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Senate File 167 - IntroducedA Bill ForAn Act 1relating to revenue and taxation by increasing the sales
2and use tax rates, establishing transfers to the natural
3resources and outdoor recreation trust fund, and including
4effective date provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 423.2, subsection 1, unnumbered
2paragraph 1, Code 2017, is amended to read as follows:
3There is imposed a tax of six and three-eighths percent upon
4the sales price of all sales of tangible personal property,
5consisting of goods, wares, or merchandise, sold at retail in
6the state to consumers or users except as otherwise provided
7in this subchapter.
8 Sec. 2. Section 423.2, subsections 2 and 3, Code 2017, are
9amended to read as follows:
102. A tax of six and three-eighths percent is imposed upon
11the sales price of the sale or furnishing of gas, electricity,
12water, heat, pay television service, and communication service,
13including the sales price from such sales by any municipal
14corporation or joint water utility furnishing gas, electricity,
15water, heat, pay television service, and communication service
16to the public in its proprietary capacity, except as otherwise
17provided in this subchapter, when sold at retail in the state
18to consumers or users.
193. A tax of six and three-eighths percent is imposed upon
20the sales price of all sales of tickets or admissions to places
21of amusement, fairs, and athletic events except those of
22elementary and secondary educational institutions. A tax of
23six and three-eighths percent is imposed on the sales price of
24an entry fee or like charge imposed solely for the privilege of
25participating in an activity at a place of amusement, fair, or
26athletic event unless the sales price of tickets or admissions
27charges for observing the same activity are taxable under this
28subchapter. A tax of six and three-eighths percent is imposed
29upon that part of private club membership fees or charges paid
30for the privilege of participating in any athletic sports
31provided club members.
32 Sec. 3. Section 423.2, subsection 4, paragraph a, Code 2017,
33is amended to read as follows:
34a. A tax of six and three-eighths percent is imposed upon
35the sales price derived from the operation of all forms of
-1-1amusement devices and games of skill, games of chance, raffles,
2and bingo games as defined in chapter 99B, and card game
3tournaments conducted under section 99B.27, that are operated
4or conducted within the state, the tax to be collected from
5the operator in the same manner as for the collection of taxes
6upon the sales price of tickets or admission as provided in
7this section. Nothing in this subsection shall legalize any
8games of skill or chance or slot-operated devices which are now
9prohibited by law.
10 Sec. 4. Section 423.2, subsection 5, Code 2017, is amended
11to read as follows:
125. There is imposed a tax of six and three-eighths percent
13upon the sales price from the furnishing of services as defined
14in section 423.1.
15 Sec. 5. Section 423.2, subsection 7, paragraph a,
16unnumbered paragraph 1, Code 2017, is amended to read as
17follows:
18A tax of six and three-eighths percent is imposed upon the
19sales price from the sales, furnishing, or service of solid
20waste collection and disposal service.
21 Sec. 6. Section 423.2, subsection 8, paragraph a, Code 2017,
22is amended to read as follows:
23a. A tax of six and three-eighths percent is imposed on
24the sales price from sales of bundled transactions. For the
25purposes of this subsection, a “bundled transaction” is the
26retail sale of two or more distinct and identifiable products,
27except real property and services to real property, which
28are sold for one nonitemized price. A “bundled transaction”
29does not include the sale of any products in which the sales
30price varies, or is negotiable, based on the selection by the
31purchaser of the products included in the transaction.
32 Sec. 7. Section 423.2, subsection 9, Code 2017, is amended
33to read as follows:
349. A tax of six and three-eighths percent is imposed upon
35the sales price from any mobile telecommunications service,
-2-1including all paging services, that this state is allowed
2to tax pursuant to the provisions of the federal Mobile
3Telecommunications Sourcing Act, Pub.L. No.106-252, 4 U.S.C.
4§116 et seq. For purposes of this subsection, taxes on mobile
5telecommunications service, as defined under the federal Mobile
6Telecommunications Sourcing Act that are deemed to be provided
7by the customer’s home service provider, shall be paid to
8the taxing jurisdiction whose territorial limits encompass
9the customer’s place of primary use, regardless of where the
10mobile telecommunications service originates, terminates,
11or passes through and shall in all other respects be taxed
12in conformity with the federal Mobile Telecommunications
13Sourcing Act. All other provisions of the federal Mobile
14Telecommunications Sourcing Act are adopted by the state of
15Iowa and incorporated into this subsection by reference. With
16respect to mobile telecommunications service under the federal
17Mobile Telecommunications Sourcing Act, the director shall, if
18requested, enter into agreements consistent with the provisions
19of the federal Act.
20 Sec. 8. Section 423.2, subsection 11, paragraph b,
21subparagraph (2), Code 2017, is amended to read as follows:
22(2) Transfer from the remaining revenues the amounts
23required under Article VII, section 10, of the Constitution
24of the State of Iowa to the natural resources and outdoor
25recreation trust fund created in section 461.31, if applicable.
26 Sec. 9. Section 423.2, subsection 14, Code 2017, is amended
27to read as follows:
2814. The sales tax rate of six and three-eighths percent is
29reduced to five and three-eighths percent on January 1, 2030.
30 Sec. 10. Section 423.5, subsection 1, unnumbered paragraph
311, Code 2017, is amended to read as follows:
32Except as provided in paragraph “c”, an excise tax at the
33rate of six and three-eighths percent of the purchase price or
34installed purchase price is imposed on the following:
35 Sec. 11. Section 423.5, subsection 5, Code 2017, is amended
-3-1to read as follows:
25. The use tax rate of six and three-eighths percent is
3reduced to five and three-eighths percent on January 1, 2030.
4 Sec. 12. Section 423.43, subsection 1, paragraph b, Code
52017, is amended to read as follows:
6b. Subsequent to the deposit into the general fund of the
7state and after the transfer of such pursuant to paragraph “a”,
8the department shall do the following in the order prescribed:
9(1) Transfer therevenues collected under chapter 423B, the
10department shall transfer one-sixth.
11(2) Transfer fifteen and six thousand eight hundred
12sixty-three ten-thousandths percentof such remaining revenues
13to the secure an advanced vision for education fund created in
14section 423F.2. This paragraph subparagraph (2) is repealed
15December 31, 2029.
16 Sec. 13. PURPOSE. The purpose of this Act is to provide
17for the implementation of Article VII, section 10, of the
18Constitution of the State of Iowa by fully funding the natural
19resources and outdoor recreation trust fund as created in
20section 461.31, pursuant to Article VII, section 10, of the
21Constitution of the State of Iowa.
22 Sec. 14. EFFECTIVE DATE. This Act takes effect on July 1,
232018.
24EXPLANATION
25The inclusion of this explanation does not constitute agreement with
26the explanation’s substance by the members of the general assembly.
27This bill relates to state sales and use taxes and to an
28amendment to the Iowa Constitution ratified on November 2,
292010, which created a natural resources and outdoor recreation
30trust fund (fund) and dedicated a portion of state revenues to
31the fund for the purposes of protecting and enhancing water
32quality and natural areas in the state including parks, trails,
33and fish and wildlife habitat, and conserving agricultural
34soils in the state (Article VII, section 10). The fund is
35codified in Code section 461.31. Pursuant to the amendment,
-4-1the amount credited to the fund will be equal to the amount
2generated by an increase in the state sales tax rate occurring
3after the effective date of the constitutional amendment, but
4shall not exceed the amount that a state sales tax rate of
50.375 percent would generate. The state sales tax rate has not
6been increased since the effective date of the constitutional
7amendment, so no amounts have been credited to the fund. The
8bill increases from 6 percent to 6.375 percent the state
9sales tax rate and the state use tax rate, and provides for
10the transfer of sales tax revenues to the fund. The bill
11also amends the transfer of use tax revenues to the secure
12an advanced vision for education fund (SAVE) in Code section
13423F.2 from 1/6th (approximately 16.66 percent) of the revenues
14to 15.6863 percent of the revenues to ensure that SAVE receives
15approximately the same proportion of the total use tax revenue
16as it did prior to the use tax rate increase provided in the
17bill.
18The bill takes effect July 1, 2018.
-5-mm/sc
2and use tax rates, establishing transfers to the natural
3resources and outdoor recreation trust fund, and including
4effective date provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 423.2, subsection 1, unnumbered
2paragraph 1, Code 2017, is amended to read as follows:
3There is imposed a tax of six and three-eighths percent upon
4the sales price of all sales of tangible personal property,
5consisting of goods, wares, or merchandise, sold at retail in
6the state to consumers or users except as otherwise provided
7in this subchapter.
8 Sec. 2. Section 423.2, subsections 2 and 3, Code 2017, are
9amended to read as follows:
102. A tax of six and three-eighths percent is imposed upon
11the sales price of the sale or furnishing of gas, electricity,
12water, heat, pay television service, and communication service,
13including the sales price from such sales by any municipal
14corporation or joint water utility furnishing gas, electricity,
15water, heat, pay television service, and communication service
16to the public in its proprietary capacity, except as otherwise
17provided in this subchapter, when sold at retail in the state
18to consumers or users.
193. A tax of six and three-eighths percent is imposed upon
20the sales price of all sales of tickets or admissions to places
21of amusement, fairs, and athletic events except those of
22elementary and secondary educational institutions. A tax of
23six and three-eighths percent is imposed on the sales price of
24an entry fee or like charge imposed solely for the privilege of
25participating in an activity at a place of amusement, fair, or
26athletic event unless the sales price of tickets or admissions
27charges for observing the same activity are taxable under this
28subchapter. A tax of six and three-eighths percent is imposed
29upon that part of private club membership fees or charges paid
30for the privilege of participating in any athletic sports
31provided club members.
32 Sec. 3. Section 423.2, subsection 4, paragraph a, Code 2017,
33is amended to read as follows:
34a. A tax of six and three-eighths percent is imposed upon
35the sales price derived from the operation of all forms of
-1-1amusement devices and games of skill, games of chance, raffles,
2and bingo games as defined in chapter 99B, and card game
3tournaments conducted under section 99B.27, that are operated
4or conducted within the state, the tax to be collected from
5the operator in the same manner as for the collection of taxes
6upon the sales price of tickets or admission as provided in
7this section. Nothing in this subsection shall legalize any
8games of skill or chance or slot-operated devices which are now
9prohibited by law.
10 Sec. 4. Section 423.2, subsection 5, Code 2017, is amended
11to read as follows:
125. There is imposed a tax of six and three-eighths percent
13upon the sales price from the furnishing of services as defined
14in section 423.1.
15 Sec. 5. Section 423.2, subsection 7, paragraph a,
16unnumbered paragraph 1, Code 2017, is amended to read as
17follows:
18A tax of six and three-eighths percent is imposed upon the
19sales price from the sales, furnishing, or service of solid
20waste collection and disposal service.
21 Sec. 6. Section 423.2, subsection 8, paragraph a, Code 2017,
22is amended to read as follows:
23a. A tax of six and three-eighths percent is imposed on
24the sales price from sales of bundled transactions. For the
25purposes of this subsection, a “bundled transaction” is the
26retail sale of two or more distinct and identifiable products,
27except real property and services to real property, which
28are sold for one nonitemized price. A “bundled transaction”
29does not include the sale of any products in which the sales
30price varies, or is negotiable, based on the selection by the
31purchaser of the products included in the transaction.
32 Sec. 7. Section 423.2, subsection 9, Code 2017, is amended
33to read as follows:
349. A tax of six and three-eighths percent is imposed upon
35the sales price from any mobile telecommunications service,
-2-1including all paging services, that this state is allowed
2to tax pursuant to the provisions of the federal Mobile
3Telecommunications Sourcing Act, Pub.L. No.106-252, 4 U.S.C.
4§116 et seq. For purposes of this subsection, taxes on mobile
5telecommunications service, as defined under the federal Mobile
6Telecommunications Sourcing Act that are deemed to be provided
7by the customer’s home service provider, shall be paid to
8the taxing jurisdiction whose territorial limits encompass
9the customer’s place of primary use, regardless of where the
10mobile telecommunications service originates, terminates,
11or passes through and shall in all other respects be taxed
12in conformity with the federal Mobile Telecommunications
13Sourcing Act. All other provisions of the federal Mobile
14Telecommunications Sourcing Act are adopted by the state of
15Iowa and incorporated into this subsection by reference. With
16respect to mobile telecommunications service under the federal
17Mobile Telecommunications Sourcing Act, the director shall, if
18requested, enter into agreements consistent with the provisions
19of the federal Act.
20 Sec. 8. Section 423.2, subsection 11, paragraph b,
21subparagraph (2), Code 2017, is amended to read as follows:
22(2) Transfer from the remaining revenues the amounts
23required under Article VII, section 10, of the Constitution
24of the State of Iowa to the natural resources and outdoor
25recreation trust fund created in section 461.31, if applicable.
26 Sec. 9. Section 423.2, subsection 14, Code 2017, is amended
27to read as follows:
2814. The sales tax rate of six and three-eighths percent is
29reduced to five and three-eighths percent on January 1, 2030.
30 Sec. 10. Section 423.5, subsection 1, unnumbered paragraph
311, Code 2017, is amended to read as follows:
32Except as provided in paragraph “c”, an excise tax at the
33rate of six and three-eighths percent of the purchase price or
34installed purchase price is imposed on the following:
35 Sec. 11. Section 423.5, subsection 5, Code 2017, is amended
-3-1to read as follows:
25. The use tax rate of six and three-eighths percent is
3reduced to five and three-eighths percent on January 1, 2030.
4 Sec. 12. Section 423.43, subsection 1, paragraph b, Code
52017, is amended to read as follows:
6b. Subsequent to the deposit into the general fund of the
7state and after the transfer of such pursuant to paragraph “a”,
8the department shall do the following in the order prescribed:
9(1) Transfer therevenues collected under chapter 423B, the
10department shall transfer one-sixth.
11(2) Transfer fifteen and six thousand eight hundred
12sixty-three ten-thousandths percentof such remaining revenues
13to the secure an advanced vision for education fund created in
14section 423F.2. This paragraph subparagraph (2) is repealed
15December 31, 2029.
16 Sec. 13. PURPOSE. The purpose of this Act is to provide
17for the implementation of Article VII, section 10, of the
18Constitution of the State of Iowa by fully funding the natural
19resources and outdoor recreation trust fund as created in
20section 461.31, pursuant to Article VII, section 10, of the
21Constitution of the State of Iowa.
22 Sec. 14. EFFECTIVE DATE. This Act takes effect on July 1,
232018.
24EXPLANATION
25The inclusion of this explanation does not constitute agreement with
26the explanation’s substance by the members of the general assembly.
27This bill relates to state sales and use taxes and to an
28amendment to the Iowa Constitution ratified on November 2,
292010, which created a natural resources and outdoor recreation
30trust fund (fund) and dedicated a portion of state revenues to
31the fund for the purposes of protecting and enhancing water
32quality and natural areas in the state including parks, trails,
33and fish and wildlife habitat, and conserving agricultural
34soils in the state (Article VII, section 10). The fund is
35codified in Code section 461.31. Pursuant to the amendment,
-4-1the amount credited to the fund will be equal to the amount
2generated by an increase in the state sales tax rate occurring
3after the effective date of the constitutional amendment, but
4shall not exceed the amount that a state sales tax rate of
50.375 percent would generate. The state sales tax rate has not
6been increased since the effective date of the constitutional
7amendment, so no amounts have been credited to the fund. The
8bill increases from 6 percent to 6.375 percent the state
9sales tax rate and the state use tax rate, and provides for
10the transfer of sales tax revenues to the fund. The bill
11also amends the transfer of use tax revenues to the secure
12an advanced vision for education fund (SAVE) in Code section
13423F.2 from 1/6th (approximately 16.66 percent) of the revenues
14to 15.6863 percent of the revenues to ensure that SAVE receives
15approximately the same proportion of the total use tax revenue
16as it did prior to the use tax rate increase provided in the
17bill.
18The bill takes effect July 1, 2018.
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