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House File 2583 - IntroducedA Bill ForAn Act 1relating to sales, use, franchise, and motor vehicle
2fuel taxes administered by the department of revenue
3including distributions to local governments and school
4districts, the liability of sellers, tax refund and tax
5credit incentives, sales tax on food ingredients, and motor
6fuel tax reporting modifications, and providing penalties,
7and including effective date, applicability, and retroactive
8applicability provisions.
9BE 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 423.3, subsection 104, paragraph b,
12subparagraph (1), Code 2022, is amended to read as follows:
13(1) “Commercial enterprise” means the same as defined in
14section 423.3, subsection 47, paragraph “d”, subparagraph (1),
15but also includes professions and occupations and includes
16public utilities as defined in section 476.1, subsection 3.
17 Sec. 10. Section 423.5, subsection 2, Code 2022, is amended
18to read as follows:
192. The excise tax is imposed upon every person using
20the property within this state until the tax has been paid
21directly to the county treasurer, the state department of
22transportation, a retailer, or the department. This tax is
23imposed on every person using the services or the product of
24the services in this state until the user has paid the tax
25either to an Iowa sales or use tax permit holder or to the
26department.
27 Sec. 11. Section 423.14, subsection 2, paragraph b, Code
282022, is amended to read as follows:
29b. The tax upon the use of all tangible personal property
30and specified digital products other than that enumerated in
31paragraph “a”, which is sold by a seller who is a retailer or
32its agent that is not otherwise required to collect sales tax
33under the provisions of this chapter, may be collected by the
34retailer or agent and remitted to the department, pursuant to
35the provisions of paragraph “e”, and sections 423.24, 423.29,
-4-1423.30, 423.32 423.31, and 423.33.
2 Sec. 12. Section 423.14A, subsection 3, paragraph c,
3subparagraph (2), Code 2022, is amended to read as follows:
4(2) A marketplace facilitator shall collect sales and
5use tax on the entire sales price or purchase price paid by
6a purchaser on each Iowa sale subject to sales and use tax
7that is made or facilitated by the marketplace facilitator,
8regardless of whether the marketplace seller for whom an Iowa
9sale is made or facilitated has or is required to have a retail
10 sales or use tax permit or would have been required to collect
11sales and use tax had the sale not been facilitated by the
12marketplace facilitator, and regardless of the amount of the
13sales price or purchase price that will ultimately accrue
14to or benefit the marketplace facilitator, the marketplace
15seller, or any other person. This sales and use tax collection
16responsibility of a marketplace facilitator applies but shall
17not be limited to sales facilitated through a computer software
18application, commonly referred to as in-app purchases, or
19through another specified digital product.
20 Sec. 13. Section 423.31, subsections 1, 3, 5, and 6, Code
212022, are amended to read as follows:
221. a. Each Except as provided in paragraph “b”, each person
23subject to this section and section 423.36 and in accordance
24with the provisions of this section and section 423.36 shall,
25on or before the last day of the month following the close of
26each calendar quarter month during which such person is or
27has become or ceased being subject to the provisions of this
28section and section 423.36, make, sign, and file electronically
29 a return for the calendar quarter month in the form as may be
30required. Returns shall show information relating to sales
31prices including tangible personal property, specified digital
32products, and services converted to the use of such person,
33the amounts of sales prices excluded and exempt from the tax,
34the amounts of sales prices subject to tax, a calculation of
35tax due, and any other information for the period covered by
-5-1the return as may be required. Returns shall be signed by
2the retailer or the retailer’s authorized agent and must be
3certified by the retailer to be correct in accordance with
4forms and rules prescribed by the director. A person required
5to file a sales or use tax return who is unable to do so may
6request permission from the director to file a return by
7another method.
8b. Notwithstanding paragraph “a”, each person subject to
9this section who collects and remits less than one thousand
10two hundred dollars in sales or use tax to the department per
11calendar year may file a return on or before the last day of the
12month following the close of the calendar year.
133. The sales tax forms prescribed by the director shall be
14referred to as “retailers tax deposit”. Deposit forms shall
15be signed by the retailer or the retailer’s duly authorized
16agent, and shall be duly certified by the retailer or agent to
17be correct. The director may authorize incorporated banks and
18trust companies or other depositories authorized by law which
19are depositories or financial agents of the United States,
20or of this state, to receive any sales or use tax imposed
21under this chapter, in the manner, at the times, and under
22the conditions the director prescribes. The director shall
23prescribe the manner, times, and conditions under which the
24receipt of the tax by those depositories is to be treated as
25payment of the tax to the department.
265. a. Upon making application and receiving approval
27from the director, a person and its affiliates that make
28retail sales of tangible personal property, specified digital
29products, or taxable enumerated services may make deposits and
30file a consolidated sales or use tax return for the affiliated
31group, pursuant to rules adopted by the director. A person and
32each affiliate that files a consolidated return are jointly and
33severally liable for all tax, penalty, and interest found due
34for the tax period for which a consolidated return is filed or
35required to be filed.
-6- 1b. A business required to file a consolidated sales or use
2 tax return shall file a form entitled “schedule of consolidated
3business locations” with its quarterly sales or use tax
4return that shows the taxpayer’s consolidated permit number,
5the permit number for each Iowa business location, the state
6sales tax amount by business location, and the amount of state
7sales tax due on goods consumed that are not assigned to a
8specific business location. Consolidated quarterly sales or
9use tax returns that are not accompanied by the schedule of
10consolidated business locations form are considered incomplete
11and are subject to penalty under section 421.27.
126. If necessary or advisable in order to insure ensure
13 the payment of the tax, the director may require returns and
14payment of the tax to be made for other than quarterly monthly
15 periods, the provisions of this section or other provision to
16the contrary notwithstanding.
17 Sec. 14. Section 423.31, subsection 2, Code 2022, is amended
18by striking the subsection.
19 Sec. 15. Section 423.33, subsection 1, paragraph a, Code
202022, is amended to read as follows:
21a. If a purchaser fails to pay sales tax to the retailer
22required to collect the tax, then in addition to all of the
23rights, obligations, and remedies provided, a use tax is
24payable by the purchaser directly to the department, and
25sections 423.31, 423.32, 423.37, 423.38, 423.39, 423.40,
26423.41, and 423.42 apply to the purchaser.
27 Sec. 16. Section 423.33, subsection 3, Code 2022, is amended
28to read as follows:
293. Event sponsor’s liability for sales tax. A person
30sponsoring a flea market or a craft, antique, coin, or stamp
31show or similar event shall obtain from every retailer selling
32tangible personal property, specified digital products, or
33taxable services at the event proof that the retailer possesses
34a valid sales or use tax permit or secure from the retailer
35a statement, taken in good faith, that tangible personal
-7-1property, specified digital products, or services offered for
2sale are not subject to sales tax. Failure to do so renders
3a sponsor of the event liable for payment of any sales tax,
4interest, and penalty due and owing from any retailer selling
5property or services at the event. Sections 423.31, 423.32,
6 423.37, 423.38, 423.39, 423.40, 423.41, and 423.42 apply to the
7sponsors. For purposes of this subsection, a “person sponsoring
8a flea market or a craft, antique, coin, or stamp show or similar
9event” does not include a marketplace facilitator as defined in
10section 423.14A, subsection 1, an organization which sponsors
11an event determined to qualify as an event involving casual
12sales pursuant to section 423.3, subsection 39, or the state
13fair or a fair as defined in section 174.1.
14 Sec. 17. Section 423.34, Code 2022, is amended to read as
15follows:
16423.34 Liability of user.
17Any person who uses any tangible personal property,
18specified digital products, or services enumerated in section
19423.2 upon which the use tax has not been paid, either to the
20county treasurer or to a retailer or direct to the department
21as required by this subchapter, shall be liable for the payment
22of tax, and shall on or before the last day of the month next
23succeeding each quarterly monthly period pay the use tax upon
24all tangible personal property, specified digital products,
25or services used by the person during the preceding quarterly
26 monthly period in the manner and accompanied by such returns
27as the director shall prescribe. All of the provisions of
28sections 423.32 423.31 and 423.33 with reference to the returns
29and payments shall be applicable to the returns and payments
30required by this section.
31 Sec. 18. Section 423.36, subsection 4, paragraph b, Code
322022, is amended to read as follows:
33b. If an applicant is making sales outside Iowa for use in
34this state or furnishing services outside Iowa, the product
35or result of which will be used in this state, that applicant
-8-1shall be issued one sales or use tax permit by the department
2applicable to these out-of-state sales or services.
3 Sec. 19. Section 423.36, subsection 4, Code 2022, is amended
4by adding the following new paragraph:
5 NEW PARAGRAPH. c. If an applicant is required to collect
6sales or use tax and is not included in the definition of a
7retailer maintaining a place of business in this state in
8section 423.1, subsection 48, paragraph “a”, subparagraph (1),
9the applicant shall be issued one sales or use tax permit by
10the department regardless of the number of locations from which
11sales are made.
12 Sec. 20. Section 423.36, subsections 7 and 8, Code 2022, are
13amended to read as follows:
147. a. Sellers who are not regularly engaged in selling
15at retail and do not have a permanent place of business, but
16who are temporarily engaged in selling from trucks, portable
17roadside stands, concessionaires at state, county, district,
18or local fairs, carnivals, or the like, shall report and remit
19the sales tax on a temporary seasonal basis, under rules
20the director shall provide for the efficient collection of
21the sales tax. This subsection applies to sellers who are
22temporarily engaged in furnishing services.
23b. Persons engaged in selling tangible personal property,
24specified digital products, or furnishing services shall not
25be required to obtain or retain a sales or use tax permit for a
26place of business at which taxable sales of tangible personal
27property, specified digital products, or taxable performance of
28services will not occur.
298. The provisions of subsection 1, dealing with the lawful
30right of a retailer to transact business, as applicable, apply
31to persons having receipts from furnishing services enumerated
32in section 423.2, except that a person holding a permit
33pursuant to subsection 1 shall not be required to obtain any
34separate sales or use tax permit for the purpose of engaging in
35business involving the services.
-9-1 Sec. 21. Section 423.40, subsections 1, 2, 3, and 5, Code
22022, are amended to read as follows:
31. In addition to the sales or use tax or additional sales
4or use tax, the taxpayer shall pay a penalty as provided in
5section 421.27. The taxpayer shall also pay interest on the
6sales or use tax or additional sales or use tax at the rate
7in effect under section 421.7 for each month counting each
8fraction of a month as an entire month, computed from the date
9the semimonthly or monthly tax deposit form or return was
10required to be filed. The penalty and interest shall be paid
11to the department and disposed of in the same manner as other
12receipts under this subchapter. Unpaid penalties and interest
13may be enforced in the same manner as the taxes imposed by this
14chapter.
152. a. Any person who knowingly sells tangible personal
16property, specified digital products, tickets or admissions
17to places of amusement and athletic events, or gas, water,
18electricity, or communication service at retail, or engages in
19the furnishing of services enumerated in section 423.2, in this
20state without procuring a permit to collect tax, as provided
21in section 423.36, or who violates section 423.24 and the
22officers of any corporation who so act are guilty of a serious
23misdemeanor.
24b. A person who knowingly sells tangible personal property,
25specified digital products, tickets or admissions to places of
26amusement and athletic events, or gas, water, electricity, or
27communication service at retail, or engages in the furnishing
28of services enumerated in section 423.2, in this state after
29the person’s sales or use tax permit has been revoked and
30before it has been restored as provided in section 423.36,
31subsection 6, and the officers of any corporation who so act
32are guilty of an aggravated misdemeanor.
333. A person who willfully attempts in any manner to evade
34any tax imposed by this chapter or the payment of the tax or
35a person who makes or causes to be made a false or fraudulent
-10-1semimonthly or monthly tax deposit form or return with intent
2to evade any tax imposed by subchapter II or III or the payment
3of the tax is guilty of a class “D” felony.
45. A person required to pay sales or use tax, or to make,
5sign, or file a tax deposit form or return or supplemental
6return, who willfully makes a false or fraudulent tax deposit
7form or return, or willfully fails to pay at least ninety
8percent of the tax or willfully fails to make, sign, or file
9the tax deposit form or return, at the time required by law, is
10guilty of a fraudulent practice.
11 Sec. 22. Section 423.45, subsection 4, paragraph b, Code
122022, is amended to read as follows:
13b. The sales tax liability for all sales of tangible
14personal property and specified digital products and all sales
15of services is upon the seller and the purchaser unless the
16seller takes from the purchaser a valid exemption certificate
17stating under penalty of perjury that the purchase is for a
18nontaxable purpose and is not a retail sale as defined in
19section 423.1, or the seller is not obligated to collect tax
20due, or unless the seller takes a fuel exemption certificate
21pursuant to subsection 5. If the tangible personal property,
22specified digital products, or services are purchased tax free
23pursuant to a valid exemption certificate and the tangible
24personal property, specified digital products, or services are
25used or disposed of by the purchaser in a nonexempt manner, the
26purchaser is solely liable for the taxes and shall remit the
27taxes directly to the department and sections 423.31, 423.32,
28 423.37, 423.38, 423.39, 423.40, 423.41, and 423.42 shall apply
29to the purchaser.
30 Sec. 23. Section 423.45, subsection 5, paragraph c, Code
312022, is amended to read as follows:
32c. The seller may accept a completed fuel exemption
33certificate, as prepared by the purchaser, for three
34years unless the purchaser files a new completed exemption
35certificate. If the fuel is purchased tax free pursuant to a
-11-1fuel exemption certificate which is taken by the seller, and
2the fuel is used or disposed of by the purchaser in a nonexempt
3manner, the purchaser is solely liable for the taxes, and shall
4remit the taxes directly to the department and sections 423.31,
5423.32, 423.37, 423.38, 423.39, 423.40, 423.41, and 423.42
6shall apply to the purchaser.
7 Sec. 24. Section 423.50, subsection 1, Code 2022, is amended
8to read as follows:
91. Only one remittance of tax per return is required except
10as provided in this subsection. Sellers that collect more
11than thirty thousand dollars in sales and use taxes for this
12state during the preceding calendar year shall be required to
13make additional remittances as required under rules adopted by
14the director. The filing of a return is not required with an
15additional remittance.
16 Sec. 25. Section 423.57, Code 2022, is amended to read as
17follows:
18423.57 Statutes applicable.
19The director shall administer this subchapter as it relates
20to the taxes imposed in this chapter in the same manner and
21subject to all the provisions of, and all of the powers,
22duties, authority, and restrictions contained in sections
23423.14, 423.14A, 423.14B, 423.15, 423.16, 423.17, 423.19,
24423.20, 423.21, 423.22, 423.23, 423.24, 423.25, 423.29, 423.31,
25423.32, 423.33, 423.34, 423.34A, 423.35, 423.37, 423.38,
26423.39, 423.40, 423.41, and 423.42, section 423.43, subsection
271, and sections 423.45, 423.46, and 423.47.
28 Sec. 26. Section 423.58, Code 2022, is amended to read as
29follows:
30423.58 Collection, permit, and tax return exemption for
31certain out-of-state businesses.
32Notwithstanding sections 423.14, 423.14A, 423.14B, 423.29,
33423.31, 423.32, and 423.36, a person meeting the requirements
34of section 29C.24 is not required to obtain a sales or use tax
35permit, collect and remit sales and use tax, or make and file
-12-1applicable sales or use tax returns, as provided in section
229C.24, subsection 3, paragraph “a”, subparagraph (2).
3 Sec. 27. Section 423A.6, subsection 4, Code 2022, is amended
4to read as follows:
54. Section 422.25, subsection 4, sections 422.30, 422.67,
6and 422.68, section 422.69, subsection 1, sections 422.70,
7422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
81, and sections 423.23, 423.24, 423.25, 423.31, 423.33,
9423.35, 423.37 through 423.42, and 423.47, consistent with the
10provisions of this chapter, apply with respect to the taxes
11authorized under this chapter, in the same manner and with the
12same effect as if the state and local hotel and motel taxes
13were retail sales taxes within the meaning of those statutes.
14Notwithstanding this subsection, the director shall provide
15for quarterly monthly filing of returns and for other than
16quarterly monthly filing of returns both as prescribed in
17section 423.31. The director may require all persons who are
18engaged in the business of deriving any sales price subject
19to tax under this chapter to register with the department.
20All taxes collected under this chapter by a retailer, lodging
21provider, lodging facilitator, lodging platform, or any other
22person are deemed to be held in trust for the state of Iowa and
23the local jurisdictions imposing the taxes.
24 Sec. 28. Section 423B.5, subsection 3, Code 2022, is amended
25to read as follows:
263. A tax permit other than the state sales or use tax permit
27required under section 423.36 shall not be required by local
28authorities.
29 Sec. 29. Section 423B.6, subsection 2, paragraph c, Code
302022, is amended to read as follows:
31c. Frequency of deposits and quarterly monthly reports of a
32local sales and services tax with the department of revenue are
33governed by the tax provisions in section 423.31. Local tax
34collections shall not be included in computation of the total
35tax to determine frequency of filing under section 423.31.
-13-1 Sec. 30. Section 423C.4, Code 2022, is amended to read as
2follows:
3423C.4 Administration and enforcement.
4All powers and requirements of the director of revenue
5to administer the state sales tax law under chapter 423 are
6applicable to the administration of the tax imposed under
7section 423C.3, including but not limited to section 422.25,
8subsection 4, sections 422.30, 422.67, and 422.68, section
9422.69, subsection 1, sections 422.70 through 422.75, section
10423.14, subsection 1, and sections 423.15, 423.23, 423.24,
11423.25, 423.31, 423.33, 423.35 and 423.37 through 423.42,
12423.45, 423.46, and 423.47. However, as an exception to the
13powers specified in section 423.31, the director shall only
14require the filing of quarterly monthly reports.
15 Sec. 31. Section 423D.4, subsection 3, Code 2022, is amended
16to read as follows:
173. Section 422.25, subsection 4, sections 422.30, 422.67,
18and 422.68, section 422.69, subsection 1, sections 422.70,
19422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
201, and sections 423.23, 423.24, 423.25, 423.31 through
21423.35, 423.37 through 423.42, and 423.47, consistent with
22the provisions of this chapter, apply with respect to the tax
23authorized under this chapter, in the same manner and with the
24same effect as if the excise taxes on equipment sales or use
25were retail sales taxes within the meaning of those statutes.
26Notwithstanding this subsection, the director shall provide
27for quarterly monthly filing of returns and for other than
28quarterly monthly filing of returns both as prescribed in
29section 423.31. All taxes collected under this chapter by a
30retailer or any user are deemed to be held in trust for the
31state of Iowa.
32 Sec. 32. Section 423G.5, subsection 3, Code 2022, is amended
33to read as follows:
343. Section 422.25, subsection 4, sections 422.30, 422.67,
35and 422.68, section 422.69, subsection 1, sections 422.70,
-14-1422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
21, and sections 423.23, 423.24, 423.25, 423.31 through
3423.35, 423.37 through 423.42, and 423.47, consistent with the
4provisions of this chapter, shall apply with respect to the tax
5authorized under this chapter, in the same manner and with the
6same effect as if the excise taxes on the sale or furnishing of
7a water service were retail sales taxes within the meaning of
8those statutes. Notwithstanding this subsection, the director
9shall provide for quarterly monthly filing of returns and
10for other than quarterly monthly filing of returns both as
11prescribed in section 423.31. All taxes collected under this
12chapter by a retailer or any user are deemed to be held in trust
13for the state of Iowa.
14 Sec. 33. Section 728.1, subsection 6, Code 2022, is amended
15to read as follows:
166. “Place of business” means the premises of a business
17required to obtain a sales or use tax permit pursuant to
18chapter 423, the premises of a nonprofit or not-for-profit
19organization, and the premises of an establishment which is
20open to the public at large or where entrance is limited by a
21cover charge or membership requirement.
22 Sec. 34. Section 728.5, subsection 1, unnumbered paragraph
231, Code 2022, is amended to read as follows:
24An owner, manager, or person who exercises direct control
25over a place of business required to obtain a sales or use tax
26permit shall be guilty of a serious misdemeanor under any of
27the following circumstances:
28 Sec. 35. REPEAL. Section 423.32, Code 2022, is repealed.
29 Sec. 36. IMPLEMENTATION — EMERGENCY RULES. The department
30of revenue may adopt emergency rules under section 17A.4,
31subsection 3, and section 17A.5, subsection 2, paragraph “b”,
32to implement the provisions of this division of this Act and
33the rules shall be effective immediately upon filing unless
34a later date is specified in the rules. Any rules adopted
35in accordance with this section shall also be published as a
-15-1notice of intended action as provided in section 17A.4.
2 Sec. 37. EFFECTIVE DATE. The following, being deemed of
3immediate importance, takes effect upon enactment:
4The section of this division of this Act enacting emergency
5rules relating to the implementation of this division of this
6Act.
7DIVISION II
8DISTRIBUTIONS OF REVENUE TO LOCAL GOVERNMENTS AND SCHOOL
9DISTRICTS
10 Sec. 38. Section 423B.7, subsection 2, paragraph a, Code
112022, is amended to read as follows:
12a. The director of revenue by August 15 of each fiscal
13year the last day of each month shall send transfer to each
14city or county where the local option tax is imposed, an
15estimate of the amount of tax moneys remitted to the department
16attributable to each city or county will receive for the year
17and for each month of the year from the preceding month. At the
18end of each month, the director may revise the estimates for
19the year and remaining months.
20 Sec. 39. Section 423B.7, subsection 2, paragraphs b and c,
21Code 2022, are amended by striking the paragraphs.
22 Sec. 40. Section 423F.2, subsection 4, paragraph a, Code
232022, is amended to read as follows:
24a. The director of revenue by August 15 of each fiscal year
25 the last day of each month shall send transfer to each school
26district an estimate of the amount of tax moneys remitted
27to the department attributable to each school district will
28receive for the year and for each month of the year from the
29preceding month. At the end of each month, the director may
30revise the estimates for the year and remaining months.
31 Sec. 41. Section 423F.2, subsection 4, paragraph b, Code
322022, is amended by striking the paragraph and inserting in
33lieu thereof the following:
34b. On or before August 15 of each fiscal year the director
35of revenue shall provide to each school district an estimate
-16-1of the amount of tax moneys to be distributed to each school
2district for the current fiscal year.
3 Sec. 42. Section 423F.2, subsection 4, paragraph c, Code
42022, is amended by striking the paragraph.
5 Sec. 43. TRANSITION PROVISION FOR LOCAL OPTION SALES TAX
6AND SECURING AN ADVANCED VISION FOR EDUCATION — TRANSFER
7AMOUNTS. Notwithstanding any other provision of law to the
8contrary, the department of revenue shall estimate monthly
9local option sales tax and securing an advanced vision for
10education transfer amounts through the end of the 2022 calendar
11year. The department of revenue shall transfer estimated
12amounts to each local government or school district for the
13months of July, August, and September 2022. Beginning with the
14October 2022 transfer, the department shall not use estimated
15amounts and shall transfer the amount of tax attributable to
16each local government or school district for the tax remitted
17in September 2022. Any adjustment amount that is necessary to
18the July, August, or September 2022 estimated transfer amount
19to reflect the accurate attributable amount shall be made by
20the department of revenue or the local government or school
21district by the close of business on December 30, 2022.
22DIVISION III
23LIABILITY OF SELLERS USING CERTIFIED SERVICE provider
24 Sec. 44. Section 423.48, subsection 3, paragraph a, Code
252022, is amended to read as follows:
26a. A model 1 seller’s obligation to calculate, collect, and
27remit sales and use taxes shall be performed by its certified
28service provider, except for the seller’s obligation to remit
29tax on its own purchases. As the seller’s agent, the certified
30service provider is liable for its model 1 seller’s sales
31and use tax due Iowa on all sales transactions it processes
32for the seller except as set out in this section. A seller
33that contracts with a certified service provider is not
34liable to the state for sales or use tax due on transactions
35processed by the certified service provider unless the seller
-17-1misrepresents the types of items or services it sells or
2commits fraud certified service provider establishes that
3the certified service provider is not liable in accordance
4with the agreement. In the absence of probable cause to
5believe that the seller has committed fraud or made a material
6misrepresentation liability relief established by the certified
7service provider, the seller is not subject to audit on the
8transactions processed by the certified service provider.
9A model 1 seller is subject to audit for transactions not
10processed by the certified service provider. The director is
11authorized to perform a system check of the model 1 seller and
12review the seller’s procedures to determine if the certified
13service provider’s system is functioning properly and the
14extent to which the seller’s transactions are being processed
15by the certified service provider.
16DIVISION IV
17AUTHORITY TO CANCEL VARIOUS PERMITS ISSUED BY THE DEPARTMENT
18 Sec. 45. Section 421.17, Code 2022, is amended by adding the
19following new subsection:
20 NEW SUBSECTION. 37. Notwithstanding any other provision
21of law to the contrary, to cancel the following permits upon
22verification by the department of revenue the permits are no
23longer in use: income tax withholding, sales or use tax, or
24motor fuel tax.
25DIVISION V
26ECONOMIC DEVELOPMENT AUTHORITY SALES AND USE TAX REFUND
27INCENTIVES
28 Sec. 46. Section 15.331A, subsection 2, Code 2022, is
29amended to read as follows:
302. To receive the refund, a claim shall be filed by the
31eligible business with the department of revenue as follows:
32a. The contractor or subcontractor shall state under oath,
33on forms provided by the department of revenue, the amount of
34the sales of tangible personal property or services rendered,
35furnished, or performed including water, sewer, gas, and
-18-1electric utility services upon which sales or use tax has been
2paid prior to the project contract completion, and shall file
3the forms with the eligible business before final settlement
4is made.
5b. The eligible business shall, not more than one year after
6project contract completion, make application to the department
7of revenue for any refund of the amount of the sales and use
8taxes paid pursuant to chapter 423 upon any tangible personal
9property, or services rendered, furnished, or performed,
10including water, sewer, gas, and electric utility services.
11The application shall be made in the manner and upon forms to
12be provided by the department of revenue, and the department of
13revenue shall audit the claim and, if approved, issue a warrant
14to the eligible business in the amount of the sales or use tax
15which has been paid to the state of Iowa under a contract. The
16application must be made within one year after the project
17completion date. A claim filed by the eligible business in
18accordance with this section shall not be denied by reason of a
19limitation provision set forth in chapter 421 or 423.
20c. The eligible business shall inform the department of
21revenue in writing after project contract completion. For
22purposes of this section, “project completion” means the
23first date upon which the average annualized production of
24finished product for the preceding ninety-day period at the
25manufacturing facility operated by the eligible business is
26at least fifty percent of the initial design capacity of the
27facility.
28 Sec. 47. Section 15.331A, Code 2022, is amended by adding
29the following new subsection:
30 NEW SUBSECTION. 4. For purposes of this section, “contract
31completion” means the date of completion of a written contract
32relating to the construction or equipping of the facility that
33is part of the project of the eligible business.
34 Sec. 48. Section 15.331C, subsections 1 and 2, Code 2022,
35are amended to read as follows:
-19- 11. An In lieu of the sales and use tax refund provided
2in section 15.331A, an eligible business may claim a tax
3credit in an amount equal to the sales and use taxes paid by a
4third-party developer under chapter 423 for gas, electricity,
5water, or sewer utility services, goods, wares, or merchandise,
6or on services rendered, furnished, or performed to or for a
7contractor or subcontractor and used in the fulfillment of a
8written contract relating to the construction or equipping of
9a facility of the eligible business. Taxes attributable to
10intangible property and furniture and furnishings shall not
11be included, but taxes attributable to racks, shelving, and
12conveyor equipment to be used in a warehouse or distribution
13center shall be included. Any credit in excess of the tax
14liability for the tax year may be credited to the tax liability
15for the following seven years or until depleted, whichever
16occurs earlier. An eligible business may elect to receive a
17refund of all or a portion of an unused tax credit.
182. A third-party developer shall state under oath, on
19forms provided by the department of revenue, the amount of
20taxes paid as described in subsection 1 and shall submit such
21forms to the department of revenue. The taxes paid shall be
22itemized to allow identification of the taxes attributable
23to racks, shelving, and conveyor equipment to be used in a
24warehouse or distribution center. The eligible business
25shall make application to the department of revenue in the
26manner and form prescribed by the department of revenue, and
27within the time for applying for a sales and use tax refund
28under section 15.331A.After timely receiving the form from
29the third-party developer and application from the eligible
30business, the department of revenue shall audit the claim
31and, if approved, shall issue a tax credit certificate to the
32eligible business 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
-20-1contractor or subcontractor and used in the fulfillment of a
2written contract relating to the construction or equipping
3of a facility. The department of revenue shall also issue a
4tax credit certificate to the eligible business equal to the
5taxes paid and attributable to racks, shelving, and conveyor
6equipment to be used in a warehouse or distribution center.
7The aggregate combined total amount of tax refunds under
8section 15.331A for taxes paid and attributable to racks,
9shelving, and conveyor equipment to be used in a warehouse or
10distribution center and of tax credit certificates issued by
11the department of revenue under this section for the taxes paid
12and attributable to racks, shelving, and conveyor equipment
13to be used in a warehouse or distribution center shall not
14exceed five hundred thousand dollars in a fiscal year. If
15an applicant for a tax credit certificate does not receive
16a refund or certificate for the taxes paid and attributable
17to racks, shelving, and conveyor equipment to be used in a
18warehouse or distribution center, the application shall be
19considered in succeeding fiscal years. The eligible business
20shall not claim a tax credit under this section unless a tax
21credit certificate issued by the department of revenue is
22included with the taxpayer’s tax return for the tax year for
23which the tax credit is claimed. A tax credit certificate
24shall contain the eligible business’s name, address, tax
25identification number, the amount of the tax credit, and other
26information deemed necessary by the department of revenue.
27 Sec. 49. Section 15.355, subsection 2, Code 2022, is amended
28by striking the subsection and inserting in lieu thereof the
29following:
302. a. A housing business may claim a refund of the sales
31and use taxes paid under chapter 423 prior to the completion
32of the housing project that are directly related to a housing
33project and specified in the agreement.
34b. To receive a refund, a claim shall be filed by the
35housing business with the department of revenue as follows:
-21- 1(1) The contractor or subcontractor shall state under oath,
2on forms provided by the department of revenue, the amount
3of sales and use taxes paid under chapter 423 prior to the
4completion of the housing project that are directly related to
5a housing project and specified in the agreement.
6(2) The contractor or subcontractor shall file the forms
7with the housing business before final settlement is made.
8(3) (a) The housing business shall, after the agreement
9completion date, make application to the department of revenue
10for any refund of the amount of sales and use taxes paid under
11chapter 423 prior to the completion of the housing project that
12were directly related to a housing project and specified in the
13agreement. The application shall be made in the manner and
14upon forms to be provided by the department of revenue. The
15department of revenue shall audit the claim and, if approved,
16issue a warrant to the housing business. The application
17must be made within one year after the agreement completion
18date. A claim filed by the housing business in accordance with
19this subsection shall not be denied by reason of a limitation
20provision set forth in chapter 421 or 423.
21(b) For purposes of this subparagraph, “agreement completion
22date” means the date on which the authority notifies the
23department of revenue that all applicable requirements of the
24agreement entered into pursuant to section 15.354, subsection
253, paragraph “a”, and all applicable requirements of this part,
26including the rules the authority and the department of revenue
27adopt pursuant to section 15.356, are satisfied.
28c. A contractor or subcontractor who willfully makes a
29false claim under oath in violation of the provisions of this
30subsection shall be guilty of a simple misdemeanor and in
31addition to any other penalty, the contractor or subcontractor
32shall be liable for the payment of the tax and any applicable
33penalty and interest.
34 Sec. 50. EFFECTIVE DATE. This division of this Act, being
35deemed of immediate importance, takes effect upon enactment.
-22-1 Sec. 51. APPLICABILITY. This division of this Act applies
2to claims for refunds filed on or after the effective date of
3this division of this Act.
4DIVISION VI
5FRANCHISE TAX
6 Sec. 52. Section 422.63, Code 2022, is amended to read as
7follows:
8422.63 Amount of tax.
91. The franchise tax is imposed annually in an amount equal
10to five the percent specified in subsection 2 of the net income
11received or accrued during the taxable year. If the net income
12of the financial institution is derived from its business
13carried on entirely within the state, the tax shall be imposed
14on the entire net income, but if the business is carried on
15partly within and partly without the state, the portion of net
16income reasonably attributable to the business within the state
17shall be specifically allocated or equitably apportioned within
18and without the state under rules of the director.
192. a. For tax years beginning prior to January 1, 2023,
20five percent.
21b. For tax years beginning on or after January 1, 2023, but
22before January 1, 2024, four and seven-tenths percent.
23c. For tax years beginning on or after January 1, 2024, but
24before January 1, 2025, four and four-tenths percent.
25d. For tax years beginning on or after January 1, 2025, but
26before January 1, 2026, four and one-tenth percent.
27e. For tax years beginning on or after January 1, 2026, but
28before January 1, 2027, three and eight-tenths percent.
29f. For tax years beginning on or after January 1, 2027,
30three and one-half percent.
31DIVISION VII
32MANUFACTURED FOOD — SALES TAX EXEMPTION
33 Sec. 53. Section 423.3, subsection 49, Code 2022, is amended
34to read as follows:
3549. a. The sales price from the sale of carbon dioxide
-23-1in a liquid, solid, or gaseous form, electricity, steam, and
2other taxable services and the lease or rental of tangible
3personal property when used by a manufacturer of food products
4 to primarily produce marketable food products for human
5consumption food or food ingredients, including but not
6limited to treatment of material to change its form, context,
7or condition, in order to produce the food product or food
8ingredients, maintenance of quality or integrity of the
9food product or food ingredients, changing or maintenance of
10temperature levels necessary to avoid spoilage or to hold the
11food product or food ingredients in marketable condition,
12maintenance of environmental conditions necessary for the safe
13or efficient use of machinery and material used to produce
14the food product or food ingredients, sanitation and quality
15control activities, formation of packaging, placement into
16shipping containers, and movement of the material or food
17product or food ingredients until shipment from the building
18of manufacture.
19b. For purposes of this subsection, “food or food
20ingredients” means the same as “food and food ingredients” as
21defined in subsection 57, paragraph “d”, and includes tangible
22personal property that could be sold for ingestion or chewing
23by humans but is sold for another use.
24 Sec. 54. REFUNDS. Refunds of taxes, interest, or penalties
25which arise from the enactment of this division of this Act,
26for sales or services occurring between January 1, 2019, and
27the effective date of this division of this Act, shall be
28limited to one hundred thousand dollars in the aggregate for
29any calendar year in which claims are eligible for a refund and
30shall not be allowed unless refund claims are filed by October
311, 2022, notwithstanding any other law to the contrary. If the
32amount of claims totals more than one hundred thousand dollars
33in the aggregate for any calendar year in which claims are
34eligible for a refund, the department of revenue shall prorate
35the one hundred thousand dollars in the aggregate among all the
-24-1claimants for that particular calendar year in relation to the
2amounts of the claimants’ valid claims.
3 Sec. 55. EFFECTIVE DATE. This division of this Act, being
4deemed of immediate importance, takes effect upon enactment.
5 Sec. 56. RETROACTIVE APPLICABILITY. This division of this
6Act applies retroactively to January 1, 2019.
7DIVISION VIII
8MOTOR FUEL REPORTING REQUIREMENT — PENALTY
9 Sec. 57. Section 452A.33, subsection 1, paragraph c, Code
102022, is amended to read as follows:
11c. (1) The retail dealer shall prepare and submit file
12 the report with the department in a manner and according to
13procedures required by the department in compliance with
14section 452A.61. However, the department may require that the
15retail dealer file the report with the department by electronic
16transmission. The department may require that retail dealers
17report to the department on an annual, quarterly, or monthly
18basis. The department, upon application by a retail dealer,
19may grant a reasonable extension of time to file the report.
20(2) If a retail dealer fails to file the report as required
21by this section or fails to maintain records required to file
22the report the department may impose a civil penalty of not
23more than one hundred dollars per occurrence in addition to any
24other penalty provided by law. The penalty amount shall be
25deposited into the general fund of the state.
26EXPLANATION
27The inclusion of this explanation does not constitute agreement with
28the explanation’s substance by the members of the general assembly.
29This bill relates to sales, use, franchise, and motor
30vehicle fuel taxes administered by the department of revenue
31including distributions to local governments and school
32districts, sales tax on food ingredients, the liability of
33sellers, tax refund and tax credit incentives, and motor fuel
34tax reporting modifications.
35DIVISION I — SALES, USE, AND EXCISE TAX — RETURNS DUE. The
-25-1bill allows a taxpayer to have a combined sales and use tax
2permit and to file a combined return for sales and use taxes.
3Currently, a taxpayer must possess a separate sales and use tax
4permit and file separate sales and use tax returns.
5The bill changes numerous references to the phrase “sales
6tax permit” in the Code to the phrase “sales or use tax
7permit”.
8Currently, a person is required to file a sales or use tax
9return on a quarterly basis. The bill changes this filing
10requirement from a quarterly basis to a monthly basis. The
11bill does allow a person required to file a sales or use tax
12return and who collects less than $1,200 in sales or use tax in
13a calendar year, to file a return once a year on or before the
14last day of the month following the close of the calendar year.
15The bill allows certain persons required to collect sales
16or use tax who do not meet the definition of a “retailer
17maintaining a business in this state” in Code section
18423.1(48)(a)(1), to be issued only one sales or use tax permit.
19The bill allows the director of revenue, if necessary, to
20ensure the payment of sales or use tax, to require a sales or
21use tax return be filed on a different basis other than on a
22monthly basis.
23The bill strikes “professions and occupations” from
24the definition of “commercial enterprise” in Code section
25423.3(104) thus making sales to professions and occupations
26related to prewritten software, specified digital services,
27and other services subject to the sales tax. The bill expands
28the definition of “commercial enterprise” to include a “public
29utility” as defined in Code section 476.1(3). As a result, the
30sales price of specified digital products, prewritten computer
31software, and other enumerated digital and computer services
32furnished to a public utility are exempt from the sales tax, if
33exclusively used by the public utility.
34The bill strikes a provision allowing a person required to
35file a sales or use tax return to take a credit against the
-26-1total quarterly amount of tax due, upon a proper showing of
2necessity, allowing for the balance of tax due to be paid up to
330 days after the return was due.
4The bill strikes a provision requiring a seller, who
5collects more than $30,000 of sales or use tax in the preceding
6calendar year, to make additional remittances to the state
7under the rules adopted by the director of revenue.
8The bill allows the department of revenue to adopt emergency
9rules to implement the division. The emergency rules provision
10takes effect upon enactment.
11DIVISION II — DISTRIBUTIONS OF REVENUE TO LOCAL GOVERNMENTS
12AND SCHOOL DISTRICTS. Currently, by August 15, the department
13of revenue estimates the local option sale tax (LOST) and
14securing an advanced vision for education (SAVE) tax amounts
15that will be transferred to each local government or school
16district on a fiscal year and monthly basis. The transfer
17estimates may be revised for the year and remaining months by
18the director of revenue if the estimates are incorrect.
19Commencing with the fiscal year beginning July 1, 2022, the
20bill changes the LOST and SAVE transfer amount procedures, by
21requiring the department of revenue to transfer the actual
22LOST and SAVE taxes collected that are attributable to each
23local government or school district to that local government
24or school district.
25The bill also creates a transition procedure for the LOST
26and SAVE tax amounts transferred during July and August 2022.
27Under the transition procedure, the department of revenue shall
28transfer estimated amounts of LOST and SAVE to each local
29government or school district for the months of July, August,
30and September 2022. However, beginning with the October 2022
31transfer, the department of revenue shall transfer the actual
32amount of tax attributable to each local government or school
33district for the LOST and SAVE tax remitted in September 2022.
34The bill requires any adjustment amount that is necessary to
35the July, August, or September 2022 estimated transfer amounts
-27-1be made by the close of business on December 30, 2022.
2DIVISION III — LIABILITY OF SELLERS USING CERTIFIED
3SERVICE PROVIDER. The bill specifies that a seller of personal
4property or services who contracts with a certified service
5provider is not liable to the state for sales or use tax due on
6transactions processed by the certified service provider unless
7the certified service provider establishes it is not liable
8in accordance with the agreement with the seller. The bill
9specifies that if the certified service provider is liable for
10the sales or use tax due, the seller is not subject to audit
11on transactions processed by the certified service provider.
12“Certified service provider” is defined in Code section 423.1
13to mean an agent certified under the agreement to perform
14all of a seller’s sales or use tax functions, other than the
15seller’s obligation to remit tax on its own purchases.
16DIVISION IV — AUTHORITY TO CANCEL VARIOUS PERMITS ISSUED
17BY THE DEPARTMENT. The bill allows the director of the
18department of revenue to cancel the following tax permits if
19the department determines the permits are no longer in use:
20income tax withholding, sales or use tax, or motor fuel tax.
21DIVISION V — ECONOMIC DEVELOPMENT AUTHORITY SALES AND USE
22TAX REFUND INCENTIVES. Currently, for certain sales or use
23tax refund incentives in Code section 15.331A administered
24by the department of economic development authority, an
25eligible business must apply for a sales or use tax refund for
26items purchased prior to the “project” completion date. The
27bill changes the refund procedures by requiring an eligible
28business to apply for such sales or use tax refunds for items
29purchased prior to the completion of the “contract” rather than
30completion of the “project”. The bill also requires such an
31application be made within one year of the project completion
32date, and that the department of revenue be informed in writing
33after the contract completion. The bill defines “contract
34completion” as the date of completion of a written contract
35relating to the construction or equipping of the facility that
-28-1is part of the project of the eligible business.
2For the third-party developer tax credit in Code section
315.331C relating to a tax credit for sales and use taxes paid
4by a third-party developer, the bill specifies that this credit
5is in lieu of the sales and use tax refund tax incentive
6provided in Code section 15.331A.The bill also provides
7that the eligible business shall make an application to the
8department of revenue within one year of the project completion
9date, and that the department be informed in writing after
10the contract completion. The bill requires the department
11of revenue to audit any third-party developer tax credit
12claim, prior to issuing a third-party developer tax credit
13certificate.
14The bill makes changes to the procedures for workforce
15housing tax incentives in Code section 15.355. The bill
16permits a housing business to claim a refund of the sales
17and use taxes paid prior to the completion of the housing
18project that are directly related to the housing project and
19specified in an agreement. In order to receive the sales and
20use tax refund, the bill requires a contractor or subcontractor
21working on the housing project to submit a form under oath
22stating the amount of sales and use taxes paid prior to the
23housing project. The bill makes it a simple misdemeanor if a
24contractor or subcontractor willfully makes a false claim under
25oath in relating to the workforce sales and use tax refund.
26The bill then requires, after the agreement completion date,
27the housing business to make an application to the department
28of revenue for any sales and use tax refund. The bill defines
29“agreement completion date” to mean the date the economic
30development authority notifies the department of revenue that
31all applicable requirements of the agreement have been met.
32The bill also requires the department of revenue to audit the
33claim prior to issuing the sales and use tax refund.
34This division takes effect upon enactment and applies to
35claims for refunds filed on or after the effective date of the
-29-1bill.
2DIVISION VI — FRANCHISE TAX. The bill phases in a reduction
3of the current franchise tax of 5 percent of net income as
4follows: Commencing with the tax years beginning during the
52023 calendar year, 4.70 percent; for tax years beginning
6during the 2024 calendar year, 4.40 percent; for tax years
7beginning during the 2025 calendar year, 4.10 percent; for tax
8years beginning during the 2026 calendar year, 3.80 percent;
9and for all tax years beginning on or after January 1, 2027,
103.50 percent.
11DIVISION VII — MANUFACTURED FOOD — SALES TAX EXEMPTION.
12 The bill exempts from the sales tax the sales of certain items
13and services used by a manufacturer to primarily produce food
14or food ingredients, including the lease or rental of tangible
15personal property used to primarily produce such food or food
16ingredients.
17The bill defines “food or food ingredients” to mean the same
18as defined in Code section 423.3(57)(d) and includes tangible
19personal property that could be sold for ingestion or chewing
20by humans but is sold for another use.
21Under current law, in order to receive the sales tax
22exemption the items or services must be used to produce
23marketable food products for human consumption.
24By operation of Code section 423.6, an item exempt from the
25imposition of the sales tax is also exempt from the use tax
26imposed in Code section 423.5.
27The bill requires refunds of taxes, interest, or penalties
28arising from claims resulting from the enactment of the bill
29for sales or services occurring between January 1, 2019, and
30the effective date of the division to be filed prior to October
311, 2022. Refunds of taxes, interest, or penalties shall not
32exceed $100,000 in the aggregate in any calendar year in which
33claims are eligible for a refund. If the amount of claims
34totals more than $100,000 in the aggregate for any calendar
35year in which claims are eligible for a refund, the department
-30-1of revenue shall prorate the $100,000 in the aggregate among
2all the claimants for that particular calendar year.
3This division takes effect upon enactment and applies
4retroactively to January 1, 2019.
5DIVISION VIII — MOTOR FUEL REPORTING REQUIREMENT —
6PENALTY. The bill specifies that each motor fuel retail dealer
7shall file a report with the department of revenue detailing
8their total motor fuel gallonage within a reporting period
9in the manner required by the department and in compliance
10within the time frames established in Code section 452A.61.
11The bill permits the department of revenue to require a retail
12dealer to file such a report with the department by electronic
13transmission. The bill allows the department of revenue to
14impose a civil penalty on the retail dealer, not to exceed
15$100, for each instance a retail dealer fails to timely file
16a report or fails to maintain records required to file the
17report.
-31-jm/jh
2fuel taxes administered by the department of revenue
3including distributions to local governments and school
4districts, the liability of sellers, tax refund and tax
5credit incentives, sales tax on food ingredients, and motor
6fuel tax reporting modifications, and providing penalties,
7and including effective date, applicability, and retroactive
8applicability provisions.
9BE 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 423.3, subsection 104, paragraph b,
12subparagraph (1), Code 2022, is amended to read as follows:
13(1) “Commercial enterprise” means the same as defined in
14section 423.3, subsection 47, paragraph “d”, subparagraph (1),
15but also includes professions and occupations and includes
16public utilities as defined in section 476.1, subsection 3.
17 Sec. 10. Section 423.5, subsection 2, Code 2022, is amended
18to read as follows:
192. The excise tax is imposed upon every person using
20the property within this state until the tax has been paid
21directly to the county treasurer, the state department of
22transportation, a retailer, or the department. This tax is
23imposed on every person using the services or the product of
24the services in this state until the user has paid the tax
25either to an Iowa sales or use tax permit holder or to the
26department.
27 Sec. 11. Section 423.14, subsection 2, paragraph b, Code
282022, is amended to read as follows:
29b. The tax upon the use of all tangible personal property
30and specified digital products other than that enumerated in
31paragraph “a”, which is sold by a seller who is a retailer or
32its agent that is not otherwise required to collect sales tax
33under the provisions of this chapter, may be collected by the
34retailer or agent and remitted to the department, pursuant to
35the provisions of paragraph “e”, and sections 423.24, 423.29,
-4-1423.30, 423.32 423.31, and 423.33.
2 Sec. 12. Section 423.14A, subsection 3, paragraph c,
3subparagraph (2), Code 2022, is amended to read as follows:
4(2) A marketplace facilitator shall collect sales and
5use tax on the entire sales price or purchase price paid by
6a purchaser on each Iowa sale subject to sales and use tax
7that is made or facilitated by the marketplace facilitator,
8regardless of whether the marketplace seller for whom an Iowa
9sale is made or facilitated has or is required to have a retail
10 sales or use tax permit or would have been required to collect
11sales and use tax had the sale not been facilitated by the
12marketplace facilitator, and regardless of the amount of the
13sales price or purchase price that will ultimately accrue
14to or benefit the marketplace facilitator, the marketplace
15seller, or any other person. This sales and use tax collection
16responsibility of a marketplace facilitator applies but shall
17not be limited to sales facilitated through a computer software
18application, commonly referred to as in-app purchases, or
19through another specified digital product.
20 Sec. 13. Section 423.31, subsections 1, 3, 5, and 6, Code
212022, are amended to read as follows:
221. a. Each Except as provided in paragraph “b”, each person
23subject to this section and section 423.36 and in accordance
24with the provisions of this section and section 423.36 shall,
25on or before the last day of the month following the close of
26each calendar quarter month during which such person is or
27has become or ceased being subject to the provisions of this
28section and section 423.36, make, sign, and file electronically
29 a return for the calendar quarter month in the form as may be
30required. Returns shall show information relating to sales
31prices including tangible personal property, specified digital
32products, and services converted to the use of such person,
33the amounts of sales prices excluded and exempt from the tax,
34the amounts of sales prices subject to tax, a calculation of
35tax due, and any other information for the period covered by
-5-1the return as may be required. Returns shall be signed by
2the retailer or the retailer’s authorized agent and must be
3certified by the retailer to be correct in accordance with
4forms and rules prescribed by the director. A person required
5to file a sales or use tax return who is unable to do so may
6request permission from the director to file a return by
7another method.
8b. Notwithstanding paragraph “a”, each person subject to
9this section who collects and remits less than one thousand
10two hundred dollars in sales or use tax to the department per
11calendar year may file a return on or before the last day of the
12month following the close of the calendar year.
133. The sales tax forms prescribed by the director shall be
14referred to as “retailers tax deposit”. Deposit forms shall
15be signed by the retailer or the retailer’s duly authorized
16agent, and shall be duly certified by the retailer or agent to
17be correct. The director may authorize incorporated banks and
18trust companies or other depositories authorized by law which
19are depositories or financial agents of the United States,
20or of this state, to receive any sales or use tax imposed
21under this chapter, in the manner, at the times, and under
22the conditions the director prescribes. The director shall
23prescribe the manner, times, and conditions under which the
24receipt of the tax by those depositories is to be treated as
25payment of the tax to the department.
265. a. Upon making application and receiving approval
27from the director, a person and its affiliates that make
28retail sales of tangible personal property, specified digital
29products, or taxable enumerated services may make deposits and
30file a consolidated sales or use tax return for the affiliated
31group, pursuant to rules adopted by the director. A person and
32each affiliate that files a consolidated return are jointly and
33severally liable for all tax, penalty, and interest found due
34for the tax period for which a consolidated return is filed or
35required to be filed.
-6- 1b. A business required to file a consolidated sales or use
2 tax return shall file a form entitled “schedule of consolidated
3business locations” with its quarterly sales or use tax
4return that shows the taxpayer’s consolidated permit number,
5the permit number for each Iowa business location, the state
6sales tax amount by business location, and the amount of state
7sales tax due on goods consumed that are not assigned to a
8specific business location. Consolidated quarterly sales or
9use tax returns that are not accompanied by the schedule of
10consolidated business locations form are considered incomplete
11and are subject to penalty under section 421.27.
126. If necessary or advisable in order to insure ensure
13 the payment of the tax, the director may require returns and
14payment of the tax to be made for other than quarterly monthly
15 periods, the provisions of this section or other provision to
16the contrary notwithstanding.
17 Sec. 14. Section 423.31, subsection 2, Code 2022, is amended
18by striking the subsection.
19 Sec. 15. Section 423.33, subsection 1, paragraph a, Code
202022, is amended to read as follows:
21a. If a purchaser fails to pay sales tax to the retailer
22required to collect the tax, then in addition to all of the
23rights, obligations, and remedies provided, a use tax is
24payable by the purchaser directly to the department, and
25sections 423.31, 423.32, 423.37, 423.38, 423.39, 423.40,
26423.41, and 423.42 apply to the purchaser.
27 Sec. 16. Section 423.33, subsection 3, Code 2022, is amended
28to read as follows:
293. Event sponsor’s liability for sales tax. A person
30sponsoring a flea market or a craft, antique, coin, or stamp
31show or similar event shall obtain from every retailer selling
32tangible personal property, specified digital products, or
33taxable services at the event proof that the retailer possesses
34a valid sales or use tax permit or secure from the retailer
35a statement, taken in good faith, that tangible personal
-7-1property, specified digital products, or services offered for
2sale are not subject to sales tax. Failure to do so renders
3a sponsor of the event liable for payment of any sales tax,
4interest, and penalty due and owing from any retailer selling
5property or services at the event. Sections 423.31, 423.32,
6 423.37, 423.38, 423.39, 423.40, 423.41, and 423.42 apply to the
7sponsors. For purposes of this subsection, a “person sponsoring
8a flea market or a craft, antique, coin, or stamp show or similar
9event” does not include a marketplace facilitator as defined in
10section 423.14A, subsection 1, an organization which sponsors
11an event determined to qualify as an event involving casual
12sales pursuant to section 423.3, subsection 39, or the state
13fair or a fair as defined in section 174.1.
14 Sec. 17. Section 423.34, Code 2022, is amended to read as
15follows:
16423.34 Liability of user.
17Any person who uses any tangible personal property,
18specified digital products, or services enumerated in section
19423.2 upon which the use tax has not been paid, either to the
20county treasurer or to a retailer or direct to the department
21as required by this subchapter, shall be liable for the payment
22of tax, and shall on or before the last day of the month next
23succeeding each quarterly monthly period pay the use tax upon
24all tangible personal property, specified digital products,
25or services used by the person during the preceding quarterly
26 monthly period in the manner and accompanied by such returns
27as the director shall prescribe. All of the provisions of
28sections 423.32 423.31 and 423.33 with reference to the returns
29and payments shall be applicable to the returns and payments
30required by this section.
31 Sec. 18. Section 423.36, subsection 4, paragraph b, Code
322022, is amended to read as follows:
33b. If an applicant is making sales outside Iowa for use in
34this state or furnishing services outside Iowa, the product
35or result of which will be used in this state, that applicant
-8-1shall be issued one sales or use tax permit by the department
2applicable to these out-of-state sales or services.
3 Sec. 19. Section 423.36, subsection 4, Code 2022, is amended
4by adding the following new paragraph:
5 NEW PARAGRAPH. c. If an applicant is required to collect
6sales or use tax and is not included in the definition of a
7retailer maintaining a place of business in this state in
8section 423.1, subsection 48, paragraph “a”, subparagraph (1),
9the applicant shall be issued one sales or use tax permit by
10the department regardless of the number of locations from which
11sales are made.
12 Sec. 20. Section 423.36, subsections 7 and 8, Code 2022, are
13amended to read as follows:
147. a. Sellers who are not regularly engaged in selling
15at retail and do not have a permanent place of business, but
16who are temporarily engaged in selling from trucks, portable
17roadside stands, concessionaires at state, county, district,
18or local fairs, carnivals, or the like, shall report and remit
19the sales tax on a temporary seasonal basis, under rules
20the director shall provide for the efficient collection of
21the sales tax. This subsection applies to sellers who are
22temporarily engaged in furnishing services.
23b. Persons engaged in selling tangible personal property,
24specified digital products, or furnishing services shall not
25be required to obtain or retain a sales or use tax permit for a
26place of business at which taxable sales of tangible personal
27property, specified digital products, or taxable performance of
28services will not occur.
298. The provisions of subsection 1, dealing with the lawful
30right of a retailer to transact business, as applicable, apply
31to persons having receipts from furnishing services enumerated
32in section 423.2, except that a person holding a permit
33pursuant to subsection 1 shall not be required to obtain any
34separate sales or use tax permit for the purpose of engaging in
35business involving the services.
-9-1 Sec. 21. Section 423.40, subsections 1, 2, 3, and 5, Code
22022, are amended to read as follows:
31. In addition to the sales or use tax or additional sales
4or use tax, the taxpayer shall pay a penalty as provided in
5section 421.27. The taxpayer shall also pay interest on the
6sales or use tax or additional sales or use tax at the rate
7in effect under section 421.7 for each month counting each
8fraction of a month as an entire month, computed from the date
9the semimonthly or monthly tax deposit form or return was
10required to be filed. The penalty and interest shall be paid
11to the department and disposed of in the same manner as other
12receipts under this subchapter. Unpaid penalties and interest
13may be enforced in the same manner as the taxes imposed by this
14chapter.
152. a. Any person who knowingly sells tangible personal
16property, specified digital products, tickets or admissions
17to places of amusement and athletic events, or gas, water,
18electricity, or communication service at retail, or engages in
19the furnishing of services enumerated in section 423.2, in this
20state without procuring a permit to collect tax, as provided
21in section 423.36, or who violates section 423.24 and the
22officers of any corporation who so act are guilty of a serious
23misdemeanor.
24b. A person who knowingly sells tangible personal property,
25specified digital products, tickets or admissions to places of
26amusement and athletic events, or gas, water, electricity, or
27communication service at retail, or engages in the furnishing
28of services enumerated in section 423.2, in this state after
29the person’s sales or use tax permit has been revoked and
30before it has been restored as provided in section 423.36,
31subsection 6, and the officers of any corporation who so act
32are guilty of an aggravated misdemeanor.
333. A person who willfully attempts in any manner to evade
34any tax imposed by this chapter or the payment of the tax or
35a person who makes or causes to be made a false or fraudulent
-10-1semimonthly or monthly tax deposit form or return with intent
2to evade any tax imposed by subchapter II or III or the payment
3of the tax is guilty of a class “D” felony.
45. A person required to pay sales or use tax, or to make,
5sign, or file a tax deposit form or return or supplemental
6return, who willfully makes a false or fraudulent tax deposit
7form or return, or willfully fails to pay at least ninety
8percent of the tax or willfully fails to make, sign, or file
9the tax deposit form or return, at the time required by law, is
10guilty of a fraudulent practice.
11 Sec. 22. Section 423.45, subsection 4, paragraph b, Code
122022, is amended to read as follows:
13b. The sales tax liability for all sales of tangible
14personal property and specified digital products and all sales
15of services is upon the seller and the purchaser unless the
16seller takes from the purchaser a valid exemption certificate
17stating under penalty of perjury that the purchase is for a
18nontaxable purpose and is not a retail sale as defined in
19section 423.1, or the seller is not obligated to collect tax
20due, or unless the seller takes a fuel exemption certificate
21pursuant to subsection 5. If the tangible personal property,
22specified digital products, or services are purchased tax free
23pursuant to a valid exemption certificate and the tangible
24personal property, specified digital products, or services are
25used or disposed of by the purchaser in a nonexempt manner, the
26purchaser is solely liable for the taxes and shall remit the
27taxes directly to the department and sections 423.31, 423.32,
28 423.37, 423.38, 423.39, 423.40, 423.41, and 423.42 shall apply
29to the purchaser.
30 Sec. 23. Section 423.45, subsection 5, paragraph c, Code
312022, is amended to read as follows:
32c. The seller may accept a completed fuel exemption
33certificate, as prepared by the purchaser, for three
34years unless the purchaser files a new completed exemption
35certificate. If the fuel is purchased tax free pursuant to a
-11-1fuel exemption certificate which is taken by the seller, and
2the fuel is used or disposed of by the purchaser in a nonexempt
3manner, the purchaser is solely liable for the taxes, and shall
4remit the taxes directly to the department and sections 423.31,
5423.32, 423.37, 423.38, 423.39, 423.40, 423.41, and 423.42
6shall apply to the purchaser.
7 Sec. 24. Section 423.50, subsection 1, Code 2022, is amended
8to read as follows:
91. Only one remittance of tax per return is required except
10as provided in this subsection. Sellers that collect more
11than thirty thousand dollars in sales and use taxes for this
12state during the preceding calendar year shall be required to
13make additional remittances as required under rules adopted by
14the director. The filing of a return is not required with an
15additional remittance.
16 Sec. 25. Section 423.57, Code 2022, is amended to read as
17follows:
18423.57 Statutes applicable.
19The director shall administer this subchapter as it relates
20to the taxes imposed in this chapter in the same manner and
21subject to all the provisions of, and all of the powers,
22duties, authority, and restrictions contained in sections
23423.14, 423.14A, 423.14B, 423.15, 423.16, 423.17, 423.19,
24423.20, 423.21, 423.22, 423.23, 423.24, 423.25, 423.29, 423.31,
25423.32, 423.33, 423.34, 423.34A, 423.35, 423.37, 423.38,
26423.39, 423.40, 423.41, and 423.42, section 423.43, subsection
271, and sections 423.45, 423.46, and 423.47.
28 Sec. 26. Section 423.58, Code 2022, is amended to read as
29follows:
30423.58 Collection, permit, and tax return exemption for
31certain out-of-state businesses.
32Notwithstanding sections 423.14, 423.14A, 423.14B, 423.29,
33423.31, 423.32, and 423.36, a person meeting the requirements
34of section 29C.24 is not required to obtain a sales or use tax
35permit, collect and remit sales and use tax, or make and file
-12-1applicable sales or use tax returns, as provided in section
229C.24, subsection 3, paragraph “a”, subparagraph (2).
3 Sec. 27. Section 423A.6, subsection 4, Code 2022, is amended
4to read as follows:
54. Section 422.25, subsection 4, sections 422.30, 422.67,
6and 422.68, section 422.69, subsection 1, sections 422.70,
7422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
81, and sections 423.23, 423.24, 423.25, 423.31, 423.33,
9423.35, 423.37 through 423.42, and 423.47, consistent with the
10provisions of this chapter, apply with respect to the taxes
11authorized under this chapter, in the same manner and with the
12same effect as if the state and local hotel and motel taxes
13were retail sales taxes within the meaning of those statutes.
14Notwithstanding this subsection, the director shall provide
15for quarterly monthly filing of returns and for other than
16quarterly monthly filing of returns both as prescribed in
17section 423.31. The director may require all persons who are
18engaged in the business of deriving any sales price subject
19to tax under this chapter to register with the department.
20All taxes collected under this chapter by a retailer, lodging
21provider, lodging facilitator, lodging platform, or any other
22person are deemed to be held in trust for the state of Iowa and
23the local jurisdictions imposing the taxes.
24 Sec. 28. Section 423B.5, subsection 3, Code 2022, is amended
25to read as follows:
263. A tax permit other than the state sales or use tax permit
27required under section 423.36 shall not be required by local
28authorities.
29 Sec. 29. Section 423B.6, subsection 2, paragraph c, Code
302022, is amended to read as follows:
31c. Frequency of deposits and quarterly monthly reports of a
32local sales and services tax with the department of revenue are
33governed by the tax provisions in section 423.31. Local tax
34collections shall not be included in computation of the total
35tax to determine frequency of filing under section 423.31.
-13-1 Sec. 30. Section 423C.4, Code 2022, is amended to read as
2follows:
3423C.4 Administration and enforcement.
4All powers and requirements of the director of revenue
5to administer the state sales tax law under chapter 423 are
6applicable to the administration of the tax imposed under
7section 423C.3, including but not limited to section 422.25,
8subsection 4, sections 422.30, 422.67, and 422.68, section
9422.69, subsection 1, sections 422.70 through 422.75, section
10423.14, subsection 1, and sections 423.15, 423.23, 423.24,
11423.25, 423.31, 423.33, 423.35 and 423.37 through 423.42,
12423.45, 423.46, and 423.47. However, as an exception to the
13powers specified in section 423.31, the director shall only
14require the filing of quarterly monthly reports.
15 Sec. 31. Section 423D.4, subsection 3, Code 2022, is amended
16to read as follows:
173. Section 422.25, subsection 4, sections 422.30, 422.67,
18and 422.68, section 422.69, subsection 1, sections 422.70,
19422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
201, and sections 423.23, 423.24, 423.25, 423.31 through
21423.35, 423.37 through 423.42, and 423.47, consistent with
22the provisions of this chapter, apply with respect to the tax
23authorized under this chapter, in the same manner and with the
24same effect as if the excise taxes on equipment sales or use
25were retail sales taxes within the meaning of those statutes.
26Notwithstanding this subsection, the director shall provide
27for quarterly monthly filing of returns and for other than
28quarterly monthly filing of returns both as prescribed in
29section 423.31. All taxes collected under this chapter by a
30retailer or any user are deemed to be held in trust for the
31state of Iowa.
32 Sec. 32. Section 423G.5, subsection 3, Code 2022, is amended
33to read as follows:
343. Section 422.25, subsection 4, sections 422.30, 422.67,
35and 422.68, section 422.69, subsection 1, sections 422.70,
-14-1422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
21, and sections 423.23, 423.24, 423.25, 423.31 through
3423.35, 423.37 through 423.42, and 423.47, consistent with the
4provisions of this chapter, shall apply with respect to the tax
5authorized under this chapter, in the same manner and with the
6same effect as if the excise taxes on the sale or furnishing of
7a water service were retail sales taxes within the meaning of
8those statutes. Notwithstanding this subsection, the director
9shall provide for quarterly monthly filing of returns and
10for other than quarterly monthly filing of returns both as
11prescribed in section 423.31. All taxes collected under this
12chapter by a retailer or any user are deemed to be held in trust
13for the state of Iowa.
14 Sec. 33. Section 728.1, subsection 6, Code 2022, is amended
15to read as follows:
166. “Place of business” means the premises of a business
17required to obtain a sales or use tax permit pursuant to
18chapter 423, the premises of a nonprofit or not-for-profit
19organization, and the premises of an establishment which is
20open to the public at large or where entrance is limited by a
21cover charge or membership requirement.
22 Sec. 34. Section 728.5, subsection 1, unnumbered paragraph
231, Code 2022, is amended to read as follows:
24An owner, manager, or person who exercises direct control
25over a place of business required to obtain a sales or use tax
26permit shall be guilty of a serious misdemeanor under any of
27the following circumstances:
28 Sec. 35. REPEAL. Section 423.32, Code 2022, is repealed.
29 Sec. 36. IMPLEMENTATION — EMERGENCY RULES. The department
30of revenue may adopt emergency rules under section 17A.4,
31subsection 3, and section 17A.5, subsection 2, paragraph “b”,
32to implement the provisions of this division of this Act and
33the rules shall be effective immediately upon filing unless
34a later date is specified in the rules. Any rules adopted
35in accordance with this section shall also be published as a
-15-1notice of intended action as provided in section 17A.4.
2 Sec. 37. EFFECTIVE DATE. The following, being deemed of
3immediate importance, takes effect upon enactment:
4The section of this division of this Act enacting emergency
5rules relating to the implementation of this division of this
6Act.
7DIVISION II
8DISTRIBUTIONS OF REVENUE TO LOCAL GOVERNMENTS AND SCHOOL
9DISTRICTS
10 Sec. 38. Section 423B.7, subsection 2, paragraph a, Code
112022, is amended to read as follows:
12a. The director of revenue by August 15 of each fiscal
13year the last day of each month shall send transfer to each
14city or county where the local option tax is imposed, an
15estimate of the amount of tax moneys remitted to the department
16attributable to each city or county will receive for the year
17and for each month of the year from the preceding month. At the
18end of each month, the director may revise the estimates for
19the year and remaining months.
20 Sec. 39. Section 423B.7, subsection 2, paragraphs b and c,
21Code 2022, are amended by striking the paragraphs.
22 Sec. 40. Section 423F.2, subsection 4, paragraph a, Code
232022, is amended to read as follows:
24a. The director of revenue by August 15 of each fiscal year
25 the last day of each month shall send transfer to each school
26district an estimate of the amount of tax moneys remitted
27to the department attributable to each school district will
28receive for the year and for each month of the year from the
29preceding month. At the end of each month, the director may
30revise the estimates for the year and remaining months.
31 Sec. 41. Section 423F.2, subsection 4, paragraph b, Code
322022, is amended by striking the paragraph and inserting in
33lieu thereof the following:
34b. On or before August 15 of each fiscal year the director
35of revenue shall provide to each school district an estimate
-16-1of the amount of tax moneys to be distributed to each school
2district for the current fiscal year.
3 Sec. 42. Section 423F.2, subsection 4, paragraph c, Code
42022, is amended by striking the paragraph.
5 Sec. 43. TRANSITION PROVISION FOR LOCAL OPTION SALES TAX
6AND SECURING AN ADVANCED VISION FOR EDUCATION — TRANSFER
7AMOUNTS. Notwithstanding any other provision of law to the
8contrary, the department of revenue shall estimate monthly
9local option sales tax and securing an advanced vision for
10education transfer amounts through the end of the 2022 calendar
11year. The department of revenue shall transfer estimated
12amounts to each local government or school district for the
13months of July, August, and September 2022. Beginning with the
14October 2022 transfer, the department shall not use estimated
15amounts and shall transfer the amount of tax attributable to
16each local government or school district for the tax remitted
17in September 2022. Any adjustment amount that is necessary to
18the July, August, or September 2022 estimated transfer amount
19to reflect the accurate attributable amount shall be made by
20the department of revenue or the local government or school
21district by the close of business on December 30, 2022.
22DIVISION III
23LIABILITY OF SELLERS USING CERTIFIED SERVICE provider
24 Sec. 44. Section 423.48, subsection 3, paragraph a, Code
252022, is amended to read as follows:
26a. A model 1 seller’s obligation to calculate, collect, and
27remit sales and use taxes shall be performed by its certified
28service provider, except for the seller’s obligation to remit
29tax on its own purchases. As the seller’s agent, the certified
30service provider is liable for its model 1 seller’s sales
31and use tax due Iowa on all sales transactions it processes
32for the seller except as set out in this section. A seller
33that contracts with a certified service provider is not
34liable to the state for sales or use tax due on transactions
35processed by the certified service provider unless the seller
-17-1misrepresents the types of items or services it sells or
2commits fraud certified service provider establishes that
3the certified service provider is not liable in accordance
4with the agreement. In the absence of probable cause to
5believe that the seller has committed fraud or made a material
6misrepresentation liability relief established by the certified
7service provider, the seller is not subject to audit on the
8transactions processed by the certified service provider.
9A model 1 seller is subject to audit for transactions not
10processed by the certified service provider. The director is
11authorized to perform a system check of the model 1 seller and
12review the seller’s procedures to determine if the certified
13service provider’s system is functioning properly and the
14extent to which the seller’s transactions are being processed
15by the certified service provider.
16DIVISION IV
17AUTHORITY TO CANCEL VARIOUS PERMITS ISSUED BY THE DEPARTMENT
18 Sec. 45. Section 421.17, Code 2022, is amended by adding the
19following new subsection:
20 NEW SUBSECTION. 37. Notwithstanding any other provision
21of law to the contrary, to cancel the following permits upon
22verification by the department of revenue the permits are no
23longer in use: income tax withholding, sales or use tax, or
24motor fuel tax.
25DIVISION V
26ECONOMIC DEVELOPMENT AUTHORITY SALES AND USE TAX REFUND
27INCENTIVES
28 Sec. 46. Section 15.331A, subsection 2, Code 2022, is
29amended to read as follows:
302. To receive the refund, a claim shall be filed by the
31eligible business with the department of revenue as follows:
32a. The contractor or subcontractor shall state under oath,
33on forms provided by the department of revenue, the amount of
34the sales of tangible personal property or services rendered,
35furnished, or performed including water, sewer, gas, and
-18-1electric utility services upon which sales or use tax has been
2paid prior to the project contract completion, and shall file
3the forms with the eligible business before final settlement
4is made.
5b. The eligible business shall, not more than one year after
6project contract completion, make application to the department
7of revenue for any refund of the amount of the sales and use
8taxes paid pursuant to chapter 423 upon any tangible personal
9property, or services rendered, furnished, or performed,
10including water, sewer, gas, and electric utility services.
11The application shall be made in the manner and upon forms to
12be provided by the department of revenue, and the department of
13revenue shall audit the claim and, if approved, issue a warrant
14to the eligible business in the amount of the sales or use tax
15which has been paid to the state of Iowa under a contract. The
16application must be made within one year after the project
17completion date. A claim filed by the eligible business in
18accordance with this section shall not be denied by reason of a
19limitation provision set forth in chapter 421 or 423.
20c. The eligible business shall inform the department of
21revenue in writing after project contract completion. For
22purposes of this section, “project completion” means the
23first date upon which the average annualized production of
24finished product for the preceding ninety-day period at the
25manufacturing facility operated by the eligible business is
26at least fifty percent of the initial design capacity of the
27facility.
28 Sec. 47. Section 15.331A, Code 2022, is amended by adding
29the following new subsection:
30 NEW SUBSECTION. 4. For purposes of this section, “contract
31completion” means the date of completion of a written contract
32relating to the construction or equipping of the facility that
33is part of the project of the eligible business.
34 Sec. 48. Section 15.331C, subsections 1 and 2, Code 2022,
35are amended to read as follows:
-19- 11. An In lieu of the sales and use tax refund provided
2in section 15.331A, an eligible business may claim a tax
3credit in an amount equal to the sales and use taxes paid by a
4third-party developer under chapter 423 for gas, electricity,
5water, or sewer utility services, goods, wares, or merchandise,
6or on services rendered, furnished, or performed to or for a
7contractor or subcontractor and used in the fulfillment of a
8written contract relating to the construction or equipping of
9a facility of the eligible business. Taxes attributable to
10intangible property and furniture and furnishings shall not
11be included, but taxes attributable to racks, shelving, and
12conveyor equipment to be used in a warehouse or distribution
13center shall be included. Any credit in excess of the tax
14liability for the tax year may be credited to the tax liability
15for the following seven years or until depleted, whichever
16occurs earlier. An eligible business may elect to receive a
17refund of all or a portion of an unused tax credit.
182. A third-party developer shall state under oath, on
19forms provided by the department of revenue, the amount of
20taxes paid as described in subsection 1 and shall submit such
21forms to the department of revenue. The taxes paid shall be
22itemized to allow identification of the taxes attributable
23to racks, shelving, and conveyor equipment to be used in a
24warehouse or distribution center. The eligible business
25shall make application to the department of revenue in the
26manner and form prescribed by the department of revenue, and
27within the time for applying for a sales and use tax refund
28under section 15.331A.After timely receiving the form from
29the third-party developer and application from the eligible
30business, the department of revenue shall audit the claim
31and, if approved, shall issue a tax credit certificate to the
32eligible business 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
-20-1contractor or subcontractor and used in the fulfillment of a
2written contract relating to the construction or equipping
3of a facility. The department of revenue shall also issue a
4tax credit certificate to the eligible business equal to the
5taxes paid and attributable to racks, shelving, and conveyor
6equipment to be used in a warehouse or distribution center.
7The aggregate combined total amount of tax refunds under
8section 15.331A for taxes paid and attributable to racks,
9shelving, and conveyor equipment to be used in a warehouse or
10distribution center and of tax credit certificates issued by
11the department of revenue under this section for the taxes paid
12and attributable to racks, shelving, and conveyor equipment
13to be used in a warehouse or distribution center shall not
14exceed five hundred thousand dollars in a fiscal year. If
15an applicant for a tax credit certificate does not receive
16a refund or certificate for the taxes paid and attributable
17to racks, shelving, and conveyor equipment to be used in a
18warehouse or distribution center, the application shall be
19considered in succeeding fiscal years. The eligible business
20shall not claim a tax credit under this section unless a tax
21credit certificate issued by the department of revenue is
22included with the taxpayer’s tax return for the tax year for
23which the tax credit is claimed. A tax credit certificate
24shall contain the eligible business’s name, address, tax
25identification number, the amount of the tax credit, and other
26information deemed necessary by the department of revenue.
27 Sec. 49. Section 15.355, subsection 2, Code 2022, is amended
28by striking the subsection and inserting in lieu thereof the
29following:
302. a. A housing business may claim a refund of the sales
31and use taxes paid under chapter 423 prior to the completion
32of the housing project that are directly related to a housing
33project and specified in the agreement.
34b. To receive a refund, a claim shall be filed by the
35housing business with the department of revenue as follows:
-21- 1(1) The contractor or subcontractor shall state under oath,
2on forms provided by the department of revenue, the amount
3of sales and use taxes paid under chapter 423 prior to the
4completion of the housing project that are directly related to
5a housing project and specified in the agreement.
6(2) The contractor or subcontractor shall file the forms
7with the housing business before final settlement is made.
8(3) (a) The housing business shall, after the agreement
9completion date, make application to the department of revenue
10for any refund of the amount of sales and use taxes paid under
11chapter 423 prior to the completion of the housing project that
12were directly related to a housing project and specified in the
13agreement. The application shall be made in the manner and
14upon forms to be provided by the department of revenue. The
15department of revenue shall audit the claim and, if approved,
16issue a warrant to the housing business. The application
17must be made within one year after the agreement completion
18date. A claim filed by the housing business in accordance with
19this subsection shall not be denied by reason of a limitation
20provision set forth in chapter 421 or 423.
21(b) For purposes of this subparagraph, “agreement completion
22date” means the date on which the authority notifies the
23department of revenue that all applicable requirements of the
24agreement entered into pursuant to section 15.354, subsection
253, paragraph “a”, and all applicable requirements of this part,
26including the rules the authority and the department of revenue
27adopt pursuant to section 15.356, are satisfied.
28c. A contractor or subcontractor who willfully makes a
29false claim under oath in violation of the provisions of this
30subsection shall be guilty of a simple misdemeanor and in
31addition to any other penalty, the contractor or subcontractor
32shall be liable for the payment of the tax and any applicable
33penalty and interest.
34 Sec. 50. EFFECTIVE DATE. This division of this Act, being
35deemed of immediate importance, takes effect upon enactment.
-22-1 Sec. 51. APPLICABILITY. This division of this Act applies
2to claims for refunds filed on or after the effective date of
3this division of this Act.
4DIVISION VI
5FRANCHISE TAX
6 Sec. 52. Section 422.63, Code 2022, is amended to read as
7follows:
8422.63 Amount of tax.
91. The franchise tax is imposed annually in an amount equal
10to five the percent specified in subsection 2 of the net income
11received or accrued during the taxable year. If the net income
12of the financial institution is derived from its business
13carried on entirely within the state, the tax shall be imposed
14on the entire net income, but if the business is carried on
15partly within and partly without the state, the portion of net
16income reasonably attributable to the business within the state
17shall be specifically allocated or equitably apportioned within
18and without the state under rules of the director.
192. a. For tax years beginning prior to January 1, 2023,
20five percent.
21b. For tax years beginning on or after January 1, 2023, but
22before January 1, 2024, four and seven-tenths percent.
23c. For tax years beginning on or after January 1, 2024, but
24before January 1, 2025, four and four-tenths percent.
25d. For tax years beginning on or after January 1, 2025, but
26before January 1, 2026, four and one-tenth percent.
27e. For tax years beginning on or after January 1, 2026, but
28before January 1, 2027, three and eight-tenths percent.
29f. For tax years beginning on or after January 1, 2027,
30three and one-half percent.
31DIVISION VII
32MANUFACTURED FOOD — SALES TAX EXEMPTION
33 Sec. 53. Section 423.3, subsection 49, Code 2022, is amended
34to read as follows:
3549. a. The sales price from the sale of carbon dioxide
-23-1in a liquid, solid, or gaseous form, electricity, steam, and
2other taxable services and the lease or rental of tangible
3personal property when used by a manufacturer of food products
4 to primarily produce marketable food products for human
5consumption food or food ingredients, including but not
6limited to treatment of material to change its form, context,
7or condition, in order to produce the food product or food
8ingredients, maintenance of quality or integrity of the
9food product or food ingredients, changing or maintenance of
10temperature levels necessary to avoid spoilage or to hold the
11food product or food ingredients in marketable condition,
12maintenance of environmental conditions necessary for the safe
13or efficient use of machinery and material used to produce
14the food product or food ingredients, sanitation and quality
15control activities, formation of packaging, placement into
16shipping containers, and movement of the material or food
17product or food ingredients until shipment from the building
18of manufacture.
19b. For purposes of this subsection, “food or food
20ingredients” means the same as “food and food ingredients” as
21defined in subsection 57, paragraph “d”, and includes tangible
22personal property that could be sold for ingestion or chewing
23by humans but is sold for another use.
24 Sec. 54. REFUNDS. Refunds of taxes, interest, or penalties
25which arise from the enactment of this division of this Act,
26for sales or services occurring between January 1, 2019, and
27the effective date of this division of this Act, shall be
28limited to one hundred thousand dollars in the aggregate for
29any calendar year in which claims are eligible for a refund and
30shall not be allowed unless refund claims are filed by October
311, 2022, notwithstanding any other law to the contrary. If the
32amount of claims totals more than one hundred thousand dollars
33in the aggregate for any calendar year in which claims are
34eligible for a refund, the department of revenue shall prorate
35the one hundred thousand dollars in the aggregate among all the
-24-1claimants for that particular calendar year in relation to the
2amounts of the claimants’ valid claims.
3 Sec. 55. EFFECTIVE DATE. This division of this Act, being
4deemed of immediate importance, takes effect upon enactment.
5 Sec. 56. RETROACTIVE APPLICABILITY. This division of this
6Act applies retroactively to January 1, 2019.
7DIVISION VIII
8MOTOR FUEL REPORTING REQUIREMENT — PENALTY
9 Sec. 57. Section 452A.33, subsection 1, paragraph c, Code
102022, is amended to read as follows:
11c. (1) The retail dealer shall prepare and submit file
12 the report with the department in a manner and according to
13procedures required by the department in compliance with
14section 452A.61. However, the department may require that the
15retail dealer file the report with the department by electronic
16transmission. The department may require that retail dealers
17report to the department on an annual, quarterly, or monthly
18basis. The department, upon application by a retail dealer,
19may grant a reasonable extension of time to file the report.
20(2) If a retail dealer fails to file the report as required
21by this section or fails to maintain records required to file
22the report the department may impose a civil penalty of not
23more than one hundred dollars per occurrence in addition to any
24other penalty provided by law. The penalty amount shall be
25deposited into the general fund of the state.
26EXPLANATION
27The inclusion of this explanation does not constitute agreement with
28the explanation’s substance by the members of the general assembly.
29This bill relates to sales, use, franchise, and motor
30vehicle fuel taxes administered by the department of revenue
31including distributions to local governments and school
32districts, sales tax on food ingredients, the liability of
33sellers, tax refund and tax credit incentives, and motor fuel
34tax reporting modifications.
35DIVISION I — SALES, USE, AND EXCISE TAX — RETURNS DUE. The
-25-1bill allows a taxpayer to have a combined sales and use tax
2permit and to file a combined return for sales and use taxes.
3Currently, a taxpayer must possess a separate sales and use tax
4permit and file separate sales and use tax returns.
5The bill changes numerous references to the phrase “sales
6tax permit” in the Code to the phrase “sales or use tax
7permit”.
8Currently, a person is required to file a sales or use tax
9return on a quarterly basis. The bill changes this filing
10requirement from a quarterly basis to a monthly basis. The
11bill does allow a person required to file a sales or use tax
12return and who collects less than $1,200 in sales or use tax in
13a calendar year, to file a return once a year on or before the
14last day of the month following the close of the calendar year.
15The bill allows certain persons required to collect sales
16or use tax who do not meet the definition of a “retailer
17maintaining a business in this state” in Code section
18423.1(48)(a)(1), to be issued only one sales or use tax permit.
19The bill allows the director of revenue, if necessary, to
20ensure the payment of sales or use tax, to require a sales or
21use tax return be filed on a different basis other than on a
22monthly basis.
23The bill strikes “professions and occupations” from
24the definition of “commercial enterprise” in Code section
25423.3(104) thus making sales to professions and occupations
26related to prewritten software, specified digital services,
27and other services subject to the sales tax. The bill expands
28the definition of “commercial enterprise” to include a “public
29utility” as defined in Code section 476.1(3). As a result, the
30sales price of specified digital products, prewritten computer
31software, and other enumerated digital and computer services
32furnished to a public utility are exempt from the sales tax, if
33exclusively used by the public utility.
34The bill strikes a provision allowing a person required to
35file a sales or use tax return to take a credit against the
-26-1total quarterly amount of tax due, upon a proper showing of
2necessity, allowing for the balance of tax due to be paid up to
330 days after the return was due.
4The bill strikes a provision requiring a seller, who
5collects more than $30,000 of sales or use tax in the preceding
6calendar year, to make additional remittances to the state
7under the rules adopted by the director of revenue.
8The bill allows the department of revenue to adopt emergency
9rules to implement the division. The emergency rules provision
10takes effect upon enactment.
11DIVISION II — DISTRIBUTIONS OF REVENUE TO LOCAL GOVERNMENTS
12AND SCHOOL DISTRICTS. Currently, by August 15, the department
13of revenue estimates the local option sale tax (LOST) and
14securing an advanced vision for education (SAVE) tax amounts
15that will be transferred to each local government or school
16district on a fiscal year and monthly basis. The transfer
17estimates may be revised for the year and remaining months by
18the director of revenue if the estimates are incorrect.
19Commencing with the fiscal year beginning July 1, 2022, the
20bill changes the LOST and SAVE transfer amount procedures, by
21requiring the department of revenue to transfer the actual
22LOST and SAVE taxes collected that are attributable to each
23local government or school district to that local government
24or school district.
25The bill also creates a transition procedure for the LOST
26and SAVE tax amounts transferred during July and August 2022.
27Under the transition procedure, the department of revenue shall
28transfer estimated amounts of LOST and SAVE to each local
29government or school district for the months of July, August,
30and September 2022. However, beginning with the October 2022
31transfer, the department of revenue shall transfer the actual
32amount of tax attributable to each local government or school
33district for the LOST and SAVE tax remitted in September 2022.
34The bill requires any adjustment amount that is necessary to
35the July, August, or September 2022 estimated transfer amounts
-27-1be made by the close of business on December 30, 2022.
2DIVISION III — LIABILITY OF SELLERS USING CERTIFIED
3SERVICE PROVIDER. The bill specifies that a seller of personal
4property or services who contracts with a certified service
5provider is not liable to the state for sales or use tax due on
6transactions processed by the certified service provider unless
7the certified service provider establishes it is not liable
8in accordance with the agreement with the seller. The bill
9specifies that if the certified service provider is liable for
10the sales or use tax due, the seller is not subject to audit
11on transactions processed by the certified service provider.
12“Certified service provider” is defined in Code section 423.1
13to mean an agent certified under the agreement to perform
14all of a seller’s sales or use tax functions, other than the
15seller’s obligation to remit tax on its own purchases.
16DIVISION IV — AUTHORITY TO CANCEL VARIOUS PERMITS ISSUED
17BY THE DEPARTMENT. The bill allows the director of the
18department of revenue to cancel the following tax permits if
19the department determines the permits are no longer in use:
20income tax withholding, sales or use tax, or motor fuel tax.
21DIVISION V — ECONOMIC DEVELOPMENT AUTHORITY SALES AND USE
22TAX REFUND INCENTIVES. Currently, for certain sales or use
23tax refund incentives in Code section 15.331A administered
24by the department of economic development authority, an
25eligible business must apply for a sales or use tax refund for
26items purchased prior to the “project” completion date. The
27bill changes the refund procedures by requiring an eligible
28business to apply for such sales or use tax refunds for items
29purchased prior to the completion of the “contract” rather than
30completion of the “project”. The bill also requires such an
31application be made within one year of the project completion
32date, and that the department of revenue be informed in writing
33after the contract completion. The bill defines “contract
34completion” as the date of completion of a written contract
35relating to the construction or equipping of the facility that
-28-1is part of the project of the eligible business.
2For the third-party developer tax credit in Code section
315.331C relating to a tax credit for sales and use taxes paid
4by a third-party developer, the bill specifies that this credit
5is in lieu of the sales and use tax refund tax incentive
6provided in Code section 15.331A.The bill also provides
7that the eligible business shall make an application to the
8department of revenue within one year of the project completion
9date, and that the department be informed in writing after
10the contract completion. The bill requires the department
11of revenue to audit any third-party developer tax credit
12claim, prior to issuing a third-party developer tax credit
13certificate.
14The bill makes changes to the procedures for workforce
15housing tax incentives in Code section 15.355. The bill
16permits a housing business to claim a refund of the sales
17and use taxes paid prior to the completion of the housing
18project that are directly related to the housing project and
19specified in an agreement. In order to receive the sales and
20use tax refund, the bill requires a contractor or subcontractor
21working on the housing project to submit a form under oath
22stating the amount of sales and use taxes paid prior to the
23housing project. The bill makes it a simple misdemeanor if a
24contractor or subcontractor willfully makes a false claim under
25oath in relating to the workforce sales and use tax refund.
26The bill then requires, after the agreement completion date,
27the housing business to make an application to the department
28of revenue for any sales and use tax refund. The bill defines
29“agreement completion date” to mean the date the economic
30development authority notifies the department of revenue that
31all applicable requirements of the agreement have been met.
32The bill also requires the department of revenue to audit the
33claim prior to issuing the sales and use tax refund.
34This division takes effect upon enactment and applies to
35claims for refunds filed on or after the effective date of the
-29-1bill.
2DIVISION VI — FRANCHISE TAX. The bill phases in a reduction
3of the current franchise tax of 5 percent of net income as
4follows: Commencing with the tax years beginning during the
52023 calendar year, 4.70 percent; for tax years beginning
6during the 2024 calendar year, 4.40 percent; for tax years
7beginning during the 2025 calendar year, 4.10 percent; for tax
8years beginning during the 2026 calendar year, 3.80 percent;
9and for all tax years beginning on or after January 1, 2027,
103.50 percent.
11DIVISION VII — MANUFACTURED FOOD — SALES TAX EXEMPTION.
12 The bill exempts from the sales tax the sales of certain items
13and services used by a manufacturer to primarily produce food
14or food ingredients, including the lease or rental of tangible
15personal property used to primarily produce such food or food
16ingredients.
17The bill defines “food or food ingredients” to mean the same
18as defined in Code section 423.3(57)(d) and includes tangible
19personal property that could be sold for ingestion or chewing
20by humans but is sold for another use.
21Under current law, in order to receive the sales tax
22exemption the items or services must be used to produce
23marketable food products for human consumption.
24By operation of Code section 423.6, an item exempt from the
25imposition of the sales tax is also exempt from the use tax
26imposed in Code section 423.5.
27The bill requires refunds of taxes, interest, or penalties
28arising from claims resulting from the enactment of the bill
29for sales or services occurring between January 1, 2019, and
30the effective date of the division to be filed prior to October
311, 2022. Refunds of taxes, interest, or penalties shall not
32exceed $100,000 in the aggregate in any calendar year in which
33claims are eligible for a refund. If the amount of claims
34totals more than $100,000 in the aggregate for any calendar
35year in which claims are eligible for a refund, the department
-30-1of revenue shall prorate the $100,000 in the aggregate among
2all the claimants for that particular calendar year.
3This division takes effect upon enactment and applies
4retroactively to January 1, 2019.
5DIVISION VIII — MOTOR FUEL REPORTING REQUIREMENT —
6PENALTY. The bill specifies that each motor fuel retail dealer
7shall file a report with the department of revenue detailing
8their total motor fuel gallonage within a reporting period
9in the manner required by the department and in compliance
10within the time frames established in Code section 452A.61.
11The bill permits the department of revenue to require a retail
12dealer to file such a report with the department by electronic
13transmission. The bill allows the department of revenue to
14impose a civil penalty on the retail dealer, not to exceed
15$100, for each instance a retail dealer fails to timely file
16a report or fails to maintain records required to file the
17report.
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