Print
Senate File 2367 - IntroducedA Bill ForAn Act 1relating to sales, use, and motor vehicle fuel taxes
2administered by the department of revenue including
3distributions to local governments and school districts, the
4liability of sellers, tax refund and tax credit incentives,
5and motor fuel tax reporting modifications, and providing
6penalties, and including effective date and applicability
7provisions.
8BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2SALES, use, and excise tax — returns due
3 Section 1. Section 9C.3, subsection 3, Code 2022, is amended
4to read as follows:
53. The application shall state whether or not the applicant
6has an Iowa retailers sales or use tax permit and if the
7applicant has such permit, shall state the number of such
8permit.
9 Sec. 2. Section 9C.5, Code 2022, is amended to read as
10follows:
119C.5 Issuance of license.
12Upon receiving an application for a transient merchant’s
13license, the secretary of state shall investigate or cause to
14be investigated, the reputation and character of the applicant.
15If, upon making such investigation, the secretary of state is
16satisfied that the statements and representations contained in
17the application are true, and that the applicant is of good
18reputation and character, and the holder of an Iowa retailer’s
19 sales or use tax permit, and if a foreign corporation, has
20authority to do business in the state of Iowa, the secretary
21shall issue to the applicant a license as a transient merchant
22upon payment of the fee as herein prescribed for the period of
23time requested in said application and for use at the location
24and place where it is stated in said application the sale will
25be held or the business conducted, both of which shall be set
26out in said license. Such license shall be valid only for the
27period of time and at the location and place described therein.
28 Sec. 3. Section 99G.30A, subsection 2, paragraph c, Code
292022, is amended to read as follows:
30c. Frequency of deposits and quarterly monthly reports of
31the monitor vending machine excise tax with the department of
32revenue are governed by the tax provisions in section 423.31.
33Monitor vending machine excise tax collections shall not be
34included in computation of the total tax to determine frequency
35of filing under section 423.31.
-1-1 Sec. 4. Section 321.105A, subsection 4, paragraph b, Code
22022, is amended to read as follows:
3b. Section 422.25, subsection 4, sections 422.30, 422.67,
4and 422.68, section 422.69, subsection 1, sections 422.70,
5422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
62, and sections 423.23, 423.24, 423.25, 423.32, 423.33, 423.35,
7423.37 through 423.42, 423.45, and 423.47, consistent with the
8provisions of this section, apply with respect to the fees
9for new registration authorized under this section in the
10same manner and with the same effect as if the fees for new
11registration were retail use taxes within the meaning of those
12statutes.
13 Sec. 5. Section 421.26, Code 2022, is amended to read as
14follows:
15421.26 Personal liability for tax due.
16If a licensee or other person under section 452A.65, a
17retailer or purchaser under chapter 423A, 423B, 423C, 423D,
18or 423E, or section 423.14, 423.14A, 423.29, 423.31, 423.32,
19 or 423.33, or a user under section 423.34, or a permit holder
20or licensee under section 453A.13, 453A.16, or 453A.44 fails
21to pay a tax under those sections when due, an officer of a
22corporation or association, notwithstanding section 489.304,
23a member or manager of a limited liability company, or a
24partner of a partnership, having control or supervision of
25or the authority for remitting the tax payments and having
26a substantial legal or equitable interest in the ownership
27of the corporation, association, limited liability company,
28or partnership, who has intentionally failed to pay the tax
29is personally liable for the payment of the tax, interest,
30and penalty due and unpaid. However, this section shall
31not apply to taxes on accounts receivable. The dissolution
32of a corporation, association, limited liability company,
33or partnership shall not discharge a person’s liability for
34failure to remit the tax due.
35 Sec. 6. Section 423.2, subsection 1, paragraph b, Code 2022,
-2-1is amended to read as follows:
2b. Sales of building materials, supplies, and equipment
3to owners, contractors, subcontractors, or builders for the
4erection of buildings or the alteration, repair, or improvement
5of real property are retail sales of tangible personal property
6in whatever quantity sold. Where the owner, contractor,
7subcontractor, or builder is also a retailer holding a retail
8 sales or use tax permit and transacting retail sales of
9building materials, supplies, and equipment, the person shall
10purchase such items of tangible personal property without
11liability for the tax if such property will be subject to the
12tax at the time of resale or at the time it is withdrawn from
13inventory for construction purposes. The sales tax shall be
14due in the reporting period when the materials, supplies,
15and equipment are withdrawn from inventory for construction
16purposes or when sold at retail. The tax shall not be due when
17materials are withdrawn from inventory for use in construction
18outside of Iowa and the tax shall not apply to tangible
19personal property purchased and consumed by the manufacturer as
20building materials in the performance by the manufacturer or
21its subcontractor of construction outside of Iowa. The sale
22of carpeting is not a sale of building materials. The sale of
23carpeting to owners, contractors, subcontractors, or builders
24shall be treated as the sale of ordinary tangible personal
25property and subject to the tax imposed under this subsection
26and the use tax.
27 Sec. 7. Section 423.3, subsection 39, paragraph a,
28subparagraph (2), Code 2022, is amended to read as follows:
29(2) The sale of all or substantially all of the tangible
30personal property, or specified digital products, or services
31held or used by a seller in the course of the seller’s trade
32or business for which the seller is required to hold a sales
33or use tax permit when the seller sells or otherwise transfers
34the trade or business to another person who shall engage in a
35similar trade or business.
-3-1 Sec. 8. Section 423.3, subsection 80, paragraph d, Code
22022, is amended to read as follows:
3d. Subject to the limitations in paragraph “c”, where the
4owner, contractor, subcontractor, or builder is also a retailer
5holding a retail sales or use tax permit and transacting
6retail sales of building materials, supplies, and equipment,
7the tax shall not be due when materials are withdrawn from
8inventory for use in construction performed for a designated
9exempt entity if an exemption certificate is received from such
10entity.
11 Sec. 9. Section 423.5, subsection 2, Code 2022, is amended
12to read as follows:
132. The excise tax is imposed upon every person using
14the property within this state until the tax has been paid
15directly to the county treasurer, the state department of
16transportation, a retailer, or the department. This tax is
17imposed on every person using the services or the product of
18the services in this state until the user has paid the tax
19either to an Iowa sales or use tax permit holder or to the
20department.
21 Sec. 10. Section 423.14, subsection 2, paragraph b, Code
222022, is amended to read as follows:
23b. The tax upon the use of all tangible personal property
24and specified digital products other than that enumerated in
25paragraph “a”, which is sold by a seller who is a retailer or
26its agent that is not otherwise required to collect sales tax
27under the provisions of this chapter, may be collected by the
28retailer or agent and remitted to the department, pursuant to
29the provisions of paragraph “e”, and sections 423.24, 423.29,
30423.30, 423.32 423.31, and 423.33.
31 Sec. 11. Section 423.14A, subsection 3, paragraph c,
32subparagraph (2), Code 2022, is amended to read as follows:
33(2) A marketplace facilitator shall collect sales and
34use tax on the entire sales price or purchase price paid by
35a purchaser on each Iowa sale subject to sales and use tax
-4-1that is made or facilitated by the marketplace facilitator,
2regardless of whether the marketplace seller for whom an Iowa
3sale is made or facilitated has or is required to have a retail
4 sales or use tax permit or would have been required to collect
5sales and use tax had the sale not been facilitated by the
6marketplace facilitator, and regardless of the amount of the
7sales price or purchase price that will ultimately accrue
8to or benefit the marketplace facilitator, the marketplace
9seller, or any other person. This sales and use tax collection
10responsibility of a marketplace facilitator applies but shall
11not be limited to sales facilitated through a computer software
12application, commonly referred to as in-app purchases, or
13through another specified digital product.
14 Sec. 12. Section 423.31, subsections 1, 3, 5, and 6, Code
152022, are amended to read as follows:
161. a. Each Except as provided in paragraph “b”, each person
17subject to this section and section 423.36 and in accordance
18with the provisions of this section and section 423.36 shall,
19on or before the last day of the month following the close of
20each calendar quarter month during which such person is or
21has become or ceased being subject to the provisions of this
22section and section 423.36, make, sign, and file electronically
23 a return for the calendar quarter month in the form as may be
24required. Returns shall show information relating to sales
25prices including tangible personal property, specified digital
26products, and services converted to the use of such person,
27the amounts of sales prices excluded and exempt from the tax,
28the amounts of sales prices subject to tax, a calculation of
29tax due, and any other information for the period covered by
30the return as may be required. Returns shall be signed by
31the retailer or the retailer’s authorized agent and must be
32certified by the retailer to be correct in accordance with
33forms and rules prescribed by the director. A person required
34to file a sales or use tax return who is unable to do so may
35request permission from the director to file a return by
-5-1another method.
2b. Notwithstanding paragraph “a”, each person subject to
3this section who collects and remits less than one thousand
4two hundred dollars in sales or use tax to the department per
5calendar year may file a return on or before the last day of the
6month following the close of the calendar year.
73. The sales tax forms prescribed by the director shall be
8referred to as “retailers tax deposit”. Deposit forms shall
9be signed by the retailer or the retailer’s duly authorized
10agent, and shall be duly certified by the retailer or agent to
11be correct. The director may authorize incorporated banks and
12trust companies or other depositories authorized by law which
13are depositories or financial agents of the United States,
14or of this state, to receive any sales or use tax imposed
15under this chapter, in the manner, at the times, and under
16the conditions the director prescribes. The director shall
17prescribe the manner, times, and conditions under which the
18receipt of the tax by those depositories is to be treated as
19payment of the tax to the department.
205. a. Upon making application and receiving approval
21from the director, a person and its affiliates that make
22retail sales of tangible personal property, specified digital
23products, or taxable enumerated services may make deposits and
24file a consolidated sales or use tax return for the affiliated
25group, pursuant to rules adopted by the director. A person and
26each affiliate that files a consolidated return are jointly and
27severally liable for all tax, penalty, and interest found due
28for the tax period for which a consolidated return is filed or
29required to be filed.
30b. A business required to file a consolidated sales or use
31 tax return shall file a form entitled “schedule of consolidated
32business locations” with its quarterly sales or use tax
33return that shows the taxpayer’s consolidated permit number,
34the permit number for each Iowa business location, the state
35sales tax amount by business location, and the amount of state
-6-1sales tax due on goods consumed that are not assigned to a
2specific business location. Consolidated quarterly sales or
3use tax returns that are not accompanied by the schedule of
4consolidated business locations form are considered incomplete
5and are subject to penalty under section 421.27.
66. If necessary or advisable in order to insure ensure
7 the payment of the tax, the director may require returns and
8payment of the tax to be made for other than quarterly monthly
9 periods, the provisions of this section or other provision to
10the contrary notwithstanding.
11 Sec. 13. Section 423.31, subsection 2, Code 2022, is amended
12by striking the subsection.
13 Sec. 14. Section 423.33, subsection 1, paragraph a, Code
142022, is amended to read as follows:
15a. If a purchaser fails to pay sales tax to the retailer
16required to collect the tax, then in addition to all of the
17rights, obligations, and remedies provided, a use tax is
18payable by the purchaser directly to the department, and
19sections 423.31, 423.32, 423.37, 423.38, 423.39, 423.40,
20423.41, and 423.42 apply to the purchaser.
21 Sec. 15. Section 423.33, subsection 3, Code 2022, is amended
22to read as follows:
233. Event sponsor’s liability for sales tax. A person
24sponsoring a flea market or a craft, antique, coin, or stamp
25show or similar event shall obtain from every retailer selling
26tangible personal property, specified digital products, or
27taxable services at the event proof that the retailer possesses
28a valid sales or use tax permit or secure from the retailer
29a statement, taken in good faith, that tangible personal
30property, specified digital products, or services offered for
31sale are not subject to sales tax. Failure to do so renders
32a sponsor of the event liable for payment of any sales tax,
33interest, and penalty due and owing from any retailer selling
34property or services at the event. Sections 423.31, 423.32,
35 423.37, 423.38, 423.39, 423.40, 423.41, and 423.42 apply to the
-7-1sponsors. For purposes of this subsection, a “person sponsoring
2a flea market or a craft, antique, coin, or stamp show or similar
3event” does not include a marketplace facilitator as defined in
4section 423.14A, subsection 1, an organization which sponsors
5an event determined to qualify as an event involving casual
6sales pursuant to section 423.3, subsection 39, or the state
7fair or a fair as defined in section 174.1.
8 Sec. 16. Section 423.34, Code 2022, is amended to read as
9follows:
10423.34 Liability of user.
11Any person who uses any tangible personal property,
12specified digital products, or services enumerated in section
13423.2 upon which the use tax has not been paid, either to the
14county treasurer or to a retailer or direct to the department
15as required by this subchapter, shall be liable for the payment
16of tax, and shall on or before the last day of the month next
17succeeding each quarterly monthly period pay the use tax upon
18all tangible personal property, specified digital products,
19or services used by the person during the preceding quarterly
20 monthly period in the manner and accompanied by such returns
21as the director shall prescribe. All of the provisions of
22sections 423.32 423.31 and 423.33 with reference to the returns
23and payments shall be applicable to the returns and payments
24required by this section.
25 Sec. 17. Section 423.36, subsection 4, paragraph b, Code
262022, is amended to read as follows:
27b. If an applicant is making sales outside Iowa for use in
28this state or furnishing services outside Iowa, the product
29or result of which will be used in this state, that applicant
30shall be issued one sales or use tax permit by the department
31applicable to these out-of-state sales or services.
32 Sec. 18. Section 423.36, subsection 4, Code 2022, is amended
33by adding the following new paragraph:
34 NEW PARAGRAPH. c. If an applicant is required to collect
35sales or use tax and is not included in the definition of a
-8-1retailer maintaining a place of business in this state in
2section 423.1, subsection 48, paragraph “a”, subparagraph (1),
3the applicant shall be issued one sales or use tax permit by
4the department regardless of the number of locations from which
5sales are made.
6 Sec. 19. Section 423.36, subsections 7 and 8, Code 2022, are
7amended to read as follows:
87. a. Sellers who are not regularly engaged in selling
9at retail and do not have a permanent place of business, but
10who are temporarily engaged in selling from trucks, portable
11roadside stands, concessionaires at state, county, district,
12or local fairs, carnivals, or the like, shall report and remit
13the sales tax on a temporary seasonal basis, under rules
14the director shall provide for the efficient collection of
15the sales tax. This subsection applies to sellers who are
16temporarily engaged in furnishing services.
17b. Persons engaged in selling tangible personal property,
18specified digital products, or furnishing services shall not
19be required to obtain or retain a sales or use tax permit for a
20place of business at which taxable sales of tangible personal
21property, specified digital products, or taxable performance of
22services will not occur.
238. The provisions of subsection 1, dealing with the lawful
24right of a retailer to transact business, as applicable, apply
25to persons having receipts from furnishing services enumerated
26in section 423.2, except that a person holding a permit
27pursuant to subsection 1 shall not be required to obtain any
28separate sales or use tax permit for the purpose of engaging in
29business involving the services.
30 Sec. 20. Section 423.40, subsections 1, 2, 3, and 5, Code
312022, are amended to read as follows:
321. In addition to the sales or use tax or additional sales
33or use tax, the taxpayer shall pay a penalty as provided in
34section 421.27. The taxpayer shall also pay interest on the
35sales or use tax or additional sales or use tax at the rate
-9-1in effect under section 421.7 for each month counting each
2fraction of a month as an entire month, computed from the date
3the semimonthly or monthly tax deposit form or return was
4required to be filed. The penalty and interest shall be paid
5to the department and disposed of in the same manner as other
6receipts under this subchapter. Unpaid penalties and interest
7may be enforced in the same manner as the taxes imposed by this
8chapter.
92. a. Any person who knowingly sells tangible personal
10property, specified digital products, tickets or admissions
11to places of amusement and athletic events, or gas, water,
12electricity, or communication service at retail, or engages in
13the furnishing of services enumerated in section 423.2, in this
14state without procuring a permit to collect tax, as provided
15in section 423.36, or who violates section 423.24 and the
16officers of any corporation who so act are guilty of a serious
17misdemeanor.
18b. A person who knowingly sells tangible personal property,
19specified digital products, tickets or admissions to places of
20amusement and athletic events, or gas, water, electricity, or
21communication service at retail, or engages in the furnishing
22of services enumerated in section 423.2, in this state after
23the person’s sales or use tax permit has been revoked and
24before it has been restored as provided in section 423.36,
25subsection 6, and the officers of any corporation who so act
26are guilty of an aggravated misdemeanor.
273. A person who willfully attempts in any manner to evade
28any tax imposed by this chapter or the payment of the tax or
29a person who makes or causes to be made a false or fraudulent
30semimonthly or monthly tax deposit form or return with intent
31to evade any tax imposed by subchapter II or III or the payment
32of the tax is guilty of a class “D” felony.
335. A person required to pay sales or use tax, or to make,
34sign, or file a tax deposit form or return or supplemental
35return, who willfully makes a false or fraudulent tax deposit
-10-1form or return, or willfully fails to pay at least ninety
2percent of the tax or willfully fails to make, sign, or file
3the tax deposit form or return, at the time required by law, is
4guilty of a fraudulent practice.
5 Sec. 21. Section 423.45, subsection 4, paragraph b, Code
62022, is amended to read as follows:
7b. The sales tax liability for all sales of tangible
8personal property and specified digital products and all sales
9of services is upon the seller and the purchaser unless the
10seller takes from the purchaser a valid exemption certificate
11stating under penalty of perjury that the purchase is for a
12nontaxable purpose and is not a retail sale as defined in
13section 423.1, or the seller is not obligated to collect tax
14due, or unless the seller takes a fuel exemption certificate
15pursuant to subsection 5. If the tangible personal property,
16specified digital products, or services are purchased tax free
17pursuant to a valid exemption certificate and the tangible
18personal property, specified digital products, or services are
19used or disposed of by the purchaser in a nonexempt manner, the
20purchaser is solely liable for the taxes and shall remit the
21taxes directly to the department and sections 423.31, 423.32,
22 423.37, 423.38, 423.39, 423.40, 423.41, and 423.42 shall apply
23to the purchaser.
24 Sec. 22. Section 423.45, subsection 5, paragraph c, Code
252022, is amended to read as follows:
26c. The seller may accept a completed fuel exemption
27certificate, as prepared by the purchaser, for three
28years unless the purchaser files a new completed exemption
29certificate. If the fuel is purchased tax free pursuant to a
30fuel exemption certificate which is taken by the seller, and
31the fuel is used or disposed of by the purchaser in a nonexempt
32manner, the purchaser is solely liable for the taxes, and shall
33remit the taxes directly to the department and sections 423.31,
34423.32, 423.37, 423.38, 423.39, 423.40, 423.41, and 423.42
35shall apply to the purchaser.
-11-1 Sec. 23. Section 423.50, subsection 1, Code 2022, is amended
2to read as follows:
31. Only one remittance of tax per return is required except
4as provided in this subsection. Sellers that collect more
5than thirty thousand dollars in sales and use taxes for this
6state during the preceding calendar year shall be required to
7make additional remittances as required under rules adopted by
8the director. The filing of a return is not required with an
9additional remittance.
10 Sec. 24. Section 423.57, Code 2022, is amended to read as
11follows:
12423.57 Statutes applicable.
13The director shall administer this subchapter as it relates
14to the taxes imposed in this chapter in the same manner and
15subject to all the provisions of, and all of the powers,
16duties, authority, and restrictions contained in sections
17423.14, 423.14A, 423.14B, 423.15, 423.16, 423.17, 423.19,
18423.20, 423.21, 423.22, 423.23, 423.24, 423.25, 423.29, 423.31,
19423.32, 423.33, 423.34, 423.34A, 423.35, 423.37, 423.38,
20423.39, 423.40, 423.41, and 423.42, section 423.43, subsection
211, and sections 423.45, 423.46, and 423.47.
22 Sec. 25. Section 423.58, Code 2022, is amended to read as
23follows:
24423.58 Collection, permit, and tax return exemption for
25certain out-of-state businesses.
26Notwithstanding sections 423.14, 423.14A, 423.14B, 423.29,
27423.31, 423.32, and 423.36, a person meeting the requirements
28of section 29C.24 is not required to obtain a sales or use tax
29permit, collect and remit sales and use tax, or make and file
30applicable sales or use tax returns, as provided in section
3129C.24, subsection 3, paragraph “a”, subparagraph (2).
32 Sec. 26. Section 423A.6, subsection 4, Code 2022, is amended
33to read as follows:
344. Section 422.25, subsection 4, sections 422.30, 422.67,
35and 422.68, section 422.69, subsection 1, sections 422.70,
-12-1422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
21, and sections 423.23, 423.24, 423.25, 423.31, 423.33,
3423.35, 423.37 through 423.42, and 423.47, consistent with the
4provisions of this chapter, apply with respect to the taxes
5authorized under this chapter, in the same manner and with the
6same effect as if the state and local hotel and motel taxes
7were retail sales taxes within the meaning of those statutes.
8Notwithstanding this subsection, the director shall provide
9for quarterly monthly filing of returns and for other than
10quarterly monthly filing of returns both as prescribed in
11section 423.31. The director may require all persons who are
12engaged in the business of deriving any sales price subject
13to tax under this chapter to register with the department.
14All taxes collected under this chapter by a retailer, lodging
15provider, lodging facilitator, lodging platform, or any other
16person are deemed to be held in trust for the state of Iowa and
17the local jurisdictions imposing the taxes.
18 Sec. 27. Section 423B.5, subsection 3, Code 2022, is amended
19to read as follows:
203. A tax permit other than the state sales or use tax permit
21required under section 423.36 shall not be required by local
22authorities.
23 Sec. 28. Section 423B.6, subsection 2, paragraph c, Code
242022, is amended to read as follows:
25c. Frequency of deposits and quarterly monthly reports of a
26local sales and services tax with the department of revenue are
27governed by the tax provisions in section 423.31. Local tax
28collections shall not be included in computation of the total
29tax to determine frequency of filing under section 423.31.
30 Sec. 29. Section 423C.4, Code 2022, is amended to read as
31follows:
32423C.4 Administration and enforcement.
33All powers and requirements of the director of revenue
34to administer the state sales tax law under chapter 423 are
35applicable to the administration of the tax imposed under
-13-1section 423C.3, including but not limited to section 422.25,
2subsection 4, sections 422.30, 422.67, and 422.68, section
3422.69, subsection 1, sections 422.70 through 422.75, section
4423.14, subsection 1, and sections 423.15, 423.23, 423.24,
5423.25, 423.31, 423.33, 423.35 and 423.37 through 423.42,
6423.45, 423.46, and 423.47. However, as an exception to the
7powers specified in section 423.31, the director shall only
8require the filing of quarterly monthly reports.
9 Sec. 30. Section 423D.4, subsection 3, Code 2022, is amended
10to read as follows:
113. Section 422.25, subsection 4, sections 422.30, 422.67,
12and 422.68, section 422.69, subsection 1, sections 422.70,
13422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
141, and sections 423.23, 423.24, 423.25, 423.31 through
15423.35, 423.37 through 423.42, and 423.47, consistent with
16the provisions of this chapter, apply with respect to the tax
17authorized under this chapter, in the same manner and with the
18same effect as if the excise taxes on equipment sales or use
19were retail sales taxes within the meaning of those statutes.
20Notwithstanding this subsection, the director shall provide
21for quarterly monthly filing of returns and for other than
22quarterly monthly filing of returns both as prescribed in
23section 423.31. All taxes collected under this chapter by a
24retailer or any user are deemed to be held in trust for the
25state of Iowa.
26 Sec. 31. Section 423G.5, subsection 3, Code 2022, is amended
27to read as follows:
283. Section 422.25, subsection 4, sections 422.30, 422.67,
29and 422.68, section 422.69, subsection 1, sections 422.70,
30422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
311, and sections 423.23, 423.24, 423.25, 423.31 through
32423.35, 423.37 through 423.42, and 423.47, consistent with the
33provisions of this chapter, shall apply with respect to the tax
34authorized under this chapter, in the same manner and with the
35same effect as if the excise taxes on the sale or furnishing of
-14-1a water service were retail sales taxes within the meaning of
2those statutes. Notwithstanding this subsection, the director
3shall provide for quarterly monthly filing of returns and
4for other than quarterly monthly filing of returns both as
5prescribed in section 423.31. All taxes collected under this
6chapter by a retailer or any user are deemed to be held in trust
7for the state of Iowa.
8 Sec. 32. Section 728.1, subsection 6, Code 2022, is amended
9to read as follows:
106. “Place of business” means the premises of a business
11required to obtain a sales or use tax permit pursuant to
12chapter 423, the premises of a nonprofit or not-for-profit
13organization, and the premises of an establishment which is
14open to the public at large or where entrance is limited by a
15cover charge or membership requirement.
16 Sec. 33. Section 728.5, subsection 1, unnumbered paragraph
171, Code 2022, is amended to read as follows:
18An owner, manager, or person who exercises direct control
19over a place of business required to obtain a sales or use tax
20permit shall be guilty of a serious misdemeanor under any of
21the following circumstances:
22 Sec. 34. REPEAL. Section 423.32, Code 2022, is repealed.
23 Sec. 35. IMPLEMENTATION — EMERGENCY RULES. The department
24of revenue may adopt emergency rules under section 17A.4,
25subsection 3, and section 17A.5, subsection 2, paragraph “b”,
26to implement the provisions of this division of this Act and
27the rules shall be effective immediately upon filing unless
28a later date is specified in the rules. Any rules adopted
29in accordance with this section shall also be published as a
30notice of intended action as provided in section 17A.4.
31 Sec. 36. EFFECTIVE DATE. The following, being deemed of
32immediate importance, takes effect upon enactment:
33The section of this division of this Act enacting emergency
34rules relating to the implementation of this division of this
35Act.
-15-1DIVISION II
2DISTRIBUTIONS OF REVENUE TO LOCAL GOVERNMENTS AND SCHOOL
3DISTRICTS
4 Sec. 37. Section 423B.7, subsection 2, paragraph a, Code
52022, is amended to read as follows:
6a. The director of revenue by August 15 of each fiscal
7year the last day of each month shall send transfer to each
8city or county where the local option tax is imposed, an
9estimate of the amount of tax moneys remitted to the department
10attributable to each city or county will receive for the year
11and for each month of the year from the preceding month. At the
12end of each month, the director may revise the estimates for
13the year and remaining months.
14 Sec. 38. Section 423B.7, subsection 2, paragraphs b and c,
15Code 2022, are amended by striking the paragraphs.
16 Sec. 39. Section 423F.2, subsection 4, paragraph a, Code
172022, is amended to read as follows:
18a. The director of revenue by August 15 of each fiscal year
19 the last day of each month shall send transfer to each school
20district an estimate of the amount of tax moneys remitted
21to the department attributable to each school district will
22receive for the year and for each month of the year from the
23preceding month. At the end of each month, the director may
24revise the estimates for the year and remaining months.
25 Sec. 40. Section 423F.2, subsection 4, paragraph b, Code
262022, is amended by striking the paragraph and inserting in
27lieu thereof the following:
28b. On or before August 15 of each fiscal year the director
29of revenue shall provide to each school district an estimate
30of the amount of tax moneys to be distributed to each school
31district for the current fiscal year.
32 Sec. 41. Section 423F.2, subsection 4, paragraph c, Code
332022, is amended by striking the paragraph.
34 Sec. 42. TRANSITION PROVISION FOR LOCAL OPTION SALES TAX
35AND SECURING AN ADVANCED VISION FOR EDUCATION — TRANSFER
-16-1AMOUNTS. Notwithstanding any other provision of law to the
2contrary, the department of revenue shall estimate monthly
3local option sales tax and securing an advanced vision for
4education transfer amounts through the end of the 2022 calendar
5year. The department of revenue shall transfer estimated
6amounts to each local government or school district for the
7months of July, August, and September 2022. Beginning with the
8October 2022 transfer, the department shall not use estimated
9amounts and shall transfer the amount of tax attributable to
10each local government or school district for the tax remitted
11in September 2022. Any adjustment amount that is necessary to
12the July, August, or September 2022 estimated transfer amount
13to reflect the accurate attributable amount shall be made by
14the department of revenue or the local government or school
15district by the close of business on December 30, 2022.
16DIVISION III
17LIABILITY OF SELLERS USING CERTIFIED SERVICE provider
18 Sec. 43. Section 423.48, subsection 3, paragraph a, Code
192022, is amended to read as follows:
20a. A model 1 seller’s obligation to calculate, collect, and
21remit sales and use taxes shall be performed by its certified
22service provider, except for the seller’s obligation to remit
23tax on its own purchases. As the seller’s agent, the certified
24service provider is liable for its model 1 seller’s sales
25and use tax due Iowa on all sales transactions it processes
26for the seller except as set out in this section. A seller
27that contracts with a certified service provider is not
28liable to the state for sales or use tax due on transactions
29processed by the certified service provider unless the seller
30misrepresents the types of items or services it sells or
31commits fraud certified service provider establishes that
32the certified service provider is not liable in accordance
33with the agreement. In the absence of probable cause to
34believe that the seller has committed fraud or made a material
35misrepresentation liability relief established by the certified
-17-1service provider, the seller is not subject to audit on the
2transactions processed by the certified service provider.
3A model 1 seller is subject to audit for transactions not
4processed by the certified service provider. The director is
5authorized to perform a system check of the model 1 seller and
6review the seller’s procedures to determine if the certified
7service provider’s system is functioning properly and the
8extent to which the seller’s transactions are being processed
9by the certified service provider.
10DIVISION IV
11AUTHORITY TO CANCEL VARIOUS PERMITS ISSUED BY THE DEPARTMENT
12 Sec. 44. Section 421.17, Code 2022, is amended by adding the
13following new subsection:
14 NEW SUBSECTION. 37. Notwithstanding any other provision
15of law to the contrary, to cancel the following permits upon
16verification by the department of revenue the permits are no
17longer in use: income tax withholding, sales or use tax, or
18motor fuel tax.
19DIVISION V
20ECONOMIC DEVELOPMENT AUTHORITY SALES AND USE TAX REFUND
21INCENTIVES
22 Sec. 45. Section 15.331A, subsection 2, Code 2022, is
23amended to read as follows:
242. To receive the refund, a claim shall be filed by the
25eligible business with the department of revenue as follows:
26a. The contractor or subcontractor shall state under oath,
27on forms provided by the department of revenue, the amount of
28the sales of tangible personal property or services rendered,
29furnished, or performed including water, sewer, gas, and
30electric utility services upon which sales or use tax has been
31paid prior to the project contract completion, and shall file
32the forms with the eligible business before final settlement
33is made.
34b. The eligible business shall, not more than one year after
35project contract completion, make application to the department
-18-1of revenue for any refund of the amount of the sales and use
2taxes paid pursuant to chapter 423 upon any tangible personal
3property, or services rendered, furnished, or performed,
4including water, sewer, gas, and electric utility services.
5The application shall be made in the manner and upon forms to
6be provided by the department of revenue, and the department of
7revenue shall audit the claim and, if approved, issue a warrant
8to the eligible business in the amount of the sales or use tax
9which has been paid to the state of Iowa under a contract. The
10application must be made within one year after the project
11completion date. A claim filed by the eligible business in
12accordance with this section shall not be denied by reason of a
13limitation provision set forth in chapter 421 or 423.
14c. The eligible business shall inform the department of
15revenue in writing after project contract completion. For
16purposes of this section, “project completion” means the
17first date upon which the average annualized production of
18finished product for the preceding ninety-day period at the
19manufacturing facility operated by the eligible business is
20at least fifty percent of the initial design capacity of the
21facility.
22 Sec. 46. Section 15.331A, Code 2022, is amended by adding
23the following new subsection:
24 NEW SUBSECTION. 4. For purposes of this section, “contract
25completion” means the date of completion of a written contract
26relating to the construction or equipping of the facility that
27is part of the project of the eligible business.
28 Sec. 47. Section 15.331C, subsections 1 and 2, Code 2022,
29are amended to read as follows:
301. An In lieu of the sales and use tax refund provided
31in section 15.331A, an eligible business may claim a tax
32credit in an amount equal to the sales and use taxes paid by a
33third-party developer under chapter 423 for gas, electricity,
34water, or sewer utility services, goods, wares, or merchandise,
35or on services rendered, furnished, or performed to or for a
-19-1contractor or subcontractor and used in the fulfillment of a
2written contract relating to the construction or equipping of
3a facility of the eligible business. Taxes attributable to
4intangible property and furniture and furnishings shall not
5be included, but taxes attributable to racks, shelving, and
6conveyor equipment to be used in a warehouse or distribution
7center shall be included. Any credit in excess of the tax
8liability for the tax year may be credited to the tax liability
9for the following seven years or until depleted, whichever
10occurs earlier. An eligible business may elect to receive a
11refund of all or a portion of an unused tax credit.
122. A third-party developer shall state under oath, on
13forms provided by the department of revenue, the amount of
14taxes paid as described in subsection 1 and shall submit such
15forms to the department of revenue. The taxes paid shall be
16itemized to allow identification of the taxes attributable
17to racks, shelving, and conveyor equipment to be used in a
18warehouse or distribution center. The eligible business
19shall make application to the department of revenue in the
20manner and form prescribed by the department of revenue, and
21within the time for applying for a sales and use tax refund
22under section 15.331A.After timely receiving the form from
23the third-party developer and application from the eligible
24business, the department of revenue shall audit the claim
25and, if approved, shall issue a tax credit certificate to the
26eligible business equal to the sales and use taxes paid by a
27third-party developer under chapter 423 for gas, electricity,
28water, or sewer utility services, goods, wares, or merchandise,
29or on services rendered, furnished, or performed to or for a
30contractor or subcontractor and used in the fulfillment of a
31written contract relating to the construction or equipping
32of a facility. The department of revenue shall also issue a
33tax credit certificate to the eligible business equal to the
34taxes paid and attributable to racks, shelving, and conveyor
35equipment to be used in a warehouse or distribution center.
-20-1The aggregate combined total amount of tax refunds under
2section 15.331A for taxes paid and attributable to racks,
3shelving, and conveyor equipment to be used in a warehouse or
4distribution center and of tax credit certificates issued by
5the department of revenue under this section for the taxes paid
6and attributable to racks, shelving, and conveyor equipment
7to be used in a warehouse or distribution center shall not
8exceed five hundred thousand dollars in a fiscal year. If
9an applicant for a tax credit certificate does not receive
10a refund or certificate for the taxes paid and attributable
11to racks, shelving, and conveyor equipment to be used in a
12warehouse or distribution center, the application shall be
13considered in succeeding fiscal years. The eligible business
14shall not claim a tax credit under this section unless a tax
15credit certificate issued by the department of revenue is
16included with the taxpayer’s tax return for the tax year for
17which the tax credit is claimed. A tax credit certificate
18shall contain the eligible business’s name, address, tax
19identification number, the amount of the tax credit, and other
20information deemed necessary by the department of revenue.
21 Sec. 48. Section 15.355, subsection 2, Code 2022, is amended
22by striking the subsection and inserting in lieu thereof the
23following:
242. a. A housing business may claim a refund of the sales
25and use taxes paid under chapter 423 prior to the completion
26of the housing project that are directly related to a housing
27project and specified in the agreement.
28b. To receive a refund, a claim shall be filed by the
29housing business with the department of revenue as follows:
30(1) The contractor or subcontractor shall state under oath,
31on forms provided by the department of revenue, the amount
32of sales and use taxes paid under chapter 423 prior to the
33completion of the housing project that are directly related to
34a housing project and specified in the agreement.
35(2) The contractor or subcontractor shall file the forms
-21-1with the housing business before final settlement is made.
2(3) (a) The housing business shall, after the agreement
3completion date, make application to the department of revenue
4for any refund of the amount of sales and use taxes paid under
5chapter 423 prior to the completion of the housing project that
6were directly related to a housing project and specified in the
7agreement. The application shall be made in the manner and
8upon forms to be provided by the department of revenue. The
9department of revenue shall audit the claim and, if approved,
10issue a warrant to the housing business. The application
11must be made within one year after the agreement completion
12date. A claim filed by the housing business in accordance with
13this subsection shall not be denied by reason of a limitation
14provision set forth in chapter 421 or 423.
15(b) For purposes of this subparagraph, “agreement completion
16date” means the date on which the authority notifies the
17department of revenue that all applicable requirements of the
18agreement entered into pursuant to section 15.354, subsection
193, paragraph “a”, and all applicable requirements of this part,
20including the rules the authority and the department of revenue
21adopt pursuant to section 15.356, are satisfied.
22c. A contractor or subcontractor who willfully makes a
23false claim under oath in violation of the provisions of this
24subsection shall be guilty of a simple misdemeanor and in
25addition to any other penalty, the contractor or subcontractor
26shall be liable for the payment of the tax and any applicable
27penalty and interest.
28 Sec. 49. EFFECTIVE DATE. This division of this Act, being
29deemed of immediate importance, takes effect upon enactment.
30 Sec. 50. APPLICABILITY. This division of this Act applies
31to claims for refunds filed on or after the effective date of
32this division of this Act.
33DIVISION VI
34MOTOR FUEL REPORTING REQUIREMENT — PENALTY
35 Sec. 51. Section 452A.33, subsection 1, paragraph c, Code
-22-12022, is amended to read as follows:
2c. (1) The retail dealer shall prepare and submit file
3 the report with the department in a manner and according to
4procedures required by the department in compliance with
5section 452A.61. However, the department may require that the
6retail dealer file the report with the department by electronic
7transmission. The department may require that retail dealers
8report to the department on an annual, quarterly, or monthly
9basis. The department, upon application by a retail dealer,
10may grant a reasonable extension of time to file the report.
11(2) If a retail dealer fails to file the report as required
12by this section or fails to maintain records required to file
13the report the department may impose a civil penalty of not
14more than one hundred dollars per occurrence in addition to any
15other penalty provided by law. The penalty amount shall be
16deposited into the general fund of the state.
17EXPLANATION
18The inclusion of this explanation does not constitute agreement with
19the explanation’s substance by the members of the general assembly.
20This bill relates to sales, use, and motor vehicle fuel
21taxes administered by the department of revenue including
22distributions to local governments and school districts, the
23liability of sellers, tax refund and tax credit incentives, and
24motor fuel tax reporting modifications.
25DIVISION I — SALES, USE, AND EXCISE TAX — RETURNS DUE. The
26bill allows a taxpayer to have a combined sales and use tax
27permit and to file a combined return for sales and use taxes.
28Currently, a taxpayer must possess a separate sales and use tax
29permit and file separate sales and use tax returns.
30The bill changes numerous references to the phrase “sales
31tax permit” in the Code to the phrase “sales or use tax
32permit”.
33Currently, a person is required to file a sales or use tax
34return on a quarterly basis. The bill changes this filing
35requirement from a quarterly basis to a monthly basis. The
-23-1bill does allow a person required to file a sales or use tax
2return and who collects less than $1,200 in sales or use tax in
3a calendar year, to file a return once a year on or before the
4last day of the month following the close of the calendar year.
5The bill allows certain persons required to collect sales
6or use tax who do not meet the definition of a “retailer
7maintaining a business in this state” in Code section
8423.1(48)(a)(1), to be issued only one sales or use tax permit.
9The bill allows the director of revenue, if necessary, to
10ensure the payment of sales or use tax, to require a sales or
11use tax return be filed on a different basis other than on a
12monthly basis.
13The bill strikes a provision allowing a person required to
14file a sales or use tax return to take a credit against the
15total quarterly amount of tax due, upon a proper showing of
16necessity, allowing for the balance of tax due to be paid up to
1730 days after the return was due.
18The bill strikes a provision requiring a seller, who
19collects more than $30,000 of sales or use tax in the preceding
20calendar year, to make additional remittances to the state
21under the rules adopted by the director of revenue.
22The bill allows the department of revenue to adopt emergency
23rules to implement the division. The emergency rules provision
24takes effect upon enactment.
25DIVISION II — DISTRIBUTIONS OF REVENUE TO LOCAL GOVERNMENTS
26AND SCHOOL DISTRICTS. Currently, by August 15, the department
27of revenue estimates the local option sale tax (LOST) and
28securing an advanced vision for education (SAVE) tax amounts
29that will be transferred to each local government or school
30district on a fiscal year and monthly basis. The transfer
31estimates may be revised for the year and remaining months by
32the director of revenue if the estimates are incorrect.
33Commencing with the fiscal year beginning July 1, 2022, the
34bill changes the LOST and SAVE transfer amount procedures, by
35requiring the department of revenue to transfer the actual
-24-1LOST and SAVE taxes collected that are attributable to each
2local government or school district to that local government
3or school district.
4The bill also creates a transition procedure for the LOST
5and SAVE tax amounts transferred during July and August 2022.
6Under the transition procedure, the department of revenue shall
7transfer estimated amounts of LOST and SAVE to each local
8government or school district for the months of July, August,
9and September 2022. However, beginning with the October 2022
10transfer, the department of revenue shall transfer the actual
11amount of tax attributable to each local government or school
12district for the LOST and SAVE tax remitted in September 2022.
13The bill requires any adjustment amount that is necessary to
14the July, August, or September 2022 estimated transfer amounts
15be made by the close of business on December 30, 2022.
16DIVISION III — LIABILITY OF SELLERS USING CERTIFIED
17SERVICE PROVIDER. The bill specifies that a seller of personal
18property or services who contracts with a certified service
19provider is not liable to the state for sales or use tax due on
20transactions processed by the certified service provider unless
21the certified service provider establishes it is not liable
22in accordance with the agreement with the seller. The bill
23specifies that if the certified service provider is liable for
24the sales or use tax due, the seller is not subject to audit
25on transactions processed by the certified service provider.
26“Certified service provider” is defined in Code section 423.1
27to mean an agent certified under the agreement to perform
28all of a seller’s sales or use tax functions, other than the
29seller’s obligation to remit tax on its own purchases.
30DIVISION IV — AUTHORITY TO CANCEL VARIOUS PERMITS ISSUED
31BY THE DEPARTMENT. The bill allows the director of the
32department of revenue to cancel the following tax permits if
33the department determines the permits are no longer in use:
34income tax withholding, sales or use tax, or motor fuel tax.
35DIVISION V — ECONOMIC DEVELOPMENT AUTHORITY SALES AND USE
-25-1TAX REFUND INCENTIVES. Currently, for certain sales or use
2tax refund incentives in Code section 15.331A administered
3by the department of economic development authority, an
4eligible business must apply for a sales or use tax refund for
5items purchased prior to the “project” completion date. The
6bill changes the refund procedures by requiring an eligible
7business to apply for such sales or use tax refunds for items
8purchased prior to the completion of the “contract” rather than
9completion of the “project”. The bill also requires such an
10application be made within one year of the project completion
11date, and that the department of revenue be informed in writing
12after the contract completion. The bill defines “contract
13completion” as the date of completion of a written contract
14relating to the construction or equipping of the facility that
15is part of the project of the eligible business.
16For the third-party developer tax credit in Code section
1715.331C relating to a tax credit for sales and use taxes paid
18by a third-party developer, the bill specifies that this credit
19is in lieu of the sales and use tax refund tax incentive
20provided in Code section 15.331A.The bill also provides
21that the eligible business shall make an application to the
22department of revenue within one year of the project completion
23date, and that the department be informed in writing after
24the contract completion. The bill requires the department
25of revenue to audit any third-party developer tax credit
26claim, prior to issuing a third-party developer tax credit
27certificate.
28The bill makes changes to the procedures for workforce
29housing tax incentives in Code section 15.355. The bill
30permits a housing business to claim a refund of the sales
31and use taxes paid prior to the completion of the housing
32project that are directly related to the housing project and
33specified in an agreement. In order to receive the sales and
34use tax refund, the bill requires a contractor or subcontractor
35working on the housing project to submit a form under oath
-26-1stating the amount of sales and use taxes paid prior to the
2housing project. The bill makes it a simple misdemeanor if a
3contractor or subcontractor willfully makes a false claim under
4oath in relating to the workforce sales and use tax refund.
5The bill then requires, after the agreement completion date,
6the housing business to make an application to the department
7of revenue for any sales and use tax refund. The bill defines
8“agreement completion date” to mean the date the economic
9development authority notifies the department of revenue that
10all applicable requirements of the agreement have been met.
11The bill also requires the department of revenue to audit the
12claim prior to issuing the sales and use tax refund.
13This division takes effect upon enactment and applies to
14claims for refunds filed on or after the effective date of the
15bill.
16DIVISION VI — MOTOR FUEL REPORTING REQUIREMENT — PENALTY.
17The bill specifies that each motor fuel retail dealer shall
18file a report with the department of revenue detailing their
19total motor fuel gallonage within a reporting period in the
20manner required by the department and in compliance within
21the time frames established in Code section 452A.61. The
22bill permits the department of revenue to require a retail
23dealer to file such a report with the department by electronic
24transmission. The bill allows the department of revenue to
25impose a civil penalty on the retail dealer, not to exceed
26$100, for each instance a retail dealer fails to timely file
27a report or fails to maintain records required to file the
28report.
-27-jm/jh
2administered by the department of revenue including
3distributions to local governments and school districts, the
4liability of sellers, tax refund and tax credit incentives,
5and motor fuel tax reporting modifications, and providing
6penalties, and including effective date and applicability
7provisions.
8BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2SALES, use, and excise tax — returns due
3 Section 1. Section 9C.3, subsection 3, Code 2022, is amended
4to read as follows:
53. The application shall state whether or not the applicant
6has an Iowa retailers sales or use tax permit and if the
7applicant has such permit, shall state the number of such
8permit.
9 Sec. 2. Section 9C.5, Code 2022, is amended to read as
10follows:
119C.5 Issuance of license.
12Upon receiving an application for a transient merchant’s
13license, the secretary of state shall investigate or cause to
14be investigated, the reputation and character of the applicant.
15If, upon making such investigation, the secretary of state is
16satisfied that the statements and representations contained in
17the application are true, and that the applicant is of good
18reputation and character, and the holder of an Iowa retailer’s
19 sales or use tax permit, and if a foreign corporation, has
20authority to do business in the state of Iowa, the secretary
21shall issue to the applicant a license as a transient merchant
22upon payment of the fee as herein prescribed for the period of
23time requested in said application and for use at the location
24and place where it is stated in said application the sale will
25be held or the business conducted, both of which shall be set
26out in said license. Such license shall be valid only for the
27period of time and at the location and place described therein.
28 Sec. 3. Section 99G.30A, subsection 2, paragraph c, Code
292022, is amended to read as follows:
30c. Frequency of deposits and quarterly monthly reports of
31the monitor vending machine excise tax with the department of
32revenue are governed by the tax provisions in section 423.31.
33Monitor vending machine excise tax collections shall not be
34included in computation of the total tax to determine frequency
35of filing under section 423.31.
-1-1 Sec. 4. Section 321.105A, subsection 4, paragraph b, Code
22022, is amended to read as follows:
3b. Section 422.25, subsection 4, sections 422.30, 422.67,
4and 422.68, section 422.69, subsection 1, sections 422.70,
5422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
62, and sections 423.23, 423.24, 423.25, 423.32, 423.33, 423.35,
7423.37 through 423.42, 423.45, and 423.47, consistent with the
8provisions of this section, apply with respect to the fees
9for new registration authorized under this section in the
10same manner and with the same effect as if the fees for new
11registration were retail use taxes within the meaning of those
12statutes.
13 Sec. 5. Section 421.26, Code 2022, is amended to read as
14follows:
15421.26 Personal liability for tax due.
16If a licensee or other person under section 452A.65, a
17retailer or purchaser under chapter 423A, 423B, 423C, 423D,
18or 423E, or section 423.14, 423.14A, 423.29, 423.31, 423.32,
19 or 423.33, or a user under section 423.34, or a permit holder
20or licensee under section 453A.13, 453A.16, or 453A.44 fails
21to pay a tax under those sections when due, an officer of a
22corporation or association, notwithstanding section 489.304,
23a member or manager of a limited liability company, or a
24partner of a partnership, having control or supervision of
25or the authority for remitting the tax payments and having
26a substantial legal or equitable interest in the ownership
27of the corporation, association, limited liability company,
28or partnership, who has intentionally failed to pay the tax
29is personally liable for the payment of the tax, interest,
30and penalty due and unpaid. However, this section shall
31not apply to taxes on accounts receivable. The dissolution
32of a corporation, association, limited liability company,
33or partnership shall not discharge a person’s liability for
34failure to remit the tax due.
35 Sec. 6. Section 423.2, subsection 1, paragraph b, Code 2022,
-2-1is amended to read as follows:
2b. Sales of building materials, supplies, and equipment
3to owners, contractors, subcontractors, or builders for the
4erection of buildings or the alteration, repair, or improvement
5of real property are retail sales of tangible personal property
6in whatever quantity sold. Where the owner, contractor,
7subcontractor, or builder is also a retailer holding a retail
8 sales or use tax permit and transacting retail sales of
9building materials, supplies, and equipment, the person shall
10purchase such items of tangible personal property without
11liability for the tax if such property will be subject to the
12tax at the time of resale or at the time it is withdrawn from
13inventory for construction purposes. The sales tax shall be
14due in the reporting period when the materials, supplies,
15and equipment are withdrawn from inventory for construction
16purposes or when sold at retail. The tax shall not be due when
17materials are withdrawn from inventory for use in construction
18outside of Iowa and the tax shall not apply to tangible
19personal property purchased and consumed by the manufacturer as
20building materials in the performance by the manufacturer or
21its subcontractor of construction outside of Iowa. The sale
22of carpeting is not a sale of building materials. The sale of
23carpeting to owners, contractors, subcontractors, or builders
24shall be treated as the sale of ordinary tangible personal
25property and subject to the tax imposed under this subsection
26and the use tax.
27 Sec. 7. Section 423.3, subsection 39, paragraph a,
28subparagraph (2), Code 2022, is amended to read as follows:
29(2) The sale of all or substantially all of the tangible
30personal property, or specified digital products, or services
31held or used by a seller in the course of the seller’s trade
32or business for which the seller is required to hold a sales
33or use tax permit when the seller sells or otherwise transfers
34the trade or business to another person who shall engage in a
35similar trade or business.
-3-1 Sec. 8. Section 423.3, subsection 80, paragraph d, Code
22022, is amended to read as follows:
3d. Subject to the limitations in paragraph “c”, where the
4owner, contractor, subcontractor, or builder is also a retailer
5holding a retail sales or use tax permit and transacting
6retail sales of building materials, supplies, and equipment,
7the tax shall not be due when materials are withdrawn from
8inventory for use in construction performed for a designated
9exempt entity if an exemption certificate is received from such
10entity.
11 Sec. 9. Section 423.5, subsection 2, Code 2022, is amended
12to read as follows:
132. The excise tax is imposed upon every person using
14the property within this state until the tax has been paid
15directly to the county treasurer, the state department of
16transportation, a retailer, or the department. This tax is
17imposed on every person using the services or the product of
18the services in this state until the user has paid the tax
19either to an Iowa sales or use tax permit holder or to the
20department.
21 Sec. 10. Section 423.14, subsection 2, paragraph b, Code
222022, is amended to read as follows:
23b. The tax upon the use of all tangible personal property
24and specified digital products other than that enumerated in
25paragraph “a”, which is sold by a seller who is a retailer or
26its agent that is not otherwise required to collect sales tax
27under the provisions of this chapter, may be collected by the
28retailer or agent and remitted to the department, pursuant to
29the provisions of paragraph “e”, and sections 423.24, 423.29,
30423.30, 423.32 423.31, and 423.33.
31 Sec. 11. Section 423.14A, subsection 3, paragraph c,
32subparagraph (2), Code 2022, is amended to read as follows:
33(2) A marketplace facilitator shall collect sales and
34use tax on the entire sales price or purchase price paid by
35a purchaser on each Iowa sale subject to sales and use tax
-4-1that is made or facilitated by the marketplace facilitator,
2regardless of whether the marketplace seller for whom an Iowa
3sale is made or facilitated has or is required to have a retail
4 sales or use tax permit or would have been required to collect
5sales and use tax had the sale not been facilitated by the
6marketplace facilitator, and regardless of the amount of the
7sales price or purchase price that will ultimately accrue
8to or benefit the marketplace facilitator, the marketplace
9seller, or any other person. This sales and use tax collection
10responsibility of a marketplace facilitator applies but shall
11not be limited to sales facilitated through a computer software
12application, commonly referred to as in-app purchases, or
13through another specified digital product.
14 Sec. 12. Section 423.31, subsections 1, 3, 5, and 6, Code
152022, are amended to read as follows:
161. a. Each Except as provided in paragraph “b”, each person
17subject to this section and section 423.36 and in accordance
18with the provisions of this section and section 423.36 shall,
19on or before the last day of the month following the close of
20each calendar quarter month during which such person is or
21has become or ceased being subject to the provisions of this
22section and section 423.36, make, sign, and file electronically
23 a return for the calendar quarter month in the form as may be
24required. Returns shall show information relating to sales
25prices including tangible personal property, specified digital
26products, and services converted to the use of such person,
27the amounts of sales prices excluded and exempt from the tax,
28the amounts of sales prices subject to tax, a calculation of
29tax due, and any other information for the period covered by
30the return as may be required. Returns shall be signed by
31the retailer or the retailer’s authorized agent and must be
32certified by the retailer to be correct in accordance with
33forms and rules prescribed by the director. A person required
34to file a sales or use tax return who is unable to do so may
35request permission from the director to file a return by
-5-1another method.
2b. Notwithstanding paragraph “a”, each person subject to
3this section who collects and remits less than one thousand
4two hundred dollars in sales or use tax to the department per
5calendar year may file a return on or before the last day of the
6month following the close of the calendar year.
73. The sales tax forms prescribed by the director shall be
8referred to as “retailers tax deposit”. Deposit forms shall
9be signed by the retailer or the retailer’s duly authorized
10agent, and shall be duly certified by the retailer or agent to
11be correct. The director may authorize incorporated banks and
12trust companies or other depositories authorized by law which
13are depositories or financial agents of the United States,
14or of this state, to receive any sales or use tax imposed
15under this chapter, in the manner, at the times, and under
16the conditions the director prescribes. The director shall
17prescribe the manner, times, and conditions under which the
18receipt of the tax by those depositories is to be treated as
19payment of the tax to the department.
205. a. Upon making application and receiving approval
21from the director, a person and its affiliates that make
22retail sales of tangible personal property, specified digital
23products, or taxable enumerated services may make deposits and
24file a consolidated sales or use tax return for the affiliated
25group, pursuant to rules adopted by the director. A person and
26each affiliate that files a consolidated return are jointly and
27severally liable for all tax, penalty, and interest found due
28for the tax period for which a consolidated return is filed or
29required to be filed.
30b. A business required to file a consolidated sales or use
31 tax return shall file a form entitled “schedule of consolidated
32business locations” with its quarterly sales or use tax
33return that shows the taxpayer’s consolidated permit number,
34the permit number for each Iowa business location, the state
35sales tax amount by business location, and the amount of state
-6-1sales tax due on goods consumed that are not assigned to a
2specific business location. Consolidated quarterly sales or
3use tax returns that are not accompanied by the schedule of
4consolidated business locations form are considered incomplete
5and are subject to penalty under section 421.27.
66. If necessary or advisable in order to insure ensure
7 the payment of the tax, the director may require returns and
8payment of the tax to be made for other than quarterly monthly
9 periods, the provisions of this section or other provision to
10the contrary notwithstanding.
11 Sec. 13. Section 423.31, subsection 2, Code 2022, is amended
12by striking the subsection.
13 Sec. 14. Section 423.33, subsection 1, paragraph a, Code
142022, is amended to read as follows:
15a. If a purchaser fails to pay sales tax to the retailer
16required to collect the tax, then in addition to all of the
17rights, obligations, and remedies provided, a use tax is
18payable by the purchaser directly to the department, and
19sections 423.31, 423.32, 423.37, 423.38, 423.39, 423.40,
20423.41, and 423.42 apply to the purchaser.
21 Sec. 15. Section 423.33, subsection 3, Code 2022, is amended
22to read as follows:
233. Event sponsor’s liability for sales tax. A person
24sponsoring a flea market or a craft, antique, coin, or stamp
25show or similar event shall obtain from every retailer selling
26tangible personal property, specified digital products, or
27taxable services at the event proof that the retailer possesses
28a valid sales or use tax permit or secure from the retailer
29a statement, taken in good faith, that tangible personal
30property, specified digital products, or services offered for
31sale are not subject to sales tax. Failure to do so renders
32a sponsor of the event liable for payment of any sales tax,
33interest, and penalty due and owing from any retailer selling
34property or services at the event. Sections 423.31, 423.32,
35 423.37, 423.38, 423.39, 423.40, 423.41, and 423.42 apply to the
-7-1sponsors. For purposes of this subsection, a “person sponsoring
2a flea market or a craft, antique, coin, or stamp show or similar
3event” does not include a marketplace facilitator as defined in
4section 423.14A, subsection 1, an organization which sponsors
5an event determined to qualify as an event involving casual
6sales pursuant to section 423.3, subsection 39, or the state
7fair or a fair as defined in section 174.1.
8 Sec. 16. Section 423.34, Code 2022, is amended to read as
9follows:
10423.34 Liability of user.
11Any person who uses any tangible personal property,
12specified digital products, or services enumerated in section
13423.2 upon which the use tax has not been paid, either to the
14county treasurer or to a retailer or direct to the department
15as required by this subchapter, shall be liable for the payment
16of tax, and shall on or before the last day of the month next
17succeeding each quarterly monthly period pay the use tax upon
18all tangible personal property, specified digital products,
19or services used by the person during the preceding quarterly
20 monthly period in the manner and accompanied by such returns
21as the director shall prescribe. All of the provisions of
22sections 423.32 423.31 and 423.33 with reference to the returns
23and payments shall be applicable to the returns and payments
24required by this section.
25 Sec. 17. Section 423.36, subsection 4, paragraph b, Code
262022, is amended to read as follows:
27b. If an applicant is making sales outside Iowa for use in
28this state or furnishing services outside Iowa, the product
29or result of which will be used in this state, that applicant
30shall be issued one sales or use tax permit by the department
31applicable to these out-of-state sales or services.
32 Sec. 18. Section 423.36, subsection 4, Code 2022, is amended
33by adding the following new paragraph:
34 NEW PARAGRAPH. c. If an applicant is required to collect
35sales or use tax and is not included in the definition of a
-8-1retailer maintaining a place of business in this state in
2section 423.1, subsection 48, paragraph “a”, subparagraph (1),
3the applicant shall be issued one sales or use tax permit by
4the department regardless of the number of locations from which
5sales are made.
6 Sec. 19. Section 423.36, subsections 7 and 8, Code 2022, are
7amended to read as follows:
87. a. Sellers who are not regularly engaged in selling
9at retail and do not have a permanent place of business, but
10who are temporarily engaged in selling from trucks, portable
11roadside stands, concessionaires at state, county, district,
12or local fairs, carnivals, or the like, shall report and remit
13the sales tax on a temporary seasonal basis, under rules
14the director shall provide for the efficient collection of
15the sales tax. This subsection applies to sellers who are
16temporarily engaged in furnishing services.
17b. Persons engaged in selling tangible personal property,
18specified digital products, or furnishing services shall not
19be required to obtain or retain a sales or use tax permit for a
20place of business at which taxable sales of tangible personal
21property, specified digital products, or taxable performance of
22services will not occur.
238. The provisions of subsection 1, dealing with the lawful
24right of a retailer to transact business, as applicable, apply
25to persons having receipts from furnishing services enumerated
26in section 423.2, except that a person holding a permit
27pursuant to subsection 1 shall not be required to obtain any
28separate sales or use tax permit for the purpose of engaging in
29business involving the services.
30 Sec. 20. Section 423.40, subsections 1, 2, 3, and 5, Code
312022, are amended to read as follows:
321. In addition to the sales or use tax or additional sales
33or use tax, the taxpayer shall pay a penalty as provided in
34section 421.27. The taxpayer shall also pay interest on the
35sales or use tax or additional sales or use tax at the rate
-9-1in effect under section 421.7 for each month counting each
2fraction of a month as an entire month, computed from the date
3the semimonthly or monthly tax deposit form or return was
4required to be filed. The penalty and interest shall be paid
5to the department and disposed of in the same manner as other
6receipts under this subchapter. Unpaid penalties and interest
7may be enforced in the same manner as the taxes imposed by this
8chapter.
92. a. Any person who knowingly sells tangible personal
10property, specified digital products, tickets or admissions
11to places of amusement and athletic events, or gas, water,
12electricity, or communication service at retail, or engages in
13the furnishing of services enumerated in section 423.2, in this
14state without procuring a permit to collect tax, as provided
15in section 423.36, or who violates section 423.24 and the
16officers of any corporation who so act are guilty of a serious
17misdemeanor.
18b. A person who knowingly sells tangible personal property,
19specified digital products, tickets or admissions to places of
20amusement and athletic events, or gas, water, electricity, or
21communication service at retail, or engages in the furnishing
22of services enumerated in section 423.2, in this state after
23the person’s sales or use tax permit has been revoked and
24before it has been restored as provided in section 423.36,
25subsection 6, and the officers of any corporation who so act
26are guilty of an aggravated misdemeanor.
273. A person who willfully attempts in any manner to evade
28any tax imposed by this chapter or the payment of the tax or
29a person who makes or causes to be made a false or fraudulent
30semimonthly or monthly tax deposit form or return with intent
31to evade any tax imposed by subchapter II or III or the payment
32of the tax is guilty of a class “D” felony.
335. A person required to pay sales or use tax, or to make,
34sign, or file a tax deposit form or return or supplemental
35return, who willfully makes a false or fraudulent tax deposit
-10-1form or return, or willfully fails to pay at least ninety
2percent of the tax or willfully fails to make, sign, or file
3the tax deposit form or return, at the time required by law, is
4guilty of a fraudulent practice.
5 Sec. 21. Section 423.45, subsection 4, paragraph b, Code
62022, is amended to read as follows:
7b. The sales tax liability for all sales of tangible
8personal property and specified digital products and all sales
9of services is upon the seller and the purchaser unless the
10seller takes from the purchaser a valid exemption certificate
11stating under penalty of perjury that the purchase is for a
12nontaxable purpose and is not a retail sale as defined in
13section 423.1, or the seller is not obligated to collect tax
14due, or unless the seller takes a fuel exemption certificate
15pursuant to subsection 5. If the tangible personal property,
16specified digital products, or services are purchased tax free
17pursuant to a valid exemption certificate and the tangible
18personal property, specified digital products, or services are
19used or disposed of by the purchaser in a nonexempt manner, the
20purchaser is solely liable for the taxes and shall remit the
21taxes directly to the department and sections 423.31, 423.32,
22 423.37, 423.38, 423.39, 423.40, 423.41, and 423.42 shall apply
23to the purchaser.
24 Sec. 22. Section 423.45, subsection 5, paragraph c, Code
252022, is amended to read as follows:
26c. The seller may accept a completed fuel exemption
27certificate, as prepared by the purchaser, for three
28years unless the purchaser files a new completed exemption
29certificate. If the fuel is purchased tax free pursuant to a
30fuel exemption certificate which is taken by the seller, and
31the fuel is used or disposed of by the purchaser in a nonexempt
32manner, the purchaser is solely liable for the taxes, and shall
33remit the taxes directly to the department and sections 423.31,
34423.32, 423.37, 423.38, 423.39, 423.40, 423.41, and 423.42
35shall apply to the purchaser.
-11-1 Sec. 23. Section 423.50, subsection 1, Code 2022, is amended
2to read as follows:
31. Only one remittance of tax per return is required except
4as provided in this subsection. Sellers that collect more
5than thirty thousand dollars in sales and use taxes for this
6state during the preceding calendar year shall be required to
7make additional remittances as required under rules adopted by
8the director. The filing of a return is not required with an
9additional remittance.
10 Sec. 24. Section 423.57, Code 2022, is amended to read as
11follows:
12423.57 Statutes applicable.
13The director shall administer this subchapter as it relates
14to the taxes imposed in this chapter in the same manner and
15subject to all the provisions of, and all of the powers,
16duties, authority, and restrictions contained in sections
17423.14, 423.14A, 423.14B, 423.15, 423.16, 423.17, 423.19,
18423.20, 423.21, 423.22, 423.23, 423.24, 423.25, 423.29, 423.31,
19423.32, 423.33, 423.34, 423.34A, 423.35, 423.37, 423.38,
20423.39, 423.40, 423.41, and 423.42, section 423.43, subsection
211, and sections 423.45, 423.46, and 423.47.
22 Sec. 25. Section 423.58, Code 2022, is amended to read as
23follows:
24423.58 Collection, permit, and tax return exemption for
25certain out-of-state businesses.
26Notwithstanding sections 423.14, 423.14A, 423.14B, 423.29,
27423.31, 423.32, and 423.36, a person meeting the requirements
28of section 29C.24 is not required to obtain a sales or use tax
29permit, collect and remit sales and use tax, or make and file
30applicable sales or use tax returns, as provided in section
3129C.24, subsection 3, paragraph “a”, subparagraph (2).
32 Sec. 26. Section 423A.6, subsection 4, Code 2022, is amended
33to read as follows:
344. Section 422.25, subsection 4, sections 422.30, 422.67,
35and 422.68, section 422.69, subsection 1, sections 422.70,
-12-1422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
21, and sections 423.23, 423.24, 423.25, 423.31, 423.33,
3423.35, 423.37 through 423.42, and 423.47, consistent with the
4provisions of this chapter, apply with respect to the taxes
5authorized under this chapter, in the same manner and with the
6same effect as if the state and local hotel and motel taxes
7were retail sales taxes within the meaning of those statutes.
8Notwithstanding this subsection, the director shall provide
9for quarterly monthly filing of returns and for other than
10quarterly monthly filing of returns both as prescribed in
11section 423.31. The director may require all persons who are
12engaged in the business of deriving any sales price subject
13to tax under this chapter to register with the department.
14All taxes collected under this chapter by a retailer, lodging
15provider, lodging facilitator, lodging platform, or any other
16person are deemed to be held in trust for the state of Iowa and
17the local jurisdictions imposing the taxes.
18 Sec. 27. Section 423B.5, subsection 3, Code 2022, is amended
19to read as follows:
203. A tax permit other than the state sales or use tax permit
21required under section 423.36 shall not be required by local
22authorities.
23 Sec. 28. Section 423B.6, subsection 2, paragraph c, Code
242022, is amended to read as follows:
25c. Frequency of deposits and quarterly monthly reports of a
26local sales and services tax with the department of revenue are
27governed by the tax provisions in section 423.31. Local tax
28collections shall not be included in computation of the total
29tax to determine frequency of filing under section 423.31.
30 Sec. 29. Section 423C.4, Code 2022, is amended to read as
31follows:
32423C.4 Administration and enforcement.
33All powers and requirements of the director of revenue
34to administer the state sales tax law under chapter 423 are
35applicable to the administration of the tax imposed under
-13-1section 423C.3, including but not limited to section 422.25,
2subsection 4, sections 422.30, 422.67, and 422.68, section
3422.69, subsection 1, sections 422.70 through 422.75, section
4423.14, subsection 1, and sections 423.15, 423.23, 423.24,
5423.25, 423.31, 423.33, 423.35 and 423.37 through 423.42,
6423.45, 423.46, and 423.47. However, as an exception to the
7powers specified in section 423.31, the director shall only
8require the filing of quarterly monthly reports.
9 Sec. 30. Section 423D.4, subsection 3, Code 2022, is amended
10to read as follows:
113. Section 422.25, subsection 4, sections 422.30, 422.67,
12and 422.68, section 422.69, subsection 1, sections 422.70,
13422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
141, and sections 423.23, 423.24, 423.25, 423.31 through
15423.35, 423.37 through 423.42, and 423.47, consistent with
16the provisions of this chapter, apply with respect to the tax
17authorized under this chapter, in the same manner and with the
18same effect as if the excise taxes on equipment sales or use
19were retail sales taxes within the meaning of those statutes.
20Notwithstanding this subsection, the director shall provide
21for quarterly monthly filing of returns and for other than
22quarterly monthly filing of returns both as prescribed in
23section 423.31. All taxes collected under this chapter by a
24retailer or any user are deemed to be held in trust for the
25state of Iowa.
26 Sec. 31. Section 423G.5, subsection 3, Code 2022, is amended
27to read as follows:
283. Section 422.25, subsection 4, sections 422.30, 422.67,
29and 422.68, section 422.69, subsection 1, sections 422.70,
30422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
311, and sections 423.23, 423.24, 423.25, 423.31 through
32423.35, 423.37 through 423.42, and 423.47, consistent with the
33provisions of this chapter, shall apply with respect to the tax
34authorized under this chapter, in the same manner and with the
35same effect as if the excise taxes on the sale or furnishing of
-14-1a water service were retail sales taxes within the meaning of
2those statutes. Notwithstanding this subsection, the director
3shall provide for quarterly monthly filing of returns and
4for other than quarterly monthly filing of returns both as
5prescribed in section 423.31. All taxes collected under this
6chapter by a retailer or any user are deemed to be held in trust
7for the state of Iowa.
8 Sec. 32. Section 728.1, subsection 6, Code 2022, is amended
9to read as follows:
106. “Place of business” means the premises of a business
11required to obtain a sales or use tax permit pursuant to
12chapter 423, the premises of a nonprofit or not-for-profit
13organization, and the premises of an establishment which is
14open to the public at large or where entrance is limited by a
15cover charge or membership requirement.
16 Sec. 33. Section 728.5, subsection 1, unnumbered paragraph
171, Code 2022, is amended to read as follows:
18An owner, manager, or person who exercises direct control
19over a place of business required to obtain a sales or use tax
20permit shall be guilty of a serious misdemeanor under any of
21the following circumstances:
22 Sec. 34. REPEAL. Section 423.32, Code 2022, is repealed.
23 Sec. 35. IMPLEMENTATION — EMERGENCY RULES. The department
24of revenue may adopt emergency rules under section 17A.4,
25subsection 3, and section 17A.5, subsection 2, paragraph “b”,
26to implement the provisions of this division of this Act and
27the rules shall be effective immediately upon filing unless
28a later date is specified in the rules. Any rules adopted
29in accordance with this section shall also be published as a
30notice of intended action as provided in section 17A.4.
31 Sec. 36. EFFECTIVE DATE. The following, being deemed of
32immediate importance, takes effect upon enactment:
33The section of this division of this Act enacting emergency
34rules relating to the implementation of this division of this
35Act.
-15-1DIVISION II
2DISTRIBUTIONS OF REVENUE TO LOCAL GOVERNMENTS AND SCHOOL
3DISTRICTS
4 Sec. 37. Section 423B.7, subsection 2, paragraph a, Code
52022, is amended to read as follows:
6a. The director of revenue by August 15 of each fiscal
7year the last day of each month shall send transfer to each
8city or county where the local option tax is imposed, an
9estimate of the amount of tax moneys remitted to the department
10attributable to each city or county will receive for the year
11and for each month of the year from the preceding month. At the
12end of each month, the director may revise the estimates for
13the year and remaining months.
14 Sec. 38. Section 423B.7, subsection 2, paragraphs b and c,
15Code 2022, are amended by striking the paragraphs.
16 Sec. 39. Section 423F.2, subsection 4, paragraph a, Code
172022, is amended to read as follows:
18a. The director of revenue by August 15 of each fiscal year
19 the last day of each month shall send transfer to each school
20district an estimate of the amount of tax moneys remitted
21to the department attributable to each school district will
22receive for the year and for each month of the year from the
23preceding month. At the end of each month, the director may
24revise the estimates for the year and remaining months.
25 Sec. 40. Section 423F.2, subsection 4, paragraph b, Code
262022, is amended by striking the paragraph and inserting in
27lieu thereof the following:
28b. On or before August 15 of each fiscal year the director
29of revenue shall provide to each school district an estimate
30of the amount of tax moneys to be distributed to each school
31district for the current fiscal year.
32 Sec. 41. Section 423F.2, subsection 4, paragraph c, Code
332022, is amended by striking the paragraph.
34 Sec. 42. TRANSITION PROVISION FOR LOCAL OPTION SALES TAX
35AND SECURING AN ADVANCED VISION FOR EDUCATION — TRANSFER
-16-1AMOUNTS. Notwithstanding any other provision of law to the
2contrary, the department of revenue shall estimate monthly
3local option sales tax and securing an advanced vision for
4education transfer amounts through the end of the 2022 calendar
5year. The department of revenue shall transfer estimated
6amounts to each local government or school district for the
7months of July, August, and September 2022. Beginning with the
8October 2022 transfer, the department shall not use estimated
9amounts and shall transfer the amount of tax attributable to
10each local government or school district for the tax remitted
11in September 2022. Any adjustment amount that is necessary to
12the July, August, or September 2022 estimated transfer amount
13to reflect the accurate attributable amount shall be made by
14the department of revenue or the local government or school
15district by the close of business on December 30, 2022.
16DIVISION III
17LIABILITY OF SELLERS USING CERTIFIED SERVICE provider
18 Sec. 43. Section 423.48, subsection 3, paragraph a, Code
192022, is amended to read as follows:
20a. A model 1 seller’s obligation to calculate, collect, and
21remit sales and use taxes shall be performed by its certified
22service provider, except for the seller’s obligation to remit
23tax on its own purchases. As the seller’s agent, the certified
24service provider is liable for its model 1 seller’s sales
25and use tax due Iowa on all sales transactions it processes
26for the seller except as set out in this section. A seller
27that contracts with a certified service provider is not
28liable to the state for sales or use tax due on transactions
29processed by the certified service provider unless the seller
30misrepresents the types of items or services it sells or
31commits fraud certified service provider establishes that
32the certified service provider is not liable in accordance
33with the agreement. In the absence of probable cause to
34believe that the seller has committed fraud or made a material
35misrepresentation liability relief established by the certified
-17-1service provider, the seller is not subject to audit on the
2transactions processed by the certified service provider.
3A model 1 seller is subject to audit for transactions not
4processed by the certified service provider. The director is
5authorized to perform a system check of the model 1 seller and
6review the seller’s procedures to determine if the certified
7service provider’s system is functioning properly and the
8extent to which the seller’s transactions are being processed
9by the certified service provider.
10DIVISION IV
11AUTHORITY TO CANCEL VARIOUS PERMITS ISSUED BY THE DEPARTMENT
12 Sec. 44. Section 421.17, Code 2022, is amended by adding the
13following new subsection:
14 NEW SUBSECTION. 37. Notwithstanding any other provision
15of law to the contrary, to cancel the following permits upon
16verification by the department of revenue the permits are no
17longer in use: income tax withholding, sales or use tax, or
18motor fuel tax.
19DIVISION V
20ECONOMIC DEVELOPMENT AUTHORITY SALES AND USE TAX REFUND
21INCENTIVES
22 Sec. 45. Section 15.331A, subsection 2, Code 2022, is
23amended to read as follows:
242. To receive the refund, a claim shall be filed by the
25eligible business with the department of revenue as follows:
26a. The contractor or subcontractor shall state under oath,
27on forms provided by the department of revenue, the amount of
28the sales of tangible personal property or services rendered,
29furnished, or performed including water, sewer, gas, and
30electric utility services upon which sales or use tax has been
31paid prior to the project contract completion, and shall file
32the forms with the eligible business before final settlement
33is made.
34b. The eligible business shall, not more than one year after
35project contract completion, make application to the department
-18-1of revenue for any refund of the amount of the sales and use
2taxes paid pursuant to chapter 423 upon any tangible personal
3property, or services rendered, furnished, or performed,
4including water, sewer, gas, and electric utility services.
5The application shall be made in the manner and upon forms to
6be provided by the department of revenue, and the department of
7revenue shall audit the claim and, if approved, issue a warrant
8to the eligible business in the amount of the sales or use tax
9which has been paid to the state of Iowa under a contract. The
10application must be made within one year after the project
11completion date. A claim filed by the eligible business in
12accordance with this section shall not be denied by reason of a
13limitation provision set forth in chapter 421 or 423.
14c. The eligible business shall inform the department of
15revenue in writing after project contract completion. For
16purposes of this section, “project completion” means the
17first date upon which the average annualized production of
18finished product for the preceding ninety-day period at the
19manufacturing facility operated by the eligible business is
20at least fifty percent of the initial design capacity of the
21facility.
22 Sec. 46. Section 15.331A, Code 2022, is amended by adding
23the following new subsection:
24 NEW SUBSECTION. 4. For purposes of this section, “contract
25completion” means the date of completion of a written contract
26relating to the construction or equipping of the facility that
27is part of the project of the eligible business.
28 Sec. 47. Section 15.331C, subsections 1 and 2, Code 2022,
29are amended to read as follows:
301. An In lieu of the sales and use tax refund provided
31in section 15.331A, an eligible business may claim a tax
32credit in an amount equal to the sales and use taxes paid by a
33third-party developer under chapter 423 for gas, electricity,
34water, or sewer utility services, goods, wares, or merchandise,
35or on services rendered, furnished, or performed to or for a
-19-1contractor or subcontractor and used in the fulfillment of a
2written contract relating to the construction or equipping of
3a facility of the eligible business. Taxes attributable to
4intangible property and furniture and furnishings shall not
5be included, but taxes attributable to racks, shelving, and
6conveyor equipment to be used in a warehouse or distribution
7center shall be included. Any credit in excess of the tax
8liability for the tax year may be credited to the tax liability
9for the following seven years or until depleted, whichever
10occurs earlier. An eligible business may elect to receive a
11refund of all or a portion of an unused tax credit.
122. A third-party developer shall state under oath, on
13forms provided by the department of revenue, the amount of
14taxes paid as described in subsection 1 and shall submit such
15forms to the department of revenue. The taxes paid shall be
16itemized to allow identification of the taxes attributable
17to racks, shelving, and conveyor equipment to be used in a
18warehouse or distribution center. The eligible business
19shall make application to the department of revenue in the
20manner and form prescribed by the department of revenue, and
21within the time for applying for a sales and use tax refund
22under section 15.331A.After timely receiving the form from
23the third-party developer and application from the eligible
24business, the department of revenue shall audit the claim
25and, if approved, shall issue a tax credit certificate to the
26eligible business equal to the sales and use taxes paid by a
27third-party developer under chapter 423 for gas, electricity,
28water, or sewer utility services, goods, wares, or merchandise,
29or on services rendered, furnished, or performed to or for a
30contractor or subcontractor and used in the fulfillment of a
31written contract relating to the construction or equipping
32of a facility. The department of revenue shall also issue a
33tax credit certificate to the eligible business equal to the
34taxes paid and attributable to racks, shelving, and conveyor
35equipment to be used in a warehouse or distribution center.
-20-1The aggregate combined total amount of tax refunds under
2section 15.331A for taxes paid and attributable to racks,
3shelving, and conveyor equipment to be used in a warehouse or
4distribution center and of tax credit certificates issued by
5the department of revenue under this section for the taxes paid
6and attributable to racks, shelving, and conveyor equipment
7to be used in a warehouse or distribution center shall not
8exceed five hundred thousand dollars in a fiscal year. If
9an applicant for a tax credit certificate does not receive
10a refund or certificate for the taxes paid and attributable
11to racks, shelving, and conveyor equipment to be used in a
12warehouse or distribution center, the application shall be
13considered in succeeding fiscal years. The eligible business
14shall not claim a tax credit under this section unless a tax
15credit certificate issued by the department of revenue is
16included with the taxpayer’s tax return for the tax year for
17which the tax credit is claimed. A tax credit certificate
18shall contain the eligible business’s name, address, tax
19identification number, the amount of the tax credit, and other
20information deemed necessary by the department of revenue.
21 Sec. 48. Section 15.355, subsection 2, Code 2022, is amended
22by striking the subsection and inserting in lieu thereof the
23following:
242. a. A housing business may claim a refund of the sales
25and use taxes paid under chapter 423 prior to the completion
26of the housing project that are directly related to a housing
27project and specified in the agreement.
28b. To receive a refund, a claim shall be filed by the
29housing business with the department of revenue as follows:
30(1) The contractor or subcontractor shall state under oath,
31on forms provided by the department of revenue, the amount
32of sales and use taxes paid under chapter 423 prior to the
33completion of the housing project that are directly related to
34a housing project and specified in the agreement.
35(2) The contractor or subcontractor shall file the forms
-21-1with the housing business before final settlement is made.
2(3) (a) The housing business shall, after the agreement
3completion date, make application to the department of revenue
4for any refund of the amount of sales and use taxes paid under
5chapter 423 prior to the completion of the housing project that
6were directly related to a housing project and specified in the
7agreement. The application shall be made in the manner and
8upon forms to be provided by the department of revenue. The
9department of revenue shall audit the claim and, if approved,
10issue a warrant to the housing business. The application
11must be made within one year after the agreement completion
12date. A claim filed by the housing business in accordance with
13this subsection shall not be denied by reason of a limitation
14provision set forth in chapter 421 or 423.
15(b) For purposes of this subparagraph, “agreement completion
16date” means the date on which the authority notifies the
17department of revenue that all applicable requirements of the
18agreement entered into pursuant to section 15.354, subsection
193, paragraph “a”, and all applicable requirements of this part,
20including the rules the authority and the department of revenue
21adopt pursuant to section 15.356, are satisfied.
22c. A contractor or subcontractor who willfully makes a
23false claim under oath in violation of the provisions of this
24subsection shall be guilty of a simple misdemeanor and in
25addition to any other penalty, the contractor or subcontractor
26shall be liable for the payment of the tax and any applicable
27penalty and interest.
28 Sec. 49. EFFECTIVE DATE. This division of this Act, being
29deemed of immediate importance, takes effect upon enactment.
30 Sec. 50. APPLICABILITY. This division of this Act applies
31to claims for refunds filed on or after the effective date of
32this division of this Act.
33DIVISION VI
34MOTOR FUEL REPORTING REQUIREMENT — PENALTY
35 Sec. 51. Section 452A.33, subsection 1, paragraph c, Code
-22-12022, is amended to read as follows:
2c. (1) The retail dealer shall prepare and submit file
3 the report with the department in a manner and according to
4procedures required by the department in compliance with
5section 452A.61. However, the department may require that the
6retail dealer file the report with the department by electronic
7transmission. The department may require that retail dealers
8report to the department on an annual, quarterly, or monthly
9basis. The department, upon application by a retail dealer,
10may grant a reasonable extension of time to file the report.
11(2) If a retail dealer fails to file the report as required
12by this section or fails to maintain records required to file
13the report the department may impose a civil penalty of not
14more than one hundred dollars per occurrence in addition to any
15other penalty provided by law. The penalty amount shall be
16deposited into the general fund of the state.
17EXPLANATION
18The inclusion of this explanation does not constitute agreement with
19the explanation’s substance by the members of the general assembly.
20This bill relates to sales, use, and motor vehicle fuel
21taxes administered by the department of revenue including
22distributions to local governments and school districts, the
23liability of sellers, tax refund and tax credit incentives, and
24motor fuel tax reporting modifications.
25DIVISION I — SALES, USE, AND EXCISE TAX — RETURNS DUE. The
26bill allows a taxpayer to have a combined sales and use tax
27permit and to file a combined return for sales and use taxes.
28Currently, a taxpayer must possess a separate sales and use tax
29permit and file separate sales and use tax returns.
30The bill changes numerous references to the phrase “sales
31tax permit” in the Code to the phrase “sales or use tax
32permit”.
33Currently, a person is required to file a sales or use tax
34return on a quarterly basis. The bill changes this filing
35requirement from a quarterly basis to a monthly basis. The
-23-1bill does allow a person required to file a sales or use tax
2return and who collects less than $1,200 in sales or use tax in
3a calendar year, to file a return once a year on or before the
4last day of the month following the close of the calendar year.
5The bill allows certain persons required to collect sales
6or use tax who do not meet the definition of a “retailer
7maintaining a business in this state” in Code section
8423.1(48)(a)(1), to be issued only one sales or use tax permit.
9The bill allows the director of revenue, if necessary, to
10ensure the payment of sales or use tax, to require a sales or
11use tax return be filed on a different basis other than on a
12monthly basis.
13The bill strikes a provision allowing a person required to
14file a sales or use tax return to take a credit against the
15total quarterly amount of tax due, upon a proper showing of
16necessity, allowing for the balance of tax due to be paid up to
1730 days after the return was due.
18The bill strikes a provision requiring a seller, who
19collects more than $30,000 of sales or use tax in the preceding
20calendar year, to make additional remittances to the state
21under the rules adopted by the director of revenue.
22The bill allows the department of revenue to adopt emergency
23rules to implement the division. The emergency rules provision
24takes effect upon enactment.
25DIVISION II — DISTRIBUTIONS OF REVENUE TO LOCAL GOVERNMENTS
26AND SCHOOL DISTRICTS. Currently, by August 15, the department
27of revenue estimates the local option sale tax (LOST) and
28securing an advanced vision for education (SAVE) tax amounts
29that will be transferred to each local government or school
30district on a fiscal year and monthly basis. The transfer
31estimates may be revised for the year and remaining months by
32the director of revenue if the estimates are incorrect.
33Commencing with the fiscal year beginning July 1, 2022, the
34bill changes the LOST and SAVE transfer amount procedures, by
35requiring the department of revenue to transfer the actual
-24-1LOST and SAVE taxes collected that are attributable to each
2local government or school district to that local government
3or school district.
4The bill also creates a transition procedure for the LOST
5and SAVE tax amounts transferred during July and August 2022.
6Under the transition procedure, the department of revenue shall
7transfer estimated amounts of LOST and SAVE to each local
8government or school district for the months of July, August,
9and September 2022. However, beginning with the October 2022
10transfer, the department of revenue shall transfer the actual
11amount of tax attributable to each local government or school
12district for the LOST and SAVE tax remitted in September 2022.
13The bill requires any adjustment amount that is necessary to
14the July, August, or September 2022 estimated transfer amounts
15be made by the close of business on December 30, 2022.
16DIVISION III — LIABILITY OF SELLERS USING CERTIFIED
17SERVICE PROVIDER. The bill specifies that a seller of personal
18property or services who contracts with a certified service
19provider is not liable to the state for sales or use tax due on
20transactions processed by the certified service provider unless
21the certified service provider establishes it is not liable
22in accordance with the agreement with the seller. The bill
23specifies that if the certified service provider is liable for
24the sales or use tax due, the seller is not subject to audit
25on transactions processed by the certified service provider.
26“Certified service provider” is defined in Code section 423.1
27to mean an agent certified under the agreement to perform
28all of a seller’s sales or use tax functions, other than the
29seller’s obligation to remit tax on its own purchases.
30DIVISION IV — AUTHORITY TO CANCEL VARIOUS PERMITS ISSUED
31BY THE DEPARTMENT. The bill allows the director of the
32department of revenue to cancel the following tax permits if
33the department determines the permits are no longer in use:
34income tax withholding, sales or use tax, or motor fuel tax.
35DIVISION V — ECONOMIC DEVELOPMENT AUTHORITY SALES AND USE
-25-1TAX REFUND INCENTIVES. Currently, for certain sales or use
2tax refund incentives in Code section 15.331A administered
3by the department of economic development authority, an
4eligible business must apply for a sales or use tax refund for
5items purchased prior to the “project” completion date. The
6bill changes the refund procedures by requiring an eligible
7business to apply for such sales or use tax refunds for items
8purchased prior to the completion of the “contract” rather than
9completion of the “project”. The bill also requires such an
10application be made within one year of the project completion
11date, and that the department of revenue be informed in writing
12after the contract completion. The bill defines “contract
13completion” as the date of completion of a written contract
14relating to the construction or equipping of the facility that
15is part of the project of the eligible business.
16For the third-party developer tax credit in Code section
1715.331C relating to a tax credit for sales and use taxes paid
18by a third-party developer, the bill specifies that this credit
19is in lieu of the sales and use tax refund tax incentive
20provided in Code section 15.331A.The bill also provides
21that the eligible business shall make an application to the
22department of revenue within one year of the project completion
23date, and that the department be informed in writing after
24the contract completion. The bill requires the department
25of revenue to audit any third-party developer tax credit
26claim, prior to issuing a third-party developer tax credit
27certificate.
28The bill makes changes to the procedures for workforce
29housing tax incentives in Code section 15.355. The bill
30permits a housing business to claim a refund of the sales
31and use taxes paid prior to the completion of the housing
32project that are directly related to the housing project and
33specified in an agreement. In order to receive the sales and
34use tax refund, the bill requires a contractor or subcontractor
35working on the housing project to submit a form under oath
-26-1stating the amount of sales and use taxes paid prior to the
2housing project. The bill makes it a simple misdemeanor if a
3contractor or subcontractor willfully makes a false claim under
4oath in relating to the workforce sales and use tax refund.
5The bill then requires, after the agreement completion date,
6the housing business to make an application to the department
7of revenue for any sales and use tax refund. The bill defines
8“agreement completion date” to mean the date the economic
9development authority notifies the department of revenue that
10all applicable requirements of the agreement have been met.
11The bill also requires the department of revenue to audit the
12claim prior to issuing the sales and use tax refund.
13This division takes effect upon enactment and applies to
14claims for refunds filed on or after the effective date of the
15bill.
16DIVISION VI — MOTOR FUEL REPORTING REQUIREMENT — PENALTY.
17The bill specifies that each motor fuel retail dealer shall
18file a report with the department of revenue detailing their
19total motor fuel gallonage within a reporting period in the
20manner required by the department and in compliance within
21the time frames established in Code section 452A.61. The
22bill permits the department of revenue to require a retail
23dealer to file such a report with the department by electronic
24transmission. The bill allows the department of revenue to
25impose a civil penalty on the retail dealer, not to exceed
26$100, for each instance a retail dealer fails to timely file
27a report or fails to maintain records required to file the
28report.
-27-jm/jh