322021, is amended to read as follows:
33b. If the owner of the snowmobile is unable to present
34satisfactory evidence that the sales or use tax has been paid,
35the county recorder shall collect the tax. On or before the
-19-1tenth day of each month, the county recorder shall remit to
2the department of revenue the amount of the taxes collected
3during the preceding month, together with an itemized statement
4on forms furnished by the department of revenue showing the
5name of each taxpayer, the make and purchase price of each
6snowmobile, the amount of tax paid, and such other information
7as the department of revenue requires in a manner prescribed
8by the department.
9 Sec. 37. Section 321I.4, subsection 2, paragraph b, Code
102021, is amended to read as follows:
11b. If the owner of the all-terrain vehicle is unable to
12present satisfactory evidence that the sales or use tax has
13been paid, the county recorder shall collect the tax. On or
14before the tenth day of each month, the county recorder shall
15remit to the department of revenue the amount of the taxes
16collected during the preceding month, together with an itemized
17statement on forms furnished by the department of revenue
18showing the name of each taxpayer, the make and purchase price
19of each all-terrain vehicle, the amount of tax paid, and such
20other information as the department of revenue requires in a
21manner prescribed by the department.
22 Sec. 38. Section 462A.55, Code 2021, is amended to read as
23follows:
24462A.55 Sales or use tax to be paid before registration.
25No vessel shall be registered by the county recorder until
26there has been presented to the recorder receipts, bills of
27sale, or other satisfactory evidence that the sales or use tax
28has been paid for the purchase of the vessel. If the owner
29of the vessel is unable to present satisfactory evidence that
30the sales or use tax has been paid, the county recorder shall
31collect the tax. On or before the tenth day of each month, the
32county recorder shall remit to the department of revenue the
33amount of the taxes so collected during the preceding month,
34together with an itemized statement on forms furnished by the
35department of revenue showing the name of each taxpayer, the
-20-1make and purchase price of each vessel and motor, the amount
2of tax paid, and such other information as the department of
3revenue shall require in a manner prescribed by the department.
4DIVISION X
5TANGIBLE PERSONAL PROPERTY — RENTALS — SALES AND USE TAX
6 Sec. 39. Section 9C.1, subsection 1, Code 2021, is amended
7to read as follows:
81. As used in this chapter, the term “transient merchant”
9shall mean and include every merchant, whether an individual
10person, a firm, corporation, partnership, or association, and
11whether owner, agent, bailee, consignee, or employee, who shall
12bring or cause to be brought within the state of Iowa any
13goods, wares, or merchandise tangible personal property of any
14kind, nature, or description, with the intention of temporarily
15or intermittently selling or offering to sell at retail such
16goods, wares, or merchandise tangible personal property within
17the state of Iowa. The term “transient merchant” shall also
18mean and include every merchant, whether an individual person,
19a firm, corporation, partnership, or an association, who shall
20by itself, or by agent, consignee, or employee, temporarily or
21intermittently engage in or conduct at one or more locations a
22business within the state of Iowa for the sale at retail of any
23goods, wares, or merchandise tangible personal property of any
24nature or description.
25 Sec. 40. Section 9C.2, Code 2021, is amended to read as
26follows:
279C.2 License required.
28It shall be unlawful for any transient merchant to sell,
29dispose of, or offer for sale any goods, wares or merchandise
30 tangible personal property of any kind, nature or description,
31at any time or place within the state of Iowa, outside the
32limits of any city in the state of Iowa, or within the limits
33of any city in the state of Iowa that has not by ordinance
34provided for the licensing of transient merchants, unless such
35transient merchant has a valid license as provided in this
-21-1chapter and has complied with the regulations set forth in this
2chapter.
3 Sec. 41. Section 9C.3, unnumbered paragraph 1, Code 2021,
4is amended to read as follows:
5Any transient merchant desiring a transient merchant’s
6license shall at least ten days prior to the first day any sale
7is made, file with the secretary of state of the state of Iowa
8an application in writing duly verified by the person, firm,
9corporation, partnership, or association proposing to sell
10or offer to sell at retail any goods, wares, or merchandise
11 tangible personal property, or to engage in or conduct a
12temporary or intermittent business for the sale at retail of
13any goods, wares, or merchandise tangible personal property.
14The application shall state the following facts:
15 Sec. 42. Section 9C.3, subsections 2, 5, 6, and 7, Code
162021, are amended to read as follows:
172. If the application be made by an agent, bailee,
18consignee, or employee, the application shall so state and set
19out the name and address of such agent, bailee, consignee, or
20employee and shall also set out the name and address of the
21owner of the goods, wares, and merchandise tangible personal
22property to be sold or offered for sale.
235. The value of the goods tangible personal property to be
24sold or offered for sale or the average inventory to be carried
25by any such transient merchant engaging in or conducting an
26intermittent or temporary business as the case may be.
276. The date or dates upon which said goods, wares, or
28merchandise tangible personal property shall be sold or offered
29for sale, or the date or dates upon which it is the intention
30of the applicant to engage in or conduct a temporary or
31intermittent business.
327. The location and address where such goods, wares, or
33merchandise tangible personal property shall be sold or offered
34for sale, or such business engaged in or conducted.
35 Sec. 43. Section 9C.4, subsection 1, Code 2021, is amended
-22-1to read as follows:
21. At the time and as part of filing the application, the
3applicant shall file with the secretary of state a bond, with
4sureties to be approved by the secretary of state, in a penal
5sum two times the value of the goods, wares or merchandise
6 tangible personal property to be sold or offered for sale or
7the average inventory to be carried by such transient merchant
8engaged in or conducting an intermittent or temporary business
9as the case may be as shown by the application, running to the
10state of Iowa, for the use and benefit of any purchaser of any
11merchandise tangible personal property from such transient
12merchant who might have a cause of action of any nature arising
13from or out of such sale against the applicant or the owner of
14such merchandise property if other than the applicant. The
15bond shall be conditioned on the payment by the applicant of
16all taxes that may be payable by, or due from, the applicant
17to the state of Iowa or any subdivision thereof, and shall
18be further conditioned for the payment of any fines that may
19be assessed by any court against the applicant for violation
20of the provision of this chapter, as well as for the payment
21and satisfaction of any and all causes of action against the
22applicant commenced within one year from the date of sale
23thereof, and arising from such sale. However, the aggregate
24liability of the surety for all such taxes, fines, and causes
25of action shall in no event exceed the principal sum of such
26bond.
27 Sec. 44. Section 9C.6, Code 2021, is amended to read as
28follows:
299C.6 License fee.
30Prior to issuing the said transient merchant’s license,
31the secretary of state shall collect for the state of Iowa a
32license fee in the sum of twenty-five dollars for each day the
33applicant, as shown by the application, shall propose to sell
34or offer for sale any goods, wares or merchandise tangible
35personal property, or for each day the applicant, as shown by
-23-1the application, proposes to engage in and conduct a business
2as a transient merchant as the case may be.
3 Sec. 45. Section 9C.7, Code 2021, is amended to read as
4follows:
59C.7 Misrepresentation.
6It shall be unlawful for any transient merchant making sales
7or engaging in or conducting a business under a transient
8merchant’s license to make any false or misleading statements
9or representation regarding any article sold or offered for
10sale by such transient merchant as to condition, quality,
11original cost, or cost to such transient merchant of any
12article sold or offered for sale or to sell or offer for
13sale goods, wares or merchandise tangible personal property
14 of a value in excess of the value thereof as shown by said
15application, or to sell or offer for sale at retail any goods,
16wares or merchandise tangible personal property, or to engage
17in or conduct an intermittent or temporary business on any days
18or at any place other than those shown by such license.
19 Sec. 46. Section 15.331A, subsection 1, Code 2021, is
20amended to read as follows:
211. The eligible business shall be entitled to a refund
22of the sales and use taxes paid under chapter 423 for gas,
23electricity, water, or sewer utility services, goods, wares,
24or merchandise tangible personal property, or on services
25rendered, furnished, or performed to or for a contractor or
26subcontractor and used in the fulfillment of a written contract
27relating to the construction or equipping of a facility that is
28part of a project of the eligible business. Taxes attributable
29to intangible property and furniture and furnishings shall not
30be refunded. However, an eligible business shall be entitled
31to a refund for taxes attributable to racks, shelving, and
32conveyor equipment to be used in a warehouse or distribution
33center subject to section 15.331C.
34 Sec. 47. Section 15.331A, subsection 2, paragraphs a and b,
35Code 2021, are amended to read as follows:
-24- 1a. The contractor or subcontractor shall state under
2oath, on forms provided by the department of revenue, the
3amount of the sales of goods, wares, or merchandise tangible
4personal property or services rendered, furnished, or performed
5including water, sewer, gas, and electric utility services
6upon which sales or use tax has been paid prior to the project
7completion, and shall file the forms with the eligible business
8before final settlement is made.
9b. The eligible business shall, not more than one year
10after project completion, make application to the department
11of revenue for any refund of the amount of the sales and use
12taxes paid pursuant to chapter 423 upon any goods, wares, or
13merchandise tangible personal property, or services rendered,
14furnished, or performed, including water, sewer, gas, and
15electric utility services. The application shall be made in
16the manner and upon forms to be provided by the department of
17revenue, and the department of revenue shall audit the claim
18and, if approved, issue a warrant to the eligible business in
19the amount of the sales or use tax which has been paid to the
20state of Iowa under a contract. A claim filed by the eligible
21business in accordance with this section shall not be denied
22by reason of a limitation provision set forth in chapter 421
23or 423.
24 Sec. 48. Section 15.331C, Code 2021, is amended to read as
25follows:
2615.331C Corporate tax credit for certain sales taxes paid by
27third-party developer.
281. An eligible business may claim a corporate tax credit
29in an amount equal to the sales and use taxes paid by a
30third-party developer under chapter 423 for gas, electricity,
31water, or sewer utility services, goods, wares, or merchandise
32 tangible personal property, or on services rendered, furnished,
33or performed to or for a contractor or subcontractor and
34used in the fulfillment of a written contract relating to
35the construction or equipping of a facility of the eligible
-25-1business. Taxes attributable to intangible property and
2furniture and furnishings shall not be included, but taxes
3attributable to racks, shelving, and conveyor equipment to be
4used in a warehouse or distribution center shall be included.
5Any credit in excess of the tax liability for the tax year
6may be credited to the tax liability for the following seven
7years or until depleted, whichever occurs earlier. An eligible
8business may elect to receive a refund of all or a portion of an
9unused tax credit.
102. A third-party developer shall state under oath, on forms
11provided by the department of revenue, the amount of taxes paid
12as described in subsection 1 and shall submit such forms to
13the department of revenue. The taxes paid shall be itemized
14to allow identification of the taxes attributable to racks,
15shelving, and conveyor equipment to be used in a warehouse
16or distribution center. After receiving the form from the
17third-party developer, the department of revenue shall issue
18a tax credit certificate to the eligible business equal to
19the sales and use taxes paid by a third-party developer under
20chapter 423 for gas, electricity, water, or sewer utility
21services, goods, wares, or merchandise tangible personal
22property, or on services rendered, furnished, or performed
23to or for a contractor or subcontractor and used in the
24fulfillment of a written contract relating to the construction
25or equipping of a facility. The department of revenue
26shall also issue a tax credit certificate to the eligible
27business equal to the taxes paid and attributable to racks,
28shelving, and conveyor equipment to be used in a warehouse
29or distribution center. The aggregate combined total amount
30of tax refunds under section 15.331A for taxes attributable
31to racks, shelving, and conveyor equipment to be used in a
32warehouse or distribution center and of tax credit certificates
33issued by the department of revenue for the taxes paid and
34attributable to racks, shelving, and conveyor equipment
35to be used in a warehouse or distribution center shall not
-26-1exceed five hundred thousand dollars in a fiscal year. If
2an applicant for a tax credit certificate does not receive
3a certificate for the taxes paid and attributable to racks,
4shelving, and conveyor equipment to be used in a warehouse
5or distribution center, the application shall be considered
6in succeeding fiscal years. The eligible business shall not
7claim a tax credit under this section unless a tax credit
8certificate issued by the department of revenue is included
9with the taxpayer’s tax return for the tax year for which the
10tax credit is claimed. A tax credit certificate shall contain
11the eligible business’s name, address, tax identification
12number, the amount of the tax credit, and other information
13deemed necessary by the department of revenue.
14 Sec. 49. Section 321.105A, subsection 3, paragraph f,
15subparagraph (1), Code 2021, is amended to read as follows:
16(1) Vehicles leased to entities listed in section 423.3,
17subsections 17, 18, 19, 20, 21, 22, 26, 27, 28, 31, and 79, to
18the extent that those entities are exempt from the tax imposed
19on the sale of tangible personal property, consisting of goods,
20wares, or merchandise, sold at retail in the state to consumers
21or users.
22 Sec. 50. Section 423.1, subsection 21, Code 2021, is amended
23by striking the subsection.
24 Sec. 51. Section 423.1, subsection 50, Code 2021, is amended
25to read as follows:
2650. a. “Sales” or “sale” means any transfer, exchange, or
27barter, conditional or otherwise, in any manner or by any means
28whatsoever, for consideration, including but not limited to any
29such transfer, exchange, or barter on a subscription basis.
30b. “Sales” or “sale” includes a rental.
31 Sec. 52. Section 423.2, subsection 1, unnumbered paragraph
321, Code 2021, is amended to read as follows:
33There is imposed a tax of six percent upon the sales price of
34all sales of tangible personal property, consisting of goods,
35wares, or merchandise, sold at retail in the state to consumers
-27-1or users except as otherwise provided in this subchapter.
2 Sec. 53. Section 423.3, subsections 13, 46, 47A, 75, and 76,
3Code 2021, are amended to read as follows:
413. The sales price from the sale or rental of irrigation
5equipment, whether installed above or below ground, to a
6contractor or farmer if the equipment will be primarily used in
7agricultural operations.
846. The sales price from sales or rentals to a printer or
9publisher of the following:acetate; anti-halation backing;
10antistatic spray; back lining; base material used as a carrier
11for light sensitive emulsions; blankets; blow-ups; bronze
12powder; carbon tissue; codas; color filters; color separations;
13contacts; continuous tone separations; creative art; custom
14dies and die cutting materials; dampener sleeves; dampening
15solution; design and styling; diazo coating; dot etching; dot
16etching solutions; drawings; drawsheets; driers; duplicate
17films or prints; electronically digitized images; electrotypes;
18end product of image modulation; engravings; etch solutions;
19film; finished art or final art; fix; fixative spray; flats;
20flying pasters; foils; goldenrod paper; gum; halftones;
21illustrations; ink; ink paste; keylines; lacquer; lasering
22images; layouts; lettering; line negatives and positives;
23linotypes; lithographic offset plates; magnesium and zinc
24etchings; masking paper; masks; masters; mats; mat service;
25metal toner; models and modeling; mylar; negatives; nonoffset
26spray; opaque film process paper; opaquing; padding compound;
27paper stock; photographic materials: acids, plastic film,
28desensitizer emulsion, exposure chemicals, fix, developers,
29and paper; photography, day rate; photopolymer coating;
30photographs; photostats; photo-display tape; phototypesetter
31materials; pH-indicator sticks; positives; press pack; printing
32cylinders; printing plates, all types; process lettering;
33proof paper; proofs and proof processes, all types; pumice
34powder; purchased author alterations; purchased composition;
35purchased phototypesetting; purchased stripping and pasteups;
-28-1red litho tape; reducers; roller covering; screen tints;
2sketches; stepped plates; stereotypes; strip types; substrate;
3tints; tissue overlays; toners; transparencies; tympan;
4typesetting; typography; varnishes; veloxes; wood mounts; and
5any other items used in a like capacity to any of the above
6enumerated items by the printer or publisher to complete a
7finished product for sale at retail. Expendable tools and
8supplies which are not enumerated in this subsection are
9excluded from the exemption. “Printer” means that portion of a
10person’s business engaged in printing that completes a finished
11product for ultimate sale at retail or means that portion of a
12person’s business used to complete a finished printed packaging
13material used to package a product for ultimate sale at retail.
14“Printer” does not mean an in-house printer who prints or
15copyrights its own materials.
1647A. The sales price from the sale or rental of central
17office equipment or transmission equipment primarily used
18by local exchange carriers and competitive local exchange
19service providers as defined in section 476.96, Code 2017;
20by franchised cable television operators, mutual companies,
21municipal utilities, cooperatives, and companies furnishing
22communications services that are not subject to rate regulation
23as provided in chapter 476; by long distance companies as
24defined in section 477.10; or for a commercial mobile radio
25service as defined in 47 C.F.R. §20.3 in the furnishing of
26telecommunications services on a commercial basis. For the
27purposes of this subsection, “central office equipment” means
28equipment utilized in the initiating, processing, amplifying,
29switching, or monitoring of telecommunications services.
30“Transmission equipment” means equipment utilized in the process
31of sending information from one location to another location.
32“Central office equipment” and “transmission equipment” also
33include ancillary equipment and apparatus which support,
34regulate, control, repair, test, or enable such equipment to
35accomplish its function.
-29- 175. The sales price from the sale or rental of aircraft;
2the sale or rental of tangible personal property permanently
3affixed or attached as a component part of the aircraft,
4including but not limited to repair or replacement materials
5or parts; and the sales price of all services used for
6aircraft repair, remodeling, and maintenance services when
7such services are performed on aircraft, aircraft engines, or
8aircraft component materials or parts. For the purposes of
9this exemption, “aircraft” means aircraft used in a scheduled
10interstate federal aviation administration certificated air
11carrier operation.
1276. The sales price from the sale or rental of tangible
13personal property permanently affixed or attached as a
14component part of the aircraft, including but not limited
15to repair or replacement materials or parts; and the sales
16price of all services used for aircraft repair, remodeling,
17and maintenance services when such services are performed on
18aircraft, aircraft engines, or aircraft component materials or
19parts. For the purposes of this exemption, “aircraft” means
20aircraft used in nonscheduled interstate federal aviation
21administration certificated air carrier operation operating
22under 14 C.F.R.ch.1, pt.135.
23 Sec. 54. Section 423.3, subsection 47, paragraph a,
24unnumbered paragraph 1, Code 2021, is amended to read as
25follows:
26The sales price from the sale or rental of computers,
27computer peripherals, machinery, equipment, replacement parts,
28supplies, and materials used to construct or self-construct
29computers, computer peripherals, machinery, equipment,
30replacement parts, and supplies, if such items are any of the
31following:
32 Sec. 55. Section 423.3, subsection 47, paragraph c,
33unnumbered paragraph 1, Code 2021, is amended to read as
34follows:
35The sales price from the sale or rental of the following
-30-1shall not be exempt from the tax imposed by this subchapter:
2 Sec. 56. Section 423.3, subsection 60, unnumbered paragraph
31, Code 2021, is amended to read as follows:
4The sales price from the sale or rental of prescription
5drugs, durable medical equipment, mobility enhancing equipment,
6prosthetic devices, and other medical devices intended for
7human use or consumption. For the purposes of this subsection:
8 Sec. 57. Section 423.3, subsection 78, paragraphs a and c,
9Code 2021, are amended to read as follows:
10a. The sales price from the sale of tangible personal
11property, specified digital products, or services rendered by
12any entity where the profits from the sale of the tangible
13personal property, specified digital products, or services
14rendered, are used by or donated to a nonprofit entity that
15is exempt from federal income taxation pursuant to section
16501(c)(3) of the Internal Revenue Code, a government entity,
17or a nonprofit private educational institution, and where the
18entire proceeds from the sale or services profits are expended
19for any of the following purposes:
20(1) Educational.
21(2) Religious.
22(3) Charitable. A charitable act is an act done out of
23goodwill, benevolence, and a desire to add to or to improve
24the good of humankind in general or any class or portion of
25humankind, with no pecuniary profit inuring to the person
26performing the service or giving the gift.
27c. Except as otherwise provided in subsection 97, this
28exemption does not apply to the sales price from games of
29skill, games of chance, raffles, and bingo games as defined
30in chapter 99B. This exemption is disallowed on the amount
31of the sales price only to the extent the profits from the
32sales, rental, or services are not used by or donated to the
33appropriate entity and expended for educational, religious, or
34charitable purposes.
35 Sec. 58. Section 423.3, subsection 82, paragraph a, Code
-31-12021, is amended to read as follows:
2a. The sales price from the sale or rental of core-making,
3mold-making, and sand-handling machinery and equipment,
4including replacement parts, directly and primarily used in the
5mold-making process by a foundry.
6 Sec. 59. Section 423.3, subsection 88, Code 2021, is amended
7to read as follows:
888. The sales price from the sale of building materials,
9supplies, goods, wares, or merchandise tangible personal
10property sold to a nonprofit Iowa affiliate of a nonprofit
11international organization whose primary activity is the
12promotion of the construction, remodeling, or rehabilitation
13of one-family or two-family dwellings for use by low-income
14families and where the building materials, supplies, goods,
15wares, or merchandise or tangible personal property are used
16in the construction, remodeling, or rehabilitation of such
17dwellings.
18 Sec. 60. Section 423.3, subsection 89, paragraphs a and b,
19Code 2021, are amended to read as follows:
20a. The sales price of all goods, wares, or merchandise
21 tangible personal property sold, or of services furnished,
22which are used in the fulfillment of a written construction
23contract for the original construction of a building or
24structure to be used as a collaborative educational facility.
25b. The sales price of all goods, wares, or merchandise
26 tangible personal property sold, or of services furnished,
27which are used in the fulfillment of a written construction
28contract for the construction of additions or modifications
29to a building or structure used as part of a collaborative
30educational facility.
31 Sec. 61. Section 423.3, subsection 92, paragraph a,
32subparagraph (1), Code 2021, is amended to read as follows:
33(1) The sales price from the sale or rental of computers
34and equipment that are necessary for the maintenance and
35operation of a web search portal and property whether directly
-32-1or indirectly connected to the computers, including but
2not limited to cooling systems, cooling towers, and other
3temperature control infrastructure; power infrastructure for
4transformation, distribution, or management of electricity used
5for the maintenance and operation of the web search portal,
6including but not limited to exterior dedicated business-owned
7substations, backup power generation systems, battery systems,
8and related infrastructure; and racking systems, cabling, and
9trays, which are necessary for the maintenance and operation of
10the web search portal.
11 Sec. 62. Section 423.3, subsection 92, paragraph b,
12subparagraph (1), Code 2021, is amended to read as follows:
13(1) The business of the purchaser or renter shall be as a
14provider of a web search portal.
15 Sec. 63. Section 423.3, subsection 92, paragraph d, Code
162021, is amended to read as follows:
17d. Failure to meet eighty percent of the minimum investment
18amount requirement specified in paragraph “b” within the first
19six years of operation from the date the web search portal
20business initiates site preparation activities will result in
21the web search portal business losing the right to claim this
22exemption and the web search portal business shall pay all
23sales or use tax that would have been due on the purchase or
24rental or use of the items listed in this exemption, plus any
25applicable penalty and interest imposed by statute.
26 Sec. 64. Section 423.3, subsection 93, paragraph a,
27subparagraph (1), Code 2021, is amended to read as follows:
28(1) The sales price from the sale or rental of computers
29and equipment that are necessary for the maintenance and
30operation of a web search portal business and property whether
31directly or indirectly connected to the computers, including
32but not limited to cooling systems, cooling towers, and other
33temperature control infrastructure; power infrastructure for
34transformation, distribution, or management of electricity used
35for the maintenance and operation of the web search portal
-33-1business, including but not limited to exterior dedicated
2business-owned substations, backup power generation systems,
3battery systems, and related infrastructure; and racking
4systems, cabling, and trays, which are necessary for the
5maintenance and operation of the web search portal business.
6 Sec. 65. Section 423.3, subsection 93, paragraph b,
7subparagraph (1), Code 2021, is amended to read as follows:
8(1) The purchaser or renter shall be a web search portal
9business.
10 Sec. 66. Section 423.3, subsection 93, paragraph d, Code
112021, is amended to read as follows:
12d. Failure to meet eighty percent of the minimum investment
13amount requirement specified in paragraph “b” within the first
14six years of operation from the date the web search portal
15business initiates site preparation activities will result in
16the web search portal business losing the right to claim this
17web search portal business exemption and the web search portal
18business shall pay all sales or use tax that would have been
19due on the purchase or rental or use of the items listed in this
20exemption, plus any applicable penalty and interest imposed by
21statute.
22 Sec. 67. Section 423.3, subsection 95, paragraph a,
23subparagraph (1), Code 2021, is amended to read as follows:
24(1) The sales price from the sale or rental of computers
25and equipment that are necessary for the maintenance and
26operation of a data center business and property whether
27directly or indirectly connected to the computers, including
28but not limited to cooling systems, cooling towers, and other
29temperature control infrastructure; power infrastructure for
30transformation, distribution, or management of electricity used
31for the maintenance and operation of the data center business,
32including but not limited to exterior dedicated business-owned
33substations, backup power generation systems, battery systems,
34and related infrastructure; and racking systems, cabling, and
35trays, which are necessary for the maintenance and operation of
-34-1the data center business.
2 Sec. 68. Section 423.3, subsection 95, paragraph b,
3subparagraph (1), Code 2021, is amended to read as follows:
4(1) The purchaser or renter shall be a data center business.
5 Sec. 69. Section 423.3, subsection 95, paragraph d, Code
62021, is amended to read as follows:
7d. Failure to meet eighty percent of the minimum investment
8amount requirement specified in paragraph “b” within the first
9six years of operation from the date the data center business
10initiates site preparation activities will result in the data
11center business losing the right to claim this data center
12business exemption and the data center business shall pay all
13sales or use tax that would have been due on the purchase or
14rental or use of the items listed in this exemption, plus any
15applicable penalty and interest imposed by statute.
16 Sec. 70. Section 423.4, subsection 1, paragraph b,
17subparagraph (3), Code 2021, is amended to read as follows:
18(3) The building materials, supplies, equipment, or
19services furnished are not used in the performance of any
20contract in connection with the operation of any municipal
21utility engaged in selling gas, electricity, or heat to
22the general public or in connection with the operation of
23a municipal pay television system; and are not used in the
24performance of a contract for a “project” “project” under
25chapter 419 as defined in that chapter other than goods, wares,
26or merchandise building materials, supplies, or equipment used
27in the performance of a contract for a “project” “project”
28 under chapter 419 for which a bond issue was approved by
29a municipality prior to July 1, 1968, or for which the
30goods, wares, or merchandise building materials, supplies,
31or equipment becomes an integral part of the project under
32contract and at the completion of the project becomes public
33property or is devoted to educational uses.
34 Sec. 71. Section 423.4, subsection 1, paragraph c, Code
352021, is amended to read as follows:
-35- 1c. A contractor shall state under oath, on forms provided
2by the department, the amount of such sales of goods, wares,
3or merchandise building materials, supplies, or equipment,
4or services furnished and used in the performance of such
5contract, and upon which sales or use tax has been paid,
6and shall file such forms with the designated exempt entity
7which has made any written contract for performance by the
8contractor. The forms shall be filed by the contractor with
9the designated exempt entity before final settlement is made.
10 Sec. 72. Section 423.31, subsection 4, Code 2021, is amended
11to read as follows:
124. Every retailer at the time of making any return required
13by this section shall compute and pay to the department the tax
14due for the preceding period. The tax on sales prices from the
15sale or rental of tangible personal property under a consumer
16rental purchase agreement as defined in section 537.3604,
17subsection 8, is payable in the tax period of receipt.
18 Sec. 73. Section 423B.8, subsection 1, Code 2021, is amended
19to read as follows:
201. Construction contractors may make application to the
21department for a refund of the additional local sales and
22services tax paid under this chapter by reason of taxes paid on
23goods, wares, or merchandise building materials, supplies, or
24equipment under the following conditions:
25a. The goods, wares, or merchandise building materials,
26supplies, or equipment are incorporated into an improvement to
27real estate in fulfillment of a written contract fully executed
28prior to the date of the imposition of a local sales and
29services tax under this chapter. The refund shall not apply to
30equipment transferred in fulfillment of a mixed construction
31contract.
32b. The contractor has paid to the department or to a
33retailer the full amount of the state and local tax.
34c. The claim is filed on forms provided by the department
35and is filed within one year of the date the tax is paid.
-36-1DIVISION XI
2INTEREST RATE SET BY DIRECTOR OF REVENUE
3 Sec. 74. Section 421.7, subsection 6, Code 2021, is amended
4to read as follows:
56. In October November of each year the director shall cause
6an advisory notice to be published in the Iowa administrative
7bulletin and in a newspaper of general circulation in this
8state, stating the rate of interest to be in effect on or
9after January 1 of the following year, as established by this
10section. The calculation and publication of the rate of
11interest by the director is exempt from chapter 17A.
12DIVISION XII
13 ASSESSORS
14 Sec. 75. Section 441.6, subsection 3, Code 2021, is amended
15to read as follows:
163. The appointee selected by the conference board under
17subsection 2 or appointed to a succeeding term under section
18441.8, subsection 1, shall not assume the office of city or
19county assessor until such appointment is confirmed by the
20director of revenue. If the director of revenue rejects
21the appointment, the examining board shall conduct a new
22examination and submit a new report to the conference board
23under subsection 1. The director of revenue shall adopt rules
24pursuant to chapter 17A to implement and administer this
25subsection.
26 Sec. 76. Section 441.17, subsection 2, Code 2021, is amended
27to read as follows:
282. Cause to be assessed, in accordance with section 441.21,
29all the property in the assessor’s county or city, except
30property exempt from taxation, or the assessment of which is
31otherwise provided for by law. However, an assessor or deputy
32assessor shall not personally assess a property if the person
33or a member of the person’s immediate family owns the property,
34has a financial interest in the property, or has a financial
35interest in the entity that owns the property. The director of
-37-1revenue shall adopt rules pursuant to chapter 17A to implement
2and administer this subsection.
3 Sec. 77. Section 441.41, Code 2021, is amended to read as
4follows:
5441.41 Legal counsel.
61. In the case of cities having an assessor, the city legal
7department shall represent the assessor and board of review
8in all litigation dealing with assessments. In the case of
9counties, the county attorney shall represent the assessor and
10board of review in all litigation dealing with assessments.
11Any taxing district interested in the taxes received from such
12assessments may be represented by an attorney and shall be
13required to appear by attorney upon written request of the
14assessor to the presiding officer of any such taxing district.
15Subject to review and prior approval by either the city legal
16department in the case of a city or the county attorney in
17the case of a county, the conference board may employ special
18counsel to assist the city legal department or county attorney
19as the case may be.
202. a. Upon the employment of special counsel described
21in subsection 1, the assessor shall provide a report to the
22department of revenue relating to the special counsel including
23but not limited to the following:
24(1) The date the employment started.
25(2) Justification for the employment.
26(3) The name and hourly rate of the special counsel.
27(4) Any other information the department may require.
28b. An assessor shall report annually to the director of
29revenue on the cost of litigation for all matters dealing with
30assessments in which special counsel assisted the city legal
31department or county attorney as described in subsection 1.
32c. The director of revenue shall adopt rules pursuant to
33chapter 17A to administer this section.
34DIVISION XIII
35CONFIDENTIAL INFORMATION — DEPARTMENT OF REVENUE
-38-1 Sec. 78. Section 422.20, subsection 5, paragraph a, Code
22021, is amended by adding the following new subparagraph:
3 NEW SUBPARAGRAPH. (7) A return as defined in section 421.6.
4 Sec. 79. Section 422.20, subsection 5, paragraph c, Code
52021, is amended to read as follows:
6c. Notwithstanding paragraph “a”, when making final orders,
7decisions, or opinions available for public inspection, the
8department may disclose the items in paragraph “a” if the
9department determines such information is relevant or necessary
10to the resolution or decision of the appeal or case.
11 Sec. 80. Section 422.72, subsection 8, paragraph a, Code
122021, is amended by adding the following new subparagraph:
13 NEW SUBPARAGRAPH. (7) A return as defined in section 421.6.
14 Sec. 81. Section 422.72, subsection 8, paragraph c, Code
152021, is amended to read as follows:
16c. Notwithstanding paragraph “a”, when making final orders,
17decisions, or opinions available for public inspection, the
18department may disclose the items in paragraph “a” if the
19department determines such information is relevant or necessary
20to the resolution or decision of the appeal or case.
21DIVISION XIV
22POWER OF ATTORNEY — DEPARTMENT OF REVENUE
23 Sec. 82. Section 421.59, subsections 2 and 3, Code 2021, are
24amended to read as follows:
252. The Unless otherwise prohibited by law, the department
26may authorize the following persons to act and receive
27information on behalf of and exercise all of the rights of a
28taxpayer, regardless of whether a power of attorney has been
29filed pursuant to subsection 1:
30a. A guardian, conservator, or custodian appointed by a
31court, if a taxpayer has been deemed legally incompetent by a
32court. The authority of the appointee to act on behalf of the
33taxpayer shall be limited to the extent specifically stated in
34the order of appointment.
35(1) Upon request, a guardian, conservator, or custodian of
-39-1a taxpayer shall submit to the department a copy of the court
2order appointing the guardian, conservator, or custodian.
3(2) The department may has standing to petition the
4court that appointed the guardian, conservator, or custodian
5to verify the appointment or to determine the scope of the
6appointment.
7b. A receiver appointed pursuant to chapter 680. An
8appointed receiver shall be limited to act on behalf of the
9taxpayer by the authority stated in the order of appointment.
10(1) Upon the request of the department, a receiver shall
11submit to the department a copy of the court order appointing
12the receiver.
13(2) The department may has standing to petition the court
14that appointed the receiver to verify the appointment or to
15determine the scope of the appointment.
16c. An individual who has been named as an authorized
17representative on a fiduciary return of income filed under
18section 422.14 or a tax return filed under chapter 450.
19d. (1) An individual holding the following title or
20position within a corporation, association, partnership, or
21other business entity:
22(a) A president or chief executive officer, or any other
23officer of the corporation or association if the president or
24chief executive officer certifies that the officer has the
25authority to legally bind the corporation or association.
26(b) A designated partner duly authorized to act on behalf
27of the partnership.
28(c) A person authorized to act on behalf of a limited
29liability company in tax matters pursuant to a valid statement
30of authority.
31(2) An individual seeking to act on behalf of a taxpayer
32pursuant to this paragraph shall file an affidavit with the
33department attesting to the identity and qualifications of the
34individual and any necessary certifications required under
35this paragraph affirm the authority of the individual to act
-40-1on behalf of the corporation, association, partnership, or
2other entity in a manner designated by the department. The
3department may require any documents or other evidence to
4demonstrate the individual has authority to act on behalf of
5the taxpayer corporation, association, partnership, or other
6entity before the department.
7e. A licensed attorney who has appeared on behalf of
8the taxpayer or the taxpayer’s probate estate in a court
9proceeding. Authorization under this paragraph is limited to
10those matters within the scope of the representation.
11f. A parent or guardian of a taxpayer who has not reached
12the age of majority where the same parent or guardian has
13signed the taxpayer’s return on behalf of the taxpayer.
14Authorization under this paragraph is limited to those matters
15relating to the return signed by the parent or guardian.
16Authorization under this paragraph automatically terminates
17when the taxpayer reaches the age of majority pursuant to
18section 599.1.
19g. A representative of a government entity. An individual
20seeking to act on behalf of a government entity pursuant to
21this paragraph shall affirm the authority of the individual to
22act on behalf of the government entity in a manner designated
23by the department. The department may require evidence to
24demonstrate the individual has authority to act on behalf of
25the government entity.
26h. An executor or personal representative of an estate.
27(1) Upon request, the executor or personal representative
28shall submit to the department a copy of the will or court
29order appointing the executor or personal representative.
30(2) The department has standing to petition the court that
31appointed the executor or personal representative to verify the
32appointment or to determine the scope of the appointment.
333. a. In lieu of executing a power of attorney pursuant
34to subsection 1, the department may enter into a memorandum
35of understanding with the allow a taxpayer for each employee,
-41-1officer, or member of a third-party to designate an entity
2engaged with or otherwise hired by a taxpayer to manage the
3tax matters of the taxpayer, to permit the disclosure of
4confidential tax information to the third-party entity and
5the authority to act on behalf of the taxpayer. An entity so
6designated may appoint or remove its own employees to carry
7out acts authorized by the taxpayer on the entity’s behalf.
8 The memorandum of understanding shall adhere to requirements
9as established by the director department may designate the
10methods by which such designation and appointments may occur.
11b. The memorandum of understanding shall be signed by
12the director, the taxpayer, and the third-party entity or an
13authorized representative of the third-party entity.
14c. At any time, a taxpayer may unilaterally revoke a
15memorandum of understanding entered into designation pursuant
16to this subsection by filing a notice of revocation with the
17department. Upon the filing of such a revocation by the
18taxpayer, the department shall cease honoring the memorandum
19of understanding designation.
20DIVISION XV
21SALES AND USE TAX REFUNDS
22 Sec. 83. Section 15.331A, subsection 2, paragraph c, Code
232021, is amended to read as follows:
24c. The eligible business shall inform the department
25of revenue in writing within two weeks of after project
26completion. For purposes of this section, “project completion”
27means the first date upon which the average annualized
28production of finished product for the preceding ninety-day
29period at the manufacturing facility operated by the eligible
30business is at least fifty percent of the initial design
31capacity of the facility.
32 Sec. 84. EFFECTIVE DATE. This division of this Act, being
33deemed of immediate importance, takes effect upon enactment.
34 Sec. 85. APPLICABILITY. This division of this Act applies
35to refund claims filed on or after the effective date of this
-42-1division of this Act.
2EXPLANATION
3The inclusion of this explanation does not constitute agreement with
4the explanation’s substance by the members of the general assembly.
5This bill relates to state taxation and related laws of
6the state including the collection of tax, tax credits, the
7assessment, valuation, and classification of property, fees
8for registration of vehicles, sales and use tax, and the
9authority of the director of revenue. The bill is organized
10into divisions.
11TAX CREDIT FOR CERTAIN SALES TAXES PAID BY THIRD-PARTY
12DEVELOPERS. Currently, an eligible business may claim a
13corporate tax credit in an amount equal to the sales and use
14taxes paid by a third-party developer under Code chapter 423
15for the construction or equipping of a facility of an eligible
16business. An “eligible business” is defined under Code section
1715.329 and means in part a business making an investment of $10
18million or more in a community.
19The bill allows an individual to claim the tax credit on an
20individual return for certain sales tax paid by a third-party
21developer, if a partnership, limited liability company, S
22corporation, estate, or trust elects to have income taxed
23directly to the individual.
24Additionally, the bill changes the name of the corporate
25tax credit to third-party developer tax credit because the tax
26credit is now available against the individual income tax.
27This division takes effect upon enactment and applies
28retroactively January 1, 2020, for tax years beginning on or
29after that date.
30GEOTHERMAL HEAT PUMP INSTALLATION TAX CREDIT. The bill
31requires an applicant for a geothermal heat pump tax credit
32to file an application for the credit with the department of
33revenue for each geothermal heat pump installation. The bill
34requires the application to be filed by May 1 following the
35year of installation.
-43- 1This division takes effect upon enactment and applies
2retroactively to January 1, 2019, for tax years beginning on
3or after that date.
4TAXES ON ELECTRICITY PROVIDERS. Under the current
5replacement tax, the proportional tax revenue from a major
6addition is allocated to the local jurisdiction where a major
7addition is located. The bill lowers the threshold for the
8classification of “major additions” of solar energy conversion
9property under the replacement tax from $10 million to $1
10million. The modified threshold allows a local jurisdiction
11to receive tax revenue generated by a solar energy conversion
12facility for major additions that exceed $1 million but does
13not change the amount of tax due on solar energy conversion
14facilities.
15FEE FOR NEW REGISTRATION — VEHICLES. The bill makes
16numerous organizational, technical, and substantive changes to
17Code section 321.105A.
18The bill specifies that to be exempt from the fee for
19new registration, the person listed on the title of a newly
20acquired vehicle must be the same person listed on the title
21and registration of the traded vehicle.
22The bill specifies that in order to be exempt from the fee
23for new registration, a trade must be between spouses rather
24than involve spouses.
25The bill exempts trades between lineal family members from
26the fee for new vehicle registration. Currently, trades
27between a grandparent, parent, child, or stepchild are exempt.
28The bill specifies a sole proprietorship shall not be
29distinguished from an individual owner for purposes of
30calculating the new vehicle registration fee when exempting the
31trade-in value from the purchase price.
32The bill specifies that the fair market value of a
33replacement motor vehicle owned by a motor vehicle dealer
34is exempt from the new vehicle registration fee if certain
35conditions are met under Code section 321.105A(2)(a)(3).
-44- 1The bill specifies that a vehicle is not subject to the new
2registration fee if the vehicle is transferred from an entity
3doing business within the state to another entity in the state
4and all of the following apply: the receiving entity was
5formed by the transferring entity within the previous 24 months
6for the purpose of continuing the business and all ownership
7remains the same, except in the case of a sole proprietorship,
8the spouse of the sole proprietor may stand in place of the
9sole proprietor.
10The bill provides that a vehicle subject to registration in
11this state is exempt from the fee for new vehicle registration
12to the extent the equivalent sales or excise tax of another
13country has been paid to that country. Currently, a vehicle
14subject to registration is exempt from the fee for new vehicle
15registration to the extent state sales, use, or occupational
16tax has been paid to another state.
17The bill provides that a vehicle subject to registration in
18this state which is owned by a person in another country is
19exempt from the fee for new vehicle registration provided the
20vehicle was purchased for use in the country from which the
21owner moved, and was not purchased for use in Iowa. Currently,
22a vehicle subject to registration is exempt from the fee for
23new vehicle registration if the vehicle is owned by a person
24in another state provided the vehicle was purchased for use in
25the state from which the owner moved, and was not purchased for
26use in Iowa.
27The bill specifies that a vehicle purchased by a licensed
28wholesaler of new motor vehicles under Code section 322.27A for
29resale by the same wholesaler is exempt from the fee for new
30registration.
31The bill provides that a vehicle transferred from one
32individual to another individual as a gift is exempt from the
33fee for new vehicle registration.
34The bill provides that a vehicle subject to registration
35is subject to the fee for new registration if the vehicle is
-45-1leased for at least six months. Currently, a vehicle with
2a gross weight rating of less than 16,000 pounds which is
3leased for at least 12 months is subject to the fee for new
4registration.
5The bill specifies if a lease is voided prior to the
6termination date contained in the lease agreement, no refund
7is permitted for the fee for new registration previously paid,
8except under certain circumstances. Currently, no refund of
9such a fee is permitted if the lease is terminated prior to the
10termination date except under certain circumstances.
11The bill creates a new penalty for persons who fail to file
12an application for certificate of title or registration on or
13before the due date in the amount of 10 percent of the fee for
14new registration due.
15The bill creates a new penalty for persons who file an
16application for certificate of title or registration with
17inaccurate information that results in the person paying less
18than the full amount of the fee for new registration. The
19penalty equals 5 percent of the fee for new registration due.
20PENALTIES — IMPUTED IOWA LIABILITY. Currently, in
21determining the amount of penalty to assess under Code section
22421.27, the department of revenue assesses a percentage of the
23imputed Iowa liability of a business who fails to file a return
24or deposit form. The bill adjusts the formula to calculate
25“imputed Iowa liability” by allowing the taxpayer to include
26any tax credits available to the taxpayer prior to calculating
27the penalty amount when using “imputed Iowa liability”.
28PARTNERSHIP AND PASS-THROUGH ENTITY AUDITS AND REPORTING.
29 The bill makes numerous technical changes to partnership and
30pass-through entity audits and reporting requirements enacted
31in 2020 Iowa Acts, chapter 1118.
32The bill allows the director of revenue to establish rules
33for the calculation of amounts due for federal partnership
34adjustments that affect state tax owed that do not fit within
35the calculations provided by Code section 422.5A(5)(c).
-46-1The bill also allows the director of revenue to establish
2rules that include state-specific issues following a state
3partnership audit in the election to pay and calculation of
4amounts due.
5Currently, if the department of revenue, the partnership
6or pass-through entity, and the partnership or pass-through
7entity owners agree, the provisions of Code section 422.25C
8may be applied to tax years beginning before January 1, 2020.
9The bill allows the department of revenue, the partnership or
10pass-through entity, and owners representing a majority of the
11ownership interests in the partnership or pass-through entity
12to enter into an agreement to allow the provisions of Code
13section 422.25C to apply to tax years beginning before January
141, 2020.
15This division takes effect upon enactment and applies
16retroactively to July 1, 2020, and applies to federal
17adjustments and federal partnership adjustments that have a
18final determination date after July 1, 2020.
19COUNTY TREASURER — CENTRALIZED COLLECTION UNIT OF THE
20DEPARTMENT OF REVENUE. Currently, a county treasurer may
21collect delinquent tax revenue owed the state. The bill allows
22a county treasurer to also collect nontax liabilities being
23collected by the centralized collection unit of the department
24of revenue.
25GARNISHMENT. The bill specifies that a distress warrant
26issued by the director of revenue or the director of
27inspections and appeals shall be considered a final judgment.
28A distress warrant generally directs the sheriff to seize,
29garnish, or levy upon, and sell, any real or personal property
30belonging to the taxpayer to satisfy the amount of any
31delinquency.
32SNOWMOBILES, ALL-TERRAIN VEHICLES, AND VESSELS — PURCHASES
33— PAYMENT OF SALES OR USE TAX. Currently, if the owner of
34a vessel (watercraft), snowmobile, or all-terrain vehicle is
35unable to present satisfactory evidence that the sales or use
-47-1tax on the purchase has been paid, the county recorder is
2required to collect the sales or use tax, and remit the amount
3of taxes along with an itemized statement by the 10th day of
4each month showing detailed information about the collection of
5the tax. The bill strikes the requirement the county recorder
6prepare and send such an itemized statement to the department
7of revenue, but does require the county recorder to remit the
8tax in a manner prescribed by the department.
9TANGIBLE PERSONAL PROPERTY. 2020 Iowa Acts, chapter 1118,
10struck numerous instances of the phrase “goods, wares, or
11merchandise” in order to update the language used in the
12Code. The bill changes additional instances of the phrase
13“goods, wares, or merchandise” to “tangible personal property”
14in Code sections 15.331A (sales and use tax refund), 15.331C
15(third-party developer tax credit as changed in the bill),
16and 321.105A (fee for new registration) and Code chapters 9C
17(transient merchants) and 423 (streamlined sales and use tax).
18CONSTRUCTION MATERIALS — SALES AND USE TAX. The bill
19changes other instances of the phrase “goods, wares, or
20merchandise” to “building materials, supplies, or equipment” in
21Code sections 423.4(1) (refunds) and 423B.8(1) (construction
22contractor refunds).
23NONPROFIT ORGANIZATIONS — SALES AND USE TAX EXEMPTION.
24 Currently, a sales and use tax exemption is allowed on the sale
25of tangible personal property, specified digital products,
26or services rendered where the profits from the sale or
27services rendered are used by or donated to a nonprofit, and
28the entire proceeds from the sale or services are expended for
29educational, religious, or charitable purposes.
30The bill enhances the readability of the sales and use tax
31exemption by specifying that the sales and use tax exemption
32applies when the entire profits from the sales or services
33rendered are used by or donated to a nonprofit, and the entire
34profits are expended for educational, religious, or charitable
35purposes.
-48- 1RENTALS — SALES AND USE TAX EXEMPTION. The bill includes
2the term “rental” in the definition of “sale” or “sales” in
3Code chapter 423 (streamlined sales and use tax), and strikes
4the term “rental” when it appears with the phrase “sale or
5rental” in Code sections 423.3 (exemptions) and 423.31(4)
6(filing of sales tax returns and payment of sales tax). The
7change has the effect of making more rental transactions exempt
8from the sales or use tax in Code section 423.3.
9INTEREST RATE SET BY DIRECTOR OF REVENUE. Currently, in
10October of each year the director of revenue sets the rate of
11interest to be used on interest-bearing obligations arising
12under certain Code chapters to be in effect on or after January
131 of the following year. The bill changes the month the rate is
14set by the director from October to November.
15ASSESSORS. The bill strikes a provision prohibiting
16an assessor or deputy assessor from personally assessing a
17property owned by an immediate family member of the assessor or
18deputy assessor. The bill specifies that an assessor appointed
19to a succeeding term should not assume the office until the
20appointment has been confirmed by the director of revenue.
21The bill provides that upon employment of a special counsel,
22the assessor shall provide a report to the department of
23revenue relating to the hiring of the special counsel.
24CONFIDENTIAL INFORMATION — DEPARTMENT OF REVENUE.
25 Currently, the department of revenue redacts certain
26information from the record in an appeal or contested case
27pursuant to Code sections 422.20 (individual tax cases) and
28422.72 (other tax cases). The bill adds a tax return to the
29list of confidential information to be redacted in an appeal or
30contested case under Code sections 422.20 and 422.72.
31The director currently has the authority to disclose
32confidential information when making final orders, decisions,
33or opinions available for public inspection, if it is necessary
34to the resolution or decision of the appeal or case. The bill
35expands the authority of the director of revenue to disclose
-49-1confidential information to include when it is relevant or
2necessary to the resolution or decision of the appeal or case.
3POWER OF ATTORNEY — DEPARTMENT OF REVENUE. In addition
4to the current types of individuals who are specified in
5Code section 421.59(2) to act on behalf of a taxpayer with
6the department of revenue, the bill adds procedures for a
7representative of a government entity to act on behalf of the
8government, and adds procedures for an executor or personal
9representative of an estate to act on behalf of an estate.
10SALES AND USE TAX REFUNDS. Currently, an eligible business
11must notify the department of revenue within two weeks of the
12completion of a project in order to receive a sales and use
13tax refund related to the high quality jobs program. The
14bill changes the notification requirement by the eligible
15business to the department of revenue to after completion of
16the project. The provision takes effect upon enactment and
17applies to refund claims filed on or after the effective date
18of this division of the bill.
-50-jm/jh
2including the collection of tax, tax credits, the assessment
3and classification of property, taxes on electricity
4providers, fees for registration of vehicles, sales and
5use tax, and the authority of the director of revenue,
6and providing penalties, and including effective date and
7retroactive applicability provisions.
8BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2TAX CREDITS FOR CERTAIN SALES TAXES PAID BY THIRD-PARTY
3DEVELOPERS
4 Section 1. Section 15.331C, Code 2021, is amended to read
5as follows:
615.331C Corporate tax credit for certain sales taxes paid by
7third-party developer Third-party developer tax credit.
81. An eligible business may claim a corporate tax credit
9in an amount equal to the sales and use taxes paid by a
10third-party developer under chapter 423 for gas, electricity,
11water, or sewer utility services, goods, wares, or merchandise,
12or on services rendered, furnished, or performed to or for a
13contractor or subcontractor and used in the fulfillment of a
14written contract relating to the construction or equipping of
15a facility of the eligible business. Taxes attributable to
16intangible property and furniture and furnishings shall not
17be included, but taxes attributable to racks, shelving, and
18conveyor equipment to be used in a warehouse or distribution
19center shall be included. Any credit in excess of the tax
20liability for the tax year may be credited to the tax liability
21for the following seven years or until depleted, whichever
22occurs earlier. An eligible business may elect to receive a
23refund of all or a portion of an unused tax credit.
242. A third-party developer shall state under oath, on
25forms provided by the department of revenue, the amount of
26taxes paid as described in subsection 1 and shall submit such
27forms to the department of revenue. The taxes paid shall be
28itemized to allow identification of the taxes attributable
29to racks, shelving, and conveyor equipment to be used in a
30warehouse or distribution center. After receiving the form
31from the third-party developer, the department of revenue shall
32issue a tax credit certificate to the eligible business equal
33to the sales and use taxes paid by a third-party developer
34under chapter 423 for gas, electricity, water, or sewer
35utility services, goods, wares, or merchandise, or on services
-1-1rendered, furnished, or performed to or for a contractor or
2subcontractor and used in the fulfillment of a written contract
3relating to the construction or equipping of a facility.
4The department of revenue shall also issue a tax credit
5certificate to the eligible business equal to the taxes paid
6and attributable to racks, shelving, and conveyor equipment to
7be used in a warehouse or distribution center. The aggregate
8combined total amount of tax refunds under section 15.331A for
9taxes attributable to racks, shelving, and conveyor equipment
10to be used in a warehouse or distribution center and of tax
11credit certificates issued by the department of revenue for the
12taxes paid and attributable to racks, shelving, and conveyor
13equipment to be used in a warehouse or distribution center
14shall not exceed five hundred thousand dollars in a fiscal
15year. If an applicant for a tax credit certificate does not
16receive a certificate for the taxes paid and attributable
17to racks, shelving, and conveyor equipment to be used in a
18warehouse or distribution center, the application shall be
19considered in succeeding fiscal years. The eligible business
20shall not claim a tax credit under this section unless a tax
21credit certificate issued by the department of revenue is
22included with the taxpayer’s tax return for the tax year for
23which the tax credit is claimed. A tax credit certificate
24shall contain the eligible business’s name, address, tax
25identification number, the amount of the tax credit, and other
26information deemed necessary by the department of revenue.
273. An individual may claim a tax credit under this section
28of a partnership, limited liability company, S corporation,
29estate, or trust electing to have income taxed directly to
30the individual. The amount claimed by the individual shall
31be based upon the pro rata share of the individual’s earnings
32from the partnership, limited liability company, S corporation,
33estate, or trust.
34 Sec. 2. Section 15.335A, subsection 2, paragraph d, Code
352021, is amended to read as follows:
-2- 1d. “Sales tax refund” means the sales and use tax refund as
2provided under section 15.331A or the corporate tax credit for
3certain sales taxes paid by third-party developers developer
4tax credit as provided under section 15.331C.
5 Sec. 3. NEW SECTION. 422.11T Third-party developer tax
6credit.
7The taxes imposed under this subchapter, less the credits
8allowed under section 422.12, shall be reduced by the
9third-party developer tax credit authorized pursuant to
10section 15.331C for certain sales taxes paid by a third-party
11developer.
12 Sec. 4. Section 422.33, subsection 19, Code 2021, is amended
13to read as follows:
1419. The taxes imposed under this subchapter shall be reduced
15by a corporate third-party developer tax credit authorized
16pursuant to section 15.331C for certain sales taxes paid by a
17third-party developer.
18 Sec. 5. Section 422.60, subsection 8, Code 2021, is amended
19to read as follows:
208. The taxes imposed under this subchapter shall be reduced
21by a corporate third-party developer tax credit authorized
22pursuant to section 15.331C for certain sales taxes paid by a
23third-party developer.
24 Sec. 6. EFFECTIVE DATE. This division of this Act, being
25deemed of immediate importance, takes effect upon enactment.
26 Sec. 7. RETROACTIVE APPLICABILITY. This division of this
27Act applies retroactively to January 1, 2020, for tax years
28beginning on or after that date.
29DIVISION II
30GEOTHERMAL HEAT PUMP INSTALLATION TAX CREDIT
31 Sec. 8. Section 422.12N, subsection 3, Code 2021, is amended
32to read as follows:
333. a. A taxpayer must submit an application with the
34department for each geothermal heat pump installation. The
35application must be approved by the department prior to
-3-1claiming the credit, and the application must be filed by May 1
2following the year of installation of the geothermal heat pump.
3b. The department shall accept and approve applications
4on a first-come, first-served basis until the maximum amount
5of tax credits that may be claimed pursuant to subsection 4
6is reached. If for a tax year the aggregate amount of tax
7credits applied for exceeds the amount specified in subsection
84, the department shall establish a wait list for tax credits.
9Valid applications filed by the taxpayer by May 1 following the
10year of the installation but not approved by the department
11shall be placed on a wait list in the order the applications
12were received and those applicants shall be given priority
13for having their applications approved in succeeding years.
14Placement on a wait list pursuant to this subsection shall not
15constitute a promise binding the state. The availability of a
16tax credit and approval of a tax credit application pursuant
17to this section in a future year is contingent upon the
18availability of tax credits in that particular year.
19 Sec. 9. LEGISLATIVE INTENT. It is the intent of the general
20assembly that the section of this division amending section
21422.12N is a conforming amendment consistent with current state
22law, and the amendment does not change the application of the
23current law but instead reflects current law both before and
24after enactment of this division of this Act.
25 Sec. 10. EFFECTIVE DATE. This division of this Act, being
26deemed of immediate importance, takes effect upon enactment.
27 Sec. 11. RETROACTIVE APPLICABILITY. This division of this
28Act applies retroactively to January 1, 2019, for tax years
29beginning on or after that date.
30DIVISION III
31TAXES ON ELECTRICITY PROVIDERS
32 Sec. 12. Section 437A.3, subsection 18, paragraph a,
33subparagraph (2), Code 2021, is amended to read as follows:
34(2) (a) An electric power generating plant, except a solar
35energy conversion facility, where the acquisition cost of all
-4-1interests acquired exceeds ten million dollars.
2(b) A solar energy conversion facility where the
3acquisition cost of all interests exceeds one million dollars.
4(c) For purposes of this subparagraph, “electric power
5generating plant”:
6(i) “Electric power generating plant”means each nameplate
7rated electric power generating plant owned solely or jointly
8by any person or electric power facility financed under the
9provisions of chapter 28F or 476A in which electrical energy is
10produced from other forms of energy, including all equipment
11used in the production of such energy through its step-up
12transformer.
13(ii) “Solar energy conversion facility” means the same as
14defined in section 476C.1.
15DIVISION IV
16FEE FOR NEW REGISTRATION — VEHICLES
17 Sec. 13. Section 321.105A, subsection 2, paragraph a, Code
182021, is amended to read as follows:
19a. For purposes of this subsection, “purchase price”
20applies to the measure subject to the fee for new registration.
21“Purchase price” shall be determined in the same manner as
22“sales price” is determined for purposes of computing the tax
23imposed upon the sales price of tangible personal property
24under chapter 423, pursuant to the definition of sales price
25in section 423.1, subject to the following exemptions. The
26following are exempt from the fee for new registration imposed
27by this subsection:
28(1) Exempted from the purchase price of any vehicle subject
29to registration is the The amount of any cash rebate which is
30provided by a motor vehicle manufacturer to the purchaser of
31the vehicle subject to registration so long as the rebate is
32applied to the purchase price of the vehicle.
33(2) (a) In transactions, except those subject to
34subparagraph division (b), in which a vehicle subject to
35registration is traded toward the purchase price of another
-5-1vehicle subject to registration, the purchase price is only
2that portion of the purchase price which is not valued in
3money, whether received in money or not, if the following
4conditions are met:
5(i) The vehicle traded to the retailer is the type of
6vehicle normally sold in the regular course of the retailer’s
7business.
8(ii) The vehicle traded to the retailer is intended by the
9retailer to be ultimately sold at retail or is intended to be
10used by the retailer or another in the remanufacturing of a
11like vehicle.
12(b) In a transaction between persons, neither of which is
13a retailer of vehicles subject to registration, in which a
14vehicle subject to registration is traded toward the purchase
15price of another vehicle subject to registration, the amount
16of the trade-in value allowed on the vehicle subject to
17registration traded is exempted from the purchase price.
18(c) In order for the trade-in value to be excluded from
19the purchase price, the name or names The person listed on the
20title and registration of the newly acquired vehicle being
21purchased must be the same name or names person listed on the
22title and registration of the traded vehicle being traded in
23order to exclude the trade-in value from the purchase price.
24The Additionally, the following trades qualify under this
25subparagraph division (c):
26(i) A trade involving between spouses, if the traded vehicle
27and the acquired vehicle are titled in the name of one or both
28of the spouses, with no outside party named on the title.
29(ii) A trade involving a grandparent, parent, or child
30 between lineal family members, including adopted and step
31relationships, if the name of one of the family members from
32the title of the traded vehicle is also on the title of the
33newly acquired vehicle.
34(iii) A trade involving a business an entity, if one of the
35owners listed on the title of the traded vehicle is a business,
-6-1and an entity. If multiple names are on the names on the title
2are must be separated by “or”. For purposes of trades under
3this subparagraph subdivision, a sole proprietorship shall not
4be distinguished from an individual owner.
5(iv) A trade in which the vehicle being purchased is titled
6in the name of an individual other than the owner of the traded
7vehicle due to the cosigning requirements of a financial
8institution.
9(3) Exempted from the purchase price The fair market
10value of a replacement motor vehicle owned by a motor vehicle
11dealer licensed under chapter 322 which is being registered
12by that dealer and is not otherwise exempt from the fee for
13new registration, is the fair market value of a replaced motor
14vehicle if all of the following conditions are met:
15(a) The motor vehicle being registered is being placed in
16service as a replacement motor vehicle for a motor vehicle
17registered by the motor vehicle dealer.
18(b) The motor vehicle being registered is taken from the
19motor vehicle dealer’s inventory.
20(c) Use tax or the fee for new registration on the motor
21vehicle being replaced was paid by the motor vehicle dealer
22when that motor vehicle was registered.
23(d) The replaced motor vehicle is returned to the motor
24vehicle dealer’s inventory for sale.
25(e) The application for registration and title of the motor
26vehicle being registered is filed with the county treasurer
27within two weeks of the date the replaced motor vehicle is
28returned to the motor vehicle dealer’s inventory.
29(f) The motor vehicle being registered is placed in the same
30or substantially similar service as the replaced motor vehicle.
31 Sec. 14. Section 321.105A, subsection 2, paragraph c,
32subparagraph (1), Code 2021, is amended to read as follows:
33(1) Entities listed in section 423.3, subsections 17, 18,
3419, 20, 21, 22, 26, 27, 28, 31, and 79, to the extent that
35those entities are exempt from the tax imposed on the sale of
-7-1tangible personal property, consisting of goods, wares, or
2merchandise, sold at retail in the state to consumers or users.
3 Sec. 15. Section 321.105A, subsection 2, paragraph c,
4subparagraph (3), subparagraph divisions (a) and (c), Code
52021, are amended to read as follows:
6(a) Vehicles subject to registration which are transferred
7from a business or individual conducting a business within
8this state as a sole proprietorship, partnership, or limited
9liability company to a corporation formed by the sole
10proprietorship, partnership, or limited liability company for
11the purpose of continuing the business when all of the stock
12of the corporation so formed is owned by the sole proprietor
13and the sole proprietor’s spouse, by all the partners in the
14case of a partnership, or by all the members in the case of a
15limited liability company. This exemption is equally available
16where the vehicles subject to registration are transferred from
17a corporation to a sole proprietorship, partnership, or limited
18liability company formed by that corporation for the purpose of
19continuing the business when all of the incidents of ownership
20are owned by the same person or persons who were stockholders
21of the corporation. an entity doing business within this state
22to another entity doing business within this state if all of
23the following apply:
24(i) The receiving entity was formed by the transferring
25entity for the purpose of continuing the business.
26(ii) (A) All ownership remains the same and in the
27same proportions as the previous ownership with no fewer or
28additional owners or replacement owners.
29(B) In the case of a sole proprietorship, the spouse of the
30sole proprietor may stand in place of the sole proprietor.
31(c) This exemption applies to corporations that For an
32exemption under this subparagraph, a receiving entity shall
33 have been in existence for not longer than twenty-four months.
34 Sec. 16. Section 321.105A, subsection 2, paragraph c,
35subparagraphs (7), (8), (15), (18), and (19), Code 2021, are
-8-1amended to read as follows:
2(7) Vehicles subject to registration in this state for
3which the applicant for registration has paid to another state
4a state sales, use, or occupational tax, or paid the equivalent
5sales or excise tax of another country to that country.
6However, if the tax paid to another state or country is less
7than the fee for new registration calculated for the vehicle,
8the difference shall be the amount to be collected as the fee
9for new registration.
10(8) A vehicle subject to registration in this state which is
11owned by a person who has moved from another state or country
12 with the intention of changing residency to Iowa, provided that
13the vehicle was purchased for use in the state or country from
14which the applicant moved and was not, at or near the time of
15purchase, purchased for use in Iowa.
16(15) Vehicles purchased by a licensed wholesaler of new
17motor vehicles licensed under section 322.27A for resale by the
18same wholesaler.
19(18) A vehicle delivered to a resident Native American
20Indian on the a reservation.
21(19) A vehicle transferred from one individual to another
22individual as a gift in a transaction in which no consideration
23is present.
24 Sec. 17. Section 321.105A, subsection 2, paragraph c,
25subparagraph (25), unnumbered paragraph 1, Code 2021, is
26amended to read as follows:
27Vehicles subject to registration under this chapter with
28a gross vehicle weight rating of less than sixteen thousand
29pounds when purchased for lease and titled by the lessor
30licensed pursuant to chapter 321F and actually leased for a
31period of twelve six months or more if the lease of the vehicle
32is subject to the fee for new registration under subsection
333 or exempt from the fee for new registration pursuant to
34subsection 3, paragraph “f”.
35 Sec. 18. Section 321.105A, subsection 3, paragraphs a and e,
-9-1Code 2021, are amended to read as follows:
2a. A fee for new registration is imposed in an amount equal
3to five percent of the leased price for each vehicle subject to
4registration with a gross vehicle weight rating of less than
5sixteen thousand pounds which is leased by a lessor licensed
6pursuant to chapter 321F for a period of twelve six months
7or more. The fee for new registration shall be paid by the
8owner of the vehicle to the county treasurer from whom the
9registration receipt or certificate of title is obtained. A
10registration receipt for a vehicle subject to registration or
11issuance of a certificate of title shall not be issued until
12the fee for new registration is paid in the initial instance.
13e. If the lease is terminated or voided prior to the
14termination date contained in the lease agreement, no refund
15shall be allowed for a fee for new registration previously paid
16under this section, except as provided in section 322G.4.
17 Sec. 19. Section 321.105A, subsection 7, Code 2021, is
18amended to read as follows:
197. Penalty for false statement or evasion of fee Penalties.
20a. False statement. A person who willfully makes a false
21statement in regard to the purchase price of a vehicle subject
22to a fee for new registration or willfully attempts in any
23manner to evade payment of the fee required by this section
24is guilty of a fraudulent practice. A person who willfully
25makes a false statement in regard to the purchase price of
26such a vehicle with the intent to evade payment of the fee for
27new registration or willfully attempts in any manner to evade
28payment of the fee required by this section shall be assessed
29a penalty of seventy-five percent of the amount of the fee
30unpaid and required to be paid on the actual purchase price
31less trade-in allowance.
32b. Evasion fee. An Iowa resident found to be in control
33of a vehicle which is owned by a shell business and for which
34the fee for new registration has not been paid, as provided
35in section 321.55, subsection 2, is guilty of a fraudulent
-10-1practice. An Iowa resident found to be in control of a vehicle
2which is owned by a shell business and for which the fee for new
3registration has not been paid, as provided in section 321.55,
4subsection 2, shall be assessed a penalty of seventy-five
5percent of the amount of the fee unpaid and required to be paid
6on the actual purchase price less trade-in allowance.
7c. Failure to file. If a person required by this chapter to
8file an application for certificate of title or registration
9with the county treasurer fails to file such application or
10registration on or before the due date for such application or
11registration, a penalty in the amount of ten percent of the fee
12for new registration due shall be added to the fee.
13d. Underpayment. If a person required by this chapter to
14file an application for certificate of title or registration
15with the county treasurer files such application or
16registration with any inaccurate information that results in
17the person paying less than the full amount of the fee for new
18registration, penalties, or interest that was due at the time
19of application, a penalty in the amount of five percent of the
20fee for new registration due shall be added to the fee.
21DIVISION V
22PENALTIES — IMPUTED IOWA LIABILITY
23 Sec. 20. Section 421.27, subsection 9, paragraph a, Code
242021, is amended to read as follows:
25a. “Imputed Iowa liability” means any of the following:
26(1) In the case of corporations other than corporations
27described in section 422.34 or section 422.36, subsection 5,
28the corporation’s Iowa net income after the application of the
29Iowa business activity ratio, if applicable, multiplied by the
30top income tax rate imposed under section 422.33 for the tax
31year, less any Iowa tax credits available to the corporation.
32(2) In the case of financial institutions as defined in
33section 422.61, the financial institution’s Iowa net income
34after the application of the Iowa business activity ratio, if
35applicable, multiplied by the franchise tax rate imposed under
-11-1section 422.63 for the tax year, less any Iowa tax credits
2available to the financial institution.
3(3) In this case of all other entities, including
4corporations described in section 422.36, subsection 5, and all
5other entities required to file an information return under
6section 422.15, subsection 2, the entity’s Iowa net income
7after the application of the Iowa business activity ratio, if
8applicable, multiplied by the top income tax rate imposed under
9section 422.5A for the tax year, less any Iowa tax credits
10available to the entity.
11DIVISION VI
12PARTNERSHIP AND PASS-THROUGH ENTITY AUDITS AND REPORTING
13 Sec. 21. Section 422.7, subsection 59, Code 2021, is amended
14to read as follows:
1559. Any income adjustment subtracted from federal taxable
16income for an adjustment year pursuant to section 6225 of the
17Internal Revenue Code and the regulations thereunder shall be
18added back in computing net income of the partnership and the
19partners for state tax purposes for the adjustment year.
20 Sec. 22. Section 422.25A, subsection 1, paragraph k,
21subparagraph (1), Code 2021, is amended to read as follows:
22(1) In the case of a federal partnership adjustment that
23arises from a partnership level audit, the first day on which
24no federal adjustments arising from that audit remain to
25be finally determined, whether by internal revenue service
26decision with respect to which all rights of appeal have
27been waived or exhausted, by agreement, or, if appealed or
28contested, by a final decision with respect to which all rights
29of appeal have been waived or exhausted. For agreements
30required to be signed by the internal revenue service and the
31audited partnership, the final determination date is the date
32on which the last party signed the agreement.
33 Sec. 23. Section 422.25A, subsection 4, Code 2021, is
34amended to read as follows:
354. Reporting and payment requirements for audited
-12-1 partnerships and their partners subject to final federal
2partnership adjustments.
3a. Unless an audited partnership makes the election in
4subsection 5, the audited a partnership shall do all of the
5following for all final federal partnership adjustments no
6later than ninety days after the final determination date of
7the audited partnership:
8(1) File a completed federal adjustments report.
9(2) Notify each direct partner of such partner’s
10distributive share of the adjustments in the manner and form
11prescribed by the department by rule.
12(3) File an amended composite return under section 422.13
13if one was originally filed, and if applicable for withholding
14from partners, file an amended withholding report under
15section 422.16, and pay the additional amount under this title
16that would have been due had the final federal partnership
17adjustments been reported properly as required, including any
18applicable interest and penalties.
19b. Unless an audited partnership paid an amount on behalf
20of the direct partners of the audited partnership pursuant to
21subsection 5, all direct partners of the audited partnership
22shall do all of the following no later than one hundred
23eighty days after the final determination date of the audited
24partnership:
25(1) File a completed federal adjustments report reporting
26the direct partner’s distributive share of the adjustments
27required to be reported to such partners under paragraph “a”.
28(2) If the direct partner is a tiered partner, notify all
29partners that hold an interest directly in the tiered partner
30of such partner’s distributive share of the adjustments in the
31manner and form prescribed by the department by rule.
32(3) If the direct partner is a tiered partner and subject to
33section 422.13, file an amended composite return under section
34422.13 if such return was originally filed, and if applicable
35for withholding from partners file an amended withholding
-13-1report under section 422.16 if one was originally required to
2be filed.
3(4) Pay any additional amount under this title that would
4have been due had the final federal partnership adjustments
5been reported properly as required, including any applicable
6penalty and interest.
7c. Unless a partnership or tiered partner paid an amount on
8behalf of the partners pursuant to subsection 5, each indirect
9partner shall do all of the following:
10(1) Within ninety days after the time for filing and
11furnishing statements to tiered partners and their partners
12as established by section 6226 of the Internal Revenue Code
13and the regulations thereunder, file a completed federal
14adjustments report.
15(2) If the indirect partner is a tiered partner, within
16ninety days after the time for filing and furnishing statements
17to tiered partners and their partners as established by
18section 6226 of the Internal Revenue Code and the regulations
19thereunder but within sufficient time for all indirect partners
20to also complete the requirements of this subsection, notify
21all of the partners that hold an interest directly in the
22tiered partner of such partner’s distributive share of the
23adjustments in the manner and form prescribed by the department
24by rule.
25(3) Within ninety days after the time for filing and
26furnishing statements to tiered partners and their partners
27as established by section 6226 of the Internal Revenue Code
28and the regulations thereunder, if the indirect partner
29is a tiered partner and subject to section 422.13, file an
30amended composite return under section 422.13 if such return
31was originally filed, and if applicable for withholding from
32partners, file an amended withholding report under section
33422.16 if one was originally required to be filed.
34(4) Within ninety days after the time for filing and
35furnishing statements to tiered partners and the partners of
-14-1the tiered partners as established by section 6226 of the
2Internal Revenue Code and the regulations thereunder, pay any
3additional amount due under this title, including any penalty
4and interest that would have been due had the final federal
5partnership adjustments been reported properly as required.
6 Sec. 24. Section 422.25A, subsection 5, paragraph a, Code
72021, is amended to read as follows:
8a. An audited partnership, or a tiered partner of an audited
9partnership that receives a notification of a final federal
10partnership adjustment under subsection 4 of a final federal
11partnership adjustment arising from a partnership level audit,
12may make an election to pay as provided under this subsection.
13 Sec. 25. Section 422.25A, subsection 5, paragraph b,
14unnumbered paragraph 1, Code 2021, is amended to read as
15follows:
16An audited partnership or tiered partner makes shall make an
17election to pay under this subsection by filing in the manner
18and form prescribed by the department. The audited partnership
19or tiered partner making an election to pay shall file a
20completed federal adjustments report, notifying the department
21in the manner and form prescribed by the department that it is
22making the election under this subsection, notifying notify
23 each of the direct partners of such partner’s distributive
24share of the adjustments, and paying pay on behalf of its
25partners an amount calculated in paragraph “c”, including any
26applicable penalty and interest. These requirements shall all
27be fulfilled within one of the following time periods:
28 Sec. 26. Section 422.25A, subsection 5, paragraph c,
29subparagraph (6), Code 2021, is amended to read as follows:
30(6) (a) Total the amounts computed pursuant to
31subparagraphs (2) through (5) and calculate any interest and
32penalty as provided under this title. Notwithstanding any
33provision of law to the contrary, interest and penalties on the
34amount due by the audited partnership or tiered partner shall
35be computed from the day after the due date of the reviewed
-15-1year return without extension, and shall be imposed as if the
2audited partnership or tiered partner was required to pay tax
3or show tax due on the original return for the reviewed year.
4(b) The director may establish rules providing for the
5calculation of amounts due under this subsection for federal
6partnership adjustments that affect state tax owed but that do
7not fit within the calculation in subparagraphs (2) through
8(5), such as tax credit changes. The director may establish
9rules that include changes related to state-specific issues
10following a state partnership audit in the election to pay and
11calculation of amounts due under this subsection, including
12but not limited to allocation and apportionment. Interest and
13penalty shall be computed in the same manner as described in
14subparagraph division (a).
15 Sec. 27. Section 422.25A, subsection 7, paragraph d, Code
162021, is amended to read as follows:
17d. Nothing in this section shall prohibit the department
18from assessing direct partners and indirect partners for taxes
19they owe in the event that an audited a partnership or tiered
20partner fails to timely make any report or payment required by
21this section for any reason.
22 Sec. 28. Section 422.25A, subsection 8, paragraph a, Code
232021, is amended to read as follows:
24a. The department shall assess additional Iowa income
25tax, interest, and penalties arising from final federal
26partnership adjustments in the same manner as provided in
27this title unless a different treatment is provided by this
28subsection. Since final federal partnership adjustments are
29determined at the audited partnership level, any assessment
30issued to partners shall not be appealable by the partner.
31The department may assess any taxes, including on-behalf-of
32amounts, interest, and penalties arising from the final federal
33partnership adjustments if it issues a notice of assessment to
34the audited partnership, tiered partner, or other direct or
35indirect partner on or before the expiration of the applicable
-16-1limitations period specified in section 422.25.
2 Sec. 29. Section 422.25C, subsection 4, Code 2021, is
3amended to read as follows:
44. If the department, the partnership or pass-through
5entity, and owners representing a majority of the ownership
6interests in the partnership or pass-through entity owners
7 agree, the provisions of this section may be applied to tax
8years beginning before January 1, 2020.
9 Sec. 30. Section 422.35, subsection 26, Code 2021, is
10amended to read as follows:
1126. Any income adjustment subtracted from federal taxable
12income for an adjustment year pursuant to section 6225 of the
13Internal Revenue Code and the regulations thereunder shall be
14added back in computing net income of the partnership and the
15partners for state tax purposes for the adjustment year.
16 Sec. 31. EFFECTIVE DATE. This division of this Act, being
17deemed of immediate importance, takes effect upon enactment.
18 Sec. 32. RETROACTIVE APPLICABILITY. This division of this
19Act applies retroactively to July 1, 2020, and applies to
20federal adjustments and federal partnership adjustments that
21have a final determination date after July 1, 2020.
22DIVISION VII
23VEHICLE REGISTRATION RENEWALS AND COLLECTIONS BY COUNTY
24TREASURERS — CENTRALIZED COLLECTION UNIT — DEPARTMENT OF
25REVENUE
26 Sec. 33. Section 321.40, subsection 6, paragraph b, Code
272021, is amended to read as follows:
28b. The A county treasurer of the county of the person’s
29residence and in which the person’s vehicle is registered,
30in cooperation with the department of revenue, may collect
31from a person applying for renewal of a vehicle registration
32 delinquent taxes, including penalties and interest owed to
33the state from a person applying for renewal of a vehicle
34registration, and nontax liabilities being collected by
35the central collection unit of the department of revenue
-17-1pursuant to section 421.17, subsection 27. The applicant
2may remit full payment of the taxes balance owed including
3applicable penalties and interest, along with a processing
4fee of five dollars, to the county treasurer at the time of
5registration renewal. Upon full payment of the required taxes
6 balance owed including applicable penalties and interest, the
7processing fee, and the vehicle registration fee, the county
8treasurer shall issue the registration to the person. A county
9treasurer collecting on behalf of the department of revenue
10shall update the vehicle registration records through the
11distributed teleprocessing network on a daily basis for all
12persons who have paid taxes or other balances owed pursuant to
13this subsection. A county treasurer shall forward all funds
14collected for the department of revenue to the department of
15revenue.
16 Sec. 34. Section 421.17, subsection 27, paragraph k, Code
172021, is amended to read as follows:
18k. A Pursuant to section 321.40, subsection 6, and rules
19adopted pursuant to this paragraph, a county treasurer may
20collect delinquent taxes, including penalties and interest,
21administered by the department in conjunction with renewal
22of a vehicle registration as provided in section 321.40,
23subsection 6, paragraph “b”, and rules adopted pursuant to
24this paragraph and nontax liabilities being collected by
25the central collection unit of the department of revenue.
26County treasurers shall be given access to information
27required for the collection of delinquent taxes, including
28penalties and interest, as necessary to accomplish the
29purposes of section 321.40, subsection 6, paragraph “b”. The
30confidentiality provisions of sections 422.20 and 422.72 do not
31apply to information provided by the department to a county
32treasurer pursuant to this paragraph. A county treasurer
33collecting taxes, penalties, and interest administered by
34the department is subject to the requirements and penalties
35of the confidentiality laws of this state regarding tax or
-18-1indebtedness information. The director shall adopt rules to
2implement the collection of tax debt as collections authorized
3in section 321.40 and this paragraph.
4DIVISION VIII
5GARNISHMENT
6 Sec. 35. Section 626.31, Code 2021, is amended to read as
7follows:
8626.31 Return of garnishment — action docketed — distress
9action.
10Where parties have been garnished under a distress
11warrant issued by the director of revenue or the director of
12inspections and appeals, the officer shall make return thereof
13to the court in the county where the garnishee lives, if the
14garnishee lives in Iowa, otherwise in the county where the
15taxpayer resides, if the taxpayer lives in Iowa; and if neither
16the garnishee nor the taxpayer lives in Iowa, then to the
17district court in Polk county, Iowa; the officer shall make
18return in the same manner as a return is made on a garnishment
19made under a writ of execution so far as they relate to
20garnishments, and the clerk of the district court shall docket
21an action thereon without fee the same as if a judgment had
22been recovered against the taxpayer in the county where the
23return is made, an execution issued thereon, and garnishment
24made thereunder, and thereafter the proceedings shall conform
25to proceedings in garnishment under attachments as nearly as
26may be. The warrant shall be considered in all respects as a
27final judgment.
28DIVISION IX
29SNOWMOBILES, ALL-TERRAIN VEHICLES, AND VESSELS — PURCHASES —
30PAYMENT OF SALES OR USE TAX
31 Sec. 36. Section 321G.4, subsection 2, paragraph b, Code
322021, is amended to read as follows:
33b. If the owner of the snowmobile is unable to present
34satisfactory evidence that the sales or use tax has been paid,
35the county recorder shall collect the tax. On or before the
-19-1tenth day of each month, the county recorder shall remit to
2the department of revenue the amount of the taxes collected
3during the preceding month, together with an itemized statement
4on forms furnished by the department of revenue showing the
5name of each taxpayer, the make and purchase price of each
6snowmobile, the amount of tax paid, and such other information
7as the department of revenue requires in a manner prescribed
8by the department.
9 Sec. 37. Section 321I.4, subsection 2, paragraph b, Code
102021, is amended to read as follows:
11b. If the owner of the all-terrain vehicle is unable to
12present satisfactory evidence that the sales or use tax has
13been paid, the county recorder shall collect the tax. On or
14before the tenth day of each month, the county recorder shall
15remit to the department of revenue the amount of the taxes
16collected during the preceding month, together with an itemized
17statement on forms furnished by the department of revenue
18showing the name of each taxpayer, the make and purchase price
19of each all-terrain vehicle, the amount of tax paid, and such
20other information as the department of revenue requires in a
21manner prescribed by the department.
22 Sec. 38. Section 462A.55, Code 2021, is amended to read as
23follows:
24462A.55 Sales or use tax to be paid before registration.
25No vessel shall be registered by the county recorder until
26there has been presented to the recorder receipts, bills of
27sale, or other satisfactory evidence that the sales or use tax
28has been paid for the purchase of the vessel. If the owner
29of the vessel is unable to present satisfactory evidence that
30the sales or use tax has been paid, the county recorder shall
31collect the tax. On or before the tenth day of each month, the
32county recorder shall remit to the department of revenue the
33amount of the taxes so collected during the preceding month,
34together with an itemized statement on forms furnished by the
35department of revenue showing the name of each taxpayer, the
-20-1make and purchase price of each vessel and motor, the amount
2of tax paid, and such other information as the department of
3revenue shall require in a manner prescribed by the department.
4DIVISION X
5TANGIBLE PERSONAL PROPERTY — RENTALS — SALES AND USE TAX
6 Sec. 39. Section 9C.1, subsection 1, Code 2021, is amended
7to read as follows:
81. As used in this chapter, the term “transient merchant”
9shall mean and include every merchant, whether an individual
10person, a firm, corporation, partnership, or association, and
11whether owner, agent, bailee, consignee, or employee, who shall
12bring or cause to be brought within the state of Iowa any
13goods, wares, or merchandise tangible personal property of any
14kind, nature, or description, with the intention of temporarily
15or intermittently selling or offering to sell at retail such
16goods, wares, or merchandise tangible personal property within
17the state of Iowa. The term “transient merchant” shall also
18mean and include every merchant, whether an individual person,
19a firm, corporation, partnership, or an association, who shall
20by itself, or by agent, consignee, or employee, temporarily or
21intermittently engage in or conduct at one or more locations a
22business within the state of Iowa for the sale at retail of any
23goods, wares, or merchandise tangible personal property of any
24nature or description.
25 Sec. 40. Section 9C.2, Code 2021, is amended to read as
26follows:
279C.2 License required.
28It shall be unlawful for any transient merchant to sell,
29dispose of, or offer for sale any goods, wares or merchandise
30 tangible personal property of any kind, nature or description,
31at any time or place within the state of Iowa, outside the
32limits of any city in the state of Iowa, or within the limits
33of any city in the state of Iowa that has not by ordinance
34provided for the licensing of transient merchants, unless such
35transient merchant has a valid license as provided in this
-21-1chapter and has complied with the regulations set forth in this
2chapter.
3 Sec. 41. Section 9C.3, unnumbered paragraph 1, Code 2021,
4is amended to read as follows:
5Any transient merchant desiring a transient merchant’s
6license shall at least ten days prior to the first day any sale
7is made, file with the secretary of state of the state of Iowa
8an application in writing duly verified by the person, firm,
9corporation, partnership, or association proposing to sell
10or offer to sell at retail any goods, wares, or merchandise
11 tangible personal property, or to engage in or conduct a
12temporary or intermittent business for the sale at retail of
13any goods, wares, or merchandise tangible personal property.
14The application shall state the following facts:
15 Sec. 42. Section 9C.3, subsections 2, 5, 6, and 7, Code
162021, are amended to read as follows:
172. If the application be made by an agent, bailee,
18consignee, or employee, the application shall so state and set
19out the name and address of such agent, bailee, consignee, or
20employee and shall also set out the name and address of the
21owner of the goods, wares, and merchandise tangible personal
22property to be sold or offered for sale.
235. The value of the goods tangible personal property to be
24sold or offered for sale or the average inventory to be carried
25by any such transient merchant engaging in or conducting an
26intermittent or temporary business as the case may be.
276. The date or dates upon which said goods, wares, or
28merchandise tangible personal property shall be sold or offered
29for sale, or the date or dates upon which it is the intention
30of the applicant to engage in or conduct a temporary or
31intermittent business.
327. The location and address where such goods, wares, or
33merchandise tangible personal property shall be sold or offered
34for sale, or such business engaged in or conducted.
35 Sec. 43. Section 9C.4, subsection 1, Code 2021, is amended
-22-1to read as follows:
21. At the time and as part of filing the application, the
3applicant shall file with the secretary of state a bond, with
4sureties to be approved by the secretary of state, in a penal
5sum two times the value of the goods, wares or merchandise
6 tangible personal property to be sold or offered for sale or
7the average inventory to be carried by such transient merchant
8engaged in or conducting an intermittent or temporary business
9as the case may be as shown by the application, running to the
10state of Iowa, for the use and benefit of any purchaser of any
11merchandise tangible personal property from such transient
12merchant who might have a cause of action of any nature arising
13from or out of such sale against the applicant or the owner of
14such merchandise property if other than the applicant. The
15bond shall be conditioned on the payment by the applicant of
16all taxes that may be payable by, or due from, the applicant
17to the state of Iowa or any subdivision thereof, and shall
18be further conditioned for the payment of any fines that may
19be assessed by any court against the applicant for violation
20of the provision of this chapter, as well as for the payment
21and satisfaction of any and all causes of action against the
22applicant commenced within one year from the date of sale
23thereof, and arising from such sale. However, the aggregate
24liability of the surety for all such taxes, fines, and causes
25of action shall in no event exceed the principal sum of such
26bond.
27 Sec. 44. Section 9C.6, Code 2021, is amended to read as
28follows:
299C.6 License fee.
30Prior to issuing the said transient merchant’s license,
31the secretary of state shall collect for the state of Iowa a
32license fee in the sum of twenty-five dollars for each day the
33applicant, as shown by the application, shall propose to sell
34or offer for sale any goods, wares or merchandise tangible
35personal property, or for each day the applicant, as shown by
-23-1the application, proposes to engage in and conduct a business
2as a transient merchant as the case may be.
3 Sec. 45. Section 9C.7, Code 2021, is amended to read as
4follows:
59C.7 Misrepresentation.
6It shall be unlawful for any transient merchant making sales
7or engaging in or conducting a business under a transient
8merchant’s license to make any false or misleading statements
9or representation regarding any article sold or offered for
10sale by such transient merchant as to condition, quality,
11original cost, or cost to such transient merchant of any
12article sold or offered for sale or to sell or offer for
13sale goods, wares or merchandise tangible personal property
14 of a value in excess of the value thereof as shown by said
15application, or to sell or offer for sale at retail any goods,
16wares or merchandise tangible personal property, or to engage
17in or conduct an intermittent or temporary business on any days
18or at any place other than those shown by such license.
19 Sec. 46. Section 15.331A, subsection 1, Code 2021, is
20amended to read as follows:
211. The eligible business shall be entitled to a refund
22of the sales and use taxes paid under chapter 423 for gas,
23electricity, water, or sewer utility services, goods, wares,
24or merchandise tangible personal property, or on services
25rendered, furnished, or performed to or for a contractor or
26subcontractor and used in the fulfillment of a written contract
27relating to the construction or equipping of a facility that is
28part of a project of the eligible business. Taxes attributable
29to intangible property and furniture and furnishings shall not
30be refunded. However, an eligible business shall be entitled
31to a refund for taxes attributable to racks, shelving, and
32conveyor equipment to be used in a warehouse or distribution
33center subject to section 15.331C.
34 Sec. 47. Section 15.331A, subsection 2, paragraphs a and b,
35Code 2021, are amended to read as follows:
-24- 1a. The contractor or subcontractor shall state under
2oath, on forms provided by the department of revenue, the
3amount of the sales of goods, wares, or merchandise tangible
4personal property or services rendered, furnished, or performed
5including water, sewer, gas, and electric utility services
6upon which sales or use tax has been paid prior to the project
7completion, and shall file the forms with the eligible business
8before final settlement is made.
9b. The eligible business shall, not more than one year
10after project completion, make application to the department
11of revenue for any refund of the amount of the sales and use
12taxes paid pursuant to chapter 423 upon any goods, wares, or
13merchandise tangible personal property, or services rendered,
14furnished, or performed, including water, sewer, gas, and
15electric utility services. The application shall be made in
16the manner and upon forms to be provided by the department of
17revenue, and the department of revenue shall audit the claim
18and, if approved, issue a warrant to the eligible business in
19the amount of the sales or use tax which has been paid to the
20state of Iowa under a contract. A claim filed by the eligible
21business in accordance with this section shall not be denied
22by reason of a limitation provision set forth in chapter 421
23or 423.
24 Sec. 48. Section 15.331C, Code 2021, is amended to read as
25follows:
2615.331C Corporate tax credit for certain sales taxes paid by
27third-party developer.
281. An eligible business may claim a corporate tax credit
29in an amount equal to the sales and use taxes paid by a
30third-party developer under chapter 423 for gas, electricity,
31water, or sewer utility services, goods, wares, or merchandise
32 tangible personal property, or on services rendered, furnished,
33or performed to or for a contractor or subcontractor and
34used in the fulfillment of a written contract relating to
35the construction or equipping of a facility of the eligible
-25-1business. Taxes attributable to intangible property and
2furniture and furnishings shall not be included, but taxes
3attributable to racks, shelving, and conveyor equipment to be
4used in a warehouse or distribution center shall be included.
5Any credit in excess of the tax liability for the tax year
6may be credited to the tax liability for the following seven
7years or until depleted, whichever occurs earlier. An eligible
8business may elect to receive a refund of all or a portion of an
9unused tax credit.
102. A third-party developer shall state under oath, on forms
11provided by the department of revenue, the amount of taxes paid
12as described in subsection 1 and shall submit such forms to
13the department of revenue. The taxes paid shall be itemized
14to allow identification of the taxes attributable to racks,
15shelving, and conveyor equipment to be used in a warehouse
16or distribution center. After receiving the form from the
17third-party developer, the department of revenue shall issue
18a tax credit certificate to the eligible business equal to
19the sales and use taxes paid by a third-party developer under
20chapter 423 for gas, electricity, water, or sewer utility
21services, goods, wares, or merchandise tangible personal
22property, or on services rendered, furnished, or performed
23to or for a contractor or subcontractor and used in the
24fulfillment of a written contract relating to the construction
25or equipping of a facility. The department of revenue
26shall also issue a tax credit certificate to the eligible
27business equal to the taxes paid and attributable to racks,
28shelving, and conveyor equipment to be used in a warehouse
29or distribution center. The aggregate combined total amount
30of tax refunds under section 15.331A for taxes attributable
31to racks, shelving, and conveyor equipment to be used in a
32warehouse or distribution center and of tax credit certificates
33issued by the department of revenue for the taxes paid and
34attributable to racks, shelving, and conveyor equipment
35to be used in a warehouse or distribution center shall not
-26-1exceed five hundred thousand dollars in a fiscal year. If
2an applicant for a tax credit certificate does not receive
3a certificate for the taxes paid and attributable to racks,
4shelving, and conveyor equipment to be used in a warehouse
5or distribution center, the application shall be considered
6in succeeding fiscal years. The eligible business shall not
7claim a tax credit under this section unless a tax credit
8certificate issued by the department of revenue is included
9with the taxpayer’s tax return for the tax year for which the
10tax credit is claimed. A tax credit certificate shall contain
11the eligible business’s name, address, tax identification
12number, the amount of the tax credit, and other information
13deemed necessary by the department of revenue.
14 Sec. 49. Section 321.105A, subsection 3, paragraph f,
15subparagraph (1), Code 2021, is amended to read as follows:
16(1) Vehicles leased to entities listed in section 423.3,
17subsections 17, 18, 19, 20, 21, 22, 26, 27, 28, 31, and 79, to
18the extent that those entities are exempt from the tax imposed
19on the sale of tangible personal property, consisting of goods,
20wares, or merchandise, sold at retail in the state to consumers
21or users.
22 Sec. 50. Section 423.1, subsection 21, Code 2021, is amended
23by striking the subsection.
24 Sec. 51. Section 423.1, subsection 50, Code 2021, is amended
25to read as follows:
2650. a. “Sales” or “sale” means any transfer, exchange, or
27barter, conditional or otherwise, in any manner or by any means
28whatsoever, for consideration, including but not limited to any
29such transfer, exchange, or barter on a subscription basis.
30b. “Sales” or “sale” includes a rental.
31 Sec. 52. Section 423.2, subsection 1, unnumbered paragraph
321, Code 2021, is amended to read as follows:
33There is imposed a tax of six percent upon the sales price of
34all sales of tangible personal property, consisting of goods,
35wares, or merchandise, sold at retail in the state to consumers
-27-1or users except as otherwise provided in this subchapter.
2 Sec. 53. Section 423.3, subsections 13, 46, 47A, 75, and 76,
3Code 2021, are amended to read as follows:
413. The sales price from the sale or rental of irrigation
5equipment, whether installed above or below ground, to a
6contractor or farmer if the equipment will be primarily used in
7agricultural operations.
846. The sales price from sales or rentals to a printer or
9publisher of the following:acetate; anti-halation backing;
10antistatic spray; back lining; base material used as a carrier
11for light sensitive emulsions; blankets; blow-ups; bronze
12powder; carbon tissue; codas; color filters; color separations;
13contacts; continuous tone separations; creative art; custom
14dies and die cutting materials; dampener sleeves; dampening
15solution; design and styling; diazo coating; dot etching; dot
16etching solutions; drawings; drawsheets; driers; duplicate
17films or prints; electronically digitized images; electrotypes;
18end product of image modulation; engravings; etch solutions;
19film; finished art or final art; fix; fixative spray; flats;
20flying pasters; foils; goldenrod paper; gum; halftones;
21illustrations; ink; ink paste; keylines; lacquer; lasering
22images; layouts; lettering; line negatives and positives;
23linotypes; lithographic offset plates; magnesium and zinc
24etchings; masking paper; masks; masters; mats; mat service;
25metal toner; models and modeling; mylar; negatives; nonoffset
26spray; opaque film process paper; opaquing; padding compound;
27paper stock; photographic materials: acids, plastic film,
28desensitizer emulsion, exposure chemicals, fix, developers,
29and paper; photography, day rate; photopolymer coating;
30photographs; photostats; photo-display tape; phototypesetter
31materials; pH-indicator sticks; positives; press pack; printing
32cylinders; printing plates, all types; process lettering;
33proof paper; proofs and proof processes, all types; pumice
34powder; purchased author alterations; purchased composition;
35purchased phototypesetting; purchased stripping and pasteups;
-28-1red litho tape; reducers; roller covering; screen tints;
2sketches; stepped plates; stereotypes; strip types; substrate;
3tints; tissue overlays; toners; transparencies; tympan;
4typesetting; typography; varnishes; veloxes; wood mounts; and
5any other items used in a like capacity to any of the above
6enumerated items by the printer or publisher to complete a
7finished product for sale at retail. Expendable tools and
8supplies which are not enumerated in this subsection are
9excluded from the exemption. “Printer” means that portion of a
10person’s business engaged in printing that completes a finished
11product for ultimate sale at retail or means that portion of a
12person’s business used to complete a finished printed packaging
13material used to package a product for ultimate sale at retail.
14“Printer” does not mean an in-house printer who prints or
15copyrights its own materials.
1647A. The sales price from the sale or rental of central
17office equipment or transmission equipment primarily used
18by local exchange carriers and competitive local exchange
19service providers as defined in section 476.96, Code 2017;
20by franchised cable television operators, mutual companies,
21municipal utilities, cooperatives, and companies furnishing
22communications services that are not subject to rate regulation
23as provided in chapter 476; by long distance companies as
24defined in section 477.10; or for a commercial mobile radio
25service as defined in 47 C.F.R. §20.3 in the furnishing of
26telecommunications services on a commercial basis. For the
27purposes of this subsection, “central office equipment” means
28equipment utilized in the initiating, processing, amplifying,
29switching, or monitoring of telecommunications services.
30“Transmission equipment” means equipment utilized in the process
31of sending information from one location to another location.
32“Central office equipment” and “transmission equipment” also
33include ancillary equipment and apparatus which support,
34regulate, control, repair, test, or enable such equipment to
35accomplish its function.
-29- 175. The sales price from the sale or rental of aircraft;
2the sale or rental of tangible personal property permanently
3affixed or attached as a component part of the aircraft,
4including but not limited to repair or replacement materials
5or parts; and the sales price of all services used for
6aircraft repair, remodeling, and maintenance services when
7such services are performed on aircraft, aircraft engines, or
8aircraft component materials or parts. For the purposes of
9this exemption, “aircraft” means aircraft used in a scheduled
10interstate federal aviation administration certificated air
11carrier operation.
1276. The sales price from the sale or rental of tangible
13personal property permanently affixed or attached as a
14component part of the aircraft, including but not limited
15to repair or replacement materials or parts; and the sales
16price of all services used for aircraft repair, remodeling,
17and maintenance services when such services are performed on
18aircraft, aircraft engines, or aircraft component materials or
19parts. For the purposes of this exemption, “aircraft” means
20aircraft used in nonscheduled interstate federal aviation
21administration certificated air carrier operation operating
22under 14 C.F.R.ch.1, pt.135.
23 Sec. 54. Section 423.3, subsection 47, paragraph a,
24unnumbered paragraph 1, Code 2021, is amended to read as
25follows:
26The sales price from the sale or rental of computers,
27computer peripherals, machinery, equipment, replacement parts,
28supplies, and materials used to construct or self-construct
29computers, computer peripherals, machinery, equipment,
30replacement parts, and supplies, if such items are any of the
31following:
32 Sec. 55. Section 423.3, subsection 47, paragraph c,
33unnumbered paragraph 1, Code 2021, is amended to read as
34follows:
35The sales price from the sale or rental of the following
-30-1shall not be exempt from the tax imposed by this subchapter:
2 Sec. 56. Section 423.3, subsection 60, unnumbered paragraph
31, Code 2021, is amended to read as follows:
4The sales price from the sale or rental of prescription
5drugs, durable medical equipment, mobility enhancing equipment,
6prosthetic devices, and other medical devices intended for
7human use or consumption. For the purposes of this subsection:
8 Sec. 57. Section 423.3, subsection 78, paragraphs a and c,
9Code 2021, are amended to read as follows:
10a. The sales price from the sale of tangible personal
11property, specified digital products, or services rendered by
12any entity where the profits from the sale of the tangible
13personal property, specified digital products, or services
14rendered, are used by or donated to a nonprofit entity that
15is exempt from federal income taxation pursuant to section
16501(c)(3) of the Internal Revenue Code, a government entity,
17or a nonprofit private educational institution, and where the
18entire proceeds from the sale or services profits are expended
19for any of the following purposes:
20(1) Educational.
21(2) Religious.
22(3) Charitable. A charitable act is an act done out of
23goodwill, benevolence, and a desire to add to or to improve
24the good of humankind in general or any class or portion of
25humankind, with no pecuniary profit inuring to the person
26performing the service or giving the gift.
27c. Except as otherwise provided in subsection 97, this
28exemption does not apply to the sales price from games of
29skill, games of chance, raffles, and bingo games as defined
30in chapter 99B. This exemption is disallowed on the amount
31of the sales price only to the extent the profits from the
32sales, rental, or services are not used by or donated to the
33appropriate entity and expended for educational, religious, or
34charitable purposes.
35 Sec. 58. Section 423.3, subsection 82, paragraph a, Code
-31-12021, is amended to read as follows:
2a. The sales price from the sale or rental of core-making,
3mold-making, and sand-handling machinery and equipment,
4including replacement parts, directly and primarily used in the
5mold-making process by a foundry.
6 Sec. 59. Section 423.3, subsection 88, Code 2021, is amended
7to read as follows:
888. The sales price from the sale of building materials,
9supplies, goods, wares, or merchandise tangible personal
10property sold to a nonprofit Iowa affiliate of a nonprofit
11international organization whose primary activity is the
12promotion of the construction, remodeling, or rehabilitation
13of one-family or two-family dwellings for use by low-income
14families and where the building materials, supplies, goods,
15wares, or merchandise or tangible personal property are used
16in the construction, remodeling, or rehabilitation of such
17dwellings.
18 Sec. 60. Section 423.3, subsection 89, paragraphs a and b,
19Code 2021, are amended to read as follows:
20a. The sales price of all goods, wares, or merchandise
21 tangible personal property sold, or of services furnished,
22which are used in the fulfillment of a written construction
23contract for the original construction of a building or
24structure to be used as a collaborative educational facility.
25b. The sales price of all goods, wares, or merchandise
26 tangible personal property sold, or of services furnished,
27which are used in the fulfillment of a written construction
28contract for the construction of additions or modifications
29to a building or structure used as part of a collaborative
30educational facility.
31 Sec. 61. Section 423.3, subsection 92, paragraph a,
32subparagraph (1), Code 2021, is amended to read as follows:
33(1) The sales price from the sale or rental of computers
34and equipment that are necessary for the maintenance and
35operation of a web search portal and property whether directly
-32-1or indirectly connected to the computers, including but
2not limited to cooling systems, cooling towers, and other
3temperature control infrastructure; power infrastructure for
4transformation, distribution, or management of electricity used
5for the maintenance and operation of the web search portal,
6including but not limited to exterior dedicated business-owned
7substations, backup power generation systems, battery systems,
8and related infrastructure; and racking systems, cabling, and
9trays, which are necessary for the maintenance and operation of
10the web search portal.
11 Sec. 62. Section 423.3, subsection 92, paragraph b,
12subparagraph (1), Code 2021, is amended to read as follows:
13(1) The business of the purchaser or renter shall be as a
14provider of a web search portal.
15 Sec. 63. Section 423.3, subsection 92, paragraph d, Code
162021, is amended to read as follows:
17d. Failure to meet eighty percent of the minimum investment
18amount requirement specified in paragraph “b” within the first
19six years of operation from the date the web search portal
20business initiates site preparation activities will result in
21the web search portal business losing the right to claim this
22exemption and the web search portal business shall pay all
23sales or use tax that would have been due on the purchase or
24rental or use of the items listed in this exemption, plus any
25applicable penalty and interest imposed by statute.
26 Sec. 64. Section 423.3, subsection 93, paragraph a,
27subparagraph (1), Code 2021, is amended to read as follows:
28(1) The sales price from the sale or rental of computers
29and equipment that are necessary for the maintenance and
30operation of a web search portal business and property whether
31directly or indirectly connected to the computers, including
32but not limited to cooling systems, cooling towers, and other
33temperature control infrastructure; power infrastructure for
34transformation, distribution, or management of electricity used
35for the maintenance and operation of the web search portal
-33-1business, including but not limited to exterior dedicated
2business-owned substations, backup power generation systems,
3battery systems, and related infrastructure; and racking
4systems, cabling, and trays, which are necessary for the
5maintenance and operation of the web search portal business.
6 Sec. 65. Section 423.3, subsection 93, paragraph b,
7subparagraph (1), Code 2021, is amended to read as follows:
8(1) The purchaser or renter shall be a web search portal
9business.
10 Sec. 66. Section 423.3, subsection 93, paragraph d, Code
112021, is amended to read as follows:
12d. Failure to meet eighty percent of the minimum investment
13amount requirement specified in paragraph “b” within the first
14six years of operation from the date the web search portal
15business initiates site preparation activities will result in
16the web search portal business losing the right to claim this
17web search portal business exemption and the web search portal
18business shall pay all sales or use tax that would have been
19due on the purchase or rental or use of the items listed in this
20exemption, plus any applicable penalty and interest imposed by
21statute.
22 Sec. 67. Section 423.3, subsection 95, paragraph a,
23subparagraph (1), Code 2021, is amended to read as follows:
24(1) The sales price from the sale or rental of computers
25and equipment that are necessary for the maintenance and
26operation of a data center business and property whether
27directly or indirectly connected to the computers, including
28but not limited to cooling systems, cooling towers, and other
29temperature control infrastructure; power infrastructure for
30transformation, distribution, or management of electricity used
31for the maintenance and operation of the data center business,
32including but not limited to exterior dedicated business-owned
33substations, backup power generation systems, battery systems,
34and related infrastructure; and racking systems, cabling, and
35trays, which are necessary for the maintenance and operation of
-34-1the data center business.
2 Sec. 68. Section 423.3, subsection 95, paragraph b,
3subparagraph (1), Code 2021, is amended to read as follows:
4(1) The purchaser or renter shall be a data center business.
5 Sec. 69. Section 423.3, subsection 95, paragraph d, Code
62021, is amended to read as follows:
7d. Failure to meet eighty percent of the minimum investment
8amount requirement specified in paragraph “b” within the first
9six years of operation from the date the data center business
10initiates site preparation activities will result in the data
11center business losing the right to claim this data center
12business exemption and the data center business shall pay all
13sales or use tax that would have been due on the purchase or
14rental or use of the items listed in this exemption, plus any
15applicable penalty and interest imposed by statute.
16 Sec. 70. Section 423.4, subsection 1, paragraph b,
17subparagraph (3), Code 2021, is amended to read as follows:
18(3) The building materials, supplies, equipment, or
19services furnished are not used in the performance of any
20contract in connection with the operation of any municipal
21utility engaged in selling gas, electricity, or heat to
22the general public or in connection with the operation of
23a municipal pay television system; and are not used in the
24performance of a contract for a “project” “project” under
25chapter 419 as defined in that chapter other than goods, wares,
26or merchandise building materials, supplies, or equipment used
27in the performance of a contract for a “project” “project”
28 under chapter 419 for which a bond issue was approved by
29a municipality prior to July 1, 1968, or for which the
30goods, wares, or merchandise building materials, supplies,
31or equipment becomes an integral part of the project under
32contract and at the completion of the project becomes public
33property or is devoted to educational uses.
34 Sec. 71. Section 423.4, subsection 1, paragraph c, Code
352021, is amended to read as follows:
-35- 1c. A contractor shall state under oath, on forms provided
2by the department, the amount of such sales of goods, wares,
3or merchandise building materials, supplies, or equipment,
4or services furnished and used in the performance of such
5contract, and upon which sales or use tax has been paid,
6and shall file such forms with the designated exempt entity
7which has made any written contract for performance by the
8contractor. The forms shall be filed by the contractor with
9the designated exempt entity before final settlement is made.
10 Sec. 72. Section 423.31, subsection 4, Code 2021, is amended
11to read as follows:
124. Every retailer at the time of making any return required
13by this section shall compute and pay to the department the tax
14due for the preceding period. The tax on sales prices from the
15sale or rental of tangible personal property under a consumer
16rental purchase agreement as defined in section 537.3604,
17subsection 8, is payable in the tax period of receipt.
18 Sec. 73. Section 423B.8, subsection 1, Code 2021, is amended
19to read as follows:
201. Construction contractors may make application to the
21department for a refund of the additional local sales and
22services tax paid under this chapter by reason of taxes paid on
23goods, wares, or merchandise building materials, supplies, or
24equipment under the following conditions:
25a. The goods, wares, or merchandise building materials,
26supplies, or equipment are incorporated into an improvement to
27real estate in fulfillment of a written contract fully executed
28prior to the date of the imposition of a local sales and
29services tax under this chapter. The refund shall not apply to
30equipment transferred in fulfillment of a mixed construction
31contract.
32b. The contractor has paid to the department or to a
33retailer the full amount of the state and local tax.
34c. The claim is filed on forms provided by the department
35and is filed within one year of the date the tax is paid.
-36-1DIVISION XI
2INTEREST RATE SET BY DIRECTOR OF REVENUE
3 Sec. 74. Section 421.7, subsection 6, Code 2021, is amended
4to read as follows:
56. In October November of each year the director shall cause
6an advisory notice to be published in the Iowa administrative
7bulletin and in a newspaper of general circulation in this
8state, stating the rate of interest to be in effect on or
9after January 1 of the following year, as established by this
10section. The calculation and publication of the rate of
11interest by the director is exempt from chapter 17A.
12DIVISION XII
13 ASSESSORS
14 Sec. 75. Section 441.6, subsection 3, Code 2021, is amended
15to read as follows:
163. The appointee selected by the conference board under
17subsection 2 or appointed to a succeeding term under section
18441.8, subsection 1, shall not assume the office of city or
19county assessor until such appointment is confirmed by the
20director of revenue. If the director of revenue rejects
21the appointment, the examining board shall conduct a new
22examination and submit a new report to the conference board
23under subsection 1. The director of revenue shall adopt rules
24pursuant to chapter 17A to implement and administer this
25subsection.
26 Sec. 76. Section 441.17, subsection 2, Code 2021, is amended
27to read as follows:
282. Cause to be assessed, in accordance with section 441.21,
29all the property in the assessor’s county or city, except
30property exempt from taxation, or the assessment of which is
31otherwise provided for by law. However, an assessor or deputy
32assessor shall not personally assess a property if the person
33or a member of the person’s immediate family owns the property,
34has a financial interest in the property, or has a financial
35interest in the entity that owns the property. The director of
-37-1revenue shall adopt rules pursuant to chapter 17A to implement
2and administer this subsection.
3 Sec. 77. Section 441.41, Code 2021, is amended to read as
4follows:
5441.41 Legal counsel.
61. In the case of cities having an assessor, the city legal
7department shall represent the assessor and board of review
8in all litigation dealing with assessments. In the case of
9counties, the county attorney shall represent the assessor and
10board of review in all litigation dealing with assessments.
11Any taxing district interested in the taxes received from such
12assessments may be represented by an attorney and shall be
13required to appear by attorney upon written request of the
14assessor to the presiding officer of any such taxing district.
15Subject to review and prior approval by either the city legal
16department in the case of a city or the county attorney in
17the case of a county, the conference board may employ special
18counsel to assist the city legal department or county attorney
19as the case may be.
202. a. Upon the employment of special counsel described
21in subsection 1, the assessor shall provide a report to the
22department of revenue relating to the special counsel including
23but not limited to the following:
24(1) The date the employment started.
25(2) Justification for the employment.
26(3) The name and hourly rate of the special counsel.
27(4) Any other information the department may require.
28b. An assessor shall report annually to the director of
29revenue on the cost of litigation for all matters dealing with
30assessments in which special counsel assisted the city legal
31department or county attorney as described in subsection 1.
32c. The director of revenue shall adopt rules pursuant to
33chapter 17A to administer this section.
34DIVISION XIII
35CONFIDENTIAL INFORMATION — DEPARTMENT OF REVENUE
-38-1 Sec. 78. Section 422.20, subsection 5, paragraph a, Code
22021, is amended by adding the following new subparagraph:
3 NEW SUBPARAGRAPH. (7) A return as defined in section 421.6.
4 Sec. 79. Section 422.20, subsection 5, paragraph c, Code
52021, is amended to read as follows:
6c. Notwithstanding paragraph “a”, when making final orders,
7decisions, or opinions available for public inspection, the
8department may disclose the items in paragraph “a” if the
9department determines such information is relevant or necessary
10to the resolution or decision of the appeal or case.
11 Sec. 80. Section 422.72, subsection 8, paragraph a, Code
122021, is amended by adding the following new subparagraph:
13 NEW SUBPARAGRAPH. (7) A return as defined in section 421.6.
14 Sec. 81. Section 422.72, subsection 8, paragraph c, Code
152021, is amended to read as follows:
16c. Notwithstanding paragraph “a”, when making final orders,
17decisions, or opinions available for public inspection, the
18department may disclose the items in paragraph “a” if the
19department determines such information is relevant or necessary
20to the resolution or decision of the appeal or case.
21DIVISION XIV
22POWER OF ATTORNEY — DEPARTMENT OF REVENUE
23 Sec. 82. Section 421.59, subsections 2 and 3, Code 2021, are
24amended to read as follows:
252. The Unless otherwise prohibited by law, the department
26may authorize the following persons to act and receive
27information on behalf of and exercise all of the rights of a
28taxpayer, regardless of whether a power of attorney has been
29filed pursuant to subsection 1:
30a. A guardian, conservator, or custodian appointed by a
31court, if a taxpayer has been deemed legally incompetent by a
32court. The authority of the appointee to act on behalf of the
33taxpayer shall be limited to the extent specifically stated in
34the order of appointment.
35(1) Upon request, a guardian, conservator, or custodian of
-39-1a taxpayer shall submit to the department a copy of the court
2order appointing the guardian, conservator, or custodian.
3(2) The department may has standing to petition the
4court that appointed the guardian, conservator, or custodian
5to verify the appointment or to determine the scope of the
6appointment.
7b. A receiver appointed pursuant to chapter 680. An
8appointed receiver shall be limited to act on behalf of the
9taxpayer by the authority stated in the order of appointment.
10(1) Upon the request of the department, a receiver shall
11submit to the department a copy of the court order appointing
12the receiver.
13(2) The department may has standing to petition the court
14that appointed the receiver to verify the appointment or to
15determine the scope of the appointment.
16c. An individual who has been named as an authorized
17representative on a fiduciary return of income filed under
18section 422.14 or a tax return filed under chapter 450.
19d. (1) An individual holding the following title or
20position within a corporation, association, partnership, or
21other business entity:
22(a) A president or chief executive officer, or any other
23officer of the corporation or association if the president or
24chief executive officer certifies that the officer has the
25authority to legally bind the corporation or association.
26(b) A designated partner duly authorized to act on behalf
27of the partnership.
28(c) A person authorized to act on behalf of a limited
29liability company in tax matters pursuant to a valid statement
30of authority.
31(2) An individual seeking to act on behalf of a taxpayer
32pursuant to this paragraph shall file an affidavit with the
33department attesting to the identity and qualifications of the
34individual and any necessary certifications required under
35this paragraph affirm the authority of the individual to act
-40-1on behalf of the corporation, association, partnership, or
2other entity in a manner designated by the department. The
3department may require any documents or other evidence to
4demonstrate the individual has authority to act on behalf of
5the taxpayer corporation, association, partnership, or other
6entity before the department.
7e. A licensed attorney who has appeared on behalf of
8the taxpayer or the taxpayer’s probate estate in a court
9proceeding. Authorization under this paragraph is limited to
10those matters within the scope of the representation.
11f. A parent or guardian of a taxpayer who has not reached
12the age of majority where the same parent or guardian has
13signed the taxpayer’s return on behalf of the taxpayer.
14Authorization under this paragraph is limited to those matters
15relating to the return signed by the parent or guardian.
16Authorization under this paragraph automatically terminates
17when the taxpayer reaches the age of majority pursuant to
18section 599.1.
19g. A representative of a government entity. An individual
20seeking to act on behalf of a government entity pursuant to
21this paragraph shall affirm the authority of the individual to
22act on behalf of the government entity in a manner designated
23by the department. The department may require evidence to
24demonstrate the individual has authority to act on behalf of
25the government entity.
26h. An executor or personal representative of an estate.
27(1) Upon request, the executor or personal representative
28shall submit to the department a copy of the will or court
29order appointing the executor or personal representative.
30(2) The department has standing to petition the court that
31appointed the executor or personal representative to verify the
32appointment or to determine the scope of the appointment.
333. a. In lieu of executing a power of attorney pursuant
34to subsection 1, the department may enter into a memorandum
35of understanding with the allow a taxpayer for each employee,
-41-1officer, or member of a third-party to designate an entity
2engaged with or otherwise hired by a taxpayer to manage the
3tax matters of the taxpayer, to permit the disclosure of
4confidential tax information to the third-party entity and
5the authority to act on behalf of the taxpayer. An entity so
6designated may appoint or remove its own employees to carry
7out acts authorized by the taxpayer on the entity’s behalf.
8 The memorandum of understanding shall adhere to requirements
9as established by the director department may designate the
10methods by which such designation and appointments may occur.
11b. The memorandum of understanding shall be signed by
12the director, the taxpayer, and the third-party entity or an
13authorized representative of the third-party entity.
14c. At any time, a taxpayer may unilaterally revoke a
15memorandum of understanding entered into designation pursuant
16to this subsection by filing a notice of revocation with the
17department. Upon the filing of such a revocation by the
18taxpayer, the department shall cease honoring the memorandum
19of understanding designation.
20DIVISION XV
21SALES AND USE TAX REFUNDS
22 Sec. 83. Section 15.331A, subsection 2, paragraph c, Code
232021, is amended to read as follows:
24c. The eligible business shall inform the department
25of revenue in writing within two weeks of after project
26completion. For purposes of this section, “project completion”
27means the first date upon which the average annualized
28production of finished product for the preceding ninety-day
29period at the manufacturing facility operated by the eligible
30business is at least fifty percent of the initial design
31capacity of the facility.
32 Sec. 84. EFFECTIVE DATE. This division of this Act, being
33deemed of immediate importance, takes effect upon enactment.
34 Sec. 85. APPLICABILITY. This division of this Act applies
35to refund claims filed on or after the effective date of this
-42-1division of this Act.
2EXPLANATION
3The inclusion of this explanation does not constitute agreement with
4the explanation’s substance by the members of the general assembly.
5This bill relates to state taxation and related laws of
6the state including the collection of tax, tax credits, the
7assessment, valuation, and classification of property, fees
8for registration of vehicles, sales and use tax, and the
9authority of the director of revenue. The bill is organized
10into divisions.
11TAX CREDIT FOR CERTAIN SALES TAXES PAID BY THIRD-PARTY
12DEVELOPERS. Currently, an eligible business may claim a
13corporate tax credit in an amount equal to the sales and use
14taxes paid by a third-party developer under Code chapter 423
15for the construction or equipping of a facility of an eligible
16business. An “eligible business” is defined under Code section
1715.329 and means in part a business making an investment of $10
18million or more in a community.
19The bill allows an individual to claim the tax credit on an
20individual return for certain sales tax paid by a third-party
21developer, if a partnership, limited liability company, S
22corporation, estate, or trust elects to have income taxed
23directly to the individual.
24Additionally, the bill changes the name of the corporate
25tax credit to third-party developer tax credit because the tax
26credit is now available against the individual income tax.
27This division takes effect upon enactment and applies
28retroactively January 1, 2020, for tax years beginning on or
29after that date.
30GEOTHERMAL HEAT PUMP INSTALLATION TAX CREDIT. The bill
31requires an applicant for a geothermal heat pump tax credit
32to file an application for the credit with the department of
33revenue for each geothermal heat pump installation. The bill
34requires the application to be filed by May 1 following the
35year of installation.
-43- 1This division takes effect upon enactment and applies
2retroactively to January 1, 2019, for tax years beginning on
3or after that date.
4TAXES ON ELECTRICITY PROVIDERS. Under the current
5replacement tax, the proportional tax revenue from a major
6addition is allocated to the local jurisdiction where a major
7addition is located. The bill lowers the threshold for the
8classification of “major additions” of solar energy conversion
9property under the replacement tax from $10 million to $1
10million. The modified threshold allows a local jurisdiction
11to receive tax revenue generated by a solar energy conversion
12facility for major additions that exceed $1 million but does
13not change the amount of tax due on solar energy conversion
14facilities.
15FEE FOR NEW REGISTRATION — VEHICLES. The bill makes
16numerous organizational, technical, and substantive changes to
17Code section 321.105A.
18The bill specifies that to be exempt from the fee for
19new registration, the person listed on the title of a newly
20acquired vehicle must be the same person listed on the title
21and registration of the traded vehicle.
22The bill specifies that in order to be exempt from the fee
23for new registration, a trade must be between spouses rather
24than involve spouses.
25The bill exempts trades between lineal family members from
26the fee for new vehicle registration. Currently, trades
27between a grandparent, parent, child, or stepchild are exempt.
28The bill specifies a sole proprietorship shall not be
29distinguished from an individual owner for purposes of
30calculating the new vehicle registration fee when exempting the
31trade-in value from the purchase price.
32The bill specifies that the fair market value of a
33replacement motor vehicle owned by a motor vehicle dealer
34is exempt from the new vehicle registration fee if certain
35conditions are met under Code section 321.105A(2)(a)(3).
-44- 1The bill specifies that a vehicle is not subject to the new
2registration fee if the vehicle is transferred from an entity
3doing business within the state to another entity in the state
4and all of the following apply: the receiving entity was
5formed by the transferring entity within the previous 24 months
6for the purpose of continuing the business and all ownership
7remains the same, except in the case of a sole proprietorship,
8the spouse of the sole proprietor may stand in place of the
9sole proprietor.
10The bill provides that a vehicle subject to registration in
11this state is exempt from the fee for new vehicle registration
12to the extent the equivalent sales or excise tax of another
13country has been paid to that country. Currently, a vehicle
14subject to registration is exempt from the fee for new vehicle
15registration to the extent state sales, use, or occupational
16tax has been paid to another state.
17The bill provides that a vehicle subject to registration in
18this state which is owned by a person in another country is
19exempt from the fee for new vehicle registration provided the
20vehicle was purchased for use in the country from which the
21owner moved, and was not purchased for use in Iowa. Currently,
22a vehicle subject to registration is exempt from the fee for
23new vehicle registration if the vehicle is owned by a person
24in another state provided the vehicle was purchased for use in
25the state from which the owner moved, and was not purchased for
26use in Iowa.
27The bill specifies that a vehicle purchased by a licensed
28wholesaler of new motor vehicles under Code section 322.27A for
29resale by the same wholesaler is exempt from the fee for new
30registration.
31The bill provides that a vehicle transferred from one
32individual to another individual as a gift is exempt from the
33fee for new vehicle registration.
34The bill provides that a vehicle subject to registration
35is subject to the fee for new registration if the vehicle is
-45-1leased for at least six months. Currently, a vehicle with
2a gross weight rating of less than 16,000 pounds which is
3leased for at least 12 months is subject to the fee for new
4registration.
5The bill specifies if a lease is voided prior to the
6termination date contained in the lease agreement, no refund
7is permitted for the fee for new registration previously paid,
8except under certain circumstances. Currently, no refund of
9such a fee is permitted if the lease is terminated prior to the
10termination date except under certain circumstances.
11The bill creates a new penalty for persons who fail to file
12an application for certificate of title or registration on or
13before the due date in the amount of 10 percent of the fee for
14new registration due.
15The bill creates a new penalty for persons who file an
16application for certificate of title or registration with
17inaccurate information that results in the person paying less
18than the full amount of the fee for new registration. The
19penalty equals 5 percent of the fee for new registration due.
20PENALTIES — IMPUTED IOWA LIABILITY. Currently, in
21determining the amount of penalty to assess under Code section
22421.27, the department of revenue assesses a percentage of the
23imputed Iowa liability of a business who fails to file a return
24or deposit form. The bill adjusts the formula to calculate
25“imputed Iowa liability” by allowing the taxpayer to include
26any tax credits available to the taxpayer prior to calculating
27the penalty amount when using “imputed Iowa liability”.
28PARTNERSHIP AND PASS-THROUGH ENTITY AUDITS AND REPORTING.
29 The bill makes numerous technical changes to partnership and
30pass-through entity audits and reporting requirements enacted
31in 2020 Iowa Acts, chapter 1118.
32The bill allows the director of revenue to establish rules
33for the calculation of amounts due for federal partnership
34adjustments that affect state tax owed that do not fit within
35the calculations provided by Code section 422.5A(5)(c).
-46-1The bill also allows the director of revenue to establish
2rules that include state-specific issues following a state
3partnership audit in the election to pay and calculation of
4amounts due.
5Currently, if the department of revenue, the partnership
6or pass-through entity, and the partnership or pass-through
7entity owners agree, the provisions of Code section 422.25C
8may be applied to tax years beginning before January 1, 2020.
9The bill allows the department of revenue, the partnership or
10pass-through entity, and owners representing a majority of the
11ownership interests in the partnership or pass-through entity
12to enter into an agreement to allow the provisions of Code
13section 422.25C to apply to tax years beginning before January
141, 2020.
15This division takes effect upon enactment and applies
16retroactively to July 1, 2020, and applies to federal
17adjustments and federal partnership adjustments that have a
18final determination date after July 1, 2020.
19COUNTY TREASURER — CENTRALIZED COLLECTION UNIT OF THE
20DEPARTMENT OF REVENUE. Currently, a county treasurer may
21collect delinquent tax revenue owed the state. The bill allows
22a county treasurer to also collect nontax liabilities being
23collected by the centralized collection unit of the department
24of revenue.
25GARNISHMENT. The bill specifies that a distress warrant
26issued by the director of revenue or the director of
27inspections and appeals shall be considered a final judgment.
28A distress warrant generally directs the sheriff to seize,
29garnish, or levy upon, and sell, any real or personal property
30belonging to the taxpayer to satisfy the amount of any
31delinquency.
32SNOWMOBILES, ALL-TERRAIN VEHICLES, AND VESSELS — PURCHASES
33— PAYMENT OF SALES OR USE TAX. Currently, if the owner of
34a vessel (watercraft), snowmobile, or all-terrain vehicle is
35unable to present satisfactory evidence that the sales or use
-47-1tax on the purchase has been paid, the county recorder is
2required to collect the sales or use tax, and remit the amount
3of taxes along with an itemized statement by the 10th day of
4each month showing detailed information about the collection of
5the tax. The bill strikes the requirement the county recorder
6prepare and send such an itemized statement to the department
7of revenue, but does require the county recorder to remit the
8tax in a manner prescribed by the department.
9TANGIBLE PERSONAL PROPERTY. 2020 Iowa Acts, chapter 1118,
10struck numerous instances of the phrase “goods, wares, or
11merchandise” in order to update the language used in the
12Code. The bill changes additional instances of the phrase
13“goods, wares, or merchandise” to “tangible personal property”
14in Code sections 15.331A (sales and use tax refund), 15.331C
15(third-party developer tax credit as changed in the bill),
16and 321.105A (fee for new registration) and Code chapters 9C
17(transient merchants) and 423 (streamlined sales and use tax).
18CONSTRUCTION MATERIALS — SALES AND USE TAX. The bill
19changes other instances of the phrase “goods, wares, or
20merchandise” to “building materials, supplies, or equipment” in
21Code sections 423.4(1) (refunds) and 423B.8(1) (construction
22contractor refunds).
23NONPROFIT ORGANIZATIONS — SALES AND USE TAX EXEMPTION.
24 Currently, a sales and use tax exemption is allowed on the sale
25of tangible personal property, specified digital products,
26or services rendered where the profits from the sale or
27services rendered are used by or donated to a nonprofit, and
28the entire proceeds from the sale or services are expended for
29educational, religious, or charitable purposes.
30The bill enhances the readability of the sales and use tax
31exemption by specifying that the sales and use tax exemption
32applies when the entire profits from the sales or services
33rendered are used by or donated to a nonprofit, and the entire
34profits are expended for educational, religious, or charitable
35purposes.
-48- 1RENTALS — SALES AND USE TAX EXEMPTION. The bill includes
2the term “rental” in the definition of “sale” or “sales” in
3Code chapter 423 (streamlined sales and use tax), and strikes
4the term “rental” when it appears with the phrase “sale or
5rental” in Code sections 423.3 (exemptions) and 423.31(4)
6(filing of sales tax returns and payment of sales tax). The
7change has the effect of making more rental transactions exempt
8from the sales or use tax in Code section 423.3.
9INTEREST RATE SET BY DIRECTOR OF REVENUE. Currently, in
10October of each year the director of revenue sets the rate of
11interest to be used on interest-bearing obligations arising
12under certain Code chapters to be in effect on or after January
131 of the following year. The bill changes the month the rate is
14set by the director from October to November.
15ASSESSORS. The bill strikes a provision prohibiting
16an assessor or deputy assessor from personally assessing a
17property owned by an immediate family member of the assessor or
18deputy assessor. The bill specifies that an assessor appointed
19to a succeeding term should not assume the office until the
20appointment has been confirmed by the director of revenue.
21The bill provides that upon employment of a special counsel,
22the assessor shall provide a report to the department of
23revenue relating to the hiring of the special counsel.
24CONFIDENTIAL INFORMATION — DEPARTMENT OF REVENUE.
25 Currently, the department of revenue redacts certain
26information from the record in an appeal or contested case
27pursuant to Code sections 422.20 (individual tax cases) and
28422.72 (other tax cases). The bill adds a tax return to the
29list of confidential information to be redacted in an appeal or
30contested case under Code sections 422.20 and 422.72.
31The director currently has the authority to disclose
32confidential information when making final orders, decisions,
33or opinions available for public inspection, if it is necessary
34to the resolution or decision of the appeal or case. The bill
35expands the authority of the director of revenue to disclose
-49-1confidential information to include when it is relevant or
2necessary to the resolution or decision of the appeal or case.
3POWER OF ATTORNEY — DEPARTMENT OF REVENUE. In addition
4to the current types of individuals who are specified in
5Code section 421.59(2) to act on behalf of a taxpayer with
6the department of revenue, the bill adds procedures for a
7representative of a government entity to act on behalf of the
8government, and adds procedures for an executor or personal
9representative of an estate to act on behalf of an estate.
10SALES AND USE TAX REFUNDS. Currently, an eligible business
11must notify the department of revenue within two weeks of the
12completion of a project in order to receive a sales and use
13tax refund related to the high quality jobs program. The
14bill changes the notification requirement by the eligible
15business to the department of revenue to after completion of
16the project. The provision takes effect upon enactment and
17applies to refund claims filed on or after the effective date
18of this division of the bill.
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